Clipper Realty Inc. (CLPR): Business Model Canvas [Dec-2025 Updated]

As a seasoned analyst, I can tell you that dissecting Clipper Realty Inc.'s (CLPR) business model right now is all about balancing stability against necessary risk; their Q3 2025 snapshot shows a core engine driven by nearly full residential occupancy and strong leasing growth-think new rents up over 14%-but this cash flow is directly tied to managing a hefty $1.28 billion in debt and actively repositioning commercial anchors like 141 Livingston Street. So, while the value proposition rests on prime NYC rentals, the key activities reveal a constant negotiation with lenders and city partners, especially around the massive Flatbush Gardens asset. Dive into the full canvas below to see exactly how these nine building blocks-from their $160 million bridge loan for Prospect House to their shareholder dividend-are structured to navigate this complex real estate environment.

Clipper Realty Inc. (CLPR) - Canvas Business Model: Key Partnerships

You're looking at the essential relationships Clipper Realty Inc. (CLPR) relies on to keep its New York metropolitan area portfolio running and growing. These aren't just vendors; these are the financial and governmental anchors for their operations and development pipeline. Honestly, in this market, these partnerships are as critical as the underlying real estate itself.

The debt structure is a major component here. Clipper Realty's reliance on institutional lenders is clear from the balance sheet. As of the second quarter of 2025, the carrying amount of their notes payable, which is the principal amount of debt outstanding before accounting for issuance costs, stood at $1,277.3 million. That's the number you need to watch for overall leverage.

The relationship with the New York City Housing Preservation Department (HPD) is a cornerstone for managing a significant portion of their affordable housing assets, specifically the Flatbush Gardens complex. This partnership is formalized through a regulatory agreement.

• The agreement is a 40-year term under Article XI of the Private Housing Finance Law, effective June 29, 2023.
• The partnership involves a full abatement of real estate taxes for the term.
• Clipper Realty committed to a three-year capital improvement plan, estimated to cost up to $27 million.
• The Company partnered with the NYC Housing Partnership as the not-for-profit sponsor for this project.
• The Flatbush Gardens complex contains 2,494 apartments across 59 buildings.

For ground-up development, like the Prospect House project at 953 Dean Street, Clipper Realty leans on specialized construction and financing partners. This is where they execute growth strategies outside of acquisitions.

Finally, managing existing debt, especially in challenging property situations, requires direct engagement with special servicers and financial institutions. The situation at 141 Livingston Street is a prime example of this critical partnership dynamic, even when it turns adversarial.

The loan on 141 Livingston Street is a $100 million mortgage, originally secured by Citi Real Estate Funding Inc. The property was acquired in 2014 for $55 million. The Special Servicer accelerated the loan on November 11, 2024, demanding over $116.6 million, which included principal, premium, and default interest, due to alleged failures regarding reserve deposits and net worth covenants. Clipper Realty disputes these claims, stating they have made timely payments. The commercial lease for this property with the City of New York currently provides $10.3 million per annum in rent.

Finance: draft 13-week cash view by Friday.

Clipper Realty Inc. (CLPR) - Canvas Business Model: Key Activities

Operating and managing a portfolio with ~99% residential occupancy

• Stabilized residential properties maintained 99% lease rate as of Q3 2025.
• Prospect House, the new development, was 60% leased as of Q3 2025.

Executing residential leasing with new rents up over 14% (Q3 2025)

Clipper Realty Inc. is driving value through aggressive rental rate increases across the residential portfolio.

Repositioning commercial assets like 250 and 141 Livingston Street

Key activities involve managing the transition from major commercial tenants.

• New York City terminated its lease at 250 Livingston Street on August 23, 2025.
• The 250 Livingston Street property historically generated approximately $4.6 million in quarterly revenue.
• Clipper Realty Inc. is in active discussions for a lease renewal at 141 Livingston Street, which expires in December 2025.

Managing capital improvements at Flatbush Gardens under the Article 11 agreement

The 40-year regulatory agreement mandates capital spending in exchange for real estate tax abatement.

