Tribeca House in Manhattan, comprising two buildings, one with 21 stories and one with 12 stories, containing residential and retail space with an aggregate of approximately 481,000

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Tribeca House in Manhattan, comprising two buildings, one with 21 stories and one with 12 stories, containing residential and retail space with an aggregate of approximately 483,000 square feet of residential rental Gross Leasable Area (“GLA”) and 77,000 square feet of retail rental and parking GLA;

On October 27, 2017,During 2019, we entered into a joint venture in which we own a 50% interest through which we are paying certain legal and advisory expenses in connection with various rent laws and ordinances which govern certain of our properties. During the three months ended March 31, 2021 and 2020, the Company completedincurred $0.02 million and $0.2 million, respectively, of such expenses, which are recorded as part of general and administrative in the acquisitionCondensed Consolidated Statements of a residential property at 10 West 65th Street in Manhattan, for $79.0 million. In connection with the acquisition,Operations, and the Company obtained a new $34.35 million mortgage loan, secured byhas fulfilled its commitment in the property.  The note bears interest at 3.375% for the first five years and thereafter at the prime rate plus 2.75%, subject to an option to fix the rate. The note requires interest-only payments for the first two years and monthly principal and interest payments thereafter based on a 30-year amortization schedule.     joint venture.

The operations of Clipper Realty Inc. and its consolidated subsidiaries are carried on primarily through the Operating Partnership. The Company has elected to be taxed as a Real Estate Investment Trust (“REIT”) under Sections 856 through 860 of the Internal Revenue Code.Code (the “Code”). The Company is the sole general partner of the Operating Partnership and the Operating Partnership is the sole managing member of the LLC’sLLCs that comprised the Predecessor.

At September 30, 2017, March 31, 2021, the Company’s interest, through the Operating Partnership, in the LLC’sLLCs that own the properties generally entitles it to 40.4%37.9% of the aggregate cash distributions from, and the profits and losses of, the LLC’s.LLCs.

As further discussed in Note 3, upon adoption of Accounting Standards Update (“ASU”) 2015-02, theThe Company determined that the Operating Partnership and the LLC’sLLCs are variable interest entities (“VIEs”) and that the Company was the primary beneficiary. The assets and liabilities of these VIEs represented substantially all of the Company’s assets and liabilities.

2. Sale Repurchase of Common Stock, Formation Transactions and Preferred Stock Redemption

As discussed in Note 1, in February 2017, In August 2020, the Company soldCompany’s board of directors (the “Board”) adopted a stock repurchase program to permit the repurchase of up to an aggregate of 6,390,149 primary$10.0 million in outstanding shares of the Company’s common stock. Under the repurchase program, the Company was permitted to repurchase its common stock at any time, or from time to time. The Company anticipated funding for the program to come from available sources of liquidity, including cash on hand and future cash flow. The repurchase program permitted shares to be repurchased in open market or private transactions, through block trades or otherwise. The number of shares repurchased and the timing, manner, price and amount of any repurchases was to be determined at the Company’s discretion, subject to the availability of stock, general market conditions, the trading price of the stock, alternative uses of capital and the Company’s financial performance. The repurchase program was permitted to be suspended, terminated or modified at any time for any reason, including market conditions, the cost of repurchasing shares, the availability of alternative investment opportunities, liquidity and other factors deemed appropriate by the Company. These factors could also affect the timing and amount of share repurchases. The repurchase program did not obligate the Company to repurchase any particular number of shares. On November 24, 2020, the Company completed the stock repurchase program. During the year ended December 31, 2020, the Company repurchased and retired 1,751,444 shares of common stock (includingunder the exerciserepurchase program for a total purchase price of the over-allotment option, which closed on March 10, 2017) to investors in a public offering at $13.50 per share.  The proceeds, net of offering costs, were approximately $78,685.$10.0 million.

