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 December 31, 2023.

Highlights for the Three Months Ended December 31, 2023

• Quarterly revenues of $34.9 million for the fourth quarter of 2023
• Quarterly income from operations of $9.0 million for the fourth quarter of 2023
• Net operating income (“NOI”)1 of $20.0 million for the fourth quarter of 2023
• Quarterly net loss of $2.9 million for the fourth quarter of 2023
• Record adjusted funds from operations (“AFFO”)1 of $6.3 million for the fourth quarter of 2023
• Declared a dividend of $0.095 per share for the fourth quarter of 2023

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

“The fourth quarter of 2023 for the Company has continued to produce solid results after recent record-breaking quarters, with AFFO continuing to increase. We continue to have high occupancy and rents in our buildings with good renter demand for our product. For all our properties, new leases continue to rent at more than 7% over previous rents and renewals at almost 6%. At our Dean Street new development, we have completed the building superstructure ahead of schedule, and are working to an on-time completion next year to capture the 2025 leasing season. At Flatbush Gardens, under the new Article 11 transaction, we continue to make progress in working with various New York City housing agencies to collect enhanced rental recoveries under Section 610 as we undertake the committed capital improvements. At our 250 Livingston St property, we recently announced that NYC will exercise their option to terminate their lease in late August 2025 as they had previously said they might do. While we believe re-leasing the 250 Livingston Street space is a challenge in the short term, and, indeed, we are actively pursuing opportunities at the moment, we believe the benefits we will get from Flatbush Gardens, the 1010 Pacific Street development now completed, the Dean Street development once completed, and our other buildings set us up for strong performance in the future.”

Financial Results for the Three Months Ended December 31, 2023

For the fourth quarter of 2023, revenues increased by $1.9 million, or 5.6%, to $34.9 million and $0.7 million, or 2.1% excluding revenue from Pacific House. This compares to revenue of $33.0 million during the fourth quarter of 2022. Residential revenue increased by $2.1 million, or 9.3%, and $1.0 million, or 4.2%, excluding revenue from Pacific House in the fourth quarter of 2023; driven by higher rental rates at all our residential properties. Commercial income decreased $0.3 million, or 3.0%, in the fourth quarter of 2023 due to a small number of commercial leases that expired during 2023.

For the fourth quarter of 2023, net loss was $2.9 million, or $0.09 per share or $1.8 million, or $0.06 per share excluding the net loss attributable to Pacific House operations, compared to net loss of $3.4 million, or $0.10 per share, for the fourth quarter of 2022. The adjusted change was primarily attributable to increased rental revenue discussed above and lower real estate taxes due to the Flatbush Gardens Article 11 transaction entered at the end of the second quarter, net of higher insurance, depreciation and interest expense.

For the fourth quarter of 2023, AFFO was $6.3 million, or $0.15 per share, or $6.6 million or $0.16 per share excluding the impact of Pacific House, compared to $4.7 million, or $0.11 per share, for the fourth quarter of 2022. The adjusted change was primarily attributable to increased rental revenue discussed above and lower real estate taxes due to the Flatbush Gardens Article 11 transaction entered at the end of the second quarter, net of higher insurance and interest expense.

__________ 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 December 31, 2023, notes payable (excluding unamortized loan costs) was $1,219.0 million, compared to $1,171.2 million at December 31, 2022. The increase was primarily due to the permanent financing on the Pacific House loan entered in 2023 and draws made on Dean Street development in the fourth quarter of 2023.

Dividend

The Company today declared a fourth quarter dividend of $0.095 per share, the same amount as last quarter, to shareholders of record on March 27, 2024, payable April 4, 2024.

Conference Call and Supplemental Material

The Company will host a conference call on March 14, 2024, at 5:00 PM Eastern Time to discuss the fourth quarter 2023 results and provide a business update. The conference call can be accessed by dialing (800) 346-7359 or (973) 528-0008, conference entry code 300245. A replay of the call will be available from March 14, 2024, following the call, through March 28, 2024, by dialing (800) 332-6854 or (973) 528-0005, replay conference ID 300245. 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)

 

 

December 31, 2023

 

 

December 31, 2022

 

 

 

 

 

 

 

 

 

 

ASSETS

 

 

 

 

 

 

 

 

Investment in real estate

 

 

 

 

 

 

 

 

Land and improvements

 

$

571,988

 

 

$

540,859

 

Building and improvements

 

 

726,273

 

 

 

656,460

 

Tenant improvements

 

 

3,366

 

 

 

3,406

 

Furniture, fixtures and equipment

 

 

13,278

 

 

 

12,878

 

Real estate under development

 

