What changed in Clipper Realty Inc.'s 10-K — 2024 vs 2025
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Paragraph-level year-over-year comparison of Clipper Realty Inc.'s 2024 and 2025 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2025 report.
+367 added−262 removedSource: 10-K (2026-02-26) vs 10-K (2025-02-14)
Top changes in Clipper Realty Inc.'s 2025 10-K
367 paragraphs added · 262 removed · 190 edited across 6 sections
- Item 7. Management's Discussion & Analysis+143 / −106 · 73 edited
- Item 1A. Risk Factors+123 / −81 · 70 edited
- Item 2. Properties+84 / −57 · 34 edited
- Item 1. Business+13 / −14 · 9 edited
- Item 5. Market for Registrant's Common Equity+2 / −2 · 2 edited
Item 1. Business
Business — how the company describes what it does
9 edited+4 added−5 removed44 unchanged
Item 1. Business
Business — how the company describes what it does
9 edited+4 added−5 removed44 unchanged
2024 filing
2025 filing
Biggest changeCompetitive Strengths We believe that the following competitive strengths distinguish us from other owners and operators of multifamily residential and commercial properties: ● Diverse portfolio of properties in the New York metropolitan area, which is characterized by supply constraints, high barriers to entry, near- and long-term prospects for job creation, vacancy absorption and long-term rental rate growth. ● Expertise in redeveloping and managing multifamily residential properties. ● Experienced management team with a proven track record over generations in New York real estate. 6 ● Balance sheet well-positioned for future growth. ● Strong internal rent growth prospects.
Biggest changeCompetitive Strengths We believe that the following competitive strengths distinguish us from other owners and operators of multifamily residential and commercial properties: ● Diverse portfolio of properties in the New York metropolitan area, which is characterized by supply constraints, high barriers to entry, near- and long-term prospects for job creation, vacancy absorption and long-term rental rate growth. ● Expertise in redeveloping and managing multifamily residential properties. ● Experienced management team with a proven track record over generations in New York real estate. ● Balance sheet well-positioned for future growth. ● Strong internal rent growth prospects. 6 Regulation Environmental and Related Matters Under various federal, state and local laws, ordinances and regulations, as a current or former owner and operator of real property, we may be liable for costs and damages resulting from the presence or release of hazardous substances (such as lead, asbestos and polychlorinated biphenyls), waste, petroleum products and other miscellaneous products (including but not limited to natural products such as methane and radon gas) at, on, in, under or from such property, including costs for investigation or remediation, natural resource damages or third-party liability for personal injury or property damage.
Our buildings are also subject to certain New York City environmental regulations which require us to meet certain environmental criteria over various periods of time. 7 Environmental Social and Governance The health and safety of the Company’s employees and their families remains a top priority, along with the health and safety of the Company’s tenants and the communities they serve.
Our buildings are also subject to certain New York City environmental regulations which require us to meet certain environmental criteria over various periods of time. 7 The health and safety of the Company’s employees and their families remains a top priority, along with the health and safety of the Company’s tenants and the communities they serve.
We expect competition from other real estate investors, including other REITs, private real estate funds, domestic and foreign financial institutions, life insurance companies, pension trusts, partnerships, individual investors and others, that may have greater financial resources or access to capital than we do or that are willing to acquire properties in transactions which are more highly leveraged or are less attractive from a financial viewpoint than we are willing to pursue. 8 Human Capital Resources As of December 31, 2024, we had 171 employees who provide property management, maintenance, landscaping, construction management and accounting services.
We expect competition from other real estate investors, including other REITs, private real estate funds, domestic and foreign financial institutions, life insurance companies, pension trusts, partnerships, individual investors and others, that may have greater financial resources or access to capital than we do or that are willing to acquire properties in transactions which are more highly leveraged or are less attractive from a financial viewpoint than we are willing to pursue. 8 Human Capital Resources As of December 31, 2025, we had 161 employees who provide property management, maintenance, landscaping, construction management and accounting services.
As of December 31, 2024, the properties owned by the Company consisted of the following: • Tribeca House in Manhattan, comprising two buildings, one with 21 stories and one with 12 stories, containing residential and retail space with an aggregate of approximately 483,000 square feet of residential rental Gross Leasable Area ("GLA”) and 77,000 square feet of retail rental and parking GLA; • Flatbush Gardens in Brooklyn, a 59-building residential housing complex with 2,494 rentable units and approximately 1,749,000 square feet of residential rental GLA; • 141 Livingston Street in Brooklyn, a 15-story office building with approximately 216,000 square feet of GLA; • 250 Livingston Street in Brooklyn, a 12-story office and residential building with approximately 370,000 square feet of GLA (fully remeasured); • Aspen in Manhattan, a 7-story building containing residential and retail space with approximately 166,000 square feet of residential rental GLA and approximately 21,000 square feet of retail rental GLA; • Clover House in Brooklyn, a 11-story residential building with approximately 102,000 square feet of residential rental GLA; • 10 West 65th Street in Manhattan, a 6-story residential building with approximately 76,000 square feet of residential rental GLA; • 1010 Pacific Street in Brooklyn, a 9-story residential building with approximately 119,000 square feet of residential rental GLA; and • The Dean Street property in Brooklyn, which the Company plans to redevelop as a 9-story residential building with approximately 160,000 square feet of residential rental GLA and approximately 9,000 square feet of retail rental GLA.
As of December 31, 2025, the properties owned by the Company consisted of the following: • Tribeca House in Manhattan, comprising two buildings, one with 21 stories and one with 12 stories, containing residential and retail space with an aggregate of approximately 483,000 square feet of residential rental Gross Leasable Area ("GLA”) and 77,000 square feet of retail rental and parking GLA; • Flatbush Gardens in Brooklyn, a 59-building residential housing complex with 2,494 rentable units and approximately 1,749,000 square feet of residential rental GLA; • 141 Livingston Street in Brooklyn, a 15-story office building with approximately 216,000 square feet of GLA; • 250 Livingston Street in Brooklyn, a 12-story office and residential building with approximately 370,000 square feet of GLA (fully remeasured); • Aspen in Manhattan, a 7-story building containing residential and retail space with approximately 166,000 square feet of residential rental GLA and approximately 21,000 square feet of retail rental GLA; • Clover House in Brooklyn, an 11-story residential building with approximately 102,000 square feet of residential rental GLA; • 1010 Pacific Street in Brooklyn, a 9-story residential building with approximately 119,000 square feet of residential rental GLA; and • The Dean Street property in Brooklyn, a 9-story residential building with approximately 160,000 square feet of residential rental GLA and approximately 9,000 square feet of retail rental GLA.
As of December 31, 2024, the continuing investors owned an aggregate amount of 26,317,396 Class B LLC units, representing 62.0% of our common stock on a fully diluted basis. Accordingly, the Operating Partnership’s interests in the LLC subsidiaries entitle it to receive 38.0% of the aggregate distributions from the LLC subsidiaries.
As of December 31, 2025, the continuing investors owned an aggregate amount of 26,317,396 Class B LLC units, representing 62.1% of our common stock on a fully diluted basis. Accordingly, the Operating Partnership’s interests in the LLC subsidiaries entitle it to receive 37.9% of the aggregate distributions from the LLC subsidiaries.
Additionally, the Company and the City of New York are negotiating the terms of a five-year extension of its current 206,084 square foot lease at 141 Livingston Street that expires in December of 2025. There can be no assurance that the negotiations will conclude with an agreement.
Additionally, the City of New York’s 206,084 square foot lease at 141 Livingston Street expired on December 27, 2025. The Company and City of New York are continuing to finalize a five-year extension of its expired lease for 141 Livingston Property. There can be no assurance that the negotiations will conclude with an agreement.
We have two reportable operating segments: residential rental properties and commercial rental properties. Our revenue consists primarily of rents received from our residential, commercial and, to a lesser extent, retail tenants. We derive approximately 74% of our revenues from rents received from residents in our apartment rental properties and the remainder from commercial and retail rental customers.
We have two reportable operating segments: residential rental properties and commercial rental properties. Our revenue consists primarily of rents received from our residential, commercial and, to a lesser extent, retail tenants.
The Company has also been working to identify areas where it can improve the carbon footprint of its properties. This includes complying with NYC Local Law 97 (LL97) that requires most buildings over 25 thousand square feet meet stringent carbon emissions caps starting in 2024.
The Company has been working to comply with NYC Local Law 97 (LL97) that requires most buildings over 25 thousand square feet to meet stringent carbon emissions caps starting in 2024. As such, the Company has replaced certain roofs, including the upgrading of the roofing insulation, changed light fixtures to LED lighting and insulated building piping.
As of February 23, 2024, the City of New York notified the Company of its intention to terminate its lease for 342,496 square feet of office space located at 240-250 Livingston Street effective August 23, 2025. The Lease generally provides for rent payments in the amount of $9.9 million through the end of the term.
As of August 23, 2025, the City of New York vacated its 342,496 square feet of office space located at 240-250 Livingston Street, concurrently with the termination of its lease period. The Lease generally provided rent payments of approximately $15,400 per annum.
Removed
As of December 31, 2024, agencies of the City of New York leased an aggregate of 548,580 rentable square feet of commercial space at our commercial office properties at 141 Livingston Street and 250 Livingston Street, representing approximately 22% of our total revenues for the year ended December 31, 2024.
Added
On May 30, 2025, the Company completed the sale of 10 West 65th Street in Manhattan, a 6-story residential building with approximately 76,000 square feet of residential rental GLA. for gross proceeds of $45,500. The Company incurred $1,900 in closing costs and paid $800 in accrued interest at closing.
Removed
The current lease at 141 Livingston Street provides for $10.3 million rent per annum.
Added
At closing, the Company repaid in full its $31,200 mortgage note (the “Mortgage”) with Flagstar Bank (“Flagstar”) (see note 4 below). The Company recorded a loss on the disposal of long-lived assets of $857 and a loss on impairment of long-lived assets of $33,780 during the year-ended December 31, 2025.
Removed
Regulation Environmental and Related Matters Under various federal, state and local laws, ordinances and regulations, as a current or former owner and operator of real property, we may be liable for costs and damages resulting from the presence or release of hazardous substances (such as lead, asbestos and polychlorinated biphenyls), waste, petroleum products and other miscellaneous products (including but not limited to natural products such as methane and radon gas) at, on, in, under or from such property, including costs for investigation or remediation, natural resource damages or third-party liability for personal injury or property damage.
Added
During the fiscal year ended December 31, 2025, we derived approximately 78% of our revenues from rents received from residents in our apartment rental properties and the remainder from commercial and retail rental customers.
Removed
As such, the Company has replaced certain roofs, including the upgrading of the roofing insulation, changed light fixtures to LED lighting and insulated building piping.
Added
The expired lease at 141 Livingston Street provided for $10,300 million rent per annum. The City of New York continues to occupy the space and is paying holdover rent in accordance with the terms of the expired lease. Those payments are the same as in final term of the expired lease.
Removed
The Company believes that its success is dependent upon the diverse backgrounds of its employees and strives to build a culture that is collaborative, diverse, supportive and inclusive. In furtherance of that goal, the Company provides diversity equity and inclusion training as part of its annual harassment training for both supervisors and non-supervisors.
Item 1A. Risk Factors
Risk Factors — what could go wrong, per management
70 edited+53 added−11 removed275 unchanged
Item 1A. Risk Factors
Risk Factors — what could go wrong, per management
70 edited+53 added−11 removed275 unchanged
2024 filing
2025 filing
Biggest changeIf we are not able to extend or replace the NYC lease at our 141 Livingston Street property for a minimum of a five-year term, we will be required to either fund a reserve account in the amount of $10 million payable in equal monthly payments over the 18 months after lease expiration or deliver to the lender a letter of credit in the amount of $10 million On October 28, 2024, we received notice that, as of October 7, 2024, the servicing of the mortgage notes was transferred to a special servicer (the “Special Servicer”) due to our alleged failure to make certain required payments under the loan agreement, including, but not limited to, the reserve deposit starting on July 7, 2024.
Biggest changeUnder the terms of the loan agreement, if we are not able to extend or replace the NYC lease at our 141 Livingston Street property for a minimum of a five-year term, we will be required to either fund a reserve account in the amount of $10,000 payable in equal monthly payments over the 18 months after lease expiration or deliver to the lender a letter of credit in the amount of $10,000.
We have adopted an Investment Policy that provides that our officers, including David Bistricer, JJ Bistricer and Jacob Schwimmer, are not required to present certain identified investment opportunities to us, including assets located outside the New York metropolitan area, for-sale condominium or cooperative conversions, development projects, projects that would require us to obtain guarantees from third parties or to backstop obligations of other parties, and land acquisitions.
We have adopted an Investment Policy that provides that our officers, including David Bistricer, JJ Bistricer and Jacob Schwimmer, are not required to present certain identified investment opportunities to us, including assets located outside the New York metropolitan area, for-sale condominium or cooperative conversions, development projects, projects that would require us to obtain guarantees from third parties or to backstop obligations of other parties, and land acquisitions.
Some of the factors that could negatively affect or result in fluctuations in the market price of our common stock include: ● actual or anticipated variations in our quarterly or annual operating results; ● increases in market interest rates that lead purchasers of our shares to demand a higher yield; ● changes in market valuations of similar companies; 32 ● adverse market reaction to any increased indebtedness we incur in the future; ● additions or departures of key personnel; ● actions by stockholders; ● speculation in the press or investment community; ● general market, economic and political conditions, including an economic slowdown or dislocation in the global credit markets; ● our operating performance and the performance of other similar companies; ● negative publicity regarding us specifically or our business lines generally; ● changes in accounting principles; and ● passage of legislation or other regulatory developments that adversely affect us or our industry, such as the Housing Stability and Tenant Protection Act of 2019, which was signed into law in New York in June 2019.
Some of the factors that could negatively affect or result in fluctuations in the market price of our common stock include: ● actual or anticipated variations in our quarterly or annual operating results; ● increases in market interest rates that lead purchasers of our shares to demand a higher yield; ● changes in market valuations of similar companies; ● adverse market reaction to any increased indebtedness we incur in the future; ● additions or departures of key personnel; ● actions by stockholders; ● speculation in the press or investment community; ● general market, economic and political conditions, including an economic slowdown or dislocation in the global credit markets; ● our operating performance and the performance of other similar companies; ● negative publicity regarding us specifically or our business lines generally; ● changes in accounting principles; and ● passage of legislation or other regulatory developments that adversely affect us or our industry, such as the Housing Stability and Tenant Protection Act of 2019, which was signed into law in New York in June 2019.
Risks associated with joint venture arrangements may include but are not limited to the following: ● our joint venture partners might experience financial distress, become bankrupt or fail to fund their share of required capital contributions, which may delay construction or development of a property or increase our financial commitment to the joint venture; ● we may be responsible to our partners for indemnifiable losses; ● our joint venture partners may have business interests or goals with respect to a property that conflict with our business interests and goals (including as relates to compliance with the REIT requirements), which could increase the likelihood of disputes regarding the ownership, management or disposition of the property; 17 ● we may be unable to take actions that are opposed by our joint venture partners under arrangements that require us to share decision-making authority over major decisions affecting the ownership or operation of the joint venture and any property owned by the joint venture, such as the sale or financing of the property or the making of additional capital contributions for the benefit of the property; ● our joint venture partners may take actions that we oppose; ● our ability to sell or transfer our interest in a joint venture to a third party without prior consent of our joint venture partners may be restricted; ● we may disagree with our joint venture partners about decisions affecting a property or a joint venture, which could result in litigation or arbitration that increases our expenses, distracts our officers and directors and disrupts the day-to-day operations of the property, including by delaying important decisions until the dispute is resolved; ● we may suffer losses as a result of actions taken by our joint venture partners with respect to our joint venture investments; and ● in the event that we obtain a minority position in a joint venture, we may not have significant influence or control over such joint venture or the performance of our investment therein.
Risks associated with joint venture arrangements may include but are not limited to the following: ● our joint venture partners might experience financial distress, become bankrupt or fail to fund their share of required capital contributions, which may delay construction or development of a property or increase our financial commitment to the joint venture; ● we may be responsible to our partners for indemnifiable losses; ● our joint venture partners may have business interests or goals with respect to a property that conflict with our business interests and goals (including as relates to compliance with the REIT requirements), which could increase the likelihood of disputes regarding the ownership, management or disposition of the property; 19 ● we may be unable to take actions that are opposed by our joint venture partners under arrangements that require us to share decision-making authority over major decisions affecting the ownership or operation of the joint venture and any property owned by the joint venture, such as the sale or financing of the property or the making of additional capital contributions for the benefit of the property; ● our joint venture partners may take actions that we oppose; ● our ability to sell or transfer our interest in a joint venture to a third party without prior consent of our joint venture partners may be restricted; ● we may disagree with our joint venture partners about decisions affecting a property or a joint venture, which could result in litigation or arbitration that increases our expenses, distracts our officers and directors and disrupts the day-to-day operations of the property, including by delaying important decisions until the dispute is resolved; ● we may suffer losses as a result of actions taken by our joint venture partners with respect to our joint venture investments; and ● in the event that we obtain a minority position in a joint venture, we may not have significant influence or control over such joint venture or the performance of our investment therein.
