CLPR Clipper Realty Inc

Clipper Realty Inc. (NYSE: CLPR) (the “Company”), a leading owner and operator of multifamily residential and commercial properties in the New York metropolitan area, today announced financial and operating results for the three months ended June 30, 2024.

Highlights for the Three Months Ended June 30, 2024

• Record quarterly revenues of $37.3 million for the second quarter of 2024
• Quarterly income from operations of $10.0 million for the second quarter of 2024
• Record net operating income (“NOI”)1 of $21.1 million for the second quarter of 2024
• Quarterly net loss of $1.7 million for the second quarter of 2024
• Record adjusted funds from operations (“AFFO”)1 of $7.1 million for the second quarter of 2024
• Declared a dividend of $0.095 per share for the second quarter of 2024

David Bistricer, Co-Chairman, and Chief Executive Officer, commented,

“The Company continued to grow its revenue, NOI and AFFO in the second quarter of 2024, producing record results for all these metrics on the basis of our very strong residential leasing. We continue to have high occupancy and good renter demand in our buildings. For all our properties, new leases exceeded previous rents by nearly 11% and renewals by nearly 7%. At Flatbush Gardens, as a result of the Article 11 agreement with New York City, we are beginning to collect meaningful enhanced rental recoveries under Section 610 as we continue to make the committed capital improvements and other improvements in the property. At our 250 Livingston Street property, where we previously disclosed New York City’s notification of its intention to vacate in late August 2025, we continue to actively seek solutions and pursue opportunities. At our nearby 141 Livingston Street property, we are in active discussions for a lease renewal. Our Dean Street new development continues to progress ahead of schedule, and we are confident of an on-time completion next year to capture the 2025 leasing season. Lastly, we have begun thinking about recycling properties in our portfolio to maximize performance and improve cash flow. As such, we have begun preliminary marketing activities for some of our properties, including our 10W 65th Street property, which, while potentially resulting in some loss compared to book value, would allow us to achieve better overall returns going forward. We will announce any definitive arrangements promptly as they arise.”

Financial Results for the Three Months Ended June 30, 2024

For the second quarter of 2024, revenues increased by $2.9 million, or 8.3%, to $37.3 million as compared to revenue of $34.5 million during the second quarter of 2023. Residential revenue increased by $2.7 million, or 11.8%, driven by higher rental rates at all our residential properties and higher occupancy. Commercial income increased by $0.1 million, or 0.9%, in the second quarter of 2024 due to higher escalation income at our office properties

For the second quarter of 2024, net loss was $1.7 million, or $0.06 per share compared to net loss of $3.3 million, or $0.10 per share, for the second quarter of 2023. The lower net loss as compared to last year was primarily due to increased rental revenue discussed above, the abated real estate taxes at the Flatbush Gardens property under the Article 11 transaction entered at the end of the second quarter of 2023, and the absence of Article 11 related transaction costs last year, partially offset by higher property taxes at the remaining properties and, at the Flatbush Gardens property under the Article 11 transaction, higher repairs and maintenance costs, higher payroll costs from “prevailing wage” requirements, and higher depreciation expense from capital spending.

For the second quarter of 2024, AFFO was $7.1 million, or $0.17 per share, compared to $5.5 million, or $0.13 per share, for the second quarter of 2023. As discussed above, the increase was primarily due to increased rental revenue and the abated real estate taxes at the Flatbush Gardens property, partially offset by higher property taxes at the remaining properties, and, at the Flatbush Gardens property, higher repairs and maintenance expense and higher payroll costs.

_____________ 1 NOI and AFFO are non-GAAP financial measures. For a definition of these financial measures and a reconciliation of such measures to the most comparable GAAP measures, see “Reconciliation of Non-GAAP Measures” at the end of this release.

Balance Sheet

At June 30, 2024, notes payable (excluding unamortized loan costs) was $1,255.3 million, compared to $1,219.0 million at December 31, 2023. The increase was primarily due to draws made on Dean Street development construction loan.

Dividend

The Company today declared a second quarter dividend of $0.095 per share, the same amount as last quarter, to shareholders of record on August 15, 2024, payable August 22, 2024.

