Clipper Realty (NYSE: CLPR) reported a net loss of $6.3 million for the second quarter of 2026, a significant widening from the $1.4 million loss recorded in the same period last year. The deterioration was primarily driven by the termination of a major lease at its 250 Livingston Street property, which contributed $5.7 million in non-cash charges.
Despite the headline loss, the company’s core residential portfolio demonstrated resilience. Revenues declined marginally to $38.6 million from $39 million in Q2 2025. This slight contraction masks underlying strength in rental rates, as new free market leases exceeded prior rents by over 13% across the entire portfolio. The Prospect House development at 953 Dean Street reached full stabilization with free market rents of $78 per square foot.
Financial Performance
The company’s Adjusted Funds From Operations (AFFO) fell to $3.8 million ($0.09 per share) from $8.3 million ($0.20 per share) in Q2 2025. The decline was largely attributable to the same lease termination impact at 250 Livingston Street, which reduced AFFO by $5.8 million. Excluding this item and the new Prospect House property, AFFO from remaining assets improved by $1.4 million due to strong leasing activity.
| Metric |
Q2 2026 |
Q2 2025 |
Change |
| Revenue |
$38.6 million |
$39 million |
-$0.4 million |
| Net Loss |
$6.3 million |
$1.4 million |
+$4.9 million |
| AFFO |
$3.8 million |
$8.3 million |
-$4.6 million |
| EPS (Loss) |
$0.19 |
$0.07 |
- |
Property-Level Updates
Residential leasing remained robust with an overall occupancy rate of nearly 99%. Key property-level metrics include:
- Tribeca House: Leased occupancy of 99% with overall rents at $92 per square foot. New leases were signed at $97 per square foot.
- Clover House: Occupancy stood at 98% with average rents of $92 per square foot and new leases at $95 per square foot.
- Pacific House: Achieved 99% occupancy with new free market rents at $78 per square foot.
- Aspen: Maintained occupancy above 98% with new rents 11% higher than previous leases.
At 250 Livingston Street, New York City vacated in August 2025. The lender is currently funding all expenses and marketing the loan sale. The company entered into a consent and cooperation agreement on June 4, 2026, allowing it to bid but placing it in receivership.
What the Numbers Show
The divergence between revenue stability and profit erosion highlights the structural impact of the 250 Livingston Street vacancy. While revenues fell by only $0.4 million, the net loss expanded by $4.9 million. This indicates that the $5.7 million non-cash charge related to the lease termination was the primary driver of the bottom-line decline, rather than a collapse in operating cash flows from stabilized assets. Furthermore, the fact that AFFO dropped by $4.6 million while revenue remained flat suggests that the cost structure or non-cash adjustments tied to the troubled asset are disproportionately affecting distributable cash relative to top-line performance.
Balance Sheet and Outlook
Clipper Realty ended the quarter with $37.7 million in unrestricted cash and $24.9 million in restricted cash. Operating debt was 88% fixed at an average rate of 3.87% with an average duration of 3.2 years. All debt instruments are non-recourse and non-cross-collateralized.
The company maintained its dividend at 9.5 cents per share for the second quarter, payable on August 26, 2026, to shareholders of record as of August 18, 2026. Management expects demand for residential leasing to remain strong due to constrained supply in New York City.
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