Our business may also be adversely affected by local economic conditions, as all of our revenue is currently derived from properties located in New York City, with our entire portfolio located in Manhattan and Brooklyn. 10 Factors that may affect our occupancy levels, our rental revenues, our income from operations, our funds from operations (“FFO”), our adjusted funds from operations (“AFFO”), our adjusted earnings before interest, income tax, depreciation and amortization (“Adjusted EBITDA”), our net operating income (“NOI”), our cash flow and/or the value of our properties include the following, among others: ● downturns in global, national, regional and local economic and demographic conditions; ● the Housing Stability and Tenant Protection Act of 2019, which was signed into law in New York in June 2019, as well as other rent control or stabilization laws, or other laws regulating rental housing, which could prevent us from raising rents to offset increases in operating costs; ● declines in the financial condition of our tenants, which may result in tenant defaults under leases due to bankruptcy, lack of liquidity, operational failures or other reasons, and declines in the financial condition of buyers and sellers of properties; ● declines in local, state and/or federal government budgets and/or increases in local, state and/or federal government budget deficits, which among other things could have an adverse effect on the financial condition of our only office tenant, the agencies of the City of New York, and may result in tenant defaults under leases and/or cause such tenant to seek alternative office space arrangements; ● the inability or unwillingness of our tenants to pay rent increases, or our inability to collect rents and other amounts due from our tenants; ● significant job losses in the industries in which our commercial and/or retail tenants operate, and/or from which our residential tenants derive their incomes, which may decrease demand for our commercial, retail and/or residential space, causing market rental rates and property values to be affected negatively; ● an oversupply of, or a reduced demand for, commercial and/or retail space and/or apartment homes; ● declines in household formation; ● unfavorable residential mortgage rates; ● changes in market rental rates in our markets and/or the attractiveness of our properties to tenants, particularly as our buildings continue to age, and our ability to fund repair and maintenance costs; ● competition from other available commercial and/or retail lessors and other available apartments and housing alternatives, and from other real estate investors with significant capital, such as other real estate operating companies, other REITs and institutional investment funds; ● economic conditions that could cause an increase in our operating expenses, such as increases in property taxes (particularly as a result of increased local, state and national government budget deficits and debt and potentially reduced federal aid to state and local governments), utilities, insurance, compensation of on-site personnel and routine maintenance; ● opposition from local community or political groups with respect to the development and/or operations at a property; ● investigation, removal or remediation of hazardous materials or toxic substances at a property; 11 ● changes in, and changes in enforcement of, laws, regulations and governmental policies, including without limitation, health, safety, environmental and zoning laws; and ● changes in rental housing subsidies provided by the government and/or other government programs that favor single-family rental housing or owner-occupied housing over multifamily rental housing.
Our business may also be adversely affected by local economic conditions, as all of our revenue is currently derived from properties located in New York City, with our entire portfolio located in Manhattan and Brooklyn. 12 Factors that may affect our occupancy levels, our rental revenues, our income from operations, our funds from operations (“FFO”), our adjusted funds from operations (“AFFO”), our adjusted earnings before interest, income tax, depreciation and amortization (“Adjusted EBITDA”), our net operating income (“NOI”), our cash flow and/or the value of our properties include the following, among others: ● downturns in global, national, regional and local economic and demographic conditions; ● the Housing Stability and Tenant Protection Act of 2019, which was signed into law in New York in June 2019, as well as other rent control or stabilization laws, or other laws regulating rental housing, which could prevent us from raising rents to offset increases in operating costs; ● declines in the financial condition of our tenants, which may result in tenant defaults under leases due to bankruptcy, lack of liquidity, operational failures or other reasons, and declines in the financial condition of buyers and sellers of properties; ● declines in local, state and/or federal government budgets and/or increases in local, state and/or federal government budget deficits, which among other things could have an adverse effect on the financial condition of our only office tenant, the agencies of the City of New York, and may result in tenant defaults under leases and/or cause such tenant to seek alternative office space arrangements; ● the inability or unwillingness of our tenants to pay rent increases, or our inability to collect rents and other amounts due from our tenants; ● significant job losses in the industries in which our commercial and/or retail tenants operate, and/or from which our residential tenants derive their incomes, which may decrease demand for our commercial, retail and/or residential space, causing market rental rates and property values to be affected negatively; ● an oversupply of, or a reduced demand for, commercial and/or retail space and/or apartment homes; ● declines in household formation; ● unfavorable residential mortgage rates; ● changes in market rental rates in our markets and/or the attractiveness of our properties to tenants, particularly as our buildings continue to age, and our ability to fund repair and maintenance costs; ● competition from other available commercial and/or retail lessors and other available apartments and housing alternatives, and from other real estate investors with significant capital, such as other real estate operating companies, other REITs and institutional investment funds; ● economic conditions that could cause an increase in our operating expenses, such as increases in property taxes (particularly as a result of increased local, state and national government budget deficits and debt and potentially reduced federal aid to state and local governments), utilities, insurance, compensation of on-site personnel and routine maintenance; ● opposition from local community or political groups with respect to the development and/or operations at a property; ● investigation, removal or remediation of hazardous materials or toxic substances at a property; 13 ● changes in, and changes in enforcement of, laws, regulations and governmental policies, including without limitation, health, safety, environmental and zoning laws; and ● changes in rental housing subsidies provided by the government and/or other government programs that favor single-family rental housing or owner-occupied housing over multifamily rental housing.
We refer to these restrictions as the “ownership limit.” The ownership limit may prevent or delay a change in control and, as a result, could adversely affect our stockholders’ ability to realize a premium for their shares of our common stock. ● The provisions in our charter regarding the removal of directors and the advance notice provisions of our bylaws, among others, could delay, defer or prevent a transaction or a change of control of our Company that might involve a premium price for holders of our common stock or otherwise be in their best interest. 23 In addition, certain provisions of the Maryland General Corporation Law (“MGCL”) may have the effect of deterring a third party from making a proposal to acquire us or of impeding a change of control under circumstances that otherwise could provide the holders of shares of our common stock with the opportunity to realize a premium over the then-prevailing market price of such shares, including the Maryland business combination and control share provisions.
We refer to these restrictions as the “ownership limit.” The ownership limit may prevent or delay a change in control and, as a result, could adversely affect our stockholders’ ability to realize a premium for their shares of our common stock. ● The provisions in our charter regarding the removal of directors and the advance notice provisions of our bylaws, among others, could delay, defer or prevent a transaction or a change of control of our Company that might involve a premium price for holders of our common stock or otherwise be in their best interest. 24 In addition, certain provisions of the Maryland General Corporation Law (“MGCL”) may have the effect of deterring a third party from making a proposal to acquire us or of impeding a change of control under circumstances that otherwise could provide the holders of shares of our common stock with the opportunity to realize a premium over the then-prevailing market price of such shares, including the Maryland business combination and control share provisions.
For example, we anticipate that we would have to effect any potential condominium or cooperative conversion and sale of our Tribeca House properties or 141 Livingston Street property through a TRS. REIT distribution requirements could adversely affect our liquidity and adversely affect our ability to execute our business plan.
For example, we anticipate that we would have to effect any potential condominium or cooperative conversion and sale of our Tribeca House properties or 141 Livingston Street property through a TRS. 31 REIT distribution requirements could adversely affect our liquidity and adversely affect our ability to execute our business plan.
Accordingly, it is possible that we may not meet the requirements for qualification as a REIT. If, with respect to any taxable year, we fail to maintain our qualification as a REIT, we would not be allowed to deduct distributions to stockholders in computing our taxable income.
Accordingly, it is possible that we may not meet the requirements for qualification as a REIT. 30 If, with respect to any taxable year, we fail to maintain our qualification as a REIT, we would not be allowed to deduct distributions to stockholders in computing our taxable income.
We may be unable to renew leases or lease currently vacant space or vacating space on favorable terms or at all as leases expire or terminate, which could adversely affect our financial condition, results of operations and cash flow.
We may be unable to renew leases or lease currently vacant space on favorable terms or at all as leases expire or terminate, which could adversely affect our financial condition, results of operations and cash flow.
These risks include, without limitation: ● the availability and pricing of financing on favorable terms or at all; ● the availability and timely receipt of zoning and other regulatory approvals; ● the potential for the fluctuation of occupancy rates and rents at development and redeveloped properties, which may result in our investment not being profitable; 13 ● startup, development and redevelopment costs may be higher than anticipated; ● cost overruns and untimely completion of construction (including risks beyond our control, such as weather or labor conditions or material shortages); and ● changes in the pricing and availability of buyers and sellers of such properties.
These risks include, without limitation: ● the availability and pricing of financing on favorable terms or at all; ● the availability and timely receipt of zoning and other regulatory approvals; 15 ● the potential for the fluctuation of occupancy rates and rents at development and redeveloped properties, which may result in our investment not being profitable; ● startup, development and redevelopment costs may be higher than anticipated; ● cost overruns and untimely completion of construction (including risks beyond our control, such as weather or labor conditions or material shortages); and ● changes in the pricing and availability of buyers and sellers of such properties.
However, there is no assurance that financial institutions in which we hold our cash and cash equivalents will not fail, in which case we may be subject to a risk of loss or delay in accessing all or a portion of our funds exceeding the FDIC insurance coverage, which could adversely impact our short-term liquidity, ability to operate our business, and financial performance. 26 Risks Related to Our Indebtedness and Financing We have a substantial amount of indebtedness that may limit our financial and operating activities and may adversely affect our ability to incur additional debt to fund future needs.
However, there is no assurance that financial institutions in which we hold our cash and cash equivalents will not fail, in which case we may be subject to a risk of loss or delay in accessing all or a portion of our funds exceeding the FDIC insurance coverage, which could adversely impact our short-term liquidity, ability to operate our business, and financial performance. 27 Risks Related to Our Indebtedness and Financing We have a substantial amount of indebtedness that may limit our financial and operating activities and may adversely affect our ability to incur additional debt to fund future needs.
For so long as our continuing investors continue to own shares of our stock entitling them to exercise a significant percentage of our voting power, the concentration of voting power in our continuing investors may discourage unsolicited acquisition proposals and may delay, defer or prevent any change of control of our Company that might involve a premium price for holders of our common stock or otherwise be in their best interest. 22 The ability of stockholders to control our policies and effect a change of control of our Company is limited by certain provisions of our charter and bylaws and by Maryland law.
For so long as our continuing investors continue to own shares of our stock entitling them to exercise a significant percentage of our voting power, the concentration of voting power in our continuing investors may discourage unsolicited acquisition proposals and may delay, defer or prevent any change of control of our Company that might involve a premium price for holders of our common stock or otherwise be in their best interest. 23 The ability of stockholders to control our policies and effect a change of control of our Company is limited by certain provisions of our charter and bylaws and by Maryland law.
In addition, we may or may not be eligible to take advantage of the 50% reduction to the New York City and New York State transfer tax rates that could apply with respect to transfers of real property to certain REITs. 18 Risks Related to Our Business and Operations Capital and credit market conditions, including higher interest rates, may adversely affect our access to various sources of capital or financing and/or the cost of capital, which could affect our business activities, dividends, earnings and common stock price, among other things.
In addition, we may or may not be eligible to take advantage of the 50% reduction to the New York City and New York State transfer tax rates that could apply with respect to transfers of real property to certain REITs. 20 Risks Related to Our Business and Operations Capital and credit market conditions, including higher interest rates, may adversely affect our access to various sources of capital or financing and/or the cost of capital, which could affect our business activities, dividends, earnings and common stock price, among other things.
Moreover, these agreements were not negotiated at arm’s length and in the course of structuring the formation transactions, certain of our executive officers had the ability to influence the types and level of benefits that they receive from us under these agreements. 25 David Bistricer, our Co-Chairman of the board of directors and Chief Executive Officer, and Sam Levinson, our Co-Chairman of the board of directors and Head of the Investment Committee, have outside business interests that will take their time and attention away from us, which could materially and adversely affect us.
Moreover, these agreements were not negotiated at arm’s length and in the course of structuring the formation transactions, certain of our executive officers had the ability to influence the types and level of benefits that they receive from us under these agreements. 26 David Bistricer, our Co-Chairman of the board of directors and Chief Executive Officer, and Sam Levinson, our Co-Chairman of the board of directors and Head of the Investment Committee, have outside business interests that will take their time and attention away from us, which could materially and adversely affect us.
In addition, the presence of significant mold or other airborne contaminants could expose us to liability from our tenants or others if property damage or personal injury occurs. 16 We cannot assure you that costs or liabilities incurred as a result of environmental issues will not affect our ability to make distributions to our stockholders or that such costs, liabilities, or other remedial measures will not have an adverse effect on our financial condition, results of operations and cash flows.
In addition, the presence of significant mold or other airborne contaminants could expose us to liability from our tenants or others if property damage or personal injury occurs. 18 We cannot assure you that costs or liabilities incurred as a result of environmental issues will not affect our ability to make distributions to our stockholders or that such costs, liabilities, or other remedial measures will not have an adverse effect on our financial condition, results of operations and cash flows.
These operations rely on the secure collection, storage, transmission, and other processing of confidential and other information in our computer systems and networks and subject us, and the third parties upon which we rely, to a variety of evolving threats, including, but not limited to ransomware attacks, which could cause security incidents. 20 Cyberattacks, malicious Internet-based activity, online and offline fraud, and other similar activities threaten the confidentiality, integrity, and availability of our confidential, proprietary, and sensitive data and information technology systems, and those of the third parties upon which we rely.
These operations rely on the secure collection, storage, transmission, and other processing of confidential and other information in our computer systems and networks and subject us, and the third parties upon which we rely, to a variety of evolving threats, including, but not limited to ransomware attacks, which could cause security incidents. 22 Cyberattacks, malicious Internet-based activity, online and offline fraud, and other similar activities threaten the confidentiality, integrity, and availability of our confidential, proprietary, and sensitive data and information technology systems, and those of the third parties upon which we rely.
Accordingly, while not intending to do so, we may adopt policies that may have an adverse effect on our financial condition, results of operations, ability to pay dividends or make other distributions to our stockholders and the market value of our common stock. 24 Conflicts of interest may exist or could arise in the future between the interests of our stockholders and the interests of holders of OP Units and of LLC units in our predecessor entities, which may impede business decisions that could benefit our stockholders.
Accordingly, while not intending to do so, we may adopt policies that may have an adverse effect on our financial condition, results of operations, ability to pay dividends or make other distributions to our stockholders and the market value of our common stock. 25 Conflicts of interest may exist or could arise in the future between the interests of our stockholders and the interests of holders of OP Units and of LLC units in our predecessor entities, which may impede business decisions that could benefit our stockholders.
On January 21, 2025, we received notice from the Special Servicer alleging that certain elements of our insurance on the building at 141 Livingston Street are not in compliance with the loan agreement requirements, including, but not limited to, due to a deductible in excess of what is permitted under the terms of the loan agreement and the use of an insurance carrier with a rating agency rating below that which is permitted under the terms of the loan agreement.
On January 21, 2025, we received notice from the Special Servicer alleging that certain elements of our insurance on the building at 141 Livingston Street were not in compliance with the loan agreement requirements, including, but not limited to, due to a deductible in excess of what is permitted under the terms of the loan agreement and the use of an insurance carrier with a rating agency rating below that which is permitted under the terms of the loan agreement.
Although we expect those costs to be offset by the savings provided under the Article 11 Agreement by property tax exemption and enhanced payments for tenants receiving government assistance, these costs are subject to market costs for construction materials and labor and may increase beyond current expectations. 14 Real estate investments are relatively illiquid and may limit our flexibility.
Although we expect those costs to be offset by the savings provided under the Article 11 Agreement by property tax exemption and enhanced payments for tenants receiving government assistance, these costs are subject to market costs for construction materials and labor and may increase beyond current expectations. 16 Real estate investments are relatively illiquid and may limit our flexibility.
Our financial results may be adversely affected by our exposure to losses arising from natural disasters or severe weather. We also are exposed to risks associated with inclement winter weather, including increased need for maintenance and repair of our buildings. 15 Actual or threatened terrorist attacks may adversely affect our ability to generate revenues and the value of our properties.
Our financial results may be adversely affected by our exposure to losses arising from natural disasters or severe weather. We also are exposed to risks associated with inclement winter weather, including increased need for maintenance and repair of our buildings. 17 Actual or threatened terrorist attacks may adversely affect our ability to generate revenues and the value of our properties.
Such adverse developments could materially reduce the value of our real estate portfolio and our rental revenues, and thus adversely affect our ability to meet our debt obligations and to make distributions to our stockholders. 12 Our portfolio ’ s revenue is currently generated from eight properties.
Such adverse developments could materially reduce the value of our real estate portfolio and our rental revenues, and thus adversely affect our ability to meet our debt obligations and to make distributions to our stockholders. 14 Our portfolio ’ s revenue is currently generated from eight properties.
Generally, failure to hedge effectively against interest rate changes may adversely affect our results of operations. 28 When a hedging agreement is required under the terms of a mortgage loan, it is often a condition that the hedge counterparty maintains a specified credit rating.
Generally, failure to hedge effectively against interest rate changes may adversely affect our results of operations. 29 When a hedging agreement is required under the terms of a mortgage loan, it is often a condition that the hedge counterparty maintains a specified credit rating.
Any such issuances, or the perception of such issuances, could materially and adversely affect the market price of our common stock. 33
Any such issuances, or the perception of such issuances, could materially and adversely affect the market price of our common stock.
Our subsidiary, 141 Livingston Owner LLC (the “Borrower”) and Citi Real Estate Funding Inc. entered into the loan agreement related to a $100 million loan. The loan is evidenced by promissory mortgage notes and secured by the 141 Livingston Street property.
Our subsidiary, 141 Livingston Owner LLC (the "Borrower”) and Citi Real Estate Funding Inc. entered into the loan agreement related to a $100 million loan. The loan is evidenced by promissory mortgage notes and secured by the 141 Livingston Street property.
The Special Servicer demanded that we pay (i) $2.2 million of reserve payments into a reserve account immediately (for July-October 2024) and continued monthly payments of $555,555 for an additional 14 months, (ii) $1.2 million of default interest and late charges through October 7, 2024, and (iii) an additional $10,417 per diem interest for each day thereafter.
The Special Servicer demanded that we pay (i) $2,200 of reserve payments into a reserve account immediately (for July-October 2024) and continued monthly payments of $555 for an additional 14 months, (ii) $1,200 of default interest and late charges through October 7, 2024, and (iii) an additional $10 per diem interest for each day thereafter.
We replied to the Special Servicer disputing such calculation and alleging that the Special Servicer did not calculate net worth in a reasonable manner. We provided the Special Servicer with our own calculation of net worth that shows a net worth in excess of the required amount. We await a response from the Special Servicer.
We replied to the Special Servicer disputing such calculation and alleging that the Special Servicer did not calculate net worth in a reasonable manner. We provided the Special Servicer with our own calculation of net worth that shows a net worth in excess of the required amount.
Some of these claims and actions or others to which we may be subject from time to time may result in defense costs, settlements, fines or judgments against us, some of which are not, or cannot be, covered by insurance.
Some of these claims and actions or other litigation to which we may be subject from time to time may result in defense costs, settlements, fines or judgments against us, some of which are not, or cannot be, covered by insurance.
These provisions include the following: ● Our continuing investors hold shares of our special voting stock and shares of our common stock that generally entitle them to exercise 69.8% of the voting power in our Company, including in connection with a merger or other acquisition of our Company or a change in the composition of our board of directors.
These provisions include the following: ● Our continuing investors hold shares of our special voting stock and shares of our common stock that generally entitle them to exercise 70.1% of the voting power in our Company, including in connection with a merger or other acquisition of our Company or a change in the composition of our board of directors.