On August 3, 2015, the Company sold 10,666,667 shares of common stock to private investors at a price of $13.50 per share. The proceeds, net of offering costs, were approximately $130,199.

3. Significant Accounting Policies

The Company contributed the net proceeds of the common stock offerings to the Operating Partnership in exchange for units in the Operating Partnership as described in Note 1.

Segments

On June 21, 2017, At March 31, 2021, the Company redeemed its preferred stock withhad two reportable operating segments, Residential Rental Properties and Commercial Rental Properties. The Company’s chief operating decision maker may review operational and financial data on a payment of $145.property basis.

3. Significant Accounting Policies

Basis of Consolidation

The accompanying consolidatedconsolidated financial statements of the Company are prepared in accordance with generally accepted accounting principles in the United States (“GAAP”).GAAP. The effect of all intercompany balances has been eliminated. The consolidated financial statements include the accounts of all entities in which the Company has a controlling interest. The ownership interests of other investors in these entities are recorded as non-controlling interest.interests.

Use of Estimates

The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of commitments and contingencies at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could materially differ from these estimates.

Investment in Real Estate

Real estate assets held for investment are carried at historical cost and consist of land, buildings and improvements, furniture, fixtures and equipment. Expenditures for ordinary repair and maintenance costs are charged to expense as incurred. Expenditures for improvements, renovations, and replacements of real estate assets are capitalized and depreciated over their estimated useful lives if the expenditures qualify as betterment or the life of the related asset will be substantially extended beyond the original life expectancy.

Upon the adoption ofIn accordance with ASU 2017-01,2017-01, "Business Combinations – Clarifying the Definition of a Business,” the Company evaluates each acquisition of real estate or in-substance real estate to determine if the integrated set of assets and activities acquired meets the definition of a business and needs to be accounted for as a business combination. If either of the following criteria is met, the integrated set of assets and activities acquired would not qualify as a business:

An acquired process is considered substantive if:

Generally, the Company expects that acquisitions of real estate or in-substance real estate will not meet the revised definition of a business because substantially all of the fair value is concentrated in a single identifiable asset or group of similar identifiable assets (i.e., land, buildings and related intangible assets) or because the acquisition does not include a substantive process in the form of an acquired workforce or an acquired contract that cannot be replaced without significant cost, effort or delay.

Upon acquisition of real estate, the Company assesses the fair values of acquired tangible and intangible assets including land, buildings, tenant improvements, above-market and below-market leases, in-place leases and any other identified intangible assets and assumed liabilities. The Company allocates the purchase price to the assets acquired and liabilities assumed based on their fair values. In estimating fair value of tangible and intangible assets acquired, the Company assesses and considers fair value based on estimated cash flow projections that utilize appropriate discount and capitalization rates, estimates of replacement costs, net of depreciation, and available market information. The fair value of the tangible assets of an acquired property considers the value of the property as if it were vacant.

The Company records acquired above-market and below-marketbelow-market lease values initially based on the present value, using a discount rate which reflects the risks associated with the leases acquired based on the difference between (i) the contractual amounts to be paid pursuant to each in-place lease and (ii) management’s estimate of fair market lease rates for each corresponding in-place lease, measured over a period equal to the remaining term of the lease for above-market leases and the initial term plus the term of any below-market fixed renewal options for the below-market leases. Other intangible assets acquired include amounts for in-place lease values and tenant relationship values (if any) that are based on management’s evaluation of the specific characteristics of each tenant’s lease and the Company’s overall relationship with the respective tenant. Factors to be considered by management in its analysis of in-place lease values include an estimate of carrying costs to execute similar leases. In estimating carrying costs, management includes real estate taxes, insurance and other operating expenses and estimates of lost rentals at market rates during the expected lease-up periods, depending on local market conditions. In estimating costs to execute similar leases, management considers leasing commissions, legal and other related expenses.

