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Good day, and welcome to the Clipper Realty Q2 Earnings Conference Call. [Operator Instructions] It is now my pleasure to turn the floor over to your host, Lawrence Sava, Corporate Controller at Clipper Realty. Sir, the floor is yours.

Thank you. Good afternoon, and thank you for joining us for the Second Quarter 2025 Clipper Realty Inc. Earnings Conference Call. Participating with me on today's call are J.J. Bistricer, our Chief Operating Officer; and Larry Kreider, Chief Financial Officer. Please be aware that statements made during this 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 2024 annual report on Form 10-K, which is filed and is accessible at www.sec.gov and on our website, and the second quarter 2025 quarterly report on Form 10-Q, which will be filed on the same site shortly. As a reminder, the forward-looking statements speak only as of the date of this call, August 7, 2025, and the company undertakes no duty to update them. During this 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-K and the 10-Q that will be filed shortly for a reconciliation of these non-GAAP financial measures with directly comparable GAAP measures. With that, I will now turn the call over to our Co-Chairman and Chief Operating Officer, J.J. Bistricer.

Thank you, Lawrence. Good afternoon, and welcome to the second quarter 2025 earnings call for Clipper Realty. I will provide an update on our business performance and some new developments, after which Larry will speak to our quarterly financial performance. We will then take your questions. I am pleased to report that we are reporting excellent operating results once again, including near-record revenue and record residential rents, and we had record net operating income and AFFO in the second quarter. The main driver was high residential rental demand. Overall rents are generally at all-time highs and continuing to increase, and we are nearly fully leased. In the second quarter, new leases exceeded prior rents by over 14% across the entire portfolio, as I will further detail. We have completed construction on our Prospect House development at 953 Dean Street in Brooklyn on time and on budget. Leasing commenced at the end of July, and we are presently 33% approximately leased with gross rents in excess of $88 per square foot. This project was a ground-up development in Brooklyn, where we bought the land in 2021 and 2022 and built a 9-story fully amenitized residential building with 160,000 square feet, residential rentable square feet, and 240 total units made up of 70% free market and 30% affordable, 57 parking spaces and 19,000 square feet of commercial rental feet. In the quarter, the company refinanced the construction loan at this property with a new loan of up to $160 million when fully funded. The new loan provided excess proceeds at closing of over $10 million and should provide excess proceeds going forward of $12 million for interest and operating expenses through stabilization and working capital. On our other ground-up development project, Pacific House at 1010 Pacific Street in Brooklyn is stabilized and is contributing to cash flow after a year of full operation. In the quarter, as previously announced, we sold 10 West 65th Street property for $45.5 million, which generated approximately $13 million after payment of debt and cost. We have sought to sell the property because our 2017 purchase acquisition plan to convert many units to free market was restricted by the 2019 Housing Stability and Protection Act. As to the office properties, at the 141 Livingston Street property leased to New York City, we have received a 5-year renewal, which the company is processing. At the 250 Livingston Street property, New York City is vacating at the end of the month, and we are actively seeking solutions, including having discussions with our lender. Regarding our second quarter results, we are reporting near-record quarterly revenue of $39 million, a 4.5% increase over last year; record NOI of $22.1 million, a 5% increase; and record AFFO of $8.3 million, a 17% increase as a result of the strong leasing I just mentioned. These results represent improvements over the second quarter last year, as Larry will further detail. To provide more details on leasing, we expect residential leasing to remain strong in the foreseeable future as demand remains high and the overall rental housing supply remains constrained as new development is discouraged. All our residential rents are now at record highs. As of the end of December, Tribeca House had leased occupancy of 100%, overall rent per foot of over $86 per foot and new rents on average at $93 per foot. The Clover House property had occupancy of 98% average overall rents of $88 per foot and new leases of $96 per foot. Our recently completed Pacific House property, consisting of a blend of free market and rent stabilized tenants, had occupancy of 96% and free market rents of $82 per foot on new leases. Our other residential properties at Aspen and 250 Livingston Street continued to perform at record levels with average occupancy above 99% and new rents and renewals 14% higher compared to previous leases. We have begun leasing at the newly completed Prospect House ground-up development at 953 Dean Street and are now 33% leased at $88 per square foot gross. And finally, at the Flatbush Gardens property, overall average rents were $31.27 per square foot at the end of the quarter, an increase of 11% over last year. As previously disclosed, we have been operating under the 40-year Article 11 agreement made with the Housing Preservation Development of New York City in June 2023. Since the beginning of the agreement in July 2023, we have spent nearly $14 million towards fulfilling our capital improvement commitments in the agreement and other related capital projects and provided additional housing funded principally by a full abatement of the real estate taxes and other rent supplements. Rent collections across our portfolio remains strong. The overall collection rate in the second quarter on all residential properties was approximately 97%, including Flatbush Gardens at 95%. We are responsibly and steadily working through our legal system to minimize arrears. Looking ahead, we remain focused on optimizing occupancy, pricing and expenses across the business to best position ourselves for growth. I will now turn the call over to Larry, who will discuss our financial results.