In these events, we cannot assure you that such tenants will renew those leases or not exercise early termination options or that we will be able to re-lease spaces on economically advantageous terms or at all. For example, the City of New York has advised us that it will vacate the 250 Livingston Street property in August 2025.
In these events, we cannot assure you that such tenants will renew those leases or not exercise early termination options or that we will be able to re-lease spaces on economically advantageous terms or at all. For example, the City of New York has vacated the 250 Livingston Street property in August 2025.
In periods when the capital and credit markets experience significant volatility, the amounts, sources and cost of capital available to us may be adversely affected. We primarily use third-party financing to fund acquisitions of properties and to refinance indebtedness as it matures. As of December 31, 2024, we had no corporate debt and $1,275.4 million in property-level debt.
In periods when the capital and credit markets experience significant volatility, the amounts, sources and cost of capital available to us may be adversely affected. We primarily use third-party financing to fund acquisitions of properties and to refinance indebtedness as it matures. As of December 31, 2025, we had no corporate debt and $1,286.2 million in property-level debt.
On December 18, 2024, we received notice from the Special Servicer that due to its allegation that Clipper Realty (the “Guarantor”) did not maintain a net worth of not less than $100 million as of December 31, 2022 and 2023, respectively, as required under the loan agreement, we are in default on the loan.
On December 18, 2024, we received notice from the Special Servicer that due to its allegation that we as the Guarantor did not maintain a net worth of not less than $100 million as of December 31, 2022 and 2023, respectively, as required under the loan agreement, we were in default on the loan.
We cannot assure you that expiring leases will be renewed or tenants will not exercise any early termination options or that our properties will be re-leased at net effective rental rates equal to or above the current average net effective rental rates As of February 23, 2024, NYC notified us of its intention to terminate its lease at 250 Livingston Street effective August 23, 2025.
We cannot assure you that expiring leases will be renewed or tenants will not exercise any early termination options or that our properties will be re-leased at net effective rental rates equal to or above the current average net effective rental rates As of August 23, 2025, NYC vacated its lease at 250 Livingston Street.
As of December 31, 2024, we had $1,275.4 million of total indebtedness, all of which was property-level debt. See Note 4 of the accompanying “Notes to Consolidated Financial Statements” for a discussion of the Company’s property-level debt.
As of December 31, 2025, we had $1,286.2 million of total indebtedness, all of which was property-level debt. See Note 4 of the accompanying “Notes to Consolidated Financial Statements” for a discussion of the Company’s property-level debt.
As of that date, 342,496 of rentable square feet of commercial space will be available. Additionally, the 206,084 square foot lease with the City of New York at 141 Livingston Street property will expire at December 27, 2025. We and the NYC are negotiating the terms of a five-year extension of the current lease.
As of that date, 342,496 of rentable square feet of commercial space is available. Additionally, the 206,084 square foot lease with the City of New York (“NYC”) at 141 Livingston Street property expired at December 27, 2025. We and NYC are negotiating the terms of a five-year extension of the expired lease.
As a result, our continuing investors are generally entitled to exercise 69.8% of the voting power in our Company.
As a result, our continuing investors are generally entitled to exercise 70.1% of the voting power in our Company.
Such amounts include, but are not limited to, $100.0 million principal amount of the mortgage notes, approximately $5.0 million of default yield maintenance premium, $10.0 million aggregate reserve deposit, and the above-described penalty default interest and penalties.
Such amounts included, but were not limited to, $100,000 principal amount of the mortgage notes, approximately $5,000 of default yield maintenance premium, $10,000 aggregate reserve deposit, and the above-described penalty default interest and penalties.
Such disclosures are costly, and the disclosure or the failure to comply with such disclosure requirements could lead to adverse consequences. 21 Risks Related to Our Organization and Structure Our continuing investors hold shares of our special voting stock that entitle them to vote together with holders of our common stock on an as-exchanged basis, based on their ownership of Class B LLC units in our predecessor entities, and are generally able to significantly influence the composition of our board of directors, our management and the conduct of our business.
Risks Related to Our Organization and Structure Our continuing investors hold shares of our special voting stock that entitle them to vote together with holders of our common stock on an as-exchanged basis, based on their ownership of Class B LLC units in our predecessor entities, and are generally able to significantly influence the composition of our board of directors, our management and the conduct of our business.
As of December 31, 2024, we had approximately 65,696 rentable square feet of vacant residential space (excluding leases signed but not yet commenced) at our operating properties, and leases representing approximately 69% of the square footage of residential space at the operating properties will expire during the year ending December 31, 2025 (including month-to-month leases).
As of December 31, 2025, we had approximately 163,541 rentable square feet of vacant residential space (excluding leases signed but not yet commenced) at our operating properties, and leases representing approximately 72% of the square footage of residential space at the operating properties have or will expire during the year ending December 31, 2026 (including month-to-month leases).
We engage in development and redevelopment activities with respect to our properties as we believe market conditions dictate. For example, in 2023 we completed the development of the 1010 Pacific Street property and plan to develop the Dean Street property as fully amenitized residential rental buildings.
We engage in development and redevelopment activities with respect to our properties as we believe market conditions dictate. For example, in 2023 we completed the development of the 1010 Pacific Street property and in 2025 we completed the development of the Dean Street property.
Our board of directors is authorized, without approval of our common stockholders, to cause us to issue additional shares of our stock or to raise capital through the issuance of preferred stock, options, warrants and other rights on terms and for consideration as our board of directors in its sole discretion may determine.
Our board of directors is authorized, without approval of our common stockholders, to cause us to issue additional shares of our stock or to raise capital through the issuance of preferred stock, options, warrants and other rights on terms and for consideration as our board of directors in its sole discretion may determine. 33 Sales of substantial amounts of our common stock could dilute current ownership and could cause the market price of our common stock to decrease significantly.
We may not have sufficient cash flow to meet the required payments of principal and interest on our debt or to pay distributions on our common stock at expected levels. In the future, our cash flow could be insufficient to meet required payments of principal and interest or to pay distributions on our shares at expected levels.
In the future, our cash flow could be insufficient to meet required payments of principal and interest or to pay distributions on our shares at expected levels.
If we cease to be a REIT, we will not be allowed a deduction for dividends paid to stockholders in computing our taxable income and will be subject to U.S. federal income tax at regular corporate rates and state and local taxes, which may have adverse consequences on our total return to our stockholders. 31 Our ability to provide certain services to our tenants may be limited by the REIT rules, or may have to be provided through a TRS.
If we cease to be a REIT, we will not be allowed a deduction for dividends paid to stockholders in computing our taxable income and will be subject to U.S. federal income tax at regular corporate rates and state and local taxes, which may have adverse consequences on our total return to our stockholders.
If the property taxes we pay increase, our financial condition, results of operations, cash flow, per share trading price of our common stock and our ability to satisfy our principal and interest obligations and to make distributions to our stockholders could be adversely affected.
If the property taxes we pay increase, our financial condition, results of operations, cash flow, per share trading price of our common stock and our ability to satisfy our principal and interest obligations and to make distributions to our stockholders could be adversely affected. 32 Risks Related to Ownership of Our Common Stock The market price and trading volume of our common stock may be volatile, which could result in rapid and substantial losses for our stockholders.
As of December 31, 2024, our portfolio consisted of nine properties, eight of which generated revenues in 2024 – the Tribeca House properties, the Flatbush Gardens complex, the 141 Livingston Street property, the 250 Livingston Street property, the Aspen property, the 10 West 65th Street property, the Clover House property and the 1010 Pacific Street property, which accounted for 28.2%, 31.3%, 11.1%, 12.1%, 4.8%, 2.7%, 5.5% and 4.3%, respectively, of our portfolio’s total revenue for the year ended December 31, 2024.
As of December 31, 2025, our portfolio consisted of eight revenue generating properties,– the Tribeca House properties, the Flatbush Gardens complex, the 141 Livingston Street property, the 250 Livingston Street property, the Aspen property, the Clover House property the 1010 Pacific Street property, and the Dean Street Property which accounted for 29.6%, 34.0%, 10.9%, 8.1%, 5.1%, 5.6.%, 4.2% and 1.3%, respectively, of our portfolio’s total revenue for the year ended December 31, 2025.
We agreed to these provisions in order to assist our continuing investors in deferring the recognition of taxable gain as a result of and after the formation transactions. These obligations require us to maintain more or different indebtedness than we would otherwise require for our business.
We agreed to these provisions in order to assist our continuing investors in deferring the recognition of taxable gain as a result of and after the formation transactions.
See Note 7, “Commitments and Contingencies” of our consolidated financial statements included in Item 15 of this Annual Report on Form 10-K. 19 Our subsidiaries may be prohibited from making distributions and other payments to us.
See Note 7, “Commitments and Contingencies” of our consolidated financial statements included in this Annual Report on Form 10-K. 21 Our subsidiaries may be prohibited from making distributions and other payments to us. All of our properties are owned indirectly by subsidiaries, in particular, our LLC subsidiaries, and substantially all of our operations are conducted by our Operating Partnership.
The ability of our subsidiaries to make such distributions and other payments depends on their earnings and cash flow and may be subject to statutory or contractual limitations.
As a result, we depend on distributions and other payments from our Operating Partnership and subsidiaries in order to satisfy our financial obligations and make payments to our investors. The ability of our subsidiaries to make such distributions and other payments depends on their earnings and cash flow and may be subject to statutory or contractual limitations.
Sales of substantial amounts of our common stock, or the perception that such sales could occur, may adversely affect the market price of our common stock.
We cannot predict the effect, if any, of future sales of our common stock, or the availability of our common stock for future sales, on the value of our common stock. Sales of substantial amounts of our common stock, or the perception that such sales could occur, may adversely affect the market price of our common stock.
These actions could have the effect of reducing our income and amounts available for distribution to our stockholders. 30 We may be subject to a 100% penalty tax on any prohibited transactions that we enter into, or may be required to forego certain otherwise beneficial opportunities in order to avoid the penalty tax on prohibited transactions.
We may be subject to a 100% penalty tax on any prohibited transactions that we enter into, or may be required to forego certain otherwise beneficial opportunities in order to avoid the penalty tax on prohibited transactions.
As a REIT, we generally cannot provide services to our tenants other than those that are customarily provided by landlords, nor can we derive income from a third party that provides such services. If we forego providing such services to our tenants, we may be at a disadvantage to competitors who are not subject to the same restrictions.
Our ability to provide certain services to our tenants may be limited by the REIT rules, or may have to be provided through a TRS. As a REIT, we generally cannot provide services to our tenants other than those that are customarily provided by landlords, nor can we derive income from a third party that provides such services.
This Annual Report on Form 10-K contains forward-looking statements that involve risks see "Cautionary Note Concerning Forward-Looking Statements." Risks Related to Real Estate We depend on two commercial leases with certain agencies of the City of New York (NYC), as a single government tenant in our office buildings, with one lease terminating effective August 23, 2025 and the other lease expiring on December 27, 2025.
This Annual Report on Form 10-K contains forward-looking statements that involve risks see "Cautionary Note Concerning Forward-Looking Statements." Risks Related to Real Estate Our dependency on two commercial leases with certain agencies of the City of New York (NYC), as a single government tenant in our office buildings, with one lease having terminated effective August 23, 2025, and the other lease having expired on December 27, 2025 and our inability to replace NYC as a tenant at rent rates comparable to the rates in the lease that terminated in August 2025 or to enter into a five-year extension of the lease that expired in December 2025 could cause a material adverse effect on us, including our financial condition, results of operations and cash flow.
We currently have, and expect to incur in the future, interest-bearing debt at rates that vary with market interest rates.
Changing interest rates could increase interest costs and adversely affect our cash flows and the market price of our securities. We currently have, and expect to incur in the future, interest-bearing debt at rates that vary with market interest rates.
As of December 31, 2024, we had approximately $140.0 million of variable rate indebtedness outstanding, for our Dean Street development property and our 10 West 65 th Street property, which constitutes approximately 11.0% of total outstanding indebtedness as of such date, and we have experienced increases in the interest rates on such indebtedness, which has increased our interest expense and adversely impacted our results of operations and cash flows.
As of December 31, 2025, we had approximately $148.0 million of variable rate indebtedness outstanding, for our Dean Street property, which constitutes approximately 11.5% of total outstanding indebtedness as of such date, and although we have experienced decreases in the interest rates on such indebtedness, rates are subject to fluctuations and any increase in rates would increase our interest expense and adversely impact our results of operations and cash flows.
If we are unable to replace the NYC lease at comparable rents, we may not be able to cure the conditions listed in the loan agreement.
If we are unable to replace the NYC lease at comparable rents, we may not be able to cure the conditions listed in the loan agreement, and it could impact our available cash to fund corporate operations and pay dividends and distributions to our stockholders.
The 141 Livingston Street lease expires on December 27, 2025, and if NYC were to decide not to renew or extend such lease on its stated termination date, pursuant to the terms of the lease, we would be at risk of not being able to replace NYC as a tenant, leasing the space below the current rates, incurring costs to improve the space or offer other inducements to fill the space, all of which may have an adverse effect on our financial condition, results of operations and cash flow.
Those payments are the same as those in final term of the expired lease. 10 If we are unable to finalize the agreement, we would be at risk of not being able to replace NYC as a tenant, leasing the space below the current rates, incurring costs to improve the space or offer other inducements to fill the space, all of which may have an adverse effect on our financial condition, results of operations and cash flow.
We may be unable to replace NYC as a tenant or unable to replace it with other commercial tenants at comparable rent rates, may incur substantial costs to improve the vacated space or may have to offer significant inducements to fill the space, all of which may have an adverse effect on our financial condition, results of operations and cash flow.
We have been unable to replace NYC as a tenant, and we may continue to be unable to replace it with other commercial tenants at comparable rent rates or at all, may incur substantial costs to improve the vacated space or may have to offer significant inducements to fill the space, all of which may have an adverse effect on our financial condition, results of operations and cash flow. 9 Our subsidiary, 250 Livingston Owner LLC (“Borrower”), entered into the Loan Agreement, dated as of May 31, 2019 (the “Loan Agreement”), with Citi Real Estate Funding Inc., related to a loan in the principal amount of $125.0 million (the “Loan”).
If any one of these events were to occur, our financial condition, results of operations, cash flow and the market value of our common stock could be adversely affected.
If any one of these events were to occur, our financial condition, results of operations, cash flow and the market value of our common stock could be adversely affected. Furthermore, foreclosures could create taxable income without accompanying cash proceeds, which could hurt our ability to meet the REIT distribution requirements imposed by the Code.
However, our ability to make such distributions may be limited by a requirement to escrow cash flow from our lease at 250 Livingston Street, which may be classified as taxable income. 29 We believe that we are organized, have operated and will continue to operate in a manner that will allow us to qualify as a REIT commencing with our first taxable year ended December 31, 2015.
We believe that we are organized, have operated and will continue to operate in a manner that will allow us to qualify as a REIT commencing with our first taxable year ended December 31, 2015. However, we cannot assure you that we are organized, have operated and will continue to operate as such.
There can be no assurance that the negotiations will conclude with an agreement.
There can be no assurance that the negotiations will conclude with an agreement. NYC currently occupies the space under the holdover provisions in expired lease.
As of December 31, 2024, Kings County Court, the Human Resources Administration, and the Department of Environmental Protection, all of which are agencies of the City of New York, leased an aggregate of 548,580 rentable square feet of commercial space at our commercial office properties at 141 Livingston Street and 250 Livingston Street, the rents from which represented approximately 22% of our total revenues for the year-ended December 31, 2024.
As of December 31, 2025, Kings County Court, the Human Resources Administration, and the Department of Environmental Protection, all of which are agencies of the City of New York, occupied all 206,084 of rentable square feet at 141 Livingston Street and terminated its lease and vacated all 342,496 rentable square feet of commercial space at our 250 Livingston Street.
Our results of operations and cash available for distribution to our stockholders would be adversely affected if any of these properties were materially damaged or destroyed.
On May 30, 2025, the Company completed the sale 10 West 65th Street property, which accounted for 1.2% of our revenue for the year-ended December 31, 2025. Our results of operations and cash available for distribution to our stockholders would be adversely affected if any of these properties were materially damaged or destroyed.
All amounts remaining in such cash management account after the lender’s allocations set forth in the loan agreement will be disbursed to us once the tenant cure conditions are satisfied under the loan agreement. As of February 14, 2025, we are required to deposit into such cash management account approximately $5.7 million upon demand by the lender.
We responded by disputing the allegations in May 8, 2025, letter and noting all rents from the tenants have been deposited into the cash management account. All amounts remaining in such cash management account after the lender’s allocations set forth in the loan agreement will be disbursed to us if the tenant cure conditions are satisfied under the loan agreement.
Additionally, applicable data privacy and security obligations may require us to notify relevant stakeholders of security incidents.
Additionally, applicable data privacy and security obligations may require us to notify relevant stakeholders of security incidents. Such disclosures are costly, and the disclosure or the failure to comply with such disclosure requirements could lead to adverse consequences.
Hedging activity may expose us to risks, including the risks that a counterparty will not perform and that the hedge will not yield the economic benefits we anticipate, which could adversely affect us.
As previously disclosed, the Company is in the process of negotiating a Consent and Cooperation Agreement with the Lender for the sale of the Property, but there can be no assurance that such Consent and Cooperation Agreement will be consummated Hedging activity may expose us to risks, including the risks that a counterparty will not perform and that the hedge will not yield the economic benefits we anticipate, which could adversely affect us.
As a result, we may be required to liquidate from our portfolio otherwise attractive investments.
As a result, we may be required to liquidate from our portfolio otherwise attractive investments. These actions could have the effect of reducing our income and amounts available for distribution to our stockholders.
As of February 23, 2024, The City of New York, a municipal corporation acting through the Department of Citywide Administrative Services ("NYC”), notified us of its intention to terminate its lease at 250 Livingston Street effective August 23, 2025. The lease generally provides for rent payments in the amount of $15.4 million per annum.
We are also subject to covenants covering these leases in our loan agreements related to our commercial office properties located at 250 Livingston Street and 141 Livingston Street. 250 Livingston Street Property As of February 23, 2024, The City of New York, a municipal corporation acting through the Department of Citywide Administrative Services ("NYC”), notified us of its intention to terminate its lease at 250 Livingston Street effective August 23, 2025, and they vacated the space on that date.