Conference Call and Supplemental Material

The Company will host a conference call on August 1, 2024, at 5:00 PM Eastern Time to discuss the second quarter 2024 results and provide a business update. The conference call can be accessed by dialing (800) 346-7359 or (973) 528-0008, conference entry code 151415. A replay of the call will be available from August 1, 2024, following the call, through August 15, 2024, by dialing (800) 332-6854 or (973) 528-0005, replay conference ID 151415. Supplemental data to this press release can be found under the “Quarterly Earnings” navigation tab on the “Investors” page of our website at www.clipperrealty.com. The Company’s filings with the Securities and Exchange Commission (the “SEC”) are filed at www.sec.gov under Clipper Realty Inc.

About Clipper Realty Inc.

Clipper Realty Inc. (NYSE: CLPR) is a self-administered and self-managed real estate company that acquires, owns, manages, operates, and repositions multifamily residential and commercial properties in the New York metropolitan area, with a portfolio in Manhattan and Brooklyn. For more information on the Company, please visit www.clipperrealty.com.

Forward-Looking Statements

Various statements contained in this press release, including those that express a belief, expectation or intention, as well as those that are not statements of historical fact, are forward-looking statements. These forward-looking statements may include estimates concerning capital projects and the success of specific properties. Our forward-looking statements are generally accompanied by words such as "estimate," "project," "predict," "believe," "expect," "intend," "anticipate," "potential," "plan" or other words that convey the uncertainty of future events or outcomes. The forward-looking statements in this press release speak only as of the date of this press release.

We disclaim any obligation to update these statements unless required by law, and we caution you not to rely on them unduly. We have based these forward-looking statements on our current expectations and assumptions about future events. While our management considers these expectations and assumptions to be reasonable, they are inherently subject to significant business, economic, competitive, regulatory and other risks, contingencies and uncertainties), most of which are difficult to predict and many of which are beyond our control and which may cause our actual results, performance or achievements to differ materially from any future results, performance or achievements expressed or implied by these forward-looking statements. For a discussion of these and other important factors that could affect our actual results, please refer to our filings with the SEC, including the "Risk Factors" section of our Annual Report on Form 10-K for the year ended December 31, 2023, and other reports filed from time to time with the SEC.

Clipper Realty Inc.

Consolidated Balance Sheets

(In thousands, except for share and per share data)

 

 

 

June 30, 2024

 

 

December 31, 2023

 

 

 

(unaudited)

 

 

 

 

 

ASSETS

 

 

 

 

 

 

 

 

Investment in real estate

 

 

 

 

 

 

 

 

Land and improvements

 

$

571,988

 

 

$

571,988

 

Building and improvements

 

 

732,917

 

 

 

726,273

 

Tenant improvements

 

 

3,366

 

 

 

3,366

 

Furniture, fixtures and equipment

 

 

13,616

 

 

 

13,278

 

Real estate under development

 

 

124,071

 

 

 

87,285

 

Total investment in real estate

 

 

1,445,958

 

 

 

1,402,190

 

Accumulated depreciation

 

 

(228,387

)

 

 

(213,606

)

Investment in real estate, net

 

 

1,217,571

 

 

 

1,188,584

 

 

 

 

 

 

 

 

 

 

Cash and cash equivalents

 

 

20,254

 

 

 

22,163

 

Restricted cash

 

 

16,490

 

 

 

14,062

 

Tenant and other receivables, net of allowance for doubtful accounts of $250 and $234, respectively

 

 

5,836

 

 

 

5,181

 

Deferred rent

 

 

2,273

 

 

 

2,359

 

Deferred costs and intangible assets, net

 

 

5,903

 

 

 

6,127

 

Prepaid expenses and other assets

 

 

6,275

 

 

 

10,854

 

TOTAL ASSETS

 

$

1,274,602

 

 

$

1,249,330

 

 

 

 

 

 

 

 

 

 

LIABILITIES AND EQUITY(DEFICIT)

 

 

 

 

 

 

 

 

Liabilities:

 

 

 

 

 

 

 

 

Notes payable, net of unamortized loan costs of $11,212 and $13,405, respectively

 

$

1,244,136

 

 

$

1,205,624

 

Accounts payable and accrued liabilities

 

 

19,802

 

 

 

20,994

 

Security deposits

 

 

9,109

 

 

 

8,765

 

Other liabilities

 

 

6,247

 

 

 

6,712

 

TOTAL LIABILITIES

 

 

1,279,294

 

 

 

1,242,095

 

 

 

 

 

 

 

 

 

 

Equity(Deficit):

 

 

 

 

 

 

 

 

Preferred stock, $0.01 par value; 100,000 shares authorized (including 140 shares of 12.5% Series A cumulative non-voting preferred stock), zero shares issued and outstanding