• The company continues to collect enhanced rental recoveries under Section 610.
• Since the agreement began in July 2023, nearly $14,000,000 was spent on committed capital improvements and related projects as of Q2 2025.
• The initial three-year capital improvement commitment under the agreement was approximately $27 million.

Securing asset-by-asset financing, like the $160 million bridge loan for Prospect House

Financing activities focus on funding new developments and managing existing debt on an asset-by-asset basis.

Clipper Realty Inc. (CLPR) - Canvas Business Model: Key Resources

You're looking at the hard assets and financial scaffolding that Clipper Realty Inc. uses to operate in the tight New York City market as of late 2025. These aren't abstract concepts; they are the concrete numbers underpinning their strategy.

Core portfolio of NYC properties in Brooklyn and Manhattan forms the bedrock. This includes established assets like Flatbush Gardens, where the company is working through capital improvement commitments under the Article 11 agreement with New York City. For comparison on rental performance from stabilized assets in Q3 2025, you see clear pricing power:

• Stabilized properties overall were 99% leased as of Q3 2025.
• New residential leases across the portfolio exceeded prior rents by over 14% in the third quarter.
• Residential renewals saw increases of 5% to 6% over previous rates.
• Overall residential rent collections stood at approximately 95% for the quarter.

Here's a quick look at specific residential asset performance metrics from Q3 2025:

The newest addition is the newly completed, high-rent development asset: Prospect House. This ground-up development in Brooklyn came online in August 2025. By the end of Q3 2025, it was approximately 60% leased. The free market rents achieved there are strong, exceeding $88 per square foot gross. To be fair, this asset was fully loaded with expenses during the initial lease-up phase, which impacted overall AFFO for the quarter.

Prospect House details include:

• Building Structure: 9-story structure.
• Residential Square Footage: 160,000 square feet.
• Total Units: 240 units.
• Unit Mix: 70% free market, 30% affordable.
• Commercial Square Footage: 19,000 square feet.
• Parking Spaces: 57.

Clipper Realty Inc. relies on substantial debt capital to finance its portfolio, including this new development. As of September 30, 2025, the company reported notes payable (excluding unamortized loan costs) totaling $1,281.2 million. This figure reflected an increase from year-end 2024, driven by borrowings for the Prospect House bridge loan refinancing and subsequent draws. The liability structure is managed conservatively; operating debt was 88% fixed at an average rate of 3.87% with an average duration of 3.7 years at the end of Q3 2025. Importantly, these debt instruments are nonrecourse and not cross-collateralized, meaning they finance the portfolio on an asset-by-asset basis.

Finally, the operational backbone is its self-administered and self-managed real estate operating platform. This internal structure allows Clipper Realty Inc. to directly control leasing, collections, and property management across its Manhattan and Brooklyn assets, which is key when driving those record residential rents.

Clipper Realty Inc. (CLPR) - Canvas Business Model: Value Propositions

You're looking at the core strengths Clipper Realty Inc. (CLPR) is banking on right now, late in 2025. It all boils down to their real estate assets in the tightest market in the country.

Stable, High-Occupancy Residential Rental Income in a Constrained NYC Market

The residential side of Clipper Realty Inc.'s business is definitely the anchor. Honestly, with the housing supply in New York City staying constrained, their ability to keep units filled is a huge value driver. They are reporting near-full occupancy across their stabilized residential properties.

• Overall stabilized residential portfolio occupancy: 99% as of Q3 2025.
• New residential leases across the entire portfolio exceeded prior rents by over 14% in Q3 2025.
• Residential lease renewals saw an increase of 5% in Q3 2025.
• Q3 2025 total company revenue was $37.7 million.

Here's a quick look at the leasing performance at some of their key residential assets in Q3 2025:

Upside Potential from New Development Lease-Up (Prospect House)

The recently completed Prospect House development in Brooklyn is a clear near-term growth catalyst. They brought this 9-story building online in August 2025, right on schedule and budget. The value here is capturing full market rents on brand-new, high-amenity space.