To avoid entity-level U.S. federal income and excise taxes, we anticipate distributing at least 100% of our taxable income.
To avoid entity-level U.S. federal income and excise taxes, we anticipate distributing at least 100% of our taxable income. However, our ability to make such distributions may be limited by a requirement to escrow cash flow from our lease at 250 Livingston Street, which may be classified as taxable income.
As of December 31, 2024, we had no vacant commercial space, and approximately 13,000 rentable square feet of vacant retail space.
As of December 31, 2025, we had 342,296 rentable square feet of vacant commercial space and a further 206,084 rentable square feet of commercial space that is subject to the holdover provisions in an expired lease, and approximately 11,000 rentable square feet of vacant retail space.
We and NYC are in the process of negotiating the terms of a five-year extension of the current lease upon its expiration in December 2025. There can be no assurance that the negotiations will conclude with an agreement.
The Company and City of New York are continuing to work through the finalizing of a previously agreed five-year extension of its expired lease. There can be no assurance that the negotiations will conclude with an agreement. The expired lease at 141 Livingston Street provided for $10.3 million in rent per annum.
In connection with the termination of the 250 Livingston Street lease, pursuant to the terms of the loan agreement related to $125 million building mortgage, we have established a cash management account for the benefit of the lender, into which we will be obligated to deposit all revenue generated by the building at 250 Livingston Street.
On March 18, 2025, we were notified by legal counsel to the servicer for the loan related to the 250 Livingston Street property that, due to the failure of our subsidiary, 250 Livingston Owner LLC, to cause all revenue generated by the 250 Livingston Street property to be deposited into the cash management account as required by the loan agreement related to the $125 million building mortgage loan, an event of default occurred under the $125 million building mortgage loan.
Removed
Our inability to replace NYC as a tenant at rent rates comparable to the rates in the lease that terminates in August 2025 or to negotiate a five-year extension of the lease expiring in December 2025 could cause a material adverse effect on us, including our financial condition, results of operations and cash flow.
Added
The commercial rental space at 141 Livingston is occupied subject to hold-over rent provisions in the lease that expired on December 27, 2025. Our commercial leases with the City of New York comprised approximately 18% and 22% of total revenues for the years ended December 31, 2025 and 2024, respectively.
Removed
We are also subject to covenants covering these leases in our loan agreements related to our commercial office properties located at 250 Livingston Street and 141 Livingston Street. Breaches of these covenants could result in defaults under the loan agreements.
Added
The lease generally provided for rent payments in the amount of $15.4 million per annum.
Removed
If the excess cash is not released to us, it could impact our available cash to fund corporate operations and pay dividends and distributions to our stockholders. 9 On January 2, 2025, we were notified that the loan servicing of the loan related to the 250 Livingston Street property was transferred, at our request, to LNR Partners (“LNR”) to serve as special servicer in order for us to engage in negotiations on a modification of our loan.
Added
The Loan is evidenced by certain promissory notes (the “Notes”) and secured by our 250 Livingston Street property in Brooklyn, New York (the “Property”). We and our Operating Partnership serve as guarantors of certain obligations under the Loan.
Removed
On January 6, 2025, we and LNR signed a Pre-Negotiation Letter Agreement to discuss our request for a reduction in the loan. These negotiations continue and there can be no guarantee that they will conclude with an agreement.
Added
The notice provided that if the 250 Livingston Owner LLC fails to cure the event of default, the lender may, among other things, accelerate the $125 million building mortgage loan and demand all amounts owing to the lender to be immediately payable, institute proceedings for the foreclosure of all liens securing the loan and sell the 250 Livingston Street Property, or file a lawsuit against the 250 Livingston owner LLC or the guarantors.
Removed
We and the Special Servicer have entered into a pre-negotiation agreement and as such are engaged in good faith discussions regarding the terms of the loan agreement related to the monthly reserve deposit, among other matters.
Added
As of May 12, 2025, we have complied with the lender’s requirement to have the deposits made by all tenants deposited directly into the cash management account. On May 8, 2025, we transferred $6.3 million to the cash management account to cover amounts owed prior to the activation of the cash management account.
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Item 2. Properties
Properties — owned and leased real estate
34 edited+50 added−23 removed29 unchanged
Item 2. Properties
Properties — owned and leased real estate
34 edited+50 added−23 removed29 unchanged
2024 filing
2025 filing
Biggest changeFt. # Units Percent Leased Annualized December 2024 Base Rental Revenue (millions)(1) Net Effective Rent Per Occupied Square Foot Residential Tribeca House Manhattan 1921/1964 482,512 506 98.4 % $ 38.27 $ 84.98 Flatbush Gardens Brooklyn 1950 1,748,671 2,494 99.1 % $ 51.40 $ 30.04 250 Livingston Street Brooklyn 1920 26,819 36 100.0 % $ 1.49 $ 61.11 Aspen Manhattan 2004 165,542 232 99.5 % $ 6.56 $ 40.82 10 West 65th Street Manhattan 1939 75,678 82 100.0 % $ 4.28 $ 56.59 Clover House Brooklyn 1959 102,131 158 97.4 % $ 8.16 $ 85.91 1010 Pacific Street Brooklyn 2023 115,401 175 97.7 % $ 6.81 $ 62.80 2,716,754 3,683 98.9 % $ 116.7 $ 44.31 Commercial 141 Livingston Street Brooklyn 1959 220,937 2 100.0 % $ 10.7 $ 81.17 250 Livingston Street Brooklyn 1920 343,486 2 100.0 % $ 15.5 $ 175.85 Tribeca House Manhattan 1921/1964 77,383 10 88.5 % $ 3.89 $ 67.56 Aspen Manhattan 2004 12,429 5 73.4 % $ 0.46 $ 50.29 654,235 19 90.5 % $ 30.55 $ 51.60 Total 3,370,989 3,702 97.3 % $ 147.52 $ 44.97 (2) Real Estate Under Development Dean Street Brooklyn 154,468 (3) 242 (3) (1) Represents annualized revenue based on December 2024 data.
Biggest changeFt. # Units Percent Leased Annualized December 2025 Base Rental Revenue (millions)(1) Net Effective Rent Per Occupied Square Foot Residential Tribeca House Manhattan 1921/1964 482,512 508 99.4 % $ 42.6 $ 88.74 Flatbush Gardens Brooklyn 1950 1,748,671 2,496 98.2 % $ 55.3 $ 32.20 250 Livingston Street Brooklyn 1920 26,819 36 100.0 % $ 1.7 $ 65.05 Aspen Manhattan 2004 165,542 232 97.8 % $ 6.9 $ 42.52 Clover House Brooklyn 1959 102,131 158 95.6 % $ 8.8 $ 89.74 1010 Pacific Street Brooklyn 2023 115,401 175 96.0 % $ 7.0 $ 63.35 Dean Street Brooklyn 2025 158,664 240 66.3 % $ 7.1 $ 67.20 2,799,740 3,845 96.4 % $ 129.4 $ 47.92 Commercial 141 Livingston Street Brooklyn 1959 220,937 1 6.7 % $ 0.5 $ 32.30 250 Livingston Street Brooklyn 1920 343,486 1 0.3 % $ 0.1 $ 116.16 Tribeca House Manhattan 1921/1964 77,383 10 91.6 % $ 4.0 $ 56.11 Aspen Manhattan 2004 21,062 6 78.0 % $ 0.6 $ 37.36 662,868 20 15.6 % $ 5.2 $ 50.11 Total 3,462,608 3,865 80.9 % $ 134.6 $ 48.00 (2) (1) Represents annualized revenue based on December 2025 data.
If we are not able to extend or replace the NYC lease at our 141 Livingston Street property for a minimum of a five-year term, we will be required to either fund a reserve account in the amount of $10 million payable in equal monthly payments over the 18 months after lease expiration or deliver to the lender a letter of credit in the amount of $10 million On October 28, 2024, we received notice that, as of October 7, 2024, the servicing of the mortgage notes was transferred to a special servicer (the “Special Servicer”) due to our alleged failure to make certain required payments under the loan agreement, including, but not limited to, the reserve deposit starting on July 7, 2024.
If we are not able to extend or replace the NYC lease at our 141 Livingston Street property for a minimum of a five-year term, we will be required to either fund a reserve account in the amount of $10 million payable in equal monthly payments over the 18 months after lease expiration or deliver to the lender a letter of credit in the amount of $10 million On October 28, 2024, we received notice that, as of October 7, 2024, the servicing of the mortgage notes was transferred to a special servicer (the "Special Servicer”) due to our alleged failure to make certain required payments under the loan agreement, including, but not limited to, the reserve deposit starting on July 7, 2024.
In addition, the property includes an adjacent lot at 22 Smith Street, currently used as a parking lot measuring approximately 5,000 square feet. 37 Property highlights include: Location • 141 Livingston Street Building Type • Commercial • Retail (parking) Tenant • City of New York Amenities • Elevators • Parking Nearby Rapid Transit Access • MTA Subway A, C, F, G, R, 2, 3, 4, 5 trains The 141 Livingston Street property is encumbered by a mortgage note to Citi Real Estate Funding Inc. with a balance of $100 million as of December 31, 2024.
In addition, the property includes an adjacent lot at 22 Smith Street, currently used as a parking lot measuring approximately 5,000 square feet. 37 Property highlights include: Location • 141 Livingston Street Building Type • Commercial • Retail (parking) Tenant • City of New York Amenities • Elevators • Parking Nearby Rapid Transit Access • MTA Subway A, C, F, G, R, 2, 3, 4, 5 trains The 141 Livingston Street property is encumbered by a mortgage note to Citi Real Estate Funding Inc. with a balance of $100 million as of December 31, 2025.
The properties also feature approximately 77,400 square feet of retail space, comprising approximately 53,000 square feet of street-level and mezzanine-level retail space, and an externally managed garage. Tenants include Equinox (a premium fitness club), Starbucks and 7 Eleven. The weighted average remaining lease duration of the retail tenants at December 31, 2024, is approximately four years.
The properties also feature approximately 77,400 square feet of retail space, comprising approximately 53,000 square feet of street-level and mezzanine-level retail space, and an externally managed garage. Tenants include Equinox (a premium fitness club), Starbucks and 7 Eleven. The weighted average remaining lease duration of the retail tenants at December 31, 2025, is approximately four years.
Additionally, the property includes 36 multifamily residential apartment units (26,819 square feet), which were developed by Clipper Equity from 2003 through 2013. 38 Property highlights include: Location • 250 Livingston Street Building Type • Commercial • Residential • Retail Commercial Tenant • City of New York Amenities • Elevators Nearby Rapid Transit Access • MTA Subway A, B, C, F, G, Q, R, 2, 3, 4, 5 trains The 250 Livingston Street property is encumbered by a mortgage note to Citi Real Estate Funding Inc. with a balance of $125.0 million as of December 31, 2024.
Additionally, the property includes 36 multifamily residential apartment units (26,819 square feet), which were developed by Clipper Equity from 2003 through 2013. 39 Property highlights include: Location • 250 Livingston Street Building Type • Commercial • Residential • Retail Commercial Tenant • City of New York Amenities • Elevators Nearby Rapid Transit Access • MTA Subway A, B, C, F, G, Q, R, 2, 3, 4, 5 trains The 250 Livingston Street property is encumbered by a mortgage note to Citi Real Estate Funding Inc. with a balance of $125.0 million as of December 31, 2025.
Property highlights include: Location • 1955 1st Avenue Building Type • Residential • Retail Number of Units • 232 Amenities • Courtyard, game room, fitness center Nearby Rapid Transit Access • MTA Subway Q, 4, 5, 6 trains The Aspen property is encumbered by a mortgage note to Capital One Multifamily Finance LLC with a balance of $59.4 million as of December 31, 2024.
Property highlights include: Location • 1955 1st Avenue Building Type • Residential • Retail Number of Units • 232 Amenities • Courtyard, game room, fitness center Nearby Rapid Transit Access • MTA Subway Q, 4, 5, 6 trains The Aspen property is encumbered by a mortgage note to Capital One Multifamily Finance LLC with a balance of $57.7 million as of December 31, 2024.
Property highlights include: Building Type • Residential Number of Units • 2,494 Amenities • Park-like space between buildings • Parking lots Nearby Rapid Transit Access • MTA Subway 2, 5 trains Flatbush Gardens is encumbered by a mortgage note to New York Community Bank with a balance of $329.0 million as of December 31, 2024.
Property highlights include: Building Type • Residential Number of Units • 2,494 Amenities • Park-like space between buildings • Parking lots Nearby Rapid Transit Access • MTA Subway 2, 5 trains Flatbush Gardens is encumbered by a mortgage note to Flagstar Bank, New York Community Bank with a balance of $329.0 million as of December 31, 2025.
We replied to the Special Servicer disputing such calculation and alleging that the Special Servicer did not calculate net worth in a reasonable manner. We provided the Special Servicer with our own calculation of net worth that shows a net worth in excess of the required amount. We await a response from the Special Servicer.
We replied to the Special Servicer disputing such calculation and alleging that the Special Servicer did not calculate net worth in a reasonable manner. We provided the Special Servicer with our own calculation of net worth that shows a net worth in excess of the required amount.
If we are unable to replace the NYC lease at comparable rents, we may not be able to cure the conditions listed in the loan agreement. If the excess cash is not released to us, it could impact our available cash to fund corporate operations and pay dividends and distributions to our stockholders.
If we are unable to replace the NYC lease at comparable rents, we may not be able to cure the conditions listed in the loan agreement, and it could impact our available cash to fund corporate operations and pay dividends and distributions to our stockholders.
The property’s main commercial tenant, the City of New York, executed a 10-year lease in December 2015; under the agreement, the annual rent increased by 25%, or $2.1 million, beginning at the end of December 2020.
The property’s main commercial tenant, the City of New York, executed a 10-year lease in December 2015; under the agreement, the annual rent increased by 25%, or $2.1 million, beginning at the end of December 2020. The lease expired on December 27, 2025.
Such amounts include, but are not limited to, $100.0 million principal amount of the mortgage notes, approximately $5.0 million of default yield maintenance premium, $10.0 million aggregate reserve deposit, and the above-described penalty default interest and penalties.
Such amounts included, but were not limited to, $100.0 million principal amount of the mortgage notes, approximately $5.0 million of default yield maintenance premium, $10.0 million aggregate reserve deposit, and the above-described penalty default interest and penalties.
On December 18, 2024, we received notice from the Special Servicer that due to its allegation that Clipper Realty (the “Guarantor”) did not maintain a net worth of not less than $100 million as of December 31, 2022 and 2023, respectively, as required under the loan agreement, we are in default on the loan.
On December 18, 2024, we received notice from the Special Servicer that due to its allegation that we as the Guarantor did not maintain a net worth of not less than $100 million as of December 31, 2022 and 2023, respectively, as required under the loan agreement, we were in default on the loan.
Amenities include various unit terraces, a rooftop terrace, a fitness center and a landscaped courtyard. 39 Property highlights include: Location • 107 Columbia Heights Building Type • Residential Number of Units • 158 Amenities • Courtyard, rooftop terrace, fitness center Nearby Rapid Transit Access • MTA Subway 2, 3, A, C, F trains The Clover House property is encumbered by a mortgage note to MetLife Investment Management with a balance of $82.0 million as of December 31, 2024.
Property highlights include: Location • 107 Columbia Heights Building Type • Residential Number of Units • 158 Amenities • Courtyard, rooftop terrace, fitness center Nearby Rapid Transit Access • MTA Subway 2, 3, A, C, F trains The Clover House property is encumbered by a mortgage note to MetLife Investment Management with a balance of $82.0 million as of December 31, 2025.
The note matures on March 6, 2031, bears interest at 3.21% and requires interest-only payments for the entire term. We have the option to prepay all (but not less than all) of the unpaid balance of the loan within three months of maturity, without a prepayment premium.
The note matures on March 6, 2031, bears interest at 3.21% and requires interest-only payments for the entire term. We have the option to prepay all (but not less than all) of the unpaid balance of the loan within three months of maturity, without a prepayment premium. The 141 Livingston Street lease expired on December 27, 2025.
Touro College, which had leased 40 apartment units in accordance with an agreement entered into when the Company purchased the property, exercised its option to terminate the leases, effective January 31, 2019. The Company subsequently repositioned the apartments and leased them at market rates.
Touro College, which had leased 40 apartment units in accordance with an agreement entered into when the Company purchased the property, exercised its option to terminate the leases, effective January 31, 2019.
On January 21, 2025, we received notice from the Special Servicer alleging that certain elements of our insurance on the building at 141 Livingston Street are not in compliance with the loan agreement requirements, including, but not limited to, due to a deductible in excess of what is permitted under the terms of the loan agreement and the use of an insurance carrier with a rating agency rating below that which is permitted under the terms of the loan agreement. 250 Livingston Street The 250 Livingston Street property is a 12-story mixed-use building, with office and residential uses on the upper floors and office and retail at grade.
On January 21, 2025, we received notice from the Special Servicer alleging that certain elements of our insurance on the building at 141 Livingston Street were not in compliance with the loan agreement requirements, including, but not limited to, due to a deductible in excess of what is permitted under the terms of the loan agreement and the use of an insurance carrier with a rating agency rating below that which is permitted under the terms of the loan agreement.
The Company completed renovations in 2019 to create 158 well-appointed studio, one- and two-bedroom units across 102,131 square feet, with amenities and indoor parking for 68 cars.
The Company completed renovations in 2019 to create 158 well-appointed studio, one- and two-bedroom units across 102,131 square feet, with amenities and indoor parking for 68 cars. Amenities include various unit terraces, a rooftop terrace, a fitness center and a landscaped courtyard.
The Company intends to redevelop the property as a fully amenitized residential building with approximately 160,000 square feet of residential leasable area. The building is expected to have 240 residential units, 70% of which will be leased at market rates and 30% of which will be designated as affordable housing.
The Company redeveloped the property as a fully amenitized residential building with approximately 160,000 square feet of residential leasable area. The building has 240 residential units, 70% of which will be leased at market rates and 30% of which are designated as affordable housing. The property will also feature approximately 9,000 square feet of retail space.
We and our Operating Partnership subsidiary serve as limited guarantors of certain obligations under the loan, including those related to the reserve monthly deposit discussed below.
The loan is evidenced by promissory mortgage notes and secured by the 141 Livingston Street property. We and our Operating Partnership subsidiary serve as limited guarantors of certain obligations under the loan, including those related to the reserve monthly deposit discussed below.