 

 

-

 

 

 

-

 

Common stock, $0.01 par value; 500,000,000 shares authorized, 16,077,290 and 16,063,228 shares issued and outstanding, at June 30, 2024 and December 31, 2023, respectively

 

 

160

 

 

 

160

 

Additional paid-in-capital

 

 

89,685

 

 

 

89,483

 

Accumulated deficit

 

 

(91,623

)

 

 

(86,899

)

Total stockholders' equity

 

 

(1,778

)

 

 

2,744

 

 

 

 

 

 

 

 

 

 

Non-controlling interests

 

 

(2,914

)

 

 

4,491

 

TOTAL EQUITY(DEFICIT)

 

 

(4,692

)

 

 

7,235

 

 

 

 

 

 

 

 

 

 

TOTAL LIABILITIES AND EQUITY(DEFICIT)

 

$

1,274,602

 

 

$

1,249,330

 

Clipper Realty Inc.

Consolidated Statements of Operations

(In thousands, except per share data)

(Unaudited)

 

 

 

Three Months Ended June 30,

 

 

Six Months Ended June 30,

 

 

 

2024

 

 

2023

 

 

2024

 

 

2023

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

REVENUES

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Residential rental income

 

$

27,748

 

 

$

25,040

 

 

$

53,854

 

 

$

48,980

 

Commercial rental income

 

 

9,598

 

 

 

9,503

 

 

 

19,252

 

 

 

19,230

 

TOTAL REVENUES

 

 

37,346

 

 

 

34,543

 

 

 

73,106

 

 

 

68,210

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

OPERATING EXPENSES

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Property operating expenses

 

 

8,996

 

 

 

6,782

 

 

 

17,618

 

 

 

14,881

 

Real estate taxes and insurance

 

 

7,438

 

 

 

8,700

 

 

 

14,574

 

 

 

17,236

 

General and administrative

 

 

3,459

 

 

 

3,396

 

 

 

7,010

 

 

 

6,689

 

Transaction pursuit costs

 

 

-

 

 

 

357

 

 

 

-

 

 

 

357

 

Depreciation and amortization

 

 

7,455

 

 

 

7,269

 

 

 

14,834

 

 

 

14,094

 

TOTAL OPERATING EXPENSES

 

 

27,348

 

 

 

26,504

 

 

 

54,036

 

 

 

53,257

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

INCOME FROM OPERATIONS

 

 

9,998

 

 

 

8,039

 

 

 

19,070

 

 

 

14,953

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest expense, net

 

 

(11,741

)

 

 

(11,334

)

 

 

(23,480

)

 

 

(21,469

)

Loss on extinguishment of debt

 

 

-

 

 

 

-

 

 

 

-

 

 

 

(3,868

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net loss

 

 

(1,743

)

 

 

(3,295

)

 

 

(4,410

)

 

 

(10,384

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net loss attributable to non-controlling interests

 

 

1,083

 

 

 

2,046

 

 

 

2,737

 

 

 

6,448

 

Net loss attributable to common stockholders

 

$

(660

)

 

$

(1,249

)

 

$

(1,673

)

 

$

(3,936

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic and diluted net loss per share

 

$

(0.06

)

 

$

(0.10

)

 

$

(0.15

)

 

$

(0.29

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Weighted average common shares / OP units

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Common shares outstanding

 

 

16,077

 

 

 

16,063

 

 

 

16,077

 

 

 

16,063

 

OP units outstanding

 

 

26,317

 

 

 

26,317

 

 

 

26,317

 

 

 

26,317

 

Diluted shares outstanding

 

 

42,394

 

 

 

42,380

 

 

 

42,394

 

 

 

42,380

 

Clipper Realty Inc.

Consolidated Statements of Cash Flows

(In thousands)

(Unaudited)

 

 

 

 

Six Months Ended June 30,

 

 

.

