On August 10, 2023, Clipper Realty Inc. (the ?Company?) refinanced its $37 million mortgage on its Dean Street development with a senior construction loan (?Senior Loan?) that permits borrowings up to $115 million with Valley National Bank and a Mezzanine Loan (combined ?Construction Loans?) that permits borrowings up to $8 million with BADF 953 Dean Street Lender LLC. The Construction Loans will finance the development of 240 residential units and 9,319 square feet of commercial space at 951-953 Dean Street, 1048-1050 Pacific Street and 643 Classon Avenue in Brooklyn, NY. The Senior Loan will allow maximum borrowings of $115 million for a 30-month term, have two 6-month extension options, and bear interest at 1-Month Term SOFR plus 3.75%, with an all-in floor of 5.50%.

The Senior Loan will consist of a land loan, funded at closing to refinance the existing loan totaling $37 million, a construction loan of up to $62.4 million and a project loan of up to $15.6 million. The Company has provided a 30% payment guarantee of outstanding borrowings among other standard indemnities. The Mezzanine Loan will allow maximum borrowings of $8 million for a 30-month term, have two 6-month extension options, and bear interest at 1-Month Term SOFR plus 10%, with an all-in floor of 13%.

Interest shall accrue of the principal, is compounded monthly and is due at the end of the loan. At closing, $4.5 million was funded to cover closing costs incurred on the loan. The Company also entered into a $5 million corporate line of credit with Valley National Bank.

The line of credit bears interest of Prime + 1.5%. The Company did not draw on the line at the time of closing.