As of February 23, 2024, The City of New York, a municipal corporation acting through the Department of Citywide Administrative Services ("NYC”), notified us of its intention to terminate its lease at 250 Livingston Street effective August 23, 2025. The lease generally provides for rent payments in the amount of $15.4 million per annum.
The City of New York, a municipal corporation acting through the Department of Citywide Administrative Services ("NYC”), terminated its lease at 250 Livingston Street effective August 23, 2025, and they vacated the space on that date. The lease generally provided for rent payments in the amount of $15.4 million per annum.
Property highlights include: Location • 1010 Pacific Street Building Type • Residential Number of Units • 175 Amenities • Elevator, media room, fitness center Nearby Rapid Transit Access • MTA Subway A, C, S, 2, 3 trains There is $80.0 million in mortgage debt secured by 1010 Pacific Street as of December 31, 2024, in the form of a mortgage note to Valley National Bank which provides for maximum borrowings of $80.0 million.
Property highlights include: Location • 1010 Pacific Street Building Type • Residential Number of Units • 175 Amenities • Elevator, media room, fitness center Nearby Rapid Transit Access • MTA Subway A, C, S, 2, 3 trains There is $84.5 million in mortgage debt secured by 1010 Pacific Street as of December 31, 2025, in the form of a mortgage note to Citi Real Estate Funding Inc., a New York corporation, and Morgan Stanley Bank, N.A., a national banking association.
The Company has the option to prepay in full, or in part, the unpaid balance of the note prior to the maturity date. 40 953 Dean Street During the period December 2021 through April 2022, the Company purchased the Dean Street property which consists of multiple parcels of land in the Prospect Heights neighborhood of Brooklyn for approximately $48.5 million.
The Loan has a maturity date of October 6, 2030 and bears interest at a 5.73% rate per annum. 953 Dean Street During the period December 2021 through April 2022, the Company purchased the Dean Street property which consists of multiple parcels of land in the Prospect Heights neighborhood of Brooklyn for approximately $48.5 million.
ITEM 2. PROPERTIES Our Portfolio Summary As of December 31, 2024, our portfolio consisted of nine properties totaling approximately 3.4 million rentable square feet (plus an approximately 154 thousand rentable square feet under development) and was approximately 98% leased (excluding square footage under development).
ITEM 2. PROPERTIES Our Portfolio Summary As of December 31, 2025, our portfolio consisted of eight properties totaling approximately 3.5 million rentable square feet and was approximately 87% leased (including square footage including holdover tenants).
The total land area of the site is 29,707 square feet.
The total land area of the site is 29,707 square feet. The building currently contains 342,496 square feet of office space which is currently vacant.
Certain loan agreements require the Company to comply with affirmative and negative covenants, including the maintenance of debt service coverage ratios and liquidity balances. If the Company is not compliant, certain lenders may require cash sweeps of rent until the conditions are cured. The Company believes it is not in default on any of its loan agreements.
If the Company is not compliant, certain lenders may require cash sweeps of rent until the conditions are cured. Except as described above, the Company is not in default on any of its loan agreements. 42
The 141 Livingston Street lease expires on December 27, 2025, and if NYC were to decide not to renew or extend such lease on its stated termination date, pursuant to the terms of the lease, we would be at risk of not being able to replace NYC as a tenant, leasing the space below the current rates, incurring costs to improve the space or offer other inducements to fill the space, all of which may have an adverse effect on our financial condition, results of operations and cash flow.
There can be no assurance that the negotiations will conclude with an agreement and if we were unable to finalize and agreement and NYC was to decide vacate the building, we would be at risk of not being able to replace NYC as a tenant, leasing the space below the current rates, incurring costs to improve the space or offer other inducements to fill the space, all of which may have an adverse effect on our financial condition, results of operations and cash flow Our subsidiary, 141 Livingston Owner LLC (the “Borrower”) and Citi Real Estate Funding Inc. entered into the loan agreement related to a $100 million loan.
These properties include Tribeca House (two nearly adjacent residential properties with street-level and mezzanine-level retail space and an externally managed parking garage), the Flatbush Gardens complex (a 59-building residential complex), two properties in Downtown Brooklyn (one exclusively commercial, one mixed commercial and residential), the Aspen property (a residential building with street-level retail space and an externally managed parking garage), the 10 West 65th Street residential property, the Clover House residential property, the 1010 Pacific Street residential property and the Dean Street property (currently under development). 34 The table below presents an overview of the Company’s portfolio as of December 31, 2024: Address Submarket Year Built Leasable Sq.
These properties include Tribeca House (two nearly adjacent residential properties with street-level and mezzanine-level retail space and an externally managed parking garage), the Flatbush Gardens complex (a 59-building residential complex), two properties in Downtown Brooklyn (one exclusively commercial, one mixed commercial and residential), the Aspen property (a residential building with street-level retail space and an externally managed parking garage), the Clover House residential property, the 1010 Pacific Street residential property and the Dean Street residential property. 34 On May 30, 2025, the Company completed the sale of 10 West 65th Street in Manhattan, a 6-story residential building with approximately 76,000 square feet of residential rental GLA. for gross proceeds of $45.5 million.
All amounts remaining in such cash management account after the lender’s allocations set forth in the loan agreement will be disbursed to us once the tenant cure conditions are satisfied under the loan agreement. As of February 14, 2025, we are required to deposit into such cash management account approximately $5.7 million upon demand by the lender.
We responded by disputing the allegations in May 8, 2025, letter and noting all rents from the tenants have been deposited into the cash management account. All amounts remaining in such cash management account after the lender’s allocations set forth in the loan agreement will be disbursed to us if the tenant cure conditions are satisfied under the loan agreement.
Year Number of Tenants Total Square Feet Annualized Rental Revenue % of Annualized Rental Revenue Expiring 2025 2 548,550 25,693,317 84.0 % 2026 1 510 18,727 0.1 % 2027 2 40,568 1,730,482 5.7 % 2028 2 1,597 138,336 0.5 % 2029 — — — 0.0 % 2030 2 2,685 172,017 0.6 % 2031 1 540 165,500 0.5 % 2032 3 6,106 522,132 1.7 % 2033 1 24,200 1,456,560 4.8 % 2034 1 2,212 149,976 0.5 % Thereafter 3 8,052 541,500 1.8 % Total 18 635,020 $ 30,588,547 100.0 % Descriptions of Our Properties Tribeca House The Company purchased the 50 Murray Street and 53 Park Place buildings on December 15, 2014.
Year Number of Tenants Total Square Feet Annualized Rental Revenue % of Annualized Rental Revenue Expiring 2026 1 510 19,484 0.4 % 2027 1 7,568 380,204 7.3 % 2028 2 1,597 139,308 2.7 % 2029 — — — 0.0 % 2030 2 2,685 167,249 3.2 % 2031 1 540 175,579 3.4 % 2032 3 6,106 565,440 10.9 % 2033 1 24,200 1,485,691 28.6 % 2034 1 2,212 154,475 3.0 % 2035 — — — 0.0 % Thereafter 5 48,358 2,107,341 40.6 % Total 17 93,776 $ 5,194,772 100.0 % 35 Descriptions of Our Properties Tribeca House The Company purchased the 50 Murray Street and 53 Park Place buildings on December 15, 2014.
The line of credit bears interest of Prime + 1.5%. The line of credit expired on August 10, 2024. The Company has provided a limited guaranty for mortgage notes at several of its properties. The Company’s loan agreements contain customary representations, covenants, and events of default.
The Company has provided a limited guaranty for mortgage notes at several of its properties. The Company’s loan agreements contain customary representations, covenants, and events of default. Certain loan agreements require the Company to comply with affirmative and negative covenants, including the maintenance of debt service coverage ratios and liquidity balances.
(2) Represents weighted average. (3) Land purchases made on December 22, 2021, February 14, 2022 and April 14, 2022, square footage and number of units based on management’s development estimates 35 The table below presents an overview of commercial and retail lease expirations for the next ten years and thereafter, beginning in 2024.
(2) Represents weighted average. The table below presents an overview of commercial and retail lease expirations for the next ten years and thereafter, beginning in 2026. Excludes residential leases which are generally of one year duration.
On January 6, 2025, we and LNR signed a Pre-Negotiation Letter Agreement to discuss our request for a reduction in the loan. These negotiations continue and there can be no guarantee that they will conclude with an agreement. Aspen In June 2016, the Company purchased the Aspen property located at 1955 1st Avenue in Manhattan for $103 million.
As previously disclosed, the Company is in the process of negotiating a Consent and Cooperation Agreement with the Lender for the sale of the Property, but there can be no assurance that such Consent and Cooperation Agreement will be consummated. Aspen In June 2016, the Company purchased the Aspen property located at 1955 1st Avenue in Manhattan for $103 million.
We and NYC are in the process of negotiating the terms of a five-year extension of the current lease upon its expiration in December 2025. There can be no assurance that the negotiations will conclude with an agreement.
We and NYC are in the process of finalizing negotiations regarding a five-year extension of the expired lease.
In connection with the termination of the 250 Livingston Street lease, pursuant to the terms of the loan agreement related to $125 million building mortgage, we have established a cash management account for the benefit of the lender, into which we will be obligated to deposit all revenue generated by the building at 250 Livingston Street.
On March 18, 2025, we were notified by legal counsel to the servicer for the loan related to the 250 Livingston Street property that, due to the failure of our subsidiary, 250 Livingston Owner LLC, to cause all revenue generated by the 250 Livingston Street property to be deposited into the cash management account as required by the loan agreement related to the $125 million building mortgage loan, an event of default occurred under the $125 million building mortgage loan.
Removed
Excludes residential leases which are generally of one year duration.
Added
The Company incurred $1.9 million in closing costs and paid $800 thousand in accrued interest at closing. At closing, the Company repaid in full its $31.2 million mortgage note (the “Mortgage”) with Flagstar Bank (“Flagstar”) (see note 4 below).
Removed
Our subsidiary, 141 Livingston Owner LLC (the “Borrower”) and Citi Real Estate Funding Inc. entered into the loan agreement related to a $100 million loan. The loan is evidenced by promissory mortgage notes and secured by the 141 Livingston Street property.
Added
The Company recorded a loss on the disposal of long-lived assets of $857 thousand and a loss on impairment of long-lived assets of $33.8 million during the year-ended December 31, 2025. The table below presents an overview of the Company’s portfolio as of December 31, 2025: Address Submarket Year Built Leasable Sq.
Removed
We and the Special Servicer have entered into a pre-negotiation agreement and as such are engaged in good faith discussions regarding the terms of the loan agreement related to the monthly reserve deposit, among other matters.
Added
The City of New York continues to occupy the building under the holdover provision in the expired lease and pays rent at the same level as was required under the lease.
Removed
However, if we are unable to resolve this matter in a manner favorable to us, the lender may also seek to exercise any of its other rights or remedies under the loan agreement.
Added
On March 12, 2025, we received a letter from counsel to the successor to the special servicer reaffirming the occurrence of alleged events of default under the loan agreement described above and demanding the establishment of a restricted account, a cash management account and a debt service account.
Removed
The building currently contains 342,496 square feet of office space which is 100% leased to the City of New York’s Department of Environmental Protection and Human Resources Administration under a ten-year lease that expires in August 2030; however, the City holds one-time termination options at the end of the fifth year and the seventh year.
Added
In addition, the letter demanded that tenants of 141 Livingston Street be sent notices directing them to make lease payments to the cash management account. 38 We believe that we are not required to establish the foregoing accounts or send such notices to the tenants.
Removed
The City of New York has advised us that it will vacate the 250 Livingston Street property in 2025.
Added
However, if we are required to establish such accounts and deliver such notices, it could impact our available cash to fund corporate operations and pay dividends and distributions to our stockholders.
Removed
On January 2, 2025, we were notified that the loan servicing of the loan related to the 250 Livingston Street property was transferred, at our request, to LNR Partners (“LNR”) to serve as special servicer in order for us to engage in negotiations on a modification of our loan.
Added
On March 20, 2025, Wells Fargo Bank, National Association, as trustee for the benefit of the registered holders of certain pass-through certificates issued by trusts that are the holders of the promissory mortgage notes secured by the 141 Livingston Street property, referred to as "Plaintiff,” filed a lawsuit against the Borrower, as well as us and our Operating Partnership subsidiary, as guarantors, in the Supreme Court of the State of New York.
Removed
Property highlights include: Location • 10 West 65th Street Building Type • Residential Number of Units • 82 Amenities • Elevator Nearby Rapid Transit Access • MTA Subway A, B, C, D, 1, 2, 3 trains The 10 West 65th Street property is encumbered by a mortgage note to New York Community Bank, entered into in connection with the acquisition of the property, with a balance of $31.4 million as of December 31, 2024.
Added
Plaintiff demands, among other things, that (i) the 141 Livingston Street property be sold and the Plaintiff be paid the amounts due under the loan agreement, with interest thereon to the time of such payment, together with, among other items, the expenses of the sale, Plaintiff’s attorneys’ fees; (ii) Plaintiff be paid all rents and revenues of the 141 Livingston Street property as they become due and payable; (iii) a receiver be appointed to manage the 141 Livingston Street property, with power among other things to demand and recover payment from anyone who has received a distribution from 141 Borrower after any event of default; (iv) Plaintiff have such other and further relief as may be just and equitable; (v) guarantors pay to Plaintiff the amount of any losses or damages suffered or incurred by Plaintiff as the court may determine to be just and equitable and amounts owed under the guaranty.
Removed
The note matures on November 1, 2027, and bore an interest rate of 3.375% through October 2022 at which time it was scheduled to reset to the prime rate plus 2.75%, subject to an option to fix the rate.
Added
We believe that the claims set forth in this complaint are without merit and intend to vigorously defend against this lawsuit.
Removed
On August 26, 2022, the Company signed an amendment to the note that changed the benchmark and spread used from LIBOR plus 2.75% to 1-Month CME term SOFR plus 2.5%, rounded up to the nearest 1/8th and reset monthly. The benchmark rate at December 31, 2024 was 4.75%.
Added
On April 7, 2025, we filed an Affirmation in opposition to the motion of the Plaintiff for the appointment of a receiver and in support of defendants cross motion to dismiss the action and cancel notice of pendency with the Supreme Court of the State of New York, County of Kings.
Removed
The note required interest-only payments through November 2019, and monthly principal and interest payments thereafter based on a 30-year amortization schedule.
Added
A hearing on the motions was scheduled for April 8, 2025, but it was adjourned until May 6, 2025. The Plaintiff submitted additional filings on April 29, 2025, and we submitted our replies on May 6, 2025.
Removed
We have the option to prepay all (but not less than all) of the unpaid balance of the note prior to the maturity date, subject to certain prepayment premiums, as defined. 1010 Pacific Street In November 2019, the Company purchased the 1010 Pacific Street property in the Prospect Heights neighborhood of Brooklyn for $31 million.
Added
On May 13, 2025, the Court denied (i) the Plaintiff’s motion to appoint a receiver to manage the 141 Livingston Street property, "as Plaintiff’s likelihood of ultimately prevailing on its claims herein appears remote” and (ii) the Company’s cross motion to dismiss the lawsuit, "as Plaintiff’s contentions do raise a question of fact”.
Removed
The loan provided initial funding of $60.0 million and a further $20.0 million subject to the achievement of certain financial targets. The initial funding of $60.0 million has an annual interest rate of 5.55%. The additional borrowing of $20.0 million has an annual interest rate of 6.37%.
Added
In April 2025, we and the NYC agreed to the terms of a five-year extension of the then current lease, with an option for the NYC to terminate the lease after two years with a prior six month notice. NYC has sent the lease to us to sign.
Removed
The total borrowing of $80.0 million has a term of twenty-four months and matures on September 15, 2025.
Added
On April 22, 2025, we sent the lease to the loan special servicer for approval in accordance with the terms of the loan agreement. On May 21, 2025 the special servicer approved the lease subject to certain conditions.
Removed
The property will also feature approximately 9,000 square feet of retail space. The construction process is estimated to take approximately two years. On December 22, 2021, the Company entered into a $30 million mortgage note agreement with Bank Leumi, N.A related to the Dean Street acquisition.
Added
We rejected the conditions that amongst other changes required us to change the terms of the cancellation provisions in the lease and make amendments to the loan documents to be in line with the lenders allegations in the above lawsuit. There can be no assurance that the lease will be approved or finalized.
Removed
The notes original maturity was December 22, 2022, and was subsequently extended to September 22, 2023. The note required interest-only payments and bore interest at the prime rate (with a floor of 3.25%) plus 1.60%.
Added
On June 11, 2025, the lender filed an appeal of the denial of the receiver. On June 23, 2025, the Lender filed an amended complaint seeking a declaratory judgment that its conditions for its consent to the lease were reasonable. On July 2, 2025, the lender filed a renewed motion for a temporary receiver.
Removed
In April 2022, the Company borrowed an additional $7.0 under the mortgage note in connection with the acquisition of additional parcels of land in February and April 2022.
Added
On July 11, 2025, the Company filed an answer with counterclaims, seeking among other things declaratory relief that the lenders conditions are unreasonable for the proposed lease renewal. On July 18, 2025, we filed opposition to the renewed receiver motion. On July 30, 2025, the judge heard arguments on the renewed motion for a temporary receiver.
Removed
On August 10, 2023, the Company refinanced its $37 million mortgage on its Dean Street development with a senior construction loan with Valley National Bank that permits borrowings up to $115 million and a Mezzanine Loan with BADF 953 Dean Street Lender LLC that permits borrowings up to $8 million.
Added
On July 31, 2025, the lender filed a motion to dismiss the Company’s counterclaims. The Company filed opposition on September 30, 2025, and the motion was scheduled for hearing on December 16, 2025. On September 30, 2025, the court denied the Plaintiff’s renewed motion for a receiver.
Removed
The Senior Loan allows maximum borrowings of $115 million for a 30-month term, has two 6-month extension options, and bears interest at 1-Month Term SOFR plus 4.00%, with an all-in floor of 5.50% (8.55% at December 31, 2024).
Added
The court ruled, however, that if the City of New York exercises its option to terminate early under the proposed lease extension, the Company will be required to pay $2,000 on the first day of each month thereafter until a total of $10,000 has been accumulated.
Removed
The Senior Loan consists of a land loan, funded at closing to refinance the existing loan totaling $37.0 million, a construction loan of up to $62.4 million and a project loan of up to $15.6 million. The Company has provided a 30% payment guarantee of outstanding borrowings among other standard indemnities.
