Clipper Realty Sees Record Rents and Faces $4M Lease Termination Hit
Clipper Realty reported 99% residential occupancy with new rents up 13% and renewals up 7%, while Flatbush Gardens and Clover House achieved average rents of $32/ft (new leases $54) and $90/ft (new $95). A 250 Livingston lease termination drove a $4M revenue decline, $3.8M NOI drop and $6.1M AFFO reduction.
1. Residential Portfolio Performance
Clipper Realty’s stabilized residential portfolio reached 99% occupancy in Q4, with new rental rates rising 13% year-over-year and renewals up 7%. Flatbush Gardens posted 98% occupancy and average rents of $32 per square foot (new leases at $54), while Clover House reached 96% occupancy with average rents of $90 (new leases at $95) and collection rates near 98%.
2. Office Lease Termination Impact
New York City’s mid-August lease termination at 250 Livingston Street eliminated $4.0 million in revenue, reduced net operating income by $3.8 million and cut AFFO by $6.1 million. The company ceased interest and tax payments on the property and has initiated debt restructuring discussions without assurance of completion.
3. 953 Dean Street Development
The Prospect House project at 953 Dean Street came online on time and on budget, featuring 240 units (30% affordable), 57 parking spaces and 19,000 square feet of commercial space. As of Q4, it was 78% leased at market rents near $85 per square foot, supported by a bridge loan to fund the stabilization process.
4. Q4 Financial Results and Cash Position
Fourth-quarter revenue fell to $37.1 million from $38.0 million a year ago, with NOI down to $20.7 million from $22.6 million and AFFO declining to $1.7 million from $8.1 million. The balance sheet showed unrestricted cash of $30.8 million, restricted cash of $27.3 million and operating debt at 89% of gross asset value.