clpr20260331

clpr20260331_10q.htm

UNITED STATES SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

☒	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended March 31, 2026

☐	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to

Commission File Number: 001-38010

CLIPPER REALTY INC.

(Exact name of Registrant as specified in its charter)

Maryland

47-4579660

(State or other jurisdiction of incorporation or

organization)

(I.R.S. Employer Identification No.)

4611 12th Avenue, Suite 1L

Brooklyn, New York 11219

(Address of principal executive offices) (Zip Code)

(718) 438-2804

(Registrant's telephone number, including area code)

Not applicable

(Former name, former address and former fiscal year, if changed since last report)

Securities registered pursuant to Section 12(b) of the Act:

Title of each class	Trading Symbol	Name of each exchange on which registered
Common Stock, par value $0.01 per share	CLPR	New York Stock Exchange

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer ☐	Accelerated filer ☐
Non-accelerated filer ☒	Smaller reporting company ☒
	Emerging growth company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

As of May 14, 2026, there were 16,157,566 shares of the Registrant’s Common Stock outstanding.

TABLE OF CONTENTS

		Page
CAUTIONARY NOTE CONCERNING FORWARD-LOOKING STATEMENTS		2

PART I – FINANCIAL INFORMATION

ITEM 1.	CONDENSED FINANCIAL STATEMENTS
	CONSOLIDATED BALANCE SHEETS AS OF MARCH 31, 2026 (UNAUDITED) AND MARCH 31, 2025	3
	CONSOLIDATED STATEMENTS OF OPERATIONS FOR THE THREE MONTHS ENDED MARCH 31, 2026 AND 2025 (UNAUDITED)	4
	CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY FOR THE THREE MONTHS ENDED MARCH 31, 2026 AND 2025 (UNAUDITED)	5
	CONSOLIDATED STATEMENTS OF CASH FLOWS FOR THE THREE MONTHS ENDED MARCH 31, 2026 AND 2025 (UNAUDITED)	6
	NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)	7
ITEM 2.	MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS	25
ITEM 3.	QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK	33
ITEM 4.	CONTROLS AND PROCEDURES	33


PART II – OTHER INFORMATION

ITEM 1.	LEGAL PROCEEDINGS	33
ITEM 1A.	RISK FACTORS	34
ITEM 2.	UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS	36
ITEM 3.	DEFAULTS UPON SENIOR SECURITIES	36
ITEM 4.	MINE SAFETY DISCLOSURES	36
ITEM 5.	OTHER INFORMATION	36
ITEM 6.	EXHIBITS	36
SIGNATURES		37

CAUTIONARY NOTE CONCERNING FORWARD-LOOKING STATEMENTS

All statements other than statements of historical fact included in this Quarterly Report on Form 10-Q for Clipper Realty Inc. (the “Company”), including, without limitation, statements under “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” regarding the Company’s financial position, business strategy and the plans, objectives, expectations, or assumptions of management for future operations, are forward-looking statements. When used in this Quarterly Report on Form 10-Q, words such as “may,” “will,” “should,” “could,” “expect,” “anticipate,” “believe,” “estimate,” “project,” “predict,” “believe,” “expect,” “intend,” “continue,” “potential,” “plan,” “goal” or other words that convey the uncertainty of future events or outcomes are intended to identify forward-looking statements, which are generally not historical in nature. These statements involve risks and uncertainties that could cause actual results to differ materially from those described in such statements. These risks, contingencies and uncertainties include, but are not limited to, the following:

	●	our dependency on two commercial leases with certain agencies of the City of New York, as a single government tenant in our office buildings, and our inability to replace the City of New York as a tenant could cause a material adverse effect on us, including our financial condition, results of operations and cash flow, with one lease having terminated effective August 23, 2025 and the other lease having expired on December 27, 2025;

	●	the impact of the increase in inflation in the United States which could increase the cost of acquiring, replacing and operating our properties;

	●	market and economic conditions, affecting occupancy levels, rental rates, the overall market value of our properties, our access to capital and the cost of capital, and our ability to refinance indebtedness;