Thank you, J.J. For the second quarter, we achieved near-record revenues, which increased to $39 million from $37.3 million last year, an increase of $1.7 million or nearly 5%. NOI increased to a record $22.1 million from $21.1 million last year, an increase of $1 million or 5%. And AFFO increased to a record $8.3 million from $7.1 million, an increase of $1.2 million or 17%. For the second quarter, residential revenue increased to $29.1 million by $1.3 million. This increase was due to strong leasing for all our properties, as previously discussed. Occupancy and rental rates were at all-time highs in the quarter. Commercial revenue was higher by $0.4 million in the quarter compared to last year due to filling smaller retail vacancies at Tribeca House and Aspen properties, all at favorable rates. On the expense side, key year-over-year changes in the quarter were as follows. Property operating expenses increased $1.5 million year-over-year, substantially all at Flatbush Gardens. The increase was due to higher payroll costs for newly hired repairs and maintenance workers and most other operating expenses, partially offset by lower utilities. Real estate taxes and insurance increased by $80,000 in the second quarter year-on-year due to routine increases in real estate taxes and insurance at properties other than Flatbush Gardens, whose property taxes have been fully abated under our agreement with New York City since July 2023. General and administrative expenses were higher by $360,000 due to higher noncash amortization of executive long-term incentive securities, partially offset by lower legal costs. Interest expense decreased by $262,000 in the second quarter year-on-year due to the sale of the 10 West 65th Street property and slightly lower rates on its variable rate debt. The $685,000 loss on disposal of long-lived assets resulted from the sale of the 10 West 65th Street property, which generated approximately $13 million in net cash after paying existing debt and closing costs. As to future periods, the New York City lease at our 250 Livingston Street property ends later this month by its terms, as previously disclosed. On a quarterly basis, as reported in our supplemental data report on our website, the property has consistently generated quarterly revenue of approximately $4.6 million, including $400,000 of residential revenue, and incurred quarterly operating expenses of approximately $1.7 million and quarterly interest expense of approximately $1.2 million. As J.J. mentioned, we are actively seeking solutions, including having discussions with our lender. With regard to our balance sheet, we have $32 million of unrestricted cash and $28.8 million of restricted cash at the end of the quarter. In the second quarter, we completed the sale of the 10 West 65th Street property and closed a 2-year bridge loan for the Dean Street property, both of which put significant cash on the balance sheet for capital spending and general corporate purposes. Additionally, the bridge loan provides for additional future borrowings to cover carrying costs of the property through stabilization and put working capital cash on the balance sheet. At the end of the quarter, our operating debt is 88% fixed at an average rate of 3.87% and average duration of 4.1 years. Our debt instruments are nonrecourse, subject to limited standard carve-outs and are not cross-collateralized. We finance our portfolio on an asset-by-asset basis. Today, we are announcing a dividend of $0.095 per share for the second quarter, the same amount as last quarter. The dividend will be paid on September 5, 2025, to shareholders of record on August 21, 2025. And to conclude, we remain focused on efficiently operating our portfolio. We look forward to our current operating improvements to continue in 2025. We also look forward to leasing the 953 Dean Street Prospect House development, finalizing the 141 Livingston Street lease, resolving the 250 Livingston Street upcoming vacancy and capitalizing on other possibilities as they may present themselves. I would now like to open the line for questions.

[Operator Instructions] There were no questions in queue at this time. I will turn the call back over to the management team for closing remarks.

Thank you for joining us today. We look forward to speaking with you again soon.