• Prospect House is currently about 60% leased as of Q3 2025.
• Free market rents achieved on new leases at Prospect House are in excess of $88/sq ft.
• The development includes 160,000 residential square feet and 240 units.
• Unit mix is approximately 70% free market and 30% affordable.
• It also includes 19,000 commercial square feet and 57 parking spaces.

Below-Market Rents at Rent-Stabilized Properties Offering Future Rental Recovery

While the free-market portfolio is setting records, the rent-stabilized assets provide a different kind of value: future contractual upside, especially through regulatory programs. You see this clearly at Flatbush Gardens, where they are working to unlock better returns.

• Clipper Realty Inc. is actively working with NYC housing agencies to collect enhanced rental recoveries under the Article 11 agreement at Flatbush Gardens.
• At Flatbush Gardens, overall average rents were $31.67/ft at the end of Q3 2025, marking a 9% increase over the prior year.
• The company is focused on finalizing negotiations to bring the office property at 141 Livingston Street back to a cash-flowing position, having secured a 5-year renewal there.

Prime Brooklyn and Manhattan Locations for Both Residential and Commercial Tenants

The geographic concentration in Manhattan and Brooklyn is a value proposition in itself; these are core, supply-constrained submarkets. Clipper Realty Inc. segments its operations into Residential Rental Properties and Commercial Rental Properties, deriving most revenue from the residential segment.

Manhattan assets include Tribeca House (50 Murray St, 53 Park Place) and The Aspen (1955 First Avenue). Brooklyn assets include Clover House (107 Columbia Heights), the Livingston Street office buildings (250 and 141), Flatbush Gardens (1403 New York Ave), Pacific House (1010 Pacific St), and Prospect House (953 Dean St). The termination of the NYC lease at 250 Livingston Street in August 2025 created a short-term commercial headwind, but management is actively pursuing re-leasing opportunities.

Clipper Realty Inc. (CLPR) - Canvas Business Model: Customer Relationships

You're managing a portfolio in a tight New York City market, so understanding the direct touchpoints with your tenants is key to Clipper Realty Inc.'s (CLPR) performance. Clipper Realty Inc. (CLPR) operates as a self-administered and self-managed real estate company, meaning the customer relationship is handled entirely in-house across its multifamily residential and commercial properties.

The relationship starts transactionally with every new tenant signing a lease agreement. The market strength is evident in the pricing achieved on these new contracts. For Q3 2025, new residential rental rates across the portfolio exceeded prior rents by over 14%. This high demand is directly linked to the constrained rental housing supply in New York City.

Retention is a major focus, achieved through renewal negotiations. In the third quarter of 2025, Clipper Realty Inc. (CLPR) successfully negotiated renewals that were up by 5% over the previous lease rates. This focus helps maintain high occupancy, which stood at approximately 99-100% across stabilized residential assets as of Q3 2025. Collections across all residential properties remained strong in Q3 2025 at approximately 95%.

Here's a quick look at the leasing performance metrics from the Q3 2025 reporting period:

For commercial tenants, the relationship is currently centered on active engagement to resolve vacancies and reposition assets. Clipper Realty Inc. (CLPR) is actively engaged in negotiations to bring the office properties at 141 and 250 Livingston back to a cash flow position. The New York City lease termination at 250 Livingston Street in August 2025 reduced commercial revenue by approximately $1.9M in Q3. Separately, the company was processing a 5-year renewal for the 141 Livingston Street property as of Q2 2025.

The company is also managing the initial lease-up phase for its new development, Prospect House, which is a key customer onboarding process right now. The property was approximately 60% leased as of Q3 2025. New free market units there are achieving gross rents in excess of $88 per square foot.

The in-house management structure supports these efforts, which also involves compliance with regulatory agreements for certain properties. For instance, at Flatbush Gardens, Clipper Realty Inc. (CLPR) has spent nearly $17 million towards capital improvement commitments under the 40-year Article 11 agreement with the Housing Preservation Department of New York City since the agreement began.