The Company reviews long-lived assets for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. A property’sproperty’s value is impaired if management’s estimate of the aggregate future cash flows (undiscounted and without interest charges) to be generated by the property is less than the carrying value of the property. To the extent impairment has occurred, a write-down is recorded and measured by the amount of the difference between the carrying value of the asset and the fair value of the asset. In the event that the Company obtains proceeds through an insurance policy due to impairment, the proceeds are offset against the write-down in calculating gain/loss on disposal of assets. Management of the Company does not believe that any of its properties within the portfolio are impaired as of September 30, 2017.March 31, 2021.

For long-lived assets to be disposed of, impairment losses are recognized when the fair value of the assets less estimated cost to sell is less than the carrying value of the assets. Properties classified as real estate held-for-sale generally represent properties that are actively marketed or contracted for sale with closing expected to occur within the next twelve months. Real estate held-for-sale is carried at the lower of cost, net of accumulated depreciation, or fair value less cost to sell, determined on an asset-by-asset basis. Expenditures for ordinary repair and maintenance costs on held-for-sale properties are charged to expense as incurred. Expenditures for improvements, renovations and replacements related to held-for-sale properties are capitalized at cost. Depreciation is not recorded on real estate held-for-sale.

If a tenant vacates its space prior to the contractual termination of the lease and no rental payments are being made on the lease, any unamortized balances of the related intangibles are written off. The tenant improvements and origination costs are amortizedamortized to expense over the remaining life of the lease (or charged against earnings if the lease is terminated prior to its contractual expiration date).

Depreciation is computed using the straight-line method over the estimated useful lives of the assets as follows:

The capitalized above-market lease values are amortized as a reduction to base rental revenue over the remaining terms of the respective leases, and the capitalized below-market lease values are amortized as an increase to base rental revenue over the remaining initial terms plus the terms of any below-market fixed rate renewal options of the respective leases. The value of in-place leases is amortized to expense over the remaining initial terms of the respective leases.

Cash and Cash Equivalents

Cash and cash equivalents are defined as cash on hand and in banks,, plus all short-term investments with a maturity of three months or less when purchased. The Company maintains some of its cash in bank deposit accounts, which, at times, may exceed the federally insured limit. No losses have been experienced related to such accounts.

Restricted Cash

Restricted cash generally consists of escrows for future real estate taxes and insurance expenditures, repairs, and capital improvements, loan reserves and security deposits.

Tenant and Other Receivables and Allowance for Doubtful Accounts

Tenant and other receivables are comprised of amounts due for monthly rents and other charges.charges less allowance for doubtful accounts. The Company periodically performs a detailed review of amounts due from tenants to determine if accounts receivable balances are impaired based on factors affectingaffecting the collectability of those balances. If a tenant fails to make contractual payments beyond any allowance, the Company may recognize additional bad debt expense in future periods.

Deferred Costs

Deferred lease costs consist of fees incurred to initiate and renew operating leases. Lease costs are being amortized using the straight-line method over the terms of the respective leases.

Deferred financing costs represent commitment fees, legal and other third-partythird-party costs associated with obtaining financing. These costs are amortized over the term of the financing and are recorded in interest expense in the consolidated financial statements.statements of operations. Unamortized deferred financing costs are expensed when the associated debt is refinanced or repaid before maturity. Costs incurred in seeking financing transactions which do not close are expensed in the period the financing transaction is terminated.

Comprehensive LossIncome (Loss)

Comprehensive lossincome (loss) is comprised of net lossincome (loss) adjusted for changes in unrealized gains and losses, reported in equity, for financial instruments required to be reported at fair value under GAAP. For the three and nine months ended September 30, 2017 March 31, 2021 and 2016,2020, the Company did not own any financial instruments for which the change in value was not reported in net lossincome (loss); accordingly, and its comprehensive lossincome (loss) was its net lossincome (loss) as presented in the consolidated statements of operations.

