Hi, good afternoon and thank you for joining us for the third quarter 2026 Clipper Realty Inc. earnings conference call.

Participating with me on today's call are David Bistricer, Co-Chairman of the Board and Chief Executive Officer, and JJ Bistricer, Chief Operating Officer. Please be aware that statements made during the call that are not historical may be deemed forward-looking statements, and actual results may differ materially from those indicated by such forward-looking statements.

These statements are subject to numerous risks and uncertainties, including those disclosed in the company's 2025 annual report on Form 10-K and 2026 third quarterly report on Form 10-Q, just filed today, which are accessible at www.sec.gov and our website. As a reminder, the forward-looking statements speak only as of the date of this call, November 4th, 2026, and the company undertakes no duty to update them.

During this call, management may refer to certain non-GAAP financial measures, including adjusted funds from operations, or AFFO, adjusted earnings before interest, taxes, depreciation, and amortization, or adjusted EBITDA, and net operating income, or NOI. Please see our press release and Form 10-Q posted today for a reconciliation of these non-GAAP financial measures with the most directly comparable GAAP measures.

Our supplemental will be filed shortly today due to a technical problem with our vendor. With that, I will turn the call over to our Co-Chairman and CEO, David Bistricer.

Thank you. Good afternoon and welcome to third quarter 2026 earnings call for Clipper Realty.

I will provide an update on our business performance and some new developments, after which JJ will discuss property-level activity, including leasing performance, and Larry will speak to our quarterly financial performance. We will then take your questions.

I'm pleased to report that our residential properties continue to perform very well due to continued high residential rental demand, excellent cash flow, and demonstrating professionalism of our leasing and management teams. Overall, rents are generally at all-time highs and continuing to increase, and we are nearly fully leased.

In the third quarter, new free-market leases exceeded prior rents by over 8% across the entire portfolio. We are also in the first quarter of full occupancy throughout the quarter at Pacific House and 953 Dean Street, which we both brought online in August of last year, on time and on budget.

We have placed a bridge loan on the property that provides funds through stabilization, and expect to make it permanent in 2028. We are presently fully leased, with free-market rents of about $84 per square foot.

I will now turn over the call to JJ.

Thank you. I am pleased to report that residential leasing at all our stabilized properties is very strong, and they are 99% leased overall.

Rents are at record levels and continue to increase from already historically high levels. Overall, new rental rates at residential free-market properties in the third quarter exceeded previous rents by 9%, and renewals by 5%.

We expect demand for our residential leasing product to remain strong in the foreseeable future as overall rental housing supply in New York City remains constrained and new development discouraged. Our residential free-market rents are now at record highs.

In the third quarter, Tribeca House had leased occupancy of 99%, overall rent per foot of $94, and new rents at $105 per foot. The Clover House property had occupancy of 98%, average overall rent of $92 per foot, and new leases of $95 per foot.

The Pacific House property, consisting of a blend of free-market and rent-stabilized tenants, had leased occupancy of 99% and average overall free-market rents of $75 per foot, and new free-market leases of $84 per foot. The newly completed Prospect House ground-up development at 953 Dean Street had average overall free-market units at $84 per square foot.

Our Aspen property continues to perform at record levels, with average occupancy above 99% and new rents 11% higher compared to previous leases. As to our commercial leases, at the Tribeca House property, we entered into one new lease in the third quarter for 1,937 square feet, in addition to the 2,063 square feet earlier in the year, and a long-term renewal in the fourth quarter last year of the building's fitness facility.

At the Flatbush Gardens property, we substantially completed the 3-year capital spending requirements required by the Article 11 agreement with New York City, and we will continue investing in the property. At the 141 Livingston Street property, we continue to operate the property fully occupied by New York City Brooklyn Courthouse, which is leasing from us pending finalization of a previously agreed 5-year lease.

We expect this to be completed effective 2027, although there can be no assurance. Rent collections versus billings across our portfolio remain good.

The overall collection rate in the third quarter for all residential properties was approximately 93%. Looking ahead, we remain focused on optimizing occupancy, pricing, and expenses across the business to best position our balance sheet for growth.

I will now turn the call over to Larry, who will discuss our financial results.

Thank you, JJ. For our ongoing properties, our results for the current year versus last year reflect the continuation of very strong residential leasing at all our residential properties, and the full occupancy for the entire quarter at the new Prospect House property put in service in Q3 last year, also some new commercial leases at Tribeca House, and the continuation of operations at the 141 Livingston Street property.

At the 250 Livingston Street property, following the principal tenant New York City vacating in August 2025, the company notified the lender that it would no longer support the property's operations. Subsequently, the lender funded all expenses and placed all rents in escrow.

On June 4th, 2026, we entered into a consent and cooperation agreement to market and sell the loan on the property that allows us to bid, but puts us in receivership. We continue to accrue all expenses and record the relatively small residential revenue, despite the likelihood we will not fund the recorded expenses at the completion of the loan process.