• Direct, in-house property management and leasing for all properties.
• Transactional relationship via new lease agreements.
• Retention focus through renewal negotiations.
• Active engagement with commercial tenants for repositioning.

Finance: draft 13-week cash view by Friday.

Clipper Realty Inc. (CLPR) - Canvas Business Model: Channels

You're looking at how Clipper Realty Inc. gets its product-space in its New York metropolitan area multifamily and commercial properties-to the customer, which spans from individual renters to large institutional investors. Here's the breakdown of the primary channels used as of late 2025.

Internal leasing offices and on-site property management teams

The on-site teams are the main engine for residential unit placement, especially given the high demand in the New York City market. These teams manage the day-to-day leasing and renewals directly at the properties. The results show this channel is highly effective in a constrained supply environment.

• Residential properties maintained a 99% lease occupancy rate across stabilized properties in Q3 2025.
• New residential leases signed in Q3 2025 exceeded previous rents by over 14%.
• Residential lease renewals in Q3 2025 exceeded previous rents by over 5%.
• The new Prospect House development at 953 Dean Street was 60% leased as of the Q3 2025 earnings call.

The performance of the residential leasing channel can be mapped against key portfolio metrics:

Digital listings and online real estate platforms for residential units

While on-site teams handle the final transaction, digital platforms and online visibility are crucial for driving initial traffic and awareness, especially for market-rate units. The strong rent growth figures suggest that the digital presence effectively funnels high-quality leads to the on-site teams.

• Residential revenue growth was a key driver in Q1 2025, increasing by 11.8% year-over-year.
• The overall Q3 2025 revenue was $37.7 million, up slightly from $37.6 million in Q3 2024.

Direct negotiations with large commercial tenants and brokers

For the commercial segment, which includes the office properties, the channel shifts to direct, high-stakes negotiations, often involving brokers and government entities. This channel is currently focused on remediation following lease changes.

• Active negotiations are ongoing to bring the 250 Livingston Street and 141 Livingston Street office properties back to a cash flow position.
• The New York City lease at 250 Livingston Street terminated in August 2025.
• The 141 Livingston Street property saw the City of New York's annual rent increase by 25% beginning at the end of 2025 under its existing structure.
• Commercial income increased by $0.6 million, or 5.7%, in Q1 2025 due to leasing smaller vacant spaces at Tribeca House and Aspen.

Investor relations for distributing the $0.095 per share quarterly dividend

This channel is about communicating financial performance and distributing returns to the equity holders. The process is formalized through regulatory filings and investor communications, ensuring the dividend payment is executed reliably.

• The declared third quarter 2025 dividend was $0.095 per share.
• The payment date for this dividend is scheduled for December 4, 2025, for shareholders of record on November 26, 2025.
• The annualized dividend rate is $0.38 per share.
• Q3 2025 Adjusted Funds From Operations (AFFO) was $5.6 million.
• The company held $26.1 million in unrestricted cash at the end of Q3 2025.

Finance: draft 13-week cash view by Friday.

Clipper Realty Inc. (CLPR) - Canvas Business Model: Customer Segments

You're looking at the customer base for Clipper Realty Inc. (CLPR) as of the third quarter of 2025, which gives us the latest real-life numbers on who is renting space and who owns the equity. Honestly, the story here is overwhelmingly residential, but the commercial side is definitely seeing a shift right now.

NYC Residential Renters: Free-market tenants seeking high-end Brooklyn/Manhattan housing

This segment is driving the top-line growth. For the third quarter of 2025, residential revenue was up $1.9 million compared to the prior year, or $2.4 million on a same-store basis, showing strong pricing power. Across the portfolio, new leases signed in Q3 2025 exceeded previous rents by nearly 14%, and renewals were up over 6%.