Revenue Recognition

Rental revenue for commercial leases is recognized on a straight-line basis over the terms of the respectiverespective leases. Rental income attributable to residential leases and parking is recognized as earned, which is not materially different from the straight-line basis. Leases entered into by residents for apartment units are generally for one-year terms, renewable upon consent of both parties on an annual or monthly basis. Deferred rents receivable represents the amount by which straight-line rental revenue exceeds rents currently billed in accordance with lease agreements. Rental income attributable to residential leases and parking is recognized as earned, which is not materially different from the straight-line basis. Leases entered into by residents for apartment units are generally for one-year terms, renewable upon consent of both parties on an annual or monthly basis.

Reimbursements for operating expenses due from tenants pursuant to their lease agreements are recognized as revenue in the period the applicable expenses are incurred. These costs generally include real estate taxes, utilities, insurance, common area maintenance costs and other recoverable costs.costs and are recorded as part of commercial rental income in the condensed consolidated statements of operations.

Beginning in 2018, the Company will apply ASU 2014-09, “Revenue with Contracts with Customers.” This ASU does not apply to the Company’s lease revenues, but will apply to a portion of tenant recoveries and garage and other revenue. Management believes substantially all of the Company’s revenue falls outside of the scope of this guidance and does not anticipate any significant changes to the timing of the Company’s revenue recognition. The Company intends to implement the standard retrospectively at the date of adoption.

Beginning in 2019, the Company will be required to apply ASU 2016-02, “Leases,” to its lease revenues. For lessors, the accounting remains largely unchanged from the current model, but updated to align with certain changes to the lessee model and ASU 2014-09 discussed above.

Stock-based Compensation

The Company accounts for stock-based compensation pursuant to Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“FASB ASC”) Topic 718, “Compensation — Stock Compensation.” As such, all equity-based awards are reflected as compensation expense in the Company’s consolidated financial statements of operations over their vesting period based on the fair value at the date of grant. In the event of a forfeiture, the previously recognized expense would be reversed.

In April 2017, the Company granted 151,853 LTIP

As of March 31, 2021 and December 31, 2020, there were 1,735,563 and 1,410,371 long-term incentive plan (“LTIP”) units outstanding, respectively, with a weighted average grant date fair value of $10.96 per unit.

At September 30, 2017,$9.61 and December 31, 2016, there were 653,338 and 501,485 LTIP units outstanding, respectively, with a weighted grant-date fair value of $12.95 and $13.50$9.90 per unit, respectively. As of September 30, 2017, March 31, 2021, and December 31, 2016, 2020, there was $3.0$4.6 million and $3.5$2.4 million, respectively, of total unrecognized compensation cost related to unvested share-based compensation arrangements granted under share incentive plans. As of September 30, 2017, March 31, 2021, the weighted averageweighted-average period over which the unrecognized compensation expense will be recorded is approximately 1.2 years.one year.

In March 2021, the Company granted employees and non-employee directors 222,298 and 102,894 LTIP units, respectively, with a weighted-average grant date fair value of $8.34 per unit.

Transaction Pursuit Costs

Transaction pursuit costs primarily reflect costs incurred for abandoned acquisition, disposition or other transaction pursuits.

Income Taxes

The Company elected to be taxed and to operate in a manner that will allow it to qualify as a REIT under the U.S. Internal Revenue Code (the “Code”) commencing with its taxable year ended December 31, 2015.Code. To qualify as a REIT, the Company is required to distribute dividends equal to at least 90% of the REIT taxable income (computed without regard to the dividends paid deduction and net capital gains) to its stockholders, and meet the various other requirements imposed by the Code relating to matters such as operating results, asset holdings, distribution levels and diversity of stock ownership. Provided the Company qualifies for taxation as a REIT, it is generally not subject to U.S. federal corporate-level income tax on the earnings distributed currently to its stockholders. If the Company fails to qualify as a REIT in any taxable year, the Company will be subject to U.S. federal and state income tax on its taxable income at regular corporate tax rates and any applicable alternative minimum tax. In addition, the Company may not be able to re-elect as a REIT for the four subsequent taxable years. The entities comprising the Predecessor are limited liability companies and are treated as pass-through entities for income tax purposes. Accordingly, no provision has been made for federal, state or local income or franchise taxes in the accompanying consolidated financial statements.

