CLIPPER Rlty (NYSE:CLPR) Q4 2018 Earnings Conference Call Transcript

Mar 07, 2019 • 05:00 pm ET


CLIPPER Rlty (NYSE:CLPR) Q4 2018 Earnings Conference Call Transcript


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Good afternoon, ladies and gentlemen, and welcome to the Clipper Realty 4Q '18 Earnings Conference Call. At this time, all participants have been placed on 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, Mike Frenz. Sir, the floor is yours.

Michael Frenz

Good afternoon, and thank you for joining us for the fourth quarter 2018 Clipper Realty Inc., earnings conference call. Participating in today's call will be David Bistricer, Co-Chairman of the Board and Chief Executive Officer; JJ Bistricer, Chief Operating Officer; and Larry Kreider, Chief Financial 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 2018 annual report on Form 10-K, which is accessible at and the Company's website. As a reminder, the forward-looking statements speak only as of the date of this call, March 7, 2019, 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 interests, taxes and depreciation, or adjusted EBITDA; and net operating income, or NOI. Please see Clipper's press release and supplemental financial information posted today for reconciliation of these non-GAAP financial measures with the most directly comparable GAAP financial measures.

With that, I will now turn the call over to David Bistricer.

David Bistricer

Thank you, Michael. Good afternoon, and welcome to the fourth quarter 2018 earnings call for Clipper Realty. I'm pleased to discuss with you the state of affairs at Clipper. I will provide a few highlights of our recent activity, then turn over the call to JJ, who will update you on our portfolio, including leasing and ongoing repositioning projects. Finally, Larry will discuss our quarterly results on our balance sheet. We will then take your questions.

Regarding our recent activity, at our 250 Livingston property, we continue to make progress on our discussions with the City of New York regarding renewal of its commercial leases, which terminated in August 2020 in the low-to-mid $40 rent per square foot range.

In December, we also refinanced our $33.5 million mortgage on the property bearing a 4% interest rate due in 2023, with a $75 million two-year loan bearing interest at LIBOR plus 2.15%. At our 107 Columbia Heights property in Brooklyn, Downtown Brooklyn, we are steadily approaching completion of renovations to create a fully amenitized residential building with 159 market rate studio one and two-bedroom units with indoor parking for 68 cars. We are funding the improvements in apartments with $14.7 million construction loan and proceeds from a new mortgage at 250 Livingston Street.

We expect to complete our work in 2019 and begin lease-up. Property is located in the historic Brooklyn Heights neighborhood with unobstructed