	●	economic or regulatory developments in New York City;

	●	changes in rent stabilization regulations or claims by tenants in rent-stabilized units that their rents exceed specified maximum amounts under current regulations;

	●	our ability to control operating costs to the degree anticipated;

	●	the risk of damage to our properties, including from severe weather, natural disasters, climate change, and terrorist attacks;

	●	risks related to financing, cost overruns, and fluctuations in occupancy rates and rents resulting from development or redevelopment activities and the risk that we may not be able to pursue or complete development or redevelopment activities or that such development or redevelopment activities may not be profitable;

	●	concessions or significant capital expenditures that may be required to attract and retain tenants;

	●	the relative illiquidity of real estate investments;

	●	competition affecting our ability to engage in investment and development opportunities or attract or retain tenants;

	●	unknown or contingent liabilities in properties acquired in formative and future transactions;

	●	the possible effects of departure of key personnel in our management team on our investment opportunities and relationships with lenders and prospective business partners;

	●	conflicts of interest faced by members of management relating to the acquisition of assets and the development of properties, which may not be resolved in our favor;

	●	a transfer of a controlling interest in any of our properties that may obligate us to pay transfer tax based on the fair market value of the real property transferred;

	●	the need to establish litigation reserves, costs to defend litigation and unfavorable litigation settlements or judgments; and

	●	other risks and risk factors or uncertainties identified from time to time in our filings with the SEC.

These forward-looking statements speak only as of the date of this report, and the Company undertakes no obligation to revise or update these statements to reflect subsequent events or circumstances.

PART I – FINANCIAL INFORMATION

ITEM 1. CONDENSED FINANCIAL STATEMENTS

Clipper Realty Inc.

Consolidated Balance Sheets

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

	March 31, 2026			December 31, 2025
	(unaudited)
ASSETS
Investment in real estate
Land and improvements	$	559,419		$	559,419
Building and improvements		838,742			836,437
Tenant improvements		6,386			6,386
Furniture, fixtures and equipment		13,782			13,684
Total investment in real estate		1,418,329			1,415,926
Accumulated depreciation		(274,922	)		(266,976	)
Investment in real estate, net		1,143,407			1,148,950
Cash and cash equivalents		26,083			30,815
Restricted cash		28,568			27,339
Tenant and other receivables, net of allowance for doubtful accounts of $292 and $317, respectively		7,599			8,676
Deferred rent		2,264			2,067
Deferred costs and intangible assets, net		5,234			5,326
Prepaid expenses and other assets		12,841			11,146
TOTAL ASSETS	$	1,225,996		$	1,234,319

LIABILITIES AND EQUITY (DEFICIT)
Liabilities:
Notes payable, net of unamortized loan costs of $7,843 and $8,712, respectively	$	1,277,956		$	1,277,521
Accounts payable and accrued liabilities		22,460			18,092
Security deposits		9,692			9,519
Other liabilities		11,412			9,941
TOTAL LIABILITIES		1,321,520			1,315,073
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, 16,157,566 and 16,146,546 shares issued and outstanding, at March 31, 2026, and December 31, 2025, respectively		160			160
Additional paid-in-capital		90,819			90,677
Accumulated deficit		(127,316	)		(121,543	)
Total stockholders’ equity (deficit)		(36,337	)		(30,706	)
Non-controlling interests		(59,187	)		(50,048	)
TOTAL EQUITY (DEFICIT)		(95,524	)		(80,754	)
TOTAL LIABILITIES AND EQUITY (DEFICIT)	$	1,225,996		$	1,234,319

See accompanying notes to these consolidated financial statements.

Clipper Realty Inc.

