Material Agreement, Financial Obligation, Termination of Material Agreement (Form 8-K)

On October 1, 2025, 1010 Pacific Owner LLC, a Delaware limited liability company ("1010 Pacific") and a subsidiary of Clipper Realty Inc. (the "Company"), entered into a Loan Agreement (the "Loan Agreement") with Citi Real Estate Funding Inc., a New York corporation, and Morgan Stanley Bank, N.A., a national banking association, as the lenders, dated as of October 1, 2025.

The Loan Agreement provides for the $84.5 million loan to 1010 Pacific (the "Loan"). The Loan has a maturity date of October 6, 2030 and bears interest at a 5.73% rate per annum. The Loan is secured by the residential rental property located at 1010 Pacific Street, Brooklyn, New York (the "Property").

The Loan Agreement also contains customary representations, covenants, and events of default.

Prior to entering into the Loan Agreement, 1010 Pacific had $80.0 million in mortgage debt secured by the Property, in the form of two mortgage notes issued to Valley National Bank N.A. (the "Bank"): (i) a $60.0 million note which had an annual interest rate of 5.55%, and (ii) a $20.0 million note with an annual interest rate of 6.37%; both notes matured on September 15, 2025, and 1010 Pacific had the option to prepay in full, or in part, the unpaid balance of the notes prior to the maturity date. On October 1, 2025, concurrently with entering into the Loan Agreement, 1010 Pacific repaid $80 million mortgage loan with the Bank and terminated its loan agreement with the Bank (the "Prior Loan Agreement"). In connection with this refinancing, 1010 Pacific paid to the Bank approximately $80.4 million of principal and accrued interest outstanding under the Prior Loan Agreement.

The Company incurred no fees or costs as a result of the termination of the Prior Loan Agreement, the Company incurred approximately $1.7 million in closing costs and prepaid interest and set aside approximately $0.2 million is escrow accounts for property taxes, property insurance and rent reserves under the Loan Agreement. The Company received net proceeds of approximately $2.1 million from this refinancing at the time of closing.

The foregoing description of the Loan Agreement does not purport to be complete and is qualified in its entirety by reference to the full text of the Loan Agreement, which will be filed as an exhibit to the Quarterly Report on Form 10-Q for the quarter ended September 30, 2025 to be filed with the Securities and Exchange Commission.

The information set forth under Item 1.01 above is incorporated into this Item 1.02 by reference.

The information set forth under Item 1.01 above is incorporated into this Item 2.03 by reference.