The following details our results. For the third quarter 2026, revenues were $40.5 million as compared to revenues of $37.7 million during the third quarter of 2025, an increase of $2.8 million.

This quarter's revenues are at record levels. Revenues increased by $4.2 million, or 14.1% increase, at our residential properties, due to strong residential rental rates and occupancy, and a full quarter of Dean Street property that was placed in service in August 2025.

Commercial revenue decreased by $1.4 million due to the loss of revenue from the termination of the New York City lease in August 2025 of $2.2 million, partially offset by some new commercial leases at Tribeca House, and higher real estate tax reimbursement at 141 Livingston Street of $0.8 million. Net loss: for the third quarter of 2026, net loss was $5.9 million, or 18 cents per share, compared to net loss of $4.6 million, or 14 cents per share, for the third quarter of 2025, an increase of $1.3 million.

$4.1 million of this net loss for the third quarter was due to the termination of the New York City lease at 250 Livingston Street property, substantially all of which is non-cash, whereby the lender funded all expenses and collected all the residential rents since termination of the New York City lease. This increased loss was partially offset by $2.5 million lower loss due to strong residential leases, full stabilization of the Dean Street property, and some new commercial leases at Tribeca House, all net of annual increases in real estate taxes and insurance, and some legal expenses, and $0.2 million of additional loss that was recorded at the 10 West 75th Street property, 65th Street property, last year in the third quarter.

For AFFO: for the third quarter of 2026, AFFO was $4.1 million, or 10 cents per share, compared to $5.6 million, or 13 cents per share, for the third quarter of 2025, a decrease of $1.5 million. Of the decrease, $4.1 million was due to the termination of the New York City lease at the 250 Livingston Street property, substantially all of which is non-cash, in 2026 as described above; partially offset by $2.5 million of greater AFFO due to strong residential leasing and some new leases at Tribeca House, all net of annual increases in real estate taxes and insurance, and some legal expenses at the remaining residential properties and the 141 Livingston Street office property.

With regard to our balance sheet, we have $30.6 million of unrestricted cash and $23.1 million of restricted cash at the end of the quarter, benefiting from strong cash flow from residential properties and the 141 Livingston Street property. At the end of the quarter, our operating debt is 88% fixed at an average rate of 3.68% and average duration of 3 years.

Our debt instruments are non-recourse, subject to limited standard carve-outs, and not cross-collateralized. We finance our portfolio on an asset-by-asset basis.

Today, we are announcing a dividend of 9.5 cents per share for the third quarter, the same amount as last quarter. The dividend will be paid on November 25th to shareholders of record on November 17th.

Incidentally, we will be issuing a correcting press release, which stated the record date as November 16th. Let me now turn the call back to David for concluding remarks.

Thank you, Larry. We remain focused on efficiently operating the portfolio and capitalizing on other possibilities that may present themselves.

I will now open the line for questions.

Hey, good afternoon, guys. Congrats on all the good leasing results.

Interesting. I'd like to just follow up on kind of your refinancing plans on a couple of the mortgages coming due in early 2027.

Maybe first, just kind of on the Flatbush mortgage as that interest rate looks set to or begins to reset, I think, in May 2027, and I think adds on principal amortization after that. Maybe just talk me through what your plans are for addressing that going forward.

Is there a refinancing option on the table? Do you need to bring any additional equity to the table for that purpose, or any additional color you could provide on just kind of the Flatbush mortgage situation?

As that the rentals at Flatbush Gardens is really very, very strong. There are some runways to get additional rental increases because of the Section 8 program that we're enjoying at the Article 11 financing.

We think that the increased revenues that we have there should be able to get us a refinancing option either with the same bank or other banks, and hopefully not have to contribute more equity into that process.

I got you. The interest rate, of course, relative to your current interest-only payments, would significantly reset if current prime rates were to hold here.

I guess I'm curious: are there any plans for the dividend in 2027? Would you need to address a dividend cut if the interest rate resets to the levels implied by current interest rates?

It's a bit early to tell. We just refinanced two properties in the portfolio, not done yet, but the banks who have the mortgage are talking about 5.5%.

That's obviously more than the 3% that we're paying. I think that we should hopefully be able to have an opportunity to refinance this without more equity.

It's too early to tell you.

Okay. Also just on the Dean Street property, that's another mortgage, or I guess it was a construction loan coming due.

What are the plans for refinancing Dean Street at this point?

We're going to refinance it, put a standard mortgage on it.

Buck, we have an easy movement that we can extend the refinancing to 2028 on that loan.

Okay. I got you.

You can continue paying the current— Without additional cost. I got you.

That makes sense. Guys, thanks.

I appreciate the color.

Very welcome. Thank you.

Thank you for joining us today. We look forward to speaking to you again next quarter.

Thank you very much, have a pleasant evening.