Clipper Realty Inc

The Company’s subsidiary, 141 Livingston Owner LLC, and Citi Real Estate Funding Inc. entered into the Loan Agreement, dated as of February 18, 2021 related to the Company’s 141 Livingston property (the “Loan Agreement”). The Company and the City of New York that leases commercial space at 141 Livingston Street property are negotiating the terms of a five-year extension of the current lease upon its termination in December of 2025. There can be no assurance that the negotiations will conclude with an agreement.

On October 28, 2024 we received notice that as of October 7, 2024 the servicing of the mortgage note was transferred to a special servicer (“Special Servicer”) due to, they contend, our failure to make certain required payments under the loan, including, but not limited to, the reserve monthly deposit. The Special Servicer has demanded that we pay $2,222 of reserve payments into an escrow account immediately and continued monthly payments of $555 for an additional 14 months, $1,166 of default interest and late charges through October 7, 2024, and an additional $10 per diem interest for each day thereafter. We contend the Special Servicer has misinterpreted the terms of the loan agreement requiring monthly reserve payments beginning on July 7, 2024, and that the Company has no obligation to make reserve payments at this time under the terms of the loan agreement. We continue to discuss this issue with the Special Servicer.