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Item 3 — Quantitative and Qualitative Disclosures About Market Risk
Clipper Realty Inc. · 10-Q · Q2 FY2026 · Period ended Jun 30, 2026
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Our future income, cash flows and fair value relevant to our financial instruments depend upon prevailing market interest rates. Market risk refers to the risk of loss from adverse changes in market prices and interest rates. Based upon the nature of our operations, the principal market risk to which we are exposed is the risk related to interest rate fluctuations. Many factors, including governmental monetary and tax policies, domestic and international economic and political considerations, and other factors that are beyond our control, contribute to interest rate risk.
A one percent change in interest rates on our $150.0 million of variable rate debt as of June 30, 2026, would impact annual net loss by approximately $1.5 million.
At June 30, 2026, the Company had one interest rate cap with US Bank that caps the SOFR portion of the interest rate on the 953 Dean Street Loans at 6%.
The fair value of the Company’s notes payable was approximately $1,265.1 million and $1,267.7 million as of June 30, 2026 and December 31, 2025, respectively