Added
Under this decision and order, failure of the Company to fund the reserve fund at that time would be grounds for the Lender to submit an order appointing a receiver to the court of endorsement. On October 28, 2025, the lender filed a notice of appeal of the court’s decision.
Removed
As of December 31, 2024, the Company has drawn $49.3 million from the construction loan and $12.5 million from the project loan. The Mezzanine Loan allows maximum borrowings of $8,000 for a 30-month term, have two 6-month extension options, and bears interest at 1-Month Term SOFR plus 10%, with an all-in floor of 13% (14.55% at December 31, 2024).
Added
On October 28, 2025, the lender filed a notice of appeal of the court’s decision. On October 27, 2025, the Civil Appeals Management Program("CAMP”) of the Appellate Division, Second Department New York State Court of Appeals conducted a mandatory conference in which the Company and the Plaintiff participated to attempt to reach a settlement of the pending litigation.
Removed
Interest shall accrue on the principal, is compounded monthly and is due at the end of the term of the loan. At closing, $4,500 was funded to cover closing costs incurred on the construction loans. As of December 31,2024, the remaining $3,500 was drawn for ongoing construction costs.
Added
Another settlement conference took place on November 13, 2025.
Removed
During the years ended December 31, 2024 and 2023, the Company incurred $1,508 and $161, respectively, in interest and is included in the balance of the Notes Payable in the Consolidated Balance Sheet. On August 10, 2023, the Company entered into a $5,000 corporate line of credit with Valley National Bank.
Added
On December 24, 2025, the Company entered into the Loan Modification Agreement (the “Agreement”) with Wells Fargo Bank, National Association, as trustee for the benefit of the registered holders of certain commercial mortgage pass-through certificates related to the Loan (collectively, the “Lender”), to settle the ongoing litigation between the Lender, the Borrower, the Company and the Operating Partnership.
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Item 5. Market for Registrant's Common Equity
Market for Common Equity — stock, dividends, buybacks
2 edited+0 added−0 removed9 unchanged
Item 5. Market for Registrant's Common Equity
Market for Common Equity — stock, dividends, buybacks
2 edited+0 added−0 removed9 unchanged
2024 filing
2025 filing
Biggest changeITEM 5. MARKET FOR REGISTRANT ’ S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES Market Information Our common stock is traded on the NYSE under the ticker symbol “CLPR”. The stock began trading on February 10, 2017. Holders As of February 14, 2025, there were 6,112 beneficial holders of our common stock.
Biggest changeITEM 5. MARKET FOR REGISTRANT ’ S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES Market Information Our common stock is traded on the NYSE under the ticker symbol “CLPR”. The stock began trading on February 10, 2017. Holders As of February 24, 2026, there were 6,220 beneficial holders of our common stock.
For more information regarding risk factors that could materially adversely affect our ability to pay dividends and make other distributions to our stockholders, see “Risk Factors.” 42 Unregistered Sales of Equity Securities None. Issuer Purchases of Equity Securities None. ITEM 6. RESERVED
For more information regarding risk factors that could materially adversely affect our ability to pay dividends and make other distributions to our stockholders, see “Risk Factors.” 44 Unregistered Sales of Equity Securities None. Issuer Purchases of Equity Securities None. ITEM 6. RESERVED
Item 7. Management's Discussion & Analysis
Management's Discussion & Analysis (MD&A) — revenue / margin commentary
73 edited+70 added−33 removed107 unchanged
Item 7. Management's Discussion & Analysis
Management's Discussion & Analysis (MD&A) — revenue / margin commentary
73 edited+70 added−33 removed107 unchanged
2024 filing
2025 filing
Biggest changeThe discussion below highlights the specific properties contributing to the changes in the results of operations and focuses on the properties that the Company owned and operated for the full period in each comparison. 50 Income Statement for the Years Ended December 31, 2024 and 2023 (in thousands) 2024 Less: 1010 Pacific 2024: Excluding 1010 Pacific 2023 Less: 1010 Pacific 2023: Excluding 1010 Pacific Increase (decrease) Excluding 1010 Pacific % Revenues Residential rental income $ 109,873 $ 6,451 $ 103,422 $ 99,716 $ 3,114 $ 96,602 $ 6,820 7.1 % Commercial rental income 38,902 66 38,836 38,489 24 38,465 371 1.0 % Total revenues 148,775 6,517 142,258 138,205 3,138 135,067 7,191 5.3 % Operating Expenses Property operating expenses 34,163 906 33,257 30,619 702 29,917 3,340 11.2 % Real estate taxes and insurance 29,770 (20 ) 29,790 31,951 360 31,591 (1,801 ) (5.7 )% General and administrative 14,152 421 13,731 13,169 240 12,929 802 6.2 % Transaction pursuit costs — — — 357 — 357 (357 ) (100.0 )% Depreciation and amortization 29,892 1,417 28,475 28,939 1,305 27,634 841 3.0 % Total operating expenses 107,977 2,724 105,253 105,035 2,607 102,428 2,825 2.8 % Litigation settlement and other (269 ) — (269 ) — — — (269 ) — Income from operations 40,529 3,793 36,736 33,170 531 32,639 4,097 12.6 % Interest expense, net (47,111 ) (5,168 ) (41,943 ) (44,867 ) (3,013 ) (41,854 ) (89 ) (0.2 )% Loss on modification/extinguishment of debt — — — (3,868 ) — (3,868 ) 3,868 100.0 % Net loss $ (6,582 ) $ (1,375 ) $ (5,207 ) $ (15,565 ) $ (2,482 ) $ (13,083 ) $ 7,876 60.2 % The dollar amounts in the narrative disclosure below are in thousands, other than the base rent per square foot figures.
Biggest changeThe discussion below highlights the specific properties contributing to the changes in the results of operations and focuses on the properties that the Company owned and operated for the full period in each comparison. 52 Income Statement for the Years Ended December 31, 2025 and 2024 (in thousands) 2025 10 West: 65 th Street & Dean Street 2025: Excluding 10 West 65 th Street & Dean Street 2024 10 West: 65 th Street & Dean Street 2024: Excluding 10 West 65 th Street & Dean Street Increase (decrease) Excluding 10 West 65 th Street & Dean Street % Revenues Residential rental income $ 118,864 $ 3,742 $ 115,122 $ 109,873 $ 4,040 $ 105,833 $ 9,289 8.8 % Commercial rental income 34,338 7 34,331 38,902 14 38,888 (4,557 ) (11.7 )% Total revenues 153,202 3,749 149,453 148,775 4,054 144,721 4,732 3.3 % Operating Expenses Property operating expenses 37,986 996 36,990 34,163 728 33,435 3,555 10.6 % Real estate taxes and insurance 30,394 605 29,789 29,770 1,100 28,670 1,119 3.9 % General and administrative 15,523 401 15,122 14,152 390 13,762 1,360 9.9 % Transaction pursuit costs (10 ) — (10 ) — — — (10 ) 0.0 % Depreciation and amortization 31,327 1,884 29,443 29,892 1,170 28,722 721 2.5 % Impairment of Long-Lived Assets 33,780 33,780 — — — — — 0.0 % Total operating expenses 149,000 37,666 111,334 107,977 3,388 104,589 6,745 6.4 % Litigation settlement and other (26 ) — (26 ) (269 ) — (269 ) 243 90.3 % Income from operations 4,176 (33,917 ) 38,093 40,529 666 39,863 (1,770 ) 4.4 % Loss on disposal of long lived assets (857 ) (857 ) Interest expense, net (53,027 ) (5,737 ) (47,290 ) (47,111 ) (2,542 ) (44,569 ) (2,721 ) (6.1 )% Loss on modification/extinguishment of debt (2,627 ) — (2,627 ) — — — (2,627 ) (100.0 )% Net loss $ (52,335 ) $ (40,511 ) $ (11,824 ) $ (6,582 ) $ (1,876 ) $ (4,706 ) $ (7,118 ) (151.3 )% The dollar amounts in the narrative disclosure below are in thousands, other than the base rent per square foot figures.
In exchange, the Company is eligible to receive incremental rental assistance under section 610 of the Private Housing Financing Law for tenants receiving government rental assistance. The Section 610 rental assistance is paid by the government the City of New York as incremental rent above and beyond the base rent paid by the tenant.
In exchange, the Company is eligible to receive incremental rental assistance under section 610 of the Private Housing Financing Law for tenants receiving government rental assistance. The Section 610 rental assistance is paid by the City of New York as incremental rent above and beyond the base rent paid by the tenant.
Non-GAAP Financial Measures In this Annual Report on Form 10-K, 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. 57 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.
Non-GAAP Financial Measures In this Annual Report on Form 10-K, 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. 60 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.
Expenditures for improvements, renovations, and replacements of real estate assets are capitalized and depreciated over their estimated useful lives if the expenditures qualify as betterment or the life of the related asset will be substantially extended beyond the original life expectancy. 46 The Company evaluates each acquisition of real estate or in-substance real estate to determine if the integrated set of assets and activities acquired meets the definition of a business and needs to be accounted for as a business combination.
Expenditures for improvements, renovations, and replacements of real estate assets are capitalized and depreciated over their estimated useful lives if the expenditures qualify as betterment or the life of the related asset will be substantially extended beyond the original life expectancy. 48 The Company evaluates each acquisition of real estate or in-substance real estate to determine if the integrated set of assets and activities acquired meets the definition of a business and needs to be accounted for as a business combination.
On January 21, 2025, we received notice from the Special Servicer alleging that certain elements of our insurance on the building at 141 Livingston Street are not in compliance with the loan agreement requirements, including, but not limited to, due to a deductible in excess of what is permitted under the terms of the loan agreement and the use of an insurance carrier with a rating agency rating below that which is permitted under the terms of the loan agreement.
On January 21, 2025, we received notice from the Special Servicer alleging that certain elements of our insurance on the building at 141 Livingston Street were not in compliance with the loan agreement requirements, including, but not limited to, due to a deductible in excess of what is permitted under the terms of the loan agreement and the use of an insurance carrier with a rating agency rating below that which is permitted under the terms of the loan agreement.
We have the option to prepay all (but not less than all) of the unpaid balance of the note prior to the maturity date, subject to certain prepayment premiums, as defined. 250 Livingston Street There is $125.0 million in mortgage debt secured by 250 Livingston Street, as of December 31, 2024, in the form of a mortgage note to Citi Real Estate Funding Inc.
We have the option to prepay all (but not less than all) of the unpaid balance of the note prior to the maturity date, subject to certain prepayment premiums, as defined. 250 Livingston Street There is $125.0 million in mortgage debt secured by 250 Livingston Street, as of December 31, 2025, in the form of a mortgage note to Citi Real Estate Funding Inc.
The net loss allocable to such units is reflected as non-controlling interests in the accompanying consolidated financial statements. Results of Operations Our focus throughout the years ended December 31, 2024 and 2023, has been to manage our properties to optimize revenues and control costs, while continuing to renovate and reposition certain properties.
The net loss allocable to such units is reflected as non-controlling interests in the accompanying consolidated financial statements. Results of Operations Our focus throughout the years ended December 31, 2025 and 2024, has been to manage our properties to optimize revenues and control costs, while continuing to renovate and reposition certain properties.
Under the Article 11 agreement, the Company has entered into a Housing Repair and Maintenance Letter Agreement (“HRMLA”) in which the Company has agreed to perform certain capital improvements to Flatbush Gardens over the next three years. The current estimate is that the costs of that work will be an amount up to $27 million.
Under the Article 11 agreement, the Company has entered into a Housing Repair and Maintenance Letter Agreement (“HRMLA”) in which the Company has agreed to perform certain capital improvements to Flatbush Gardens over the next three years. The current estimate is that the costs of that work will be an amount up to $27,000.
Costs incurred in seeking financing transactions which do not close are expensed in the period the financing transaction is terminated. 48 Revenue Recognition As mentioned above under Tenant and Other Receivables and Allowance for Doubtful Accounts the Company records lease income under ASC 842,"Leases” which replaces the guidance under ASC 840.
Costs incurred in seeking financing transactions which do not close are expensed in the period the financing transaction is terminated. 50 Revenue Recognition As mentioned above under Tenant and Other Receivables and Allowance for Doubtful Accounts the Company records lease income under ASC 842,"Leases” which replaces the guidance under ASC 840.
As of December 31, 2024 and 2023, the Company had unvested LTIP units which provide for non-forfeitable rights to dividend-equivalent payments. Accordingly, these unvested LTIP units are considered participating securities and are included in the computation of basic and diluted net loss per share pursuant to the two-class method.
As of December 31, 2025 and 2024, the Company had unvested LTIP units which provide for non-forfeitable rights to dividend-equivalent payments. Accordingly, these unvested LTIP units are considered participating securities and are included in the computation of basic and diluted net loss per share pursuant to the two-class method.
Clover House There is $82,000 in mortgage debt secured by Clover House as of December 31, 2024, in the form of a mortgage note to MetLife Investment Management. The note matures on December 1, 2029, bears interest at 3.53% and requires interest-only payments for the entire term.
Clover House There is $82,000 in mortgage debt secured by Clover House as of December 31, 2025, in the form of a mortgage note to MetLife Investment Management. The note matures on December 1, 2029, bears interest at 3.53% and requires interest-only payments for the entire term.
Depreciation is not recorded on real estate held for sale. 47 If a tenant vacates its space prior to the contractual termination of the lease and no rental payments are being made on the lease, any unamortized balances of the related intangibles are written off.
Depreciation is not recorded on real estate held for sale. 49 If a tenant vacates its space prior to the contractual termination of the lease and no rental payments are being made on the lease, any unamortized balances of the related intangibles are written off.
The Company did not have dilutive securities as of December 31, 2024, or 2023. The effect of the conversion of the 26,317 Class B LLC units outstanding is not reflected in the computation of basic and diluted net loss per share, as the effect would be anti-dilutive.
The Company did not have dilutive securities as of December 31, 2025, or 2024. The effect of the conversion of the 26,317 Class B LLC units outstanding is not reflected in the computation of basic and diluted net loss per share, as the effect would be anti-dilutive.
As of December 31, 2024 and 2023, the Company has no derivatives for which it applies hedge accounting. Loss Per Share Basic and diluted net loss per share is computed by dividing net loss attributable to common stockholders by the weighted average common shares outstanding.
As of December 31, 2025 and 2024, the Company has no derivatives for which it applies hedge accounting. Loss Per Share Basic and diluted net loss per share is computed by dividing net loss attributable to common stockholders by the weighted average common shares outstanding.
For comparison of the year ended December 31, 2023 to the year ended December 31, 2022, refer to Item 7, “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2023.
For comparison of the year ended December 31, 2024 to the year ended December 31, 2023, refer to Item 7, “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2024.
We define NOI as income from operations plus real estate depreciation and amortization, general and administrative expenses, acquisition and other costs, amortization of identifiable intangibles and straight-line rent adjustments to revenue from long-term leases, less gain on termination of lease.
We define NOI as income from operations plus real estate depreciation and amortization, general and administrative expenses, acquisition and other costs, amortization of identifiable intangibles and straight-line rent adjustments to revenue from long-term leases and certain litigation settlement and other, less gain on termination of lease.
We replied to the Special Servicer disputing such calculation and alleging that the Special Servicer did not calculate net worth in a reasonable manner. We provided the Special Servicer with our own calculation of net worth that shows a net worth in excess of the required amount. We await a response from the Special Servicer.
We replied to the Special Servicer disputing such calculation and alleging that the Special Servicer did not calculate net worth in a reasonable manner. We provided the Special Servicer with our own calculation of net worth that shows a net worth in excess of the required amount.
If we are unable to replace the NYC lease at comparable rents, we may not be able to cure the conditions listed in the loan agreement. If the excess cash is not released to us, it could impact our available cash to fund corporate operations and pay dividends and distributions to our stockholders.
If we are unable to replace the NYC lease at comparable rents, we may not be able to cure the conditions listed in the loan agreement, and it could impact our available cash to fund corporate operations and pay dividends and distributions to our stockholders.
Our ability to seek increased rents at our Flatbush Gardens property, our Aspen property and a portion of our 10 West 65th Street property is limited, however, as a result of the rent stabilization laws and regulations of New York City, including the Housing Stability and Tenant Protection Act of 2019 (“HSTP”), which was signed into law in New York in June 2019.
Our ability to seek increased rents at our Flatbush Gardens property, and our Aspen property is limited, however, as a result of the rent stabilization laws and regulations of New York City, including the Housing Stability and Tenant Protection Act of 2019 (“HSTP”), which was signed into law in New York in June 2019.
Trends During 2024, the Company’s residential properties continued to have elevated occupancy levels and experienced growth in rental rates, as a result of a robust rental market in the New York metro area. The average rental rate per square foot at the Tribeca House property at December 31, 2024 was $82.52, up from $77.70 at December 31, 2023.
Trends During 2025, the Company’s residential properties continued to have elevated occupancy levels and experienced growth in rental rates, as a result of a robust rental market in the New York metro area. The average rental rate per square foot at the Tribeca House property at December 31, 2025 was $88.74, up from $82.52 at December 31, 2024.
Such amounts include, but are not limited to, $100,000 principal amount of the mortgage notes, approximately $5,000 of default yield maintenance premium, $10,000 aggregate reserve deposit, and the above-described penalty default interest and penalties.
Such amounts included, but were not limited to, $100,000 principal amount of the mortgage notes, approximately $5,000 of default yield maintenance premium, $10,000 aggregate reserve deposit, and the above-described penalty default interest and penalties.
As a result, we are particularly affected by the local economic conditions in these markets, including, but not limited to, changes in supply of or demand for apartment units in our markets, competition for real property investments in our markets, changes in government rules, regulations and fiscal policies, including those governing real estate usage and tax, and any environmental risks related to the presence of hazardous or toxic substances or materials at or in the vicinity of our properties, which could negatively affect our overall performance. 45 We may be unable to accurately predict future changes in national, regional or local economic, demographic or real estate market conditions.
As a result, we are particularly affected by the local economic conditions in these markets, including, but not limited to, changes in supply of or demand for apartment units in our markets, competition for real property investments in our markets, changes in government rules, regulations and fiscal policies, including those governing real estate usage and tax, and any environmental risks related to the presence of hazardous or toxic substances or materials at or in the vicinity of our properties, which could negatively affect our overall performance.
