Note 1 - Organization

12 Months Ended

Dec. 31, 2019

Notes to Financial Statements

Organization, Consolidation and Presentation of Financial Statements Disclosure [Text Block]

1.

Organization

Clipper Realty Inc. (the “Company” or “We”) was organized in the state of Maryland on

July 7, 2015.

On

August 3, 2015,

we completed certain formation transactions and the sale of shares of common stock in a private offering. We contributed the net proceeds of the private offering to Clipper Realty L.P., our operating partnership subsidiary (the “Operating Partnership”), in exchange for units in the Operating Partnership. The Operating Partnership in turn contributed such net proceeds to the limited liability companies (“LLCs”) that comprised the predecessor of the Company in exchange for Class A LLC units in such LLCs and became the managing member of such LLCs. The owners of the LLCs exchanged their interests for Class B LLC units and an equal number of special, non-economic, voting stock in the Company. The Class B LLC units, together with the special voting shares, are convertible into common shares of the Company on a

one

-for-

one

basis and are entitled to distributions.

On

June 27, 2016,

the Operating Partnership acquired the Aspen property located at

1955

First Avenue in Manhattan, New York.

On

February 9, 2017,

the Company priced an initial public offering of

6,390,149

primary shares of its common stock (including the exercise of the over-allotment option, which closed on

March 10, 2017)

at a price of

$13.50

per share (the “IPO”). The net proceeds of the IPO were approximately

$79,000.

We contributed the proceeds of the IPO to the Operating Partnership, in exchange for units in the Operating Partnership.

On

May 9, 2017,

the Company completed the purchase of

107

Columbia Heights (subsequently renovated and rebranded “Clover House”), a

158

-unit apartment building located in the Brooklyn Heights neighborhood of Brooklyn, New York.

On

October 27, 2017,

the Company completed the acquisition of an

82

-unit residential property at

10

West

65

th

Street in the Upper West Side neighborhood of Manhattan, New York.

On

November 8, 2019,

the Company completed the acquisition of

1010

Pacific Street located in the Prospect Heights neighborhood of Brooklyn, New York; the Company plans to redevelop the property as a

175

-unit residential building.

As of

December 31, 2019,

the properties owned by the Company consist of the following (collectively, the “Properties”):

• 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 2,496 rentable units;

• 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 65 th Street in Manhattan, a 6 -story residential building with approximately 76,000 square feet of residential rental GLA; and

• 1010 Pacific Street in Brooklyn, which the Company plans to redevelop as a 9 -story residential building with approximately 119,000 square feet of residential rental GLA.

During

2019,

we entered into a joint venture in which we own a

50%

interest through which we are paying certain legal and advisory expenses in connection with various rent laws and ordinances which govern certain of our properties. The Company committed to contribute

$0.4

million towards the joint venture. In

2019,

the Company incurred

$0.3

million of such expenses which are recorded as part of general and administrative in the Consolidated Statements of Operations.

The operations of Clipper Realty Inc. and its consolidated subsidiaries are carried on primarily through the Operating Partnership. The Company has elected to be taxed as a Real Estate Investment Trust (“REIT”) under Sections

856

through

860

of the Internal Revenue Code (the “Code”). The Company is the sole general partner of the Operating Partnership and the Operating Partnership is the sole managing member of the LLCs that comprised the Predecessor.

At

December 31, 2019,

the Company’s interest, through the Operating Partnership, in the LLCs that own the properties generally entitles it to

40.4%

of the aggregate cash distributions from, and the profits and losses of, the LLCs.

The Company determined that the Operating Partnership and the LLCs are variable interest entities (“VIEs”) and that the Company was the primary beneficiary. The assets and liabilities of these VIEs represented substantially all of the Company’s assets and liabilities.