Good afternoon, ladies and gentlemen, and welcome to the Clipper Realty 3Q 2021 Earnings Call. At this time, all participants have been placed on a listen-only mode, and we will open the floor for your questions and comments after the presentation. It is now my pleasure to turn the floor over to your host, Larry Kreider. Sir, the floor is yours.

Thank you. Good afternoon. And thank you for joining us for the third quarter 2021 Clipper Realty, Inc. earnings conference call. Participating with me on today’s call are David Bistricer, Co-Chairman of the Board and Chief Executive Officer; and JJ Bistricer, Chief Operating Officer. Please be aware that statements made during the call that are not historical may be deemed forward-looking statements and actual results may differ materially from those indicated by such forward-looking statements. These statements are subject to numerous risks and uncertainties, including those disclosed in the company’s 2020 annual report on Form 10-K, which is accessible at www.sec.gov and our website. As a reminder, the forward-looking statements speak only as of the date of this call, November 9, 2021, and the company undertakes no duty to update them. During the call, management may refer to certain non-GAAP financial measures, including adjusted funds from operations or AFFO; adjusted earnings before interest, taxes, depreciation and amortization or adjusted EBITDA and net operating income or NOI. Please see our press release, supplemental financial information and Form 10-Q posted today for a reconciliation of these non-GAAP financial measures with the most directly comparable GAAP financial measures. With that, I will now turn the call over to our Co-Chairman and CEO, David Bistricer.

Thank you, Larry. Good afternoon. And welcome to the third quarter 2021 earnings call for Clipper Realty. I will provide an update on our business performance, including recent highlights and milestones, as well as our company's progress as we recover from COVID-19 pandemic. I will then turn the call over to JJ who will discuss property level activity, including leasing performance. Finally, Larry will speak about our quarterly financial performance. We'll then take your questions. I begin by once again, extending our thanks to the entire Clipper Realty team, the ongoing hard work and perseverance as we progress out of the pandemic. We remain grateful for the continuum efforts and we are proud of the continued dedication to our residents, our communities and our business. Properties remained open and operational throughout the pandemic. And we see positive trends as we look forward. Residential leasing activity continues to improve at both the city and the economy in general, further strengthened from the depths of the pandemic. We expect rental demand to remain elevated and pricing to improve as New York City continues to reopen, people seek to relocate back to the city and employees increasingly returned to their offices. At the end of the third quarter, our properties with 94% leased and new leases at our properties are reaching or exceeding pre-pandemic levels, including the Tribeca House Property, where a new lease rates in October were approximately 76% – $76 per square foot, which is 9% better than pre-pandemic. Our balance sheet continues to be well positioned from a liquidity perspective. We have approximately $88 million of cash, consisting of $59 million of unrestricted cash and $29 million of restricted cash. We finance our portfolio on an asset by asset basis. Our debt is non-recourse, subject to limited standard carve-outs and…

Thank you. I begin by again, extending our thanks to the company's employees for their continued inspiring efforts as we progress out of this unprecedented period to normality. We are grateful for the ongoing commitment to our tenants and communities. The increasing residential leasing activity that began towards the end of last year continues today. At the end of the third quarter, all our residential properties were leased in the mid to high 90s percentage range. As we anticipated last quarter, we assume improved rental demand as New York City further reopens, normal activities resume and employees potentially require an office presence. New rental rates per square foot in October are reaching or exceeding pre-pandemic levels and all exceeding present average rates. For example, new leases in October at the Tribeca House property were $76 per square foot at Flatbush Gardens $34 per square foot; and Aspen $48 per square foot. As to our Tribeca House property, as referenced in prior quarter, our pandemic strategy continues to prove itself up. Our first goal last year was to achieve high occupancy, which we have accomplished. Year-on-year leased occupancy has increased to 96.6% from 80.1%. As occupancy increased to the high 90% mark, we will then able to begin achieving higher rent per square foot levels, which have reached 76% in October, 9% higher, $76 per square foot in October, 9% higher than the pre-pandemic levels. The goal of reaching higher rent levels on average for the whole building, however, will take some time as the lower pandemic level leases work through to full-time. Revenue at Flatbush Gardens Complex in Brooklyn held up well in the third quarter level with the second quarter. Throughout the pandemic, the property maintained high occupancy, ending the quarter 93% leased. Rent per square foot was $25…