 

2024

 

 

2023

 

 

 

 

 

 

 

 

 

 

 

CASH FLOWS FROM OPERATING ACTIVITIES

 

 

 

 

 

 

 

 

 

Net loss

 

$

(4,410

)

 

$

(10,384

)

 

 

 

 

 

 

 

 

 

 

Adjustments to reconcile net loss to net cash provided by operating activities:

 

 

 

 

 

 

 

 

 

Depreciation

 

 

14,781

 

 

 

14,044

 

Amortization of deferred financing costs

 

 

1,061

 

 

 

675

 

Amortization of deferred costs and intangible assets

 

 

294

 

 

 

292

 

Amortization of above- and below-market leases

 

 

-

 

 

 

(17

)

Loss on extinguishment of debt

 

 

-

 

 

 

3,868

 

Deferred rent

 

 

87

 

 

 

27

 

Stock-based compensation

 

 

1,274

 

 

 

1,431

 

Bad debt expense

 

 

16

 

 

 

(142

)

Changes in operating assets and liabilities:

 

 

 

 

 

 

 

 

 

Tenant and other receivables

 

 

(671

)

 

 

(18

)

Prepaid expenses, other assets and deferred costs

 

 

4,511

 

 

 

7,608

 

Accounts payable and accrued liabilities

 

 

(1,777

)

 

 

(424

)

Security deposits

 

 

345

 

 

 

720

 

Other liabilities

 

 

(467

)

 

 

(459

)

Net cash provided by operating activities

 

 

15,044

 

 

 

17,221

 

 

 

 

 

 

 

 

 

 

 

CASH FLOWS FROM INVESTING ACTIVITIES

 

 

 

 

 

 

 

 

 

Additions to land, buildings and improvements

 

 

(42,051

)

 

 

(18,915

)

Net cash used in investing activities

 

 

(42,051

)

 

 

(18,915

)

 

 

 

 

 

 

 

 

 

 

CASH FLOWS FROM FINANCING ACTIVITIES

 

 

 

 

 

 

 

 

 

Payments of mortgage notes

 

 

(985

)

 

 

(46,810

)

Proceeds from mortgage notes

 

 

37,303

 

 

 

62,330

 

Dividends and distributions

 

 

(8,792

)

 

 

(8,696

)

Loan issuance and extinguishment costs

 

 

-

 

 

 

(4,723

)

Net cash provided by financing activities

 

 

27,526

 

 

 

2,101

 

 

 

 

 

 

 

 

 

 

 

Net increase in cash and cash equivalents and restricted cash

 

 

519

 

 

 

407

 

Cash and cash equivalents and restricted cash - beginning of period

 

 

36,225

 

 

 

30,666

 

Cash and cash equivalents and restricted cash - end of period

 

$

36,744

 

 

$

31,073

 

 

 

 

 

 

 

 

 

 

 

Cash and cash equivalents and restricted cash - beginning of period:

 

 

 

 

 

 

 

 

 

Cash and cash equivalents

 

$

22,163

 

 

$

18,152

 

Restricted cash

 

 

14,062

 

 

 

12,514

 

Total cash and cash equivalents and restricted cash - beginning of period

 

$

36,225

 

 

$

30,666

 

 

 

 

 

 

 

 

 

 

 

Cash and cash equivalents and restricted cash - end of period:

 

 

 

 

 

 

 

 

 

Cash and cash equivalents

 

$

20,254

 

 

$

16,342

 

Restricted cash

 

 

16,490

 

 

 

14,731

 

Total cash and cash equivalents and restricted cash - end of period

 

$

36,744

 

 

$

31,073

 

 

 

 

 

 

 

 

 

 

 

Supplemental cash flow information:

 

 

 

 

 

 

 

 

 

Cash paid for interest, net of capitalized interest of $2,097 and $2,382 in 2024 and 2023, respectively

 

$

21,232

 

 

$

21,099

 

Non-cash interest capitalized to real estate under development

 

 

1,132

 

 

 

27

 

Additions to investment in real estate included in accounts payable and accrued liabilities

 

 

10,070

 

 

 

3,527

 

Clipper Realty Inc.

Reconciliation of Non-GAAP Measures

(In thousands, except per share data)

(Unaudited)

Non-GAAP Financial Measures

We disclose and discuss funds from operations (“FFO”), adjusted funds from operations (“AFFO”), adjusted earnings before interest, income taxes, depreciation and amortization (“Adjusted EBITDA”) and net operating income (“NOI”), all of which meet the definition of “non-GAAP financial measures” set forth in Item 10(e) of Regulation S-K promulgated by the SEC.

While management and the investment community in general believe that presentation of these measures provides useful information to investors, neither FFO, AFFO, Adjusted EBITDA, nor NOI should be considered as an alternative to net income (loss) or income from operations as an indication of our performance. We believe that to understand our performance further, FFO, AFFO, Adjusted EBITDA, and NOI should be compared with our reported net income (loss) or income from operations and considered in addition to cash flows computed in accordance with GAAP, as presented in our consolidated financial statements.

