Clipper Realty has a massive hole to plug.
David Bistricer’s REIT is set to lose the tenant occupying 93 percent of the net rentable area at 250 Livingston Street: New York City, according to Fitch Ratings.
The city exercised a termination option to end its lease in August 2025. Fitch cited the expected exit in issuing a warning about the CMBS debt tied to the Downtown Brooklyn property. The “loan of concern” designation means the ratings agency expects the debt may incur higher losses.
Clipper financed 250 Livingston with $125 million in securitized loans, Morningstar records show.
Bistricer said, “Clipper is considering several options,” given the city’s exit.
It’s been less than four years since Clipper inked new leases with the city’s Human Resources Administration and the Department of Environmental Protection. Each signed for 10-year terms through August 2030.
The agencies’ combined 342,000 square foot space will be a daunting void to fill, particularly in a challenging market where the city’s best-performing office properties are new or renovated Class A buildings in Manhattan near major transit hubs.
Given that 250 Livingston was last renovated in 2013, Clipper may have trouble competing with the fresher spaces pulling the lion’s share of tenants. The REIT owns two other Downtown Brooklyn properties: 141 Livingston Street and 233 Schermerhorn Street. It bought 250 Livingston Street, which in addition to the office space has 36 apartments totaling 27,000 square feet, in 2002.
In the first quarter, New York City tenants signed leases for 6.1 million square feet of office space, 41 percent below the pre-Covid average for the period and about 3 percent less than a year ago, according to a report by Avison Young.
Tenants continue to gravitate toward smaller leases, another hurdle for Clipper at 250 Livingston. Just nine leases topped 100,000 square feet in the first three months of the year, a touch higher than in the same quarter in 2023, but well below the 20 signed a decade ago, the report showed.
Clipper Realty is a real estate investment trust that owns multifamily, office and other commercial properties in Manhattan and Brooklyn. The REIT’s stock price is down 25 percent this year and 69 percent in the past five years, leaving it with a market capitalization of $64.7 million.
Bistricer is also the CEO of the privately held Clipper Equity, which owns rental buildings and condominiums in the New York area.
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