Thank you, JJ. For the third quarter we achieved revenues of $30.6 million virtually level with last quarter and higher than the $30 million for last year’s third quarter. For the same periods of time, we achieved NOI of $16.1 million and AFFO of $4.1 million this quarter level with the second quarter this year and improved from NOI of $14.5 million and AAFO of $2.9 million in the third quarter last year. The year-over-year revenue increase was primarily attributable to higher commercial revenue from the new office lease at the 250 Livingston Street property during the third quarter of 2020. This was partially offset by lower residential revenue at the Flatbush Gardens property from lower occupancy and at the Clover House property from lower residential rental rates offered last year to maintain occupancy. Revenue was level at the Tribeca House property as our higher leasing this year successfully recovered the lower bargain residential rates we offered. At this point, we are achieving higher rents on new residential leases that before the pandemic, although the effect will take the next few quarters to evidence itself as leases executed at lower prices – at lower rates during the pandemic through the first quarter of this year, take full term to roll off. In October, for example, at the Tribeca House property, residential rental rates were at the $76 per foot level with similar increases at our other properties as well. On the expense side, key year-over-year changes were as follows: Property operating expenses declined by $1.2 million in the third quarter year-on-year primarily driven by a decrease in apartment make-ready expenses resulting from leasing efforts last year at the Tribeca House property, a decrease in the provision for bad debts resulting primarily from the portion of the $2.2 million ERAP funds applicable to pass due amounts and a decrease in property level staffing costs resulting from realignment of operating activities last year at Flatbush Gardens. Real estate taxes and insurance increased by $0.5 million in the third quarter year-on-year and compared to the second quarter due to increased insurance costs across the portfolio. Interest expense increased by $169,000 in the third quarter year-on-year, primarily due to the refinancing at the 141 Livingston Street property in February this year. With regard to the balance sheet as David mentioned earlier, we are well positioned from a liquidity perspective. We have $88 million of cash consisting of $59 million of unrestricted cash and $29 million of restricted cash. We finance our portfolio on an asset by asset basis. Our debt is non-recourse subject to limited standard carve-outs and is not cross-collateralized. We have no debt maturities on any operating properties until 2027. Today we are announcing a dividend of $0.095 per share for the third quarter, the same amount as last quarter. The dividend will be paid on November 24 to shareholders of record on November 16. Let me now turn the call back over to David for concluding remarks.

Thank you, Larry. We remain focus on efficiently operating our portfolio with the safety of our tenants and employee is our highest priority. We continue to take the necessary steps to navigate through the current challenges, supported by a strong balance sheet. We expect New York City’s recovery from the pandemic to continue, to accelerate through 2021 and beyond. We look forward to capitalizing on the growth opportunities, including the 1010 Pacific Street development and other possibilities that may present themselves. I would now like to open up the line for questions.

Thank you. [Operator Instructions] And we have a question coming from Craig Kucera from B. Riley Securities. Your line is live.

Yes. Good evening, guys. David with the city opening back up has that enhanced your ability to start making progress again on expanding your FIR Flatbush Gardens.

It’s a little bit too early to tell. This new administration, as you know, coming into the city of New York. So, when that gets a little bit more flushed out, we’ll again, investigate what the appetite of the city is to work with us on that opportunity

Got it. I appreciate that. And understanding that you’ve been able to cut out, I believe about $800,000 of operating expenses at Flatbush Gardens. Were there any other items or events that occurred? Your operating expenses quarter was down considerable year-over-year and year-to-date. I’m just curious as to if there’s anything else that’s driving that?

Basically, taking a stronger look at the various different expenses and driving as lean as possible. And that’s something that we continue to do on a continual basis.

Yes. And one other thing, we had our reorganization, but also as we got further leased our make ready repairs and maintenance costs have declined somewhat.

Got it. That’s helpful. One more for me. Just want to make sure I understand. You mentioned that you’re seeing new leases at or above pre-pandemic levels and gave a number of different rents. Are those rents on just newly executed leases of vacant space or is that inclusive of people that renewed?

Those are the new rents on new spaces.

New space. So do you have a sense of what the increases on renewals at this point?

Yes, we do. I think renewals though are generally at a little lower increase, but they are always at an increase. We keep them fairly modest to avoid vacancy.

Okay. Fair enough. Thanks a lot.

You’re welcome.

[Operator Instructions] I’d now like to turn the floor back to David Bistricer for closing remarks.

Thank you for joining us today. We look forward to speaking with you again soon. Everyone, have a good evening.

Thank you, ladies and gentlemen. This does conclude today’s conference call. You may disconnect your phone lines at this time and have a wonderful day. Thank you for your participation.