CLPR - Earnings call transcript Q2 2021

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Operator

Good afternoon, ladies and gentlemen, and welcome to the Clipper Realty 2Q 2021 Earnings Call. At this time, all participants have been placed on a listen-only mode, and we will open the floor for your questions and comments after the presentation. It is now my pleasure to turn the floor over to your host, Larry Kreider, Chief Financial Officer. Sir, the floor is yours.

Larry Kreider

Good afternoon and thank you for joining us for the second quarter 2021 Clipper Realty Inc. call. conference earnings on the me Bistricer, are Bistricer, David Operating Participating and today’s Chief of Board JJ Executive Co-Chairman Officer. with call Officer; Chief and not during Please results actual materially by call statements aware indicated differ be made those forward-looking be that forward-looking that may are such historical from and may deemed the statements. are disclosed XX-K, XXXX website. company’s on Form in which and subject accessible annual numerous www.sec.gov and risks to statements the These uncertainties, those at is including report our

speak statements this forward-looking as of XXXX, the the of reminder, a no only the date update call, and As them. X, August duty company undertakes to

will adjusted this adjusted and or income financial a Please and refer funds During With earnings the directly for comparable net supplemental GAAP to measures see David over including or Bistricer. and reconciliation NOI. CEO, release, of our operations I turn XX-Q today financial measures. with or Form non-GAAP financial AFFO; adjusted measures, depreciation to may EBITDA management our from most taxes, before now information operating certain financial call, Co-Chairman interest, the press call non-GAAP amortization posted and these that,

David Bistricer

turn respond I Good leasing the on highlights call to discuss XXXX property-level welcome afternoon, for call as to I including Larry. well to an the milestones then our activity, and over company performance. provide the quarter to Clipper COVID-XX our second you, Thank business continues and performance, recent JJ, Realty. will who update earnings including how will will as pandemic.

quarterly financial will performance. our Finally, Larry speak about

on ongoing work efforts grateful and very their We thanks our challenging to to and unprecedented of continued this by begin I and months dedication team our perseverance then circumstances residents, the past in remain the for extending We business. during our Realty questions. will take the XX their communities again will your entire proud over for hard Clipper their time. once

increase today, year open economy further took the in pandemic. remained city the last leasing the the operational strengthened New York both throughout in and residential The the continues activity that as the general, City pandemic. from of depths of hold properties Our in and have quarter fourth

We to properties $XX the and rates York pricing quarter, levels, of are to our the pre-pandemic reopen per New proliferate. continues City July improve Tribeca demand vaccinations new to as expect square and lease reaching remain leases end leased new XX% where property, were properties elevated our at rental At approximately including our second and in foot. were

to to are compliance steps our local the with services We confident properties orders City, with of a in residents. York expect to We to and continue more necessary take over return tenants safe, remain city our the time. range operations New a and to continue resiliency desirable and to state tenants to state keep and broad normal the of providing and we typical our stay our

balance Our well positioned a be through manage to pandemic. from the liquidity perspective sheet continues to

asset-by-asset of basis. have approximately million of $XX of an portfolio million cash. unrestricted of We million cash our cash, $XX We $XX consisting restricted on financed and

cross-collateralized. non-recourse, standard limited Our not debt is and subject is to carve-outs

on We properties operating any have no maturities debt XXXX. of until our

Some more developments. recent

mile continue underway. Street in well Prospect is We Atlantic Pacific located prospect with Construction XXXX from the Hub. pipe About Brooklyn, of Center proceed in Heights. to – Terminal/Barclays X redevelopment the

rate. with portfolio, that million financing further the In shortly. provide construction will XXXX, office a take At rent point, in will update us will will cost construction XX% loan all develop total JJ we approximately contracts out, the stabilized to we this completion. completed, cap to a on approximately an discussed, at Street into It NOI are normalized the two on the $XX and property to in after would bought resulting construction. million property’s annual our our property about XXX city’s our through – estimate and provide these project to $XX.X enter facility million approximate incremental years are of portfolio, the new of X.X% quarter new complete to previously As our the project Street – the end from city NOI at $X.X the like the annual of August adding results. annual rate. to of NOI. $X million $X.X lease second increases to on XX% XXXX, expected are increased expected XX% additional at of XXX that I comment decrease property an million our Livingston to Livingston to Together a add representing commenced with run