Specific high-end properties show this in detail:

• Tribeca House had a Q3 2025 lease occupancy of 99% with new rents hitting $105 per foot.
• Clover House reported 100% occupancy in Q3 2025, with new leases at $95 per foot.
• The newly completed Prospect House development in Brooklyn, which is 70% free market, began leasing with initial free-market units at $88 per square foot gross and was 60% leased by the end of Q3 2025.
• Pacific House, which is stabilized, is achieving free-market rents of $82 per square foot on new leases with 97% occupancy.

NYC Residential Renters: Rent-stabilized tenants (e.g., Flatbush Gardens)

The rent-stabilized pool, primarily at Flatbush Gardens, continues to benefit from regulatory agreements, though it faces higher operating costs. Clipper Realty Inc. is achieving increased rental recoveries there under the Article 11 agreement with New York City. Collections at Flatbush Gardens remained strong, above 95%. Overall average rents at Flatbush Gardens were $31.67 per foot at the end of Q3 2025, marking a 9% increase year-over-year. Prospect House also includes a 30% affordable component.

Here's a quick look at the residential performance snapshot from Q3 2025:

Commercial Tenants: Institutional and corporate entities (currently a segment in flux)

This segment is actively in flux due to a significant lease event. Commercial revenue decreased by $1.8 million in Q3 2025 compared to Q3 2024, directly tied to the mid-August termination of the New York City lease at the 250 Livingston Street property. Clipper Realty Inc. is actively seeking solutions for this space. Conversely, the stabilized Pacific House development includes 19,000 square feet of commercial space.

Public Equity Investors (REIT shareholders)

The public equity holders are the REIT shareholders who own Clipper Realty Inc. As of November 2025 filings, major institutional holders included Vanguard Group Inc., holding 4.391% of the company's shares. Dimensional Fund Advisors LP held 0.911%. To be fair, the current analyst sentiment is cautious, with the one available analyst rating on the shares being a 'sell,' though the residential REIT peer group average is 'buy'. The declared dividend for Q3 2025 was $0.095 per share.

You should check the latest 10-Q filing for the full breakdown of the shareholder registry, but these figures give you the current top holders.

Clipper Realty Inc. (CLPR) - Canvas Business Model: Cost Structure

You're looking at the hard costs that drive Clipper Realty Inc.'s operations, which is crucial because, as a New York-focused REIT, those costs are significant and often tied to complex regulations. Here's the quick math on where the money goes based on late 2025 reporting.

Significant interest expense on notes payable is a major component. As of September 30, 2025, Clipper Realty Inc.'s notes payable (excluding unamortized loan costs) stood at \$1,281.2 million, which is right in line with the \$1.28 billion figure you mentioned. The cost of servicing this debt is a constant pressure point; for instance, the net loss in Q3 2025 was noted as being primarily due to increased interest expenses. To manage this, as of Q3 2025, approximately 88% of their operating debt was fixed at an average rate of 3.87%, with an average duration of 3.7 years.

Property operating expenses, including payroll and maintenance costs, show specific pressures. For the third quarter of 2025, the decrease in Net Operating Income (NOI) from ongoing properties reflected approximately \$0.7 million in higher collection and payroll expenses year-over-year. In the second quarter of 2025, higher tenant legal and payroll costs specifically at the Flatbush Gardens property also acted as a partial offset to Adjusted Funds From Operations (AFFO).

Real estate taxes and insurance premiums also move the needle. In Q2 2025, slightly increased real estate taxes and insurance premiums partially offset AFFO. For the ongoing properties in Q3 2025, there was a \$0.2 million impact from routine annual increases in these categories. However, the massive Flatbush Gardens property benefits from a 40-year abatement under the Article 11 agreement, which provides a full abatement of real estate taxes for the term of the agreement.

Capital expenditures for property improvements are heavily focused on the rent-regulated portfolio. Clipper Realty Inc. is undertaking a committed three-year capital improvement plan at Flatbush Gardens, which could amount to approximately \$27 million. In the first quarter of 2025, the company spent \$10 million on capital expenditures overall, with \$1.5 million of that specifically allocated to Flatbush Gardens for quality improvements and compliance. Separately, Clipper Equity completed more than \$20 million in renovations to Flatbush Gardens, allocating \$10 million to general property renovation and \$10 million to renovating 1,200 units.