Aspen There is $59,403 in mortgage debt secured by Aspen, as of December 31, 2024, in the form of a mortgage note to Capital One Multifamily Finance LLC. The note matures on July 1, 2028, and bears interest at 3.68%.
Aspen There is $57,734 in mortgage debt secured by Aspen, as of December 31, 2025, in the form of a mortgage note to Capital One Multifamily Finance LLC. The note matures on July 1, 2028, and bears interest at 3.68%.
The note matures on March 6, 2031, bears interest at 3.21% and requires interest-only payments for the entire term. We have the option to prepay all (but not less than all) of the unpaid balance of the loan within three months of maturity, without a prepayment premium.
The note matures on March 6, 2031, bears interest at 3.21% and requires interest-only payments for the entire term. We have the option to prepay all (but not less than all) of the unpaid balance of the loan within three months of maturity, without a prepayment premium. The 141 Livingston Street lease expired on December 27, 2025.
On December 18, 2024, we received notice from the Special Servicer that due to its allegation that Clipper Realty (the “Guarantor”) did not maintain a net worth of not less than $100,000 as of December 31, 2022 and 2023, respectively, as required under the loan agreement, we are in default on the loan.
On December 18, 2024, we received notice from the Special Servicer that due to its allegation that we as the Guarantor did not maintain a net worth of not less than $100 million as of December 31, 2022 and 2023, respectively, as required under the loan agreement, we were in default on the loan.
During the period December 2021 through April 2022, the Company purchased the Dean Street property located in Prospect Heights, New York, for approximately $48.5 million. 43 As of December 31, 2024, the Company owned: • two neighboring residential/retail rental properties at 50 Murray Street and 53 Park Place in the Tribeca neighborhood of Manhattan; • one residential property complex in the East Flatbush neighborhood of Brooklyn consisting of 59 buildings; • two primarily commercial properties in Downtown Brooklyn (one of which includes 36 residential apartment units); • one residential/retail rental property at 1955 1st Avenue in Manhattan; • one residential rental property at 107 Columbia Heights in the Brooklyn Heights neighborhood of Brooklyn; • one residential rental property at 10 West 65th Street in the Upper West Side neighborhood of Manhattan; • one residential rental property at 1010 Pacific Street in the Prospect Heights neighborhood of Brooklyn; and • the Dean Street property, to be redeveloped as a residential/retail rental building.
During the period December 2021 through April 2022, the Company purchased the Dean Street property located in Prospect Heights, New York, for approximately $48.5 million. 45 As of December 31, 2025, the Company owned: • two neighboring residential/retail rental properties at 50 Murray Street and 53 Park Place in the Tribeca neighborhood of Manhattan; • one residential property complex in the East Flatbush neighborhood of Brooklyn consisting of 59 buildings; • two primarily commercial properties in Downtown Brooklyn (one of which includes 36 residential apartment units); • one residential/retail rental property at 1955 1st Avenue in Manhattan; • one residential rental property at 107 Columbia Heights in the Brooklyn Heights neighborhood of Brooklyn; • one residential rental property at 1010 Pacific Street in the Prospect Heights neighborhood of Brooklyn; and • one residential rental property at 953 Dean Street in the Prospect Heights neighborhood of Brooklyn.
Risk Factors.” 44 Throughout 2024 and 2023, we continued to benefit from relatively low interest rates on our debt. Our weighted average interest rate as of December 31, 2024, was approximately 4.0% per annum.
Risk Factors.” 46 Throughout 2025 and 2024, we continued to benefit from relatively low interest rates on our debt. Our weighted average interest rate as of December 31, 2025, was approximately 3.9% per annum.
For the year ended December 31, 2024 and 2023, the Company charged revenue in the amount of $4,219 and $4,526, respectively, for residential receivables not deemed probable of collection and recognized revenue of $299 and $1,447, respectively, for a reassessment of collectability of residential receivables previously not deemed probable of collection.
For the year ended December 31, 2025 and 2024, the Company charged revenue in the amount of $3,822 and $4,219, respectively, for residential receivables not deemed probable of collection and recognized revenue of $145 and $299, respectively, for a reassessment of collectability of residential receivables previously not deemed probable of collection.
At our Aspen property, the residential units are subject to regulations established by the HDC, under which there are no rental restrictions on approximately 55% of the units and low- and middle-income restrictions on approximately 45% of the units.
At our Aspen property, the residential units are subject to regulations established by the HDC, under which there are no rental restrictions on approximately 55% of the units and low- and middle-income restrictions on approximately 45% of the units. There are no rent stabilization restrictions at our Tribeca House properties, our 250 Livingston Street property, our Clover House property.
Factors that May Influence Future Results of Operations We derive approximately 74% of our revenues from rents received from residents in our apartment rental properties and the remainder from commercial and retail rental customers. We believe that we have expertise in operating, renovating and repositioning our properties.
Factors that May Influence Future Results of Operations During the year ended December 31, 2025, we derived approximately 78% of our revenues from rents received from residents in our apartment rental properties and the remainder from commercial and retail rental customers. We believe that we have expertise in operating, renovating and repositioning our properties.
In accordance with ASC 842, the Company performs a detailed review of amounts due from tenants to determine if accounts receivable balances and future lease payments were probable of collection, writes off receivables not probable of collection and records a general reserve against revenues for receivables probable of collection for which a loss can be reasonably estimated.
In accordance with Accounting Standards Codification ("ASC”) 842 "Leases,” the Company performed a detailed review of amounts due from tenants to determine if accounts receivable balances and future lease payments were probable of collection, wrote off receivables not probable of collection and recorded a general reserve against revenues for receivables probable of collection for which a loss can be reasonably estimated.
Accordingly, no provision has been made for federal, state or local income or franchise taxes in the accompanying consolidated financial statements. 49 In accordance with FASB ASC Topic 740, the Company believes that it has appropriate support for the income tax positions taken and, as such, does not have any uncertain tax positions that, if successfully challenged, could result in a material impact on its financial position or results of operations.
In accordance with FASB ASC Topic 740, the Company believes that it has appropriate support for the income tax positions taken and, as such, does not have any uncertain tax positions that, if successfully challenged, could result in a material impact on its financial position or results of operations.
Liquidity and Capital Resources As of December 31, 2024, we had $1,275.4 million of indebtedness (net of unamortized issuance costs) secured by our properties, $19.9 million of cash and cash equivalents, and $18.2 million of restricted cash. See Note 4 “Notes Payable” of the accompanying “Notes to Consolidated Financial Statements” for a discussion of the Company’s property-level debt.
Liquidity and Capital Resources As of December 31, 2025, we had $1,277,521 of indebtedness (net of unamortized issuance costs) secured by our properties, $30,815 of cash and cash equivalents, and $27,339 of restricted cash. See Note 4 “Notes Payable” of the accompanying “Notes to Consolidated Financial Statements” for a discussion of the Company’s property-level debt.
The line of credit bears interest of Prime + 1.5%. The line of credit expired on August 10, 2024. The Company has provided a limited guaranty for mortgage notes at several of its properties which require the Company to maintain certain minimum liquidity and net worth levels. The Company’s loan agreements contain customary representations, covenants and events of default.
The Company has provided a limited guaranty for mortgage notes at several of its properties which require the Company to maintain certain minimum liquidity and net worth levels. The Company’s loan agreements contain customary representations, covenants and events of default.
As a public company with shares listed on a U.S. exchange, we incur general and administrative expenses, including legal, accounting, and other expenses, related to corporate governance, public reporting and compliance with various provisions of the Sarbanes-Oxley Act, related regulations of the SEC, including compliance with the reporting requirements of the Exchange Act, and the requirements of the national securities exchange on which our stock is listed.
As a public company with shares listed on a U.S. exchange, we incur general and administrative expenses, including legal, accounting, and other expenses, related to corporate governance, public reporting and compliance with various provisions of the Sarbanes-Oxley Act, related regulations of the SEC, including compliance with the reporting requirements of the Exchange Act, and the requirements of the national securities exchange on which our stock is listed. 47 Significant Accounting Policies Segments On December 31, 2025, the Company had two reportable operating segments, Residential Rental Properties and Commercial Rental Properties.
Urban office markets have also generally been negatively impacted as a result of the increase in remote working that began during the COVID-19 pandemic, leading to less demand for office space.
Urban office markets have also generally been negatively impacted as a result of the increase in remote working that began during the COVID-19 pandemic, leading to less demand for office space. Since August 23, 2025, the Company’s 250 Livingston Street property has been vacant.
The regulations also limit the maximum rent we can charge at our Flatbush Gardens property, our Aspen property and a portion of our 10 West 65th Street property on new leases.
The regulations also limit the maximum rent we can charge at our Flatbush Gardens property and our Aspen property on new leases.
Property-Level Debt The mortgages, loans and mezzanine notes payable collateralized by the properties, or the Company’s interest in the entities that own the properties and assignment of leases, are as follows (in thousands): Property Maturity Interest Rate December 31, 2024 Flatbush Gardens, Brooklyn, NY 6/1/2032 3.125 % $ 329,000 250 Livingston Street, Brooklyn, NY 6/6/2029 3.63 % 125,000 141 Livingston Street, Brooklyn, NY 3/6/2031 3.21 % 100,000 Tribeca House, Manhattan, NY 3/6/2028 4.506 % 360,000 Aspen, Manhattan, NY 7/1/2028 3.68 % 59,403 Clover House, Brooklyn, NY 12/1/2029 3.53 % 82,000 10 West 65th Street, Manhattan, NY 11/1/2027 SOFR + 2.50 % 31,437 1010 Pacific Street, Brooklyn, NY 9/15/2025 5.55 % 60,000 1010 Pacific Street, Brooklyn, NY 9/15/2025 6.37 % 20,000 953 Dean Street, Brooklyn, NY 8/10/2026 SOFR + 4 % 98,849 953 Dean Street, Brooklyn, NY 8/10/2026 SOFR + 10 % 9,670 $ 1,275,359 Flatbush Gardens There is $329,000 of mortgage debt secured by Flatbush Gardens, as of December 31, 2024, in the form of a mortgage note to New York Community Bank.
Property-Level Debt The mortgages, loans and mezzanine notes payable collateralized by the properties, or the Company’s interest in the entities that own the properties and assignment of leases, are as follows (in thousands): Property Maturity Interest Rate December 31, 2025 Flatbush Gardens, Brooklyn, NY 6/1/2032 3.125 % $ 329,000 250 Livingston Street, Brooklyn, NY 6/6/2029 3.63 % 125,000 141 Livingston Street, Brooklyn, NY 3/6/2031 3.21 % 100,000 Tribeca House, Manhattan, NY 3/6/2028 4.506 % 360,000 Aspen, Manhattan, NY 7/1/2028 3.68 % 57,733 Clover House, Brooklyn, NY 12/1/2029 3.53 % 82,000 1010 Pacific Street, Brooklyn, NY 9/30/2030 5.73 % 84,500 953 Dean Street, Brooklyn, NY 5/9/2027 SOFR + 2.65 % 115,000 953 Dean Street, Brooklyn, NY 5/9/2027 SOFR + 2.65 % 33,000 $ 1,286,233 Flatbush Gardens There is $329,000 of mortgage debt secured by Flatbush Gardens, as of December 31, 2025, in the form of a mortgage note to New York Community Bank.
At the Flatbush Garden property, average residential rent per square foot increased at December 31, 2024, was $30.04, up from $26.69 at December 31, 2023. At the Clover House property, average residential rent per square foot at December 31, 2024, was $85.91, an increase from $80.93 at December 31, 2023.
At the Flatbush Garden property, average residential rent per square foot increased at December 31, 2025, was $32.20, up from $30.04 at December 31, 2024. At the Clover House property, average residential rent per square foot at December 31, 2025, was $89.74, an increase from $85.91 at December 31, 2024.
These regulations generally limit rental increases that we can charge at our Flatbush Gardens property, our Aspen property and a portion of our Tribeca House and 10 West 65th Street property upon lease renewal; effective October 1, 2024, such increases are 2.75% for a one-year lease and 5.25% for a two-year lease.
These regulations generally limit rental increases that we can charge at our Flatbush Gardens property, our Aspen property and a portion of our Tribeca House property upon lease renewal; effective October 1, 2025, such increases are 3.00% for a one-year lease and 4.50% for a two-year lease.
During the years ended December 31, 20424 and 2023, we paid dividends and distributions on our common shares, Class B LLC units and LTIP units totaling $17.6 million and $17.4 million, respectively. 56 Cash Flows for the Years ended December 31, 2024 and 2023 (in thousands) Year Ended December 31, 2024 2023 Operating activities $ 31,862 $ 26,185 Investing activities (68,781 ) (41,357 ) Financing activities 38,746 20,731 Cash flows provided by (used in) operating activities, investing activities and financing activities for the years ended December 31, 2024 and 2023, are as follows: Net cash provided by operating activities was $31,862 for the year ended December 31, 2024, compared to $26,185 for the year ended December 31, 2023.
During the years ended December 31, 2025 and 2024, we paid dividends and distributions on our common shares, Class B LLC units and LTIP units totaling $18,455 and $17,584, respectively. 59 Cash Flows for the Years ended December 31, 2025 and 2024 (in thousands) Year Ended December 31, 2025 2024 Operating activities $ 22,571 $ 31,862 Investing activities 12,090 (68,781 ) Financing activities (14,559 ) 38,746 Cash flows provided by (used in) operating activities, investing activities and financing activities for the years ended December 31, 2025 and 2024, are as follows: Net cash provided by operating activities was $22,571 for the year ended December 31, 2025, compared to $31,862 for the year ended December 31, 2024.
Further, other REITs may use different methodologies for calculating NOI, and accordingly, our NOI may not be comparable to that of other REITs. 59 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): Years ended December 31, 2024 2023 NOI Income from operations $ 40,529 $ 33,170 Real estate depreciation and amortization 29,892 28,939 General and administrative expenses 14,152 13,169 Transaction pursuit costs - 357 Amortization of real estate tax intangible 481 481 Amortization of above- and below-market leases - (18 ) Certain litigation expenses 269 - Straight-line rent adjustments 251 214 NOI $ 85,574 $ 76,312 Recent Accounting Pronouncements See Note 2, “Significant Accounting Policies” of our consolidated financial statements included in Item 15 for a discussion of recent accounting pronouncements.
Further, other REITs may use different methodologies for calculating NOI, and accordingly, our NOI may not be comparable to that of other REITs. 62 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): Years ended December 31, 2025 2024 NOI Income from operations $ 4,176 $ 40,529 Real estate depreciation and amortization 31,327 29,892 General and administrative expenses 15,523 14,152 Transaction pursuit costs (10 ) - Amortization of real estate tax intangible 481 481 Straight-line rent adjustments 41 251 Loss on Impairment of long-lived assets 33,780 - Litigation settlement and other 26 269 NOI $ 85,344 $ 85,574 Recent Accounting Pronouncements See Note 2, “Significant Accounting Policies” of our consolidated financial statements included in this Annual Report on Form 10-K for a discussion of recent accounting pronouncements.
The 141 Livingston Street lease expires on December 27, 2025, and if NYC were to decide not to renew or extend such lease on its stated termination date, pursuant to the terms of the lease, we would be at risk of not being able to replace NYC as a tenant, leasing the space below the current rates, incurring costs to improve the space or offer other inducements to fill the space, all of which may have an adverse effect on our financial condition, results of operations and cash flow.
If we are unable to finalize the agreement, we would be at risk of not being able to replace NYC as a tenant, leasing the space below the current rates, incurring costs to improve the space or offer other inducements to fill the space, all of which may have an adverse effect on our financial condition, results of operations and cash flow.
The Company expects those costs to be offset by the savings provided by property tax exemption and enhanced payments for tenants receiving government assistance (See note 1). Through December 31, 2024 the Company spent approximately $9.1 million on capital improvements required under the HRMLA.
The Company expects those costs to be offset by the savings provided by property tax exemption and enhanced payments for tenants receiving government assistance (See note 1). Through December 31, 2025 the Company incurred approximately $21,000 on capital improvements required under the HRMLA. On September 25, 2025, the Company signed an amendment to its lease with Equinox Tribeca Inc.
As of February 23, 2024, The City of New York, a municipal corporation acting through the Department of Citywide Administrative Services ("NYC”), notified us of its intention to terminate its lease at 250 Livingston Street effective August 23, 2025. The lease generally provides for rent payments in the amount of $15,400 per annum.
As of August 23, 2025, The City of New York, a municipal corporation acting through the Department of Citywide Administrative Services ("NYC”), vacated the space it occupied at 250 Livingston Street. The lease generally provided for rent payments in the amount of $15.4 million per annum.
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): Years ended December 31, 2024 2023 FFO Net loss $ (6,582 ) $ (15,565 ) Real estate depreciation and amortization 29,892 28,939 FFO $ 23,310 $ 13,374 AFFO FFO $ 23,310 $ 13,374 Amortization of real estate tax intangible 481 481 Amortization of above- and below-market leases - (18 ) Straight-line rent adjustments 251 214 Amortization of debt origination costs 2,122 1705 Amortization of LTIP awards 2,701 3,015 Transaction pursuit costs - 357 Loss on modification/extinguishment of debt - 3,868 Certain litigation-related expenses 269 (10 ) Recurring capital spending (324 ) (436 ) AFFO $ 28,810 $ 22,550 58 Adjusted Earnings Before Interest, Income Taxes, Depreciation and Amortization We believe that Adjusted EBITDA is a useful measure of our operating performance.
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): Years ended December 31, 2025 2024 FFO Net loss $ (52,335 ) $ (6,582 ) Real estate depreciation and amortization 31,327 29,892 FFO $ (21,008 ) $ 23,310 AFFO FFO $ (21,008 ) $ 23,310 Amortization of real estate tax intangible 481 481 Straight-line rent adjustments 41 251 Amortization of debt origination costs 2,745 2,122 Amortization of LTIP awards 4,266 2,701 Transaction pursuit costs (10 ) - Loss on modification/extinguishment of debt 2,627 - Loss on Impairment of long-lived assets 33,780 - Loss on disposal of long-lived assets 857 - Litigation settlement and other 26 269 Recurring capital spending (164 ) (324 ) AFFO $ 23,641 $ 28,810 61 Adjusted Earnings Before Interest, Income Taxes, Depreciation and Amortization We believe that Adjusted EBITDA is a useful measure of our operating performance.
