Company: CLPR
Filing Date: 2025-05-08
Form Type: 8-K
Source: 0001437749-25-015484
Chunk: 3

Company: Clipper Realty Inc.
Filing Date: 2025-05-08
Form: 8-K
Chunk 3
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 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

Emerging growth company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Item 1.01. Entry into a Material Definitive Agreement.

On May 2, 2025, Dean Owner LLC, a Delaware limited liability company (“Dean Owner”) and a wholly-owned subsidiary of Clipper Realty Inc. (the “Company”), entered into the Multifamily Loan and Security Agreement (the “Loan Agreement”) with MF1 Capital LLC, a Delaware limited liability company (“MF1 Capital”), dated as of May 2, 2025. In addition, on May 2, 2025, Dean Member LLC, a Delaware limited liability company (“Dean Member”) and MF1 Capital entered into the Mezzanine Multifamily Loan and Security Agreement (the “Mezzanine Loan Agreement” and together with the Loan Agreement, the “New Loan Agreements”) with MF1 Capital, a company not affiliated with the Company dated as of May 2, 2025.

The Loan Agreement provides for the $115 million loan to Dean Owner, and the Mezzanine Loan Agreement provides for the $45 million loan to Dean Member (collectively, the “Loans”). The Loans have an initial May 2027 maturity date, with three one-year extensions available upon meeting the applicable extension conditions, and bear interest at 2.65% rate, plus 1-Month CME Term SOFR (with a floor of 2.25%). The Dean Member can borrow up to an additional $18.2 million under the Mezzanine Loan Agreement based on meeting various performance targets over the term of the loan. Under the Loan Agreement, the Company deposited with MF1 Capital (i) $4.3 million for a shortfall reserve account to pay interest and operating expenses during the initial lease up period of the Dean Street Property, and (ii) $1.6 million for completion reserve deposits towards the completion of the construction of the building.

The New Loan Agreements also contain customary representations, covenants, and events of default.

In addition, the Company purchased an interest rate cap