 

87,285

 

 

 

142,287

 

Total investment in real estate

 

 

1,402,190

 

 

 

1,355,890

 

Accumulated depreciation

 

 

(213,606

)

 

 

(184,781

)

Investment in real estate, net

 

 

1,188,584

 

 

 

1,171,109

 

 

 

 

 

 

 

 

 

 

Cash and cash equivalents

 

 

22,163

 

 

 

18,152

 

Restricted cash

 

 

14,062

 

 

 

12,514

 

Tenant and other receivables, net of allowance for doubtful accounts of $234 and $321, respectively

 

 

5,181

 

 

 

5,005

 

Deferred rent

 

 

2,359

 

 

 

2,573

 

Deferred costs and intangible assets, net

 

 

6,127

 

 

 

6,624

 

Prepaid expenses and other assets

 

 

10,854

 

 

 

13,654

 

TOTAL ASSETS

 

$

1,249,330

 

 

$

1,229,631

 

 

 

 

 

 

 

 

 

 

LIABILITIES AND EQUITY

 

 

 

 

 

 

 

 

Liabilities:

 

 

 

 

 

 

 

 

Notes payable, net of unamortized loan costs of $13,405 and $9,650, respectively

 

$

1,205,624

 

 

$

1,161,588

 

Accounts payable and accrued liabilities

 

 

20,994

 

 

 

17,094

 

Security deposits

 

 

8,765

 

 

 

7,940

 

Below-market leases, net

 

 

-

 

 

 

18

 

Other liabilities

 

 

6,712

 

 

 

5,812

 

TOTAL LIABILITIES

 

 

1,242,095

 

 

 

1,192,452

 

 

 

 

 

 

 

 

 

 

Equity:

 

 

 

 

 

 

 

 

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, 16,063,228 shares issued and outstanding

 

 

160

 

 

 

160

 

Additional paid-in-capital

 

 

89,483

 

 

 

88,829

 

Accumulated deficit

 

 

(86,899

)

 

 

(74,895

)

Total stockholders' equity

 

 

2,744

 

 

 

14,094

 

 

 

 

 

 

 

 

 

 

Non-controlling interests

 

 

4,491

 

 

 

23,085

 

TOTAL EQUITY

 

 

7,235

 

 

 

37,179

 

 

 

 

 

 

 

 

 

 

TOTAL LIABILITIES AND EQUITY

 

$

1,249,330

 

 

$

1,229,631

 

 

Clipper Realty Inc.

Consolidated Statements of Operations

(In thousands, except per share data)

 

 

Three Months Ended December 31,

 

 

Year Ended December 31,

 

 

 

2023

 

 

2022

 

 

2023

 

 

2022

 

 

 

(unaudited)

 

 

(unaudited)

 

 

 

 

 

 

 

 

 

REVENUES

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Residential rental income

 

$

25,235

 

 

$

23,095

 

 

$

99,716

 

 

$

90,262

 

Commercial rental income

 

 

9,632

 

 

 

9,914

 

 

 

38,489

 

 

 

39,484

 

TOTAL REVENUES

 

 

34,867

 

 

 

33,009

 

 

 

138,205

 

 

 

129,746

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

OPERATING EXPENSES

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Property operating expenses

 

 

7,808

 

 

 

7,572

 

 

 

30,619

 

 

 

29,306

 

Real estate taxes and insurance

 

 

7,341

 

 

 

8,492

 

 

 

31,951

 

 

 

32,561

 

General and administrative

 

 

3,140

 

 

 

3,404

 

 

 

13,169

 

 

 

12,752

 

Transaction pursuit costs

 

 

-

 

 

 

-

 

 

 

357

 

 

 

506

 

Depreciation and amortization

 

 

7,563

 

 

 

6,764

 

 

 

28,939

 

 

 

26,985

 

TOTAL OPERATING EXPENSES

 

 

25,852

 

 

 

26,232

 

 

 

105,035

 

 

 

102,110

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

INCOME FROM OPERATIONS

 

 

9,015

 

 

 

6,777

 

 

 

33,170

 

 

 

27,636

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest expense, net

 

 

(11,871

)

 

 

(10,131

)

 

 

(44,867

)

 

 

(40,207

)

Loss on extinguishment of debt

 

 

-

 

 

 

-

 

 

 

(3,868

)

 

 

-

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net loss

 

 

(2,856

)

 

 

(3,354

)

 

 

(15,565

)

 

 

(12,571

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net loss attributable to non-controlling interests

 

 

1,773

 

 

 

2,084

 

 

 

9,665

 

 

 

7,807

 