We $XX.X are of of reporting AFFO and million. quarterly revenue NOI million of $X.X $XX.X million,

JJ, corner While Larry on will operations. further an quarter who detail. the on AFFO rental as collections each by residential as last result revenue utility improved with of over and update NOI was expenses provide over will reduced as call to $X turned leasing, turn a will million and the we now improved stable I

JJ Bistricer

I extending you. to company’s again Thank thanks unprecedented begin efforts employees inspiring our their period. this for by the throughout

our and began mid nine of for trends XXs communities. levels on – approximately quarter, year continues building to last marked the in the of commitment residential our The At properties today. toward increase tenants the grateful year-end seen versus leased end leasing all percent residential end high to are ongoing ago. We were second the their a and improvement of activity XX% the months approximate in range, that

quarter, reopens – we further anticipated as rental York to improved widespread. New seeing last become demand City are vaccines at continue more and we As

present New exceeding rental and or average all reaching rates are exceeding pre-pandemic rates. levels

high. property the at Flatbush, at Aspen, July $XX Occupancy and year-end square and last XX% at nine foot; remains in square at end were the foot. $XX months ago. second residential occupied $XX per at XX% versus quarter, Tribeca At square leases the XX% House new Tribeca units per down per foot; XX.X% were House of example, For quarter,

quality are attractiveness beginning at a from has Revenue return to well property the pre-COVID given the mentioned compared standpoint at the the maintained luxury was square House XX% pricing to to in buildings levels quarter, the property. Tribeca to end the We second work per Rental throughout foot foot up diligently continue surrounding neighborhood. revenue and as the at at of manage to near complex other and $XX asset’s quarter the rates ending it The rent as in Gardens in square level. per leased. occupancy, high quarter The pandemic. Brooklyn Flatbush the record held above,

ongoing portfolio of growth strong certain and result $XXX,XXX. collections of a the remains manage excess at Flatbush we previously, expected property to of in as of despite savings effort noted pandemic. Rent expense reorganized part base, in our remained an which As Gardens story. to is operations cost have annual our challenges key element the the

end. quarter Our the rate versus collection second in XX%, XX% at an year uptick was

with on if that notify to they tenants they continue pandemic. us a cannot meet their the We basis to case-by-case rent due work obligations

expect – begins next months the benefit $X a of Rental to few the with residents benefit million paying already as from Emergency have out. applications get known We Assistance in to Program, otherwise We city approximately when also the ERAP, pending.

side, XXX affordable. XXXX XXX(a) The be foot, rentable will On which we square commenced XXX,XXX property is tax abatement. with multifamily XX% Street total indoor a building market amenitized free on a to is nine-storey, parking. XX-year, Pacific development the have fully expected and construction XX% And underground rental units, eligible at of have for

million completion. loan with enter $XX.X We – million construction through financing to into $XX under providers, are a about

In construction addition, approximately we contracts. XX% finalized have of our

will remain ahead, turn the results. its we who to our the from and business position New pricing emergence across discuss York financial now on Looking continues focused I pandemic. ourselves occupancy, expenses the over optimizing as Larry, call to best City will

Larry Kreider

JJ. you, Thank

new termination commencement quarter to offset property partially foot the other during properties have the at of recovered the second and and to $XX.X office achieved second rates leases property, the at the and XXXX. compared million property at substantially For residential lease of rates $X.X on in $XX.X of last the – residential property of $X.X quarter, the AFFO similar residential of at the $XX commercial the for XXXX. At July this attributable we revenue million revenues to primarily we year-on-year quarter Tribeca second $XX.X year the $XX.X last new but change from of Street rates occupancy $XX.X year per first increases million and XXXX, as offered million quarter was we the XXXX. the the Tribeca were $X.X third the the quarter bargain of million we XXXX achieved at the In certain well. in Livingston and at are million our as first of million the up level, maintain with million of as achieving House from House XXX in property compared the million quarter, by The to for of quarter square NOI leases at point, $XX.X second