Consolidated Statements of Operations

(In thousands, except per share data)

(Unaudited)

	Three Months Ended March 31,
	2026			2025
REVENUE
Residential rental income	$	31,904		$	29,190
Commercial rental income		6,211			10,208
TOTAL REVENUES		38,115			39,398

OPERATING EXPENSES
Property operating expenses		10,330			10,111
Real estate taxes and insurance		7,697			7,627
General and administrative		4,107			3,825
Depreciation and amortization		7,979			7,636
Loss on impairment of Long-Lived Assets		-			33,780
TOTAL OPERATING EXPENSES		30,113			62,979

Litigation settlement and other		(3,600	)		-

INCOME (LOSS) FROM OPERATIONS		4,402			(23,581	)

Interest expense, net		(15,546	)		(11,522	)

Net loss		(11,144	)		(35,103	)

Net loss attributable to non-controlling interests		6,906			21,756
Net loss attributable to common stockholders	$	(4,238	)	$	(13,347	)

Basic and diluted net loss per share	$	(0.30	)	$	(0.86	)

See accompanying notes to these consolidated financial statements.

Clipper Realty Inc.

Consolidated Statements of Changes in Equity

(In thousands, except for share data)

(Unaudited)

	Number of common shares		Common stock		Additional paid-in- capital		Accumulated deficit			Total stockholders’ equity			Non- controlling interests			Total equity
Balance December 31, 2025		16,146,546	$	160	$	90,677	$	(121,543	)	$	(30,706	)	$	(50,048	)	$	(80,754	)
Amortization of LTIP grants		—		—		—		—			—			1,086			1,086
Redemption of LTIP grants		11,020		—		—		—			—			—			—
Dividends and distributions		—		—		—		(1,535	)		(1,535	)		(3,177	)		(4,712	)
Net loss		—		—		—		(4,238	)		(4,238	)		(6,906	)		(11,144	)
Reallocation of noncontrolling interests		—		—		142		—			142			(142	)		—
Balance March 31, 2026		16,157,566	$	160	$	90,819	$	(127,316	)	$	(36,337	)	$	(59,187	)	$	(95,524	)

	Number of common shares		Common stock		Additional paid-in- capital		Accumulated deficit			Total stockholders’ equity			Non- controlling interests			Total equity
Balance December 31, 2024		16,146,546	$	160	$	89,938	$	(95,507	)	$	(5,409	)	$	(8,821	)	$	(14,230	)
Amortization of LTIP grants		—		—		—		—			—			1,143			1,143
Dividends and distributions		—		—		—		(1,534	)		(1,534	)		(3,080	)		(4,614	)
Net loss		—		—		—		(13,347	)		(13,347	)		(21,756	)		(35,103	)
Reallocation of noncontrolling interests		—		—		214		—			214			(214	)		—
Balance March 31, 2025		16,146,546	$	160	$	90,152	$	(110,388	)	$	(20,076	)	$	(32,728	)	$	(52,804	)

See accompanying notes to these consolidated financial statements.

Clipper Realty Inc.

Consolidated Statements of Cash Flows

(In thousands)

(Unaudited)

	Three Months Ended March 31,
	2026			2025
CASH FLOWS FROM OPERATING ACTIVITIES
Net loss	$	(11,144	)	$	(35,103	)
Adjustments to reconcile net loss to net cash provided by operating activities:
Depreciation		7,944			7,611
Amortization of deferred financing costs		869			457
Amortization of deferred costs and intangible assets		155			146
Loss on Impairment of long-lived assets		-			33,780
Deferred rent		(197	)		22
Stock-based compensation		1,086			1,143
Bad debt (recovery) expense		(13	)		(13	)
Changes in operating assets and liabilities:
Tenant and other receivables		795			(693	)
Prepaid expenses, other assets and deferred costs		(1,463	)		(2,149	)
Accounts payable and accrued liabilities		3,892			297
Security deposits		173			64
Other liabilities		1,471			1,114
Net cash provided by operating activities		3,568			6,676

CASH FLOWS FROM INVESTING ACTIVITIES
Additions to land, buildings, and improvements		(1,925	)		(9,680	)
Net cash provided (used) in investing activities		(1,925	)		(9,680	)

CASH FLOWS FROM FINANCING ACTIVITIES
Payments of mortgage notes		(434	)		(578	)
Proceeds from mortgage notes		-

SEC Form 10-Q filed by Clipper Realty Inc.