Funds From Operations and Adjusted Funds From Operations

FFO is defined by the National Association of Real Estate Investment Trusts (“NAREIT”) as net income (computed in accordance with GAAP), excluding gains (or losses) from sales of property and impairment adjustments, plus depreciation and amortization, and after adjustments for unconsolidated partnerships and joint ventures. Our calculation of FFO is consistent with FFO as defined by NAREIT.

AFFO is defined by us as FFO excluding amortization of identifiable intangibles incurred in property acquisitions, straight-line rent adjustments to revenue from long-term leases, amortization costs incurred in originating debt, interest rate cap mark-to-market adjustments, amortization of non-cash equity compensation, acquisition and other costs, transaction pursuit costs, loss on modification/extinguishment of debt, gain on involuntary conversion, gain on termination of lease and non-recurring litigation-related expenses, less recurring capital spending.

Historical cost accounting for real estate assets implicitly assumes that the value of real estate assets diminishes predictably over time. In fact, real estate values have historically risen or fallen with market conditions. FFO is intended to be a standard supplemental measure of operating performance that excludes historical cost depreciation and valuation adjustments from net income. We consider FFO useful in evaluating potential property acquisitions and measuring operating performance. We further consider AFFO useful in determining funds available for payment of distributions. Neither FFO nor AFFO represent net income or cash flows from operations computed in accordance with GAAP. You should not consider FFO and AFFO to be alternatives to net income (loss) as reliable measures of our operating performance; nor should you consider FFO and AFFO to be alternatives to cash flows from operating, investing or financing activities (computed in accordance with GAAP) as measures of liquidity.

Neither FFO nor AFFO measure whether cash flow is sufficient to fund all of our cash needs, including loan principal amortization, capital improvements and distributions to stockholders. FFO and AFFO do not represent cash flows from operating, investing or financing activities computed in accordance with GAAP. Further, FFO and AFFO as disclosed by other REITs might not be comparable to our calculations of FFO and AFFO.

The following table sets forth a reconciliation of FFO and AFFO for the periods presented to net loss, computed in accordance with GAAP (amounts in thousands):

 

 

Three Months Ended June 30,

 

 

Six Months Ended June 30,

 

 

 

2024

 

 

2023

 

 

2024

 

 

2023

 

FFO

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net loss

 

$

(1,743

)

 

$

(3,295

)

 

$

(4,410

)

 

$

(10,384

)

Real estate depreciation and amortization

 

 

7,455

 

 

 

7,269

 

 

 

14,834

 

 

 

14,094

 

FFO

 

$

5,712

 

 

$

3,974

 

 

$

10,424

 

 

$

3,710

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

AFFO

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

FFO

 

$

5,712

 

 

$

3,974

 

 

$

10,424

 

 

$

3,710

 

Amortization of real estate tax intangible

 

 

120

 

 

 

121

 

 

 

241

 

 

 

241

 

Amortization of above- and below-market leases

 

 

-

 

 

 

(8

)

 

 

-

 

 

 

(17

)

Straight-line rent adjustments

 

 

38

 

 

 

32

 

 

 

87

 

 

 

27

 

Amortization of debt origination costs

 

 

530

 

 

 

362

 

 

 

1,061

 

 

 

675

 

Amortization of LTIP awards

 

 

713

 

 

 

783

 

 

 

1,274

 

 

 

1,431

 

Transaction pursuit costs

 

 

-

 

 

 

357

 

 

 

-

 

 

 

357

 

Loss on extinguishment of debt

 

 

-

 

 

 

-

 

 

 

-

 

 

 

3,868

 

Recurring capital spending

 

 

(61

)

 

 

(129

)

 

 

(134

)

 

 

(324

)

AFFO

 

$

7,052

 

 

$

5,492

 

 

$

12,953

 

 

$

9,968

 

AFFO Per Share/Unit

 

$

0.17

 

 

$

0.13

 

 

$

0.31

 

 

$

0.24

 

Adjusted Earnings Before Interest, Income Taxes, Depreciation and Amortization

We believe that Adjusted EBITDA is a useful measure of our operating performance. We define Adjusted EBITDA as net income (loss) before allocation to non-controlling interests, plus real estate depreciation and amortization, amortization of identifiable intangibles, straight-line rent adjustments to revenue from long-term leases, amortization of non-cash equity compensation, interest expense (net), acquisition and other costs, transaction pursuit costs, loss on modification/extinguishment of debt and non-recurring litigation-related expenses, less gain on involuntary conversion and gain on termination of lease.