Net loss attributable to common stockholders

 

$

(1,083

)

 

$

(1,270

)

 

$

(5,900

)

 

$

(4,764

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic and diluted net loss per share

 

$

(0.09

)

 

$

(0.10

)

 

$

(0.45

)

 

$

(0.36

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Weighted average common shares / OP units

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Common shares outstanding

 

 

16,063

 

 

 

16,063

 

 

 

16,063

 

 

 

16,063

 

OP units outstanding

 

 

26,317

 

 

 

26,317

 

 

 

26,317

 

 

 

26,317

 

Diluted shares outstanding

 

 

42,380

 

 

 

42,380

 

 

 

42,380

 

 

 

42,380

 

 

Clipper Realty Inc.

Consolidated Statements of Cash Flows

(In thousands)

 

 

Year Ended December 31,

 

 

 

2023

 

 

2022

 

CASH FLOWS FROM OPERATING ACTIVITIES

 

 

 

 

 

 

 

 

Net loss

 

$

(15,565

)

 

$

(12,571

)

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

 

 

 

 

 

 

 

 

Depreciation

 

 

28,825

 

 

 

26,779

 

Amortization of deferred financing costs

 

 

1,705

 

 

 

1,252

 

Amortization of deferred costs and intangible assets

 

 

595

 

 

 

687

 

Amortization of above- and below-market leases

 

 

(18

)

 

 

(35

)

Loss on extinguishment of debt

 

 

3,868

 

 

 

-

 

Deferred rent

 

 

214

 

 

 

(163

)

Stock-based compensation

 

 

3,015

 

 

 

2,920

 

Bad debt expense

 

 

(87

)

 

 

(236

)

Changes in operating assets and liabilities:

 

 

 

 

 

 

 

 

Tenant and other receivables

 

 

(86

)

 

 

(310

)

Prepaid expenses, other assets and deferred costs

 

 

2,701

 

 

 

(214

)

Accounts payable and accrued liabilities

 

 

(707

)

 

 

1,222

 

Security deposits

 

 

825

 

 

 

830

 

Other liabilities

 

 

900

 

 

 

(22

)

Net cash provided by operating activities

 

 

26,185

 

 

 

20,139

 

 

 

 

 

 

 

 

 

 

CASH FLOWS FROM INVESTING ACTIVITIES

 

 

 

 

 

 

 

 

Additions to land, buildings and improvements

 

 

(41,357

)

 

 

(45,450

)

Acquisition deposit

 

 

-

 

 

 

2,015

 

Cash paid in connection with acquisition of real estate

 

 

-

 

 

 

(8,041

)

Net cash used in investing activities

 

 

(41,357

)

 

 

(51,476

)

 

 

 

 

 

 

 

 

 

CASH FLOWS FROM FINANCING ACTIVITIES

 

 

 

 

 

 

 

 

Payments of mortgage notes

 

 

(84,728

)

 

 

(2,191

)

Proceeds from mortgage notes

 

 

132,519

 

 

 

29,378

 

Dividends and distributions

 

 

(17,394

)

 

 

(17,073

)

Loan issuance and extinguishment costs

 

 

(9,666

)

 

 

(335

)

Net cash provided by financing activities

 

 

20,731

 

 

 

9,779

 

 

 

 

 

 

 

 

 

 

Net increase (decrease) in cash and cash equivalents and restricted cash

 

 

5,559

 

 

 

(21,558

)

Cash and cash equivalents and restricted cash - beginning of period

 

 

30,666

 

 

 

52,224

 

Cash and cash equivalents and restricted cash - end of period

 

$

36,225

 

 

$

30,666

 

 

 

 

 

 

 

 

 

 

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

 

 

 

 

 

 

 

 

Cash and cash equivalents

 

$

18,152

 

 

$

34,524

 

Restricted cash

 

 

12,514

 

 

 

17,700

 

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

 

$

30,666

 

 

$

52,224

 

 

 

 

 

 

 

 

 

 

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

 

 

 

 

 

 

 

 

Cash and cash equivalents

 

$

22,163

 

 

$

18,152

 

Restricted cash

 

 

14,062

 

 

 

12,514

 

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

 

$

36,225

 

 

$

30,666

 

 

 

 

 

 

 

 

 

 

Supplemental cash flow information:

 

 

 

 

 

 

 

 

Cash paid for interest, net of capitalized interest of $5,508 and $2,069 in 2023 and 2022, respectively

 

$

45,323

 

 

$

38,989

 

Non-cash interest capitalized to real estate under development

 

 

339

 

 

 

2,331

 

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

 

 

9,484

 

 

 

4,882

 