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): Years ended December 31, 2024 2023 Adjusted EBITDA Net loss $ (6,582 ) $ (15,565 ) Real estate depreciation and amortization 29,892 28,939 Amortization of real estate tax intangible 481 481 Amortization of above- and below-market leases - (18 ) Straight-line rent adjustments 251 214 Amortization of LTIP awards 2,701 3,015 Interest expense, net 47,111 44,867 Transaction pursuit costs - 357 Loss on modification/extinguishment of debt - 3,868 Certain litigation-related expenses 269 (10 ) Adjusted EBITDA $ 74,123 $ 66,148 Net Operating Income We believe that NOI is a useful measure of our operating performance.
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): Years ended December 31, 2025 2024 Adjusted EBITDA Net loss $ (52,335 ) $ (6,582 ) Real estate depreciation and amortization 31,327 29,892 Amortization of real estate tax intangible 481 481 Straight-line rent adjustments 41 251 Amortization of LTIP awards 4,266 2,701 Interest expense, net 53,027 47,111 Transaction pursuit costs (10 ) - Loss on modification/extinguishment of debt 2,627 - Loss on Impairment of long-lived assets 33,780 - Loss on disposal of long-lived assets 857 - Litigation settlement and other 26 269 Adjusted EBITDA $ 74,087 $ 74,123 Net Operating Income We believe that NOI is a useful measure of our operating performance.
For example, base rent per square foot increased at the Tribeca House property to $82.52 at December 31, 2024, from $77.70 at December 31, 2023 and base rent per square foot increased at the Clover House property to $85.91 at December 31, 2024, from $80.93 at December 31, 2023.
For example, base rent per square foot increased at the Tribeca House property to $88.74 at December 31, 2025, from $82.52 at December 31, 2024, base rent per square foot increased at the Clover House property to $89.74 at December 31, 2025, from $85.91 at December 31, 2024, and base rent per square foot increased at the Flatbush Gardens to $32.20 at December 31, 2025, from $30.04 at December 31, 2024.
The Special Servicer demanded that we pay (i) $2,200 of reserve payments into a reserve account immediately (for July-October 2024) and continued monthly payments of $555 for an additional 14 months, (ii) $1.2 million of default interest and late charges through October 7, 2024, and (iii) an additional $10 per diem interest for each day thereafter (an additional $1,356 as of February 14, 2025).
The Special Servicer demanded that we pay (i) $2,200 of reserve payments into a reserve account immediately (for July-October 2024) and continued monthly payments of $555 for an additional 14 months, (ii) $1,200 of default interest and late charges through October 7, 2024, and (iii) an additional $10,417 per diem interest for each day thereafter. 56 On November 11, 2024, the Special Servicer notified the Borrower that, due to its alleged event of default under the Loan Agreement, as a result of the failure to make the payments described above, the mortgage notes have been accelerated, and all amounts under the loan agreement were due and payable.
To the extent impairment has occurred, a write-down is recorded and measured by the amount of the difference between the carrying value of the asset and the fair value of the asset. Management of the Company does not believe that any of its properties within the portfolio are impaired as of December 31, 2024.
To the extent impairment has occurred, a write-down is recorded and measured by the amount of difference between the carrying value of the asset and the fair value of the asset.
Commercial rental income increased to $38,836 for the year ended December 31, 2024, from $38,465 for the year ended December 31, 2023, primarily due to increased escalation billings at the 250 Livingston Street property. Property operating expenses . Property operating expenses include property-level costs such as compensation costs for property-level personnel, repairs and maintenance, supplies, utilities and landscaping.
Property operating expenses include property-level costs such as compensation costs for property-level personnel, repairs and maintenance, supplies, utilities and landscaping. Property operating expenses increased to $36,990 for the year ended December 31, 2025, from $33,435 for the year ended December 31, 2024, primarily due to increased payroll for maintenance activities, legal costs for collection activities and utilities costs.
We anticipate meeting our long-term liquidity requirements by using cash as an interim measure and funds from public and private equity offerings and long-term secured and unsecured debt offerings. 52 We believe that as a publicly traded REIT, we will have access to multiple sources of capital to fund our long-term liquidity requirements.
We do not expect that net cash provided by operations will be sufficient to meet all of these long-term liquidity needs. We anticipate meeting our long-term liquidity requirements by using cash as an interim measure and funds from public and private equity offerings and long-term secured and unsecured debt offerings.
The discussion below compares amounts in 2024, excluding 1010 Pacific, to 2023 amounts. Revenue . Residential rental income increased to $103,422 for the year ended December 31, 2024, from $96,602 for the year ended December 31, 2023, primarily, due to increases in rental rates.
The discussion below compares amounts in 2025 to 2024 amounts, excluding Dean Street and 10 West 65 th Street properties. Revenue . Residential rental income increased to $115,122 for the year ended December 31, 2025, from $105,833 for the year ended December 31, 2024, primarily, due to increases in rental rates.
Additionally, as we move forward with the approaching expiration of the lease at 141 Livingston Street in December 2025, the Company and the City of New York are negotiating the terms of a five-year extension of their current lease.
Additionally, our lease with NYC at 141 Livingston expired in December 2025, although NYC continues to occupy its office space and pays its rent in accordance with the terms of the expired lease. The Company and the City of New York are negotiating the terms of a five-year extension of their expired lease at 141 Livingston Street property.
We have the option, commencing on January 1, 2024, to prepay the note prior to the maturity date, subject to a prepayment premium if it occurs prior to September 2, 2029. 54 There is $31,437 in mortgage debt secured by 10 West 65th Street as of December 31, 2024, in the form of a mortgage note to New York Community Bank (“NYCB”), entered into in connection with the acquisition of the property.
We have the option, commencing on January 1, 2024, to prepay the note prior to the maturity date, subject to a prepayment premium if it occurs prior to September 2, 2029. 10 West 65 th Street On May 30, 2025, in connection with the Sale of the 10 West 65 street property, the Company repaid in full the $31.200 million 2017 acquisition mortgage note (the “Mortgage”) to Flagstar Bank (“Flagstar”).
We may be unable to replace NYC as a tenant or unable to replace it with other commercial tenants at comparable rent rates, may incur substantial costs to improve the vacated space or may have to offer significant inducements to fill the space, all of which may have an adverse effect on our financial condition, results of operations and cash flow.
We may be unable to replace NYC as a tenant or unable to replace it with other commercial tenants at comparable rent rates, may incur substantial costs to improve the vacated space or may have to offer significant inducements to fill the space, all of which may have an adverse effect on our financial condition, results of operations and cash flow. 55 On March 18, 2025, we were notified by legal counsel to the servicer for the loan related to the 250 Livingston Street property that, due to the failure of our subsidiary, 250 Livingston Owner LLC, to cause all revenue generated by the 250 Livingston Street property to be deposited into the cash management account as required by the loan agreement related to the $125 million building mortgage loan, an event of default occurred under the $125million building mortgage loan.
All amounts remaining in such cash management account after the lender’s allocations set forth in the loan agreement will be disbursed to us once the tenant cure conditions are satisfied under the loan agreement. As of February 14, 2025, we are required to deposit into such cash management account approximately $5,684 upon demand by the lender.
We responded by disputing the allegations in May 8, 2025, letter and noting all rents from the tenants have been deposited into the cash management account. All amounts remaining in such cash management account after the lender’s allocations set forth in the loan agreement will be disbursed to us if the tenant cure conditions are satisfied under the loan agreement.
In the event of a forfeiture, the previously recognized expense would be reversed. Transaction Pursuit Costs Transaction pursuit costs primarily reflect costs incurred for abandoned acquisition, disposition or other transaction pursuits. Income Taxes The Company elected to be taxed and to operate in a manner that will allow it to qualify as a REIT under the Code.
Income Taxes The Company elected to be taxed and to operate in a manner that will allow it to qualify as a REIT under the Code.
Distributions In order to qualify as a REIT for Federal income tax purposes, we must currently distribute at least 90% of our taxable income to our stockholders.
(“Equinox”) which extended the term of the lease until August 31, 2040, increased rent, and provided for a cumulative $3,000 renovation allowance creditable against rent through 2032. Distributions In order to qualify as a REIT for Federal income tax purposes, we must currently distribute at least 90% of our taxable income to our stockholders.
Transaction pursuit costs of $357 in 2023 primarily reflect costs related to the Article 11 Agreement and an abandoned acquisition. Depreciation and amortization . Depreciation and amortization expense increased to $28,475 for the year ended December 31, 2024, from $27,634 for the year ended December 31, 2023, due to additions to real estate across the portfolio, primarily at Flatbush Gardens.
Depreciation and amortization expense increased to $29,443 for the year ended December 31, 2025, from $28,722 for the year ended December 31, 2024, due to additions to real estate across the portfolio, primarily at Flatbush Gardens. Interest expense, net .
If we are not able to extend or replace the NYC lease at our 141 Livingston Street property for a minimum of a five-year term, we will be required to either fund a reserve account in the amount of $10,000 payable in equal monthly payments over the 18 months after lease expiration or deliver to the lender a letter of credit in the amount of $10,000 On October 28, 2024, we received notice that, as of October 7, 2024, the servicing of the mortgage notes was transferred to a special servicer (the “Special Servicer”) due to our alleged failure to make certain required payments under the loan agreement, including, but not limited to, the reserve deposit starting on July 7, 2024.
On October 28, 2024, we received notice that, as of October 7, 2024, the servicing of the mortgage notes was transferred to a special servicer (the "Special Servicer”) due to our alleged failure to make certain required payments under the loan agreement, including, but not limited to, the reserve deposit starting on July 7, 2024.
The entities comprising the Predecessor are limited liability companies and are treated as pass-through entities for income tax purposes.
The entities comprising the Predecessor are limited liability companies and are treated as pass-through entities for income tax purposes. Accordingly, no provision has been made for federal, state or local income or franchise taxes in the accompanying consolidated financial statements.
General and administrative expenses increased to $13,731 for the year ended December 31, 2024, from $12,929 for the year ended December 31, 2023, primarily due to higher payroll costs partially offset by lower accounting fees in relation to the separation from our prior auditor in 2023. Transaction pursuit costs.
General and administrative expenses increased to $15,122 for the year ended December 31, 2025, from $13,762 for the year ended December 31, 2024, primarily due to higher LTIP amortization, partially offset by lower professional fees. Depreciation and amortization .
Significant Accounting Policies Segments On December 31, 2024, the Company had two reportable operating segments, Residential Rental Properties and Commercial Rental Properties. Our Chief Operating Decision Maker (“CODM”), represented by our Co-Chairman and Chief Executive Officer, reviews the results in which the revenue and Income from Operations is divided between the commercial and residential performance.
Our Chief Operating Decision Maker (“CODM”), represented by our Co-Chairman and Chief Executive Officer, reviews the results in which the revenue and Income from Operations is divided between the commercial and residential performance. Basis of Consolidation The consolidated financial statements of the Company included elsewhere herein are prepared in accordance with generally accepted accounting principles in the United States (“GAAP”).
Basis of Consolidation The consolidated financial statements of the Company included elsewhere herein are prepared in accordance with generally accepted accounting principles in the United States (“GAAP”). The effect of all intercompany balances has been eliminated. The consolidated financial statements include the accounts of all entities in which the Company has a controlling interest.
The effect of all intercompany balances has been eliminated. The consolidated financial statements include the accounts of all entities in which the Company has a controlling interest. The ownership interests of other investors in these entities are recorded as non-controlling interests.
Interest expense, net, increased to $41,943 for the year ended December 31, 2024 from $41,854 for the year ended December 31, 2023, primarily due to lower capitalized interest as a result of completion of development of the 1010 Pacific property in the second quarter of 2023. Loss on modification/extinguishment of debt .
Interest expense, net, increased to $47,290 for the year ended December 31, 2025 from $44,569 for the year ended December 31, 2024, primarily due to the accrual of default interest on the 250 Livingston loan that is in default. Loss on modification/extinguishment of debt .
The arrangement was approved by an independent committee of the Company’s board of directors. 53 141 Livingston Street There is $100,000 in mortgage debt secured by 141 Livingston Street, as of December 31, 2024, in the form of a mortgage note to Citi Real Estate Funding Inc.
As previously disclosed, the Company is in the process of negotiating a Consent and Cooperation Agreement with the Lender for the sale of the Property, but there can be no assurance that such Consent and Cooperation Agreement will be consummated. 141 Livingston Street There is $100,000 in mortgage debt secured by 141 Livingston Street, as of December 31, 2025, in the form of a mortgage note to Citi Real Estate Funding Inc.
We and NYC are in the process of negotiating the terms of a five-year extension of the current lease upon its expiration in December 2025. There can be no assurance that the negotiations will conclude with an agreement.
The Company and City of New York are continuing to work through the finalizing of a previously agreed five-year extension of its expired lease. There can be no assurance that the negotiations will conclude with an agreement. The expired lease at 141 Livingston Street provides for $10,300 million in rent per annum.
There are no rent stabilization restrictions at our Tribeca House properties, our 250 Livingston Street property, our Clover House property and a portion of our 10 West 65th Street property. However, they may be impacted by the April 2024 New York “Good-Cause eviction” law.
However, they may be impacted by the April 2024 New York “Good-Cause eviction” law.
As a result of the foregoing, net loss decreased to $5,205 for the year ended December 31, 2024, from $13,083 for the year ended December 31, 2023.
Loss on the extinguishment of debt in 2025 consists of costs related to the Loan modification agreement at 141 Livingston. Net loss . As a result of the foregoing, net loss increased to $11,824 for the year ended December 31, 2025, from $4,706 for the year ended December 31, 2024.
Net cash provided by financing activities was $38,746 for the year ended December 31, 2024, compared to $20,731 for the year ended December 31, 2023. The increase was primarily due to $45,126 additional borrowings under the Dean Street property loans partially offset by $36,523 borrowings in 2023 under the 1010 Pacific Street loans and scheduled debt amortization payments in 2024.
Cash was provided in the year ended December 31, 2024, by $58,330 borrowings related to the Dean Street property and partially offset by $2,000 of amortization payments and distributions of $17,584.
Real estate taxes and insurance expenses decreased to $29,790 for the year ended December 31, 2024, from $31,591 for the year ended December 31, 2023, due to the real estate tax exemption at Flatbush Gardens that began July 1, 2023, partially offset by increased property taxes and insurance across the portfolio . 51 General and administrative .
Real estate taxes and insurance expenses increased to $29,789 for the year ended December 31, 2025, from $28,670 for the year ended December 31, 2024, due to higher real estate taxes at our Aspen and at both our Livingston Street office properties and overall higher insurance premiums for the rest of the portfolio . 53 General and administrative .
Except as described above, the Company is not in default on any of its loan agreements. 55 Contractual Obligations and Commitments The following table summarizes principal and interest payment requirements on our debt under terms as of December 31, 2024: (in thousands) Principal Interest Total 2025 $ 82,144 $ 44,554 $ 126,699 2026 101,091 41,792 142,883 2027 43,019 51,333 94,352 2028 416,554 45,712 462,266 2029 209,571 37,714 247,285 Thereafter 422,980 75,940 498,919 Total $ 1,275,359 $ 297,045 $ 1,572,404 On June 29, 2023 the Company entered into the Article 11 Agreement.
Contractual Obligations and Commitments The following table summarizes principal and interest payment requirements on our debt under terms as of December 31, 2025: (in thousands) Principal Interest Total 2026 $ 1,732 $ 53,985 $ 55,717 2027 150,897 58,827 209,724 2028 416,553 50,634 467,187 2029 209,571 42,623 252,194 2030 87,313 36,297 123,610 Thereafter 420,167 43,731 463,898 Total $ 1,286,233 $ 286,097 $ 1,572,330 On June 29, 2023 the Company entered into the Article 11 Agreement.
Removed
As of December 31, 2024, the Company’s office properties had not been adversely affected from a rent perspective as a result of its long-term leases with the City of New York. However, As of February 23, 2024, the City of New York informed the Company of its intention to terminate the lease at 250 Livingston Street effective August 23, 2025.
Added
On May 30, 2025, the Company completed the sale of 10 West 65th Street in Manhattan, a 6-story residential building with approximately 76,000 square feet of residential rental GLA. for gross proceeds of $45,500. The Company incurred $1,900 in closing costs and paid $800 in accrued interest at closing.
Removed
The ownership interests of other investors in these entities are recorded as non-controlling interests.
Added
At closing, the Company repaid in full its $31,200 mortgage note (the “Mortgage”) with Flagstar Bank (“Flagstar”) (see note 4 below). The Company recorded a loss on the disposal of long-lived assets of $857 and a loss on impairment of long-lived assets of $33,780 during the year-ended December 31, 2025.
Removed
As described more fully under Revenue Recognition below, in the first quarter of 2022 the Company adopted Accounting Standards Codification (“ASC”) 842 “Leases” which replaced guidance under ASC 840 and provided for transition from balances at December 31, 2021.
Added
Additionally, our newest assets, our 1010 Pacific property and our Dean Street property are beneficiaries of a 421(a) Tax Incentive in which the properties received a 35-year tax abatement, partial in the final 10-year phase out period, in exchange for setting aside 30% of the units for affordable housing.
Removed
Property operating expenses increased to $33,257 for the year ended December 31, 2024, from $29,917 for the year ended December 31, 2023, primarily due to increased payroll for maintenance activities, legal costs for collection activities and utilities costs. Real estate taxes and insurance .
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Item 7A. Quantitative and Qualitative Disclosures About Market Risk
Market Risk — interest-rate, FX, commodity exposure
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Item 7A. Quantitative and Qualitative Disclosures About Market Risk
Market Risk — interest-rate, FX, commodity exposure
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2024 filing
2025 filing
Biggest changeThe fair value of the Company’s notes payable was approximately $1,209.6 million and $1,160.4 million as of December 31, 2024 and 2023, respectively.
Biggest changeAt December 31, 2025, the Company had one interest rate cap with US Bank that caps the SOFR portion of the interest rate on the 953 Dean Street Loans at 6%. The fair value of the Company’s notes payable was approximately $1,267,698 and $1,209,600 as of December 31, 2025 and 2024, respectively.
A one percent change in interest rates on our $140.0 million of variable rate debt as of December 31, 2024, would impact annual net income by approximately $1.4 million. At December 31, 2024, there were no interest rate caps for the Company’s outstanding debt.
The dollar amounts in the narrative disclosure below are in thousands. A one percent change in interest rates on our $148,000 variable rate debt as of December 31, 2025, would impact annual net income by approximately $1,480.