Finally, you see high legal and professional fees related to debt and lease negotiations surfacing as an expense pressure. The complexity of managing major properties like Flatbush Gardens under regulatory agreements necessitates significant professional engagement; for example, Nixon Peabody LLP served as lead counsel in negotiating the Flatbush Gardens Article 11 agreement. Also, higher tenant legal costs were specifically called out as an expense impacting Q2 2025 results at Flatbush Gardens.

Here is a snapshot of some of the key cost drivers and related metrics from the first three quarters of 2025:

• The company is actively managing debt refinancing risk, as the majority of debt matures in 2026 and 2028 and will likely need refinancing at higher rates.
• The sale of the 10 West 65th Street property in May 2025 removed its revenue and associated operating costs/debt from the current figures.
• The termination of the NYC lease at 250 Livingston Street in August 2025 reduced commercial revenue by approximately \$1.9 million in Q3 2025.
• The initial lease-up of the new Prospect House property fully loaded expenses (interest, amortization, depreciation) which reduced AFFO by approximately \$1.8 million in Q3 2025.

Finance: draft 13-week cash view by Friday.

Clipper Realty Inc. (CLPR) - Canvas Business Model: Revenue Streams

You're looking at how Clipper Realty Inc. (CLPR) actually brings in the money, which is always the most critical part of the Business Model Canvas. For late 2025, the story is clearly about the strength of the residential side offsetting headwinds in the commercial sector, plus the one-time boost from selling an asset.

Residential rental income remains the primary engine. For the three months ended September 30, 2025, this segment pulled in \$29,773 thousand in revenue. The story here is excellent leasing; on a same-store basis, excluding the newly added Prospect House and the recently sold 10 West 65th Street property, residential revenue saw a \$2.4 million or 7% increase year-over-year for the third quarter. Honestly, that kind of organic growth in this market shows you the underlying demand for their housing stock is still very strong.

The commercial rental income stream is definitely feeling the pressure. For Q3 2025, commercial revenue was \$7,925 thousand. This was down by \$1.8 million compared to the prior year's third quarter, largely because the New York City lease at 250 Livingston Street terminated on August 23, 2025. That termination alone accounted for a \$1.9 million revenue decrease in the quarter.

The overall picture for the quarter was flat revenue at \$37.7 million for Q3 2025, which was a net result of several moving parts. You have the residential boost, but you also have the commercial loss, plus the absence of the sold 10 West 65th Street property, which was a \$1 million revenue headwind. Still, the initial lease-up at the new Prospect House property added about \$0.5 million in revenue for the quarter, which is a positive sign for future performance.

Proceeds from strategic asset dispositions provide significant, though non-recurring, cash flow injections. Clipper Realty Inc. completed the sale of the 10 West 65th Street property in May 2025. This transaction generated gross proceeds of \$45.5 million, resulting in net proceeds totaling approximately \$43.6 million after closing costs. This was a strategic move to bolster liquidity, netting Clipper Realty Inc. about \$12.7 million in net cash inflow after paying off the associated mortgage.

For the bigger picture, the total revenue for the nine months ended September 30, 2025, was \$116.13 million. This top-line number is built from the core operations and the one-time sale proceeds factored into the trailing twelve months, but the quarterly breakdown shows the operational reality.

Here's a quick look at the revenue components for the third quarter of 2025 versus the prior year:

The other property income, which covers things like parking and ancillary services, isn't broken out separately in the primary statements, but its contribution is embedded within the total revenue figures and the net impact of the specific property-level adjustments mentioned.

You can see the impact of the major events on the revenue line items:

• Residential revenue increase from ongoing properties: \$2.4 million.
• Commercial revenue decrease from 250 Livingston termination: \$1.9 million.
• Revenue impact from absence of 10 West 65th Street: \$1 million decrease.
• Revenue increase from initial lease up at Prospect House: \$0.5 million.

Finance: draft 13-week cash view by Friday.