We believe that this measure provides an operating perspective not immediately apparent from GAAP income from operations or net income (loss). We consider Adjusted EBITDA to be a meaningful financial measure of our core operating performance.

However, Adjusted EBITDA should only be used as an alternative measure of our financial performance. Further, other REITs may use different methodologies for calculating Adjusted EBITDA, and accordingly, our Adjusted EBITDA may not be comparable to that of other REITs.

The following table sets forth a reconciliation of Adjusted EBITDA for the periods presented to net loss, computed in accordance with GAAP (amounts in thousands):

 

 

Three Months Ended June 30,

 

 

Six Months Ended June 30,

 

 

 

2024

 

 

2023

 

 

2024

 

 

2023

 

Adjusted EBITDA

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net loss

 

$

(1,743

)

 

$

(3,295

)

 

$

(4,410

)

 

$

(10,384

)

Real estate depreciation and amortization

 

 

7,455

 

 

 

7,269

 

 

 

14,834

 

 

 

14,094

 

Amortization of real estate tax intangible

 

 

120

 

 

 

121

 

 

 

241

 

 

 

241

 

Amortization of above- and below-market leases

 

 

-

 

 

 

(8

)

 

 

-

 

 

 

(17

)

Straight-line rent adjustments

 

 

38

 

 

 

32

 

 

 

87

 

 

 

27

 

Amortization of LTIP awards

 

 

713

 

 

 

783

 

 

 

1,274

 

 

 

1,431

 

Interest expense, net

 

 

11,741

 

 

 

11,334

 

 

 

23,480

 

 

 

21,469

 

Transaction pursuit costs

 

 

-

 

 

 

357

 

 

 

-

 

 

 

357

 

Loss on extinguishment of debt

 

 

-

 

 

 

-

 

 

 

-

 

 

 

3,868

 

Adjusted EBITDA

 

$

18,324

 

 

$

16,592

 

 

$

35,506

 

 

$

31,085

 

Net Operating Income

We believe that NOI is a useful measure of our operating performance. We define NOI as income from operations plus real estate depreciation and amortization, general and administrative expenses, acquisition and other costs, transaction pursuit costs, amortization of identifiable intangibles and straight-line rent adjustments to revenue from long-term leases, less gain on termination of lease. We believe that this measure is widely recognized and provides an operating perspective not immediately apparent from GAAP income from operations or net income (loss). We use NOI to evaluate our performance because NOI allows us to evaluate the operating performance of our company by measuring the core operations of property performance and capturing trends in rental housing and property operating expenses. NOI is also a widely used metric in valuation of properties.

However, NOI should only be used as an alternative measure of our financial performance. Further, other REITs may use different methodologies for calculating NOI, and accordingly, our NOI may not be comparable to that of other REITs.

The following table sets forth a reconciliation of NOI for the periods presented to income from operations, computed in accordance with GAAP (amounts in thousands):

 

 

Three Months Ended June 30,

 

 

Six Months Ended June 30,

 

 

 

2024

 

 

2023

 

 

2024

 

 

2023

 

NOI

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Income from operations

 

$

9,998

 

 

$

8,039

 

 

$

19,070

 

 

$

14,953

 

Real estate depreciation and amortization

 

 

7,455

 

 

 

7,269

 

 

 

14,834

 

 

 

14,094

 

General and administrative expenses

 

 

3,459

 

 

 

3,396

 

 

 

7,010

 

 

 

6,689

 

Transaction pursuit costs

 

 

-

 

 

 

357

 

 

 

-

 

 

 

357

 

Amortization of real estate tax intangible

 

 

121

 

 

 

121

 

 

 

241

 

 

 

241

 

Amortization of above- and below-market leases

 

 

-

 

 

 

(8

)

 

 

-

 

 

 

(17

)

Straight-line rent adjustments

 

 

38

 

 

 

33

 

 

 

87

 

 

 

27

 

NOI

 

$

21,071

 

 

$

19,206

 

 

$

41,242

 

 

$

36,344

 

 

View source version on businesswire.com: https://www.businesswire.com/news/home/20240801180804/en/

Lawrence Kreider Chief Financial Officer (718) 438-2804 x2231 larry@clipperrealty.com