impact the the of partially in to realignment at the staff Flatbush Flatbush legal by expense portfolio On in increases. property Real primarily industry to million changes Gardens, by the quarter provision COVID-XX; May increase side, to normal the follows: were repairs due $X.X due refinancing the in and in in and from Livingston the due and and the year-over-year million the property the an year-on-year, by tax the increased Gardens as debt driven some tenant XXXX insurance activities Gardens. quarter by second for resumption the in increases general Street year-on-year, this and maintenance $X.X in by expense of Insurance operating $X.X million at decrease the key second of offset taxes bad second across primarily estate XXX operating Flatbush year-on-year quarter year. costs property expenses February increased property of insurance cost increased activities

are As liquidity from well positioned we David perspective. a mentioned,

and by $XX cash million finance an restricted basis. our million have unrestricted of asset We cash consisting portfolio million on $XX asset of of We cash. of $XX

cross-collateralized. Our debt carve-outs subject standard is limited not is non-recourse and to

same any XXXX. of $X.XXX share announcing have no second the a amount dividend dividend properties will on debt shareholders paid August maturities Today The per the are on record last XX of we be to quarter, for quarter. August We on as until XX.

call for me Let the David remarks. back turn to concluding

David Bistricer

focused Larry. portfolio, you, and safety efficiency, on highest operating tenants the priority. remain our with our of our employees We Thank

the through balance continue challenges, by strong sheet. take to navigate necessary We steps a the buttressed to current

myriad XXXX to of pandemic We a up allow look We possibilities healthy. now other to the capitalizing through present and from recovery that on to to see development the including continue stays XXXX may everyone beyond. and Pacific for growth hope expect and We the line open safe accelerate Street questions. opportunities, forward I to themselves. now the

Operator

question Riley Thank your Securities. from coming Craig, [Operator Kucera And line first is your Craig is Instructions] live. from you. B.

Craig Kucera

have all my at quarter. have Can what point appears what at I the cash of kind are this some work, that costs Appreciate evaluating? call. you. currently given sense And sheet to do might comment that balance guys levels? Yes. you be to noted of rents getting Thank you acquisition on any you back taking put you on it had pre-pandemic you that all you’re that

David Bistricer

Well, on the have them plans have now to cash work hand, we yet. put that to don’t we specifically

We And arise. each have they we’ll it for opportunity as arises. as evaluate them available opportunity

question quarterly, let your acquisition about he… cost on the see I’ll Regarding the Larry, if

Larry Kreider

you – Craig, $XX,XXX from from first are referring to? I see the more Yes. quarter. What

Craig Kucera

it Yes, that. regard in was to

it. Okay that’s

Larry Kreider

There’s nothing to more that.

I prior just think, acquisitions. spillover, of from think that yes, – some adjustment was for I invoices

Craig Kucera

That’s the mechanics at basis XX on walk by kind going through Occupancy you Tribeca? Okay. can what’s increased fair. me And points. about of of

they’re there? signing tell you $XX. in and you in up a were I that of quarter, when mix $XX said were can versus residential at rents think you that the quarter, current a Is you rents? issue what’s have Or me the on decline kind on sequential XX% clearly, going this earlier what

David Bistricer

people very the are to they the were coming mean, rents going back pre-pandemic. simple. slowly, with they’re up, but so occupancy up. the are is back it’s occupancy Well, going I city, obviously, back going And where to

they So levels approaching seeing today. pandemic different people you’re now who quarter that mode the in was are to the are are this as and it before a where rent in

Craig Kucera

I you, time. Okay. it Thank appreciate for me. That’s your

Operator

Okay. Instructions] [Operator

Raymond James. We coming further have from a Buck we – questions from question have no Horne

Buck Horne

Great. Thanks.

the for with and of I legality kind debt like the of will how thinking on while. effect, do – these extended that’s CDC in the moratorium eviction remainder any, the you here, the bad you’re anticipate through whether curious of if Just having operationally? drag from is how still could moratoriums question, What Or getting accruals year? think does about it a but that, trend up seem that

