Clipper Realty Reports 10.2% Revenue Growth but Faces $35.1 Million Net Loss in Q1 2025

Clipper Realty Inc. reported its financial results for the first quarter of 2025, revealing total revenues of $39.4 million, a 10.2% increase from $35.8 million in the same period of 2024. The growth was primarily driven by a rise in residential rental income, which reached $29.2 million, up 11.8% from $26.1 million year-over-year. Commercial rental income also saw a modest increase, rising to $10.2 million from $9.7 million. However, the company experienced a significant net loss of $35.1 million, compared to a loss of $2.7 million in the prior year, largely due to a $33.8 million impairment charge related to the 10 West 65th Street property.

In terms of operational changes, Clipper Realty's total operating expenses surged to $63.0 million, a 136% increase from $26.7 million in the previous year. This rise was attributed to various factors, including higher property operating expenses, real estate taxes, and the aforementioned impairment charge. The company reported a notable increase in property operating expenses, which rose to $10.1 million from $8.6 million, driven by higher payroll and utility costs at its Flatbush Gardens property.

Clipper Realty's strategic developments included the ongoing negotiations for a five-year lease extension with the City of New York for its 141 Livingston Street property, which is set to expire in December 2025. The company is also actively seeking to replace the City of New York as a tenant at its 250 Livingston Street property, where the lease is set to terminate in August 2025. The company’s portfolio remains concentrated in New York City, with properties primarily located in Manhattan and Brooklyn, which exposes it to specific economic risks.

As of March 31, 2025, Clipper Realty's total assets were valued at $1.26 billion, a slight decrease from $1.29 billion at the end of 2024. The company reported $21.3 million in cash and cash equivalents, alongside $17.8 million in restricted cash. The total liabilities increased to $1.31 billion, up from $1.30 billion, primarily due to the ongoing management of its debt obligations. The company’s outlook remains cautious, with management highlighting the potential impact of inflation and market conditions on future operations, particularly regarding occupancy levels and rental rates. Clipper Realty continues to focus on optimizing its property management and exploring opportunities for growth within its existing portfolio.