 

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 December 31,

 

 

Year Ended December 31,

 

 

 

2023

 

 

2022

 

 

2023

 

 

2022

 

FFO

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net loss

 

$

(2,856

)

 

$

(3,354

)

 

$

(15,565

)

 

$

(12,571

)

Real estate depreciation and amortization

 

 

7,563

 

 

 

6,764

 

 

 

28,939

 

 

 

26,985

 

FFO

 

$

4,707

 

 

$

3,410

 

 

$

13,374

 

 

$

14,414

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

AFFO

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

FFO

 

$

4,707

 

 

$

3,410

 

 

$

13,374

 

 

$

14,414

 

Amortization of real estate tax intangible

 

 

120

 

 

 

121

 

 

 

481

 

 

 

481

 

Amortization of above- and below-market leases

 

 

-

 

 

 

(9

)

 

 

(18

)

 

 

(35

)

Straight-line rent adjustments

 

 

148

 

 

 

57

 

 

 

214

 

 

 

(163

)

Amortization of debt origination costs

 

 

607

 

 

 

313

 

 

 

1,705

 

 

 

1,252

 

Amortization of LTIP awards

 

 

801

 

 

 

856

 

 

 

3,015

 

 

 

2,920

 

Transaction pursuit costs

 

 

-

 

 

 

-

 

 

 

357

 

 

 

506

 

Loss on extinguishment of debt

 

 

-

 

 

 

-

 

 

 

3,868

 

 

 

-

 

Certain litigation-related expenses

 

 

-

 

 

 

-

 

 

 

(10

)

 

 

188

 

Recurring capital spending

 

 

(61

)

 

 

(50

)

 

 

(436

)

 

 

(326

)

AFFO

 

$

6,322

 

 

$

4,698

 

 

$

22,550

 

 

$

19,237

 

AFFO Per Share/Unit

 

$

0.15

 

 

$

0.11

 

 

$

0.53

 

 

$

0.45

 

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 December 31,

 

 

Year Ended December 31,

 

 

 

2023

 

 

2022

 

 

2023

 

 

2022

 

Adjusted EBITDA

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net loss

 

$

(2,856

)

 

$

(3,354

)

 

$

(15,565

)

 

$

(12,571

)

Real estate depreciation and amortization

 

 

7,563

 

 

 

6,764

 

 

 

28,939

 

 

 

26,985

 

Amortization of real estate tax intangible

 

 

120

 

 

 

121

 

 

 

481

 

 

 

481

 

Amortization of above- and below-market leases

 

 

-

 

 

 

(9

)

 

 

(18

)

 

 

(35

)

Straight-line rent adjustments

 

 

148

 

 

 

57

 

 

 

214

 

 

 

(163

)

Amortization of LTIP awards

 

 

801

 

 

 

856

 

 

 

3,015

 

 

 

2,920

 

Interest expense, net

 

 

11,871

 

 

 

10,131

 

 

 

44,867

 

 

 

40,207

 

Transaction pursuit costs

 

 

-

 

 

 

-

 

 

 

357

 

 

 

506

 

Loss on extinguishment of debt

 

 

-

 

 

 

-

 

 

 

3,868

 

 

 

-

 

Certain litigation-related expenses

 

 

-

 

 

 

-

 

 

 

(10

)

 

 

188

 

Adjusted EBITDA

 

$

17,647

 

 

$

14,566

 

 

$

66,148

 

 

$

58,518

 

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 December 31,

 

 

Year Ended December 31,

 

 

 

2023

 

 

2022

 

 

2023

 

 

2022

 

NOI

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Income from operations

 

$

9,015

 

 

$

6,777

 

 

$

33,170

 

 

$

27,636

 

Real estate depreciation and amortization

 

 

7,563

 

 

 

6,764

 

 

 

28,939

 

 

 

26,985

 

General and administrative expenses

 

 

3,140

 

 

 

3,404

 

 

 

13,169

 

 

 

12,752

 

Transaction pursuit costs

 

 

-

 

 

 

-

 

 

 

357

 

 

 

506

 

Amortization of real estate tax intangible

 

 

120

 

 

 

121

 

 

 

481

 

 

 

481

 

Amortization of above- and below-market leases

 

 

-

 

 

 

(9

)

 

 

(18

)

 

 

(35

)

Straight-line rent adjustments

 

 

148

 

 

 

57

 

 

 

214

 

 

 

(163

)

NOI

 

$

19,986

 

 

$

17,114

 

 

$

76,312

 

 

$

68,162

 

 

View source version on businesswire.com: https://www.businesswire.com/news/home/20240314920149/en/

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