David Bistricer

go. that collections specificity, think would the during the Not done to with we’ve we had answer the where pandemic much the better any I pandemic, as feared than onset but at of

the it’s with and is more to to than This continuing do We much large, with People, of comfortable their have footings, that we are they’re people a and more economic not – miss, paying because not a credit at the collections whether now bill and better some doing have anticipated, want bills. improve. day, open, yet by rating. chances. end not take are bad comfortable fully starting not affects wants they’re the the this but courts nobody through open, of And courts the to open their or to rating

have they will of we’re don’t the getting summonses better think the climate and/or actually courts where by understanding will are worse some and we processing time have But street it’s that a some wind open eventually. people if a them. pay, think on processing it. credit our buildings bad when up But also they problems, they So and are Courts matter nonetheless, that I issuing is they’re the let up. economic politicians better not these I are the collections month-to-month, and will only of because eventually,

Buck Horne

to to to money, conversely, find the once you back turnover turnover? the you a your the have going the would expired, or you portion maybe feel process? incur don’t I to be substantial way so of Or are would find end where situations tenants think are of point, And catch up the finally guess, level of do these at a that a moratoriums substantial that that like fully actually there’s

David Bistricer

we right better to the put basis. that Obviously, not on And are of it. reserves is and paying small. worse. that’s quarter-by-quarter people whatever level a watching think It’s getting it’s small that I we have off on do amount. of And I it see a we’re getting not and

going we where the not housing, sidewalk. on end So to to themselves do people even luxury when the because day, courts improve, open like the at people not the it’s of up, think But That find what, we’re go a large, I quality something know have that want have and the delivering paying down an you ability by – down to for. find we’ll this cheaper. go say, obviously, notch. is always are people It’s and

So that – decrease. think to I it’s on, don’t think going improve, I not from here

we’ll better. think get I

Buck Horne

Okay. I the… was One just with one, last curious

JJ Bistricer

Buck, just add to add that. that. to just me I’ll let

we’re their on that taking government heard we going you If the for call, be to to people opportunity could that the not also out the that subsidies they’re apply pay rents. to discussed giving

around applications in we made million that $X point. So for of excess at this

start that, out on cover working trickling we pretty they’re a monthly ones logistics So but those for in the to the actually soon of expect that cannot expense their basis. rental

Buck Horne

Appreciate one retail other progress it commercial Got space? of terms retail, re-leasing there? level Thanks. That’s is Tribeca whether any improvement the or last of it. JJ. it’s properties, Yes, just ground in then space, the any update helpful. Any my or

David Bistricer

I think we’ve…

JJ Bistricer

take I’ll that.

David Bistricer

the were a we of leasing spaces pandemic, would substantial precursor meant just I’ll going take – give to to have during decision Go we you ahead. conscious is than prudent to we much have what these we charging. And that a we months market the that right better We if The where few in that previously. have think the vacant, it doing in stores go going couple was to we’re from we we of out now now. were Tribeca, think do to a a wait tell But to you, I’ll JJ discount lot have we retail. mostly bit, a with next made don’t because out don’t

prior were that the like we the Now $XX rent, the one at corner, even large, We specific time, way below the pandemic. we tenant by – the paying spaces over and during to we re-lease that’s achieving more in than – market. think, on today’s have we spot at vacated will, these market, think was

JJ Bistricer

the basis. Right. that to that, to we’re a on with actively say I’ll just add And brokers engaged daily

We’re speaking to time. them all the

years. on We that tenants, sometimes soon. XX, We’re not effect. that’s hopefully actively out, that’s call rent going a because for ourselves want deals out deal from lock the going to listening seems short-term be to benefiting potential it, and to very going to but let’s XX low commercial go phase artificially like we’re we Because over negotiating with rent a don’t say strike it’s, a of COVID in depression

them, So in just silly to will make we’re to we’re that a but not look going now. few years talking deal from a

Buck Horne

Got Appreciate great it. a got Have clarity. the it. Right, day.

David Bistricer

Thank you.

JJ Bistricer

you. Thank

Operator

Okay.

questions no have remaining queue. We in

David Bistricer

joining Thank everybody you and very much. stay night. Thank you call, safe. our for a Have good

Operator

ladies you, Thank conference call. conclude and gentlemen. today’s This does

your You may at you Thank have disconnect for a your participation. this phone lines day. time, wonderful and

Clipper Realty (CLPR) 10 Aug 212021 Q2 Earnings call transcript