On March 27, 2020, the President signed into law the Coronavirus Aid, Relief, and Economic Security Act (the “CARES Act”). The CARES Act was enacted to provide economic relief to companies and individuals in response to the COVID-19 pandemic. Included in the CARES Act are tax provisions which increase allowable interest expense deductions for 2019 and 2020 and increase the ability for taxpayers to use net operating losses. While we do not expect these provisions to have a material impact on the Company’s taxable income or tax liabilities, we continue to analyze the provisions of the CARES Act and related guidance as it is published.

In accordance with FASB ASC Topic 740, the Company believes that it has appropriate support for the income tax positions taken and, as such, does not have any uncertain tax positions that, if successfully challenged, could result in a material impact on its or the Predecessor’s financial position or results of operations. The prior three years’ income tax returns are subject to review by the Internal Revenue Service.

Fair Value Measurements

Refer to Note 9, “Fair8, “Fair Value of Financial Instruments”.

Derivative Financial InstrumentsInstruments

FASB derivative and hedging guidance establishes accounting and reporting standards for derivative instruments, including certain derivative instruments embedded in other contracts, and for hedging activities. As required by FASB guidance, the Company records all derivatives on the consolidated balance sheets at fair value. The accounting for changes in the fair value of derivatives depends on the intended use of the derivative and the resulting designation.

Derivatives used to hedge the exposure to changeschanges in the fair value of an asset, liability, or firm commitment attributable to a particular risk, such as interest rate risk, are considered fair value hedges. Derivatives used to hedge the exposure to variability in expected future cash flows, or other types of forecast transactions, are considered cash flow hedges. For derivatives designated as fair value hedges, changes in the fair value of the derivative and the hedged item related to the hedged risk are recognized in earnings. For derivatives designated as cash flow hedges, the effective portion of changes in the fair value of the derivative is initially reported in other comprehensive income (loss) (outside of earnings) and subsequently reclassified to earnings when the hedged transaction affects earnings, and the ineffective portion of changes in the fair value of the derivative is recognized directly in earnings. The Company assesses the effectiveness of each hedging relationship by comparing the changes in the fair value or cash flows of the derivative hedging instrument with the changes in the fair value or cash flows of the designated hedged item or transaction. For derivatives not designated as hedges, changes in fair value would be recognized in earnings. As of September 30, 2017, March 31, 2021, the Company has no derivatives for which it applies hedge accounting.

Earnings (Loss)Loss Per ShareShare

Basic and diluted net loss per share is computed by dividing net loss attributable to common stockholders by the weighted average common shares outstanding. As of September 30, 2017 March 31, 2021 and 2016,2020, the Company hashad unvested LTIP Unitsunits which provide for non-forfeitablenon-forfeitable rights to dividend equivalentdividend-equivalent payments. Accordingly, these unvested LTIP Unitsunits are considered participating securities and are included in the computation of basic and diluted net loss per share pursuant to the two-classtwo-class method. The Company does did not have dilutive securities as of September 30, 2017 March 31, 2021 or 2016.2020.

The effect of the conversion of the 26,317 Class B LLC units outstanding is not reflected in the computation of basic and diluted net loss per share, as the effect would be anti-dilutive. The net loss allocableallocable to such units is reflected as noncontrollingnon-controlling interests in the accompanying consolidated financial statements.

The following table sets forth the computation of basic and diluted earnings (loss)net loss per share for the periods indicated (unaudited):

Recently Issued Pronouncements

In August 2017, April 2020, FASB issued a Staff Q & A to provide interpretive guidance for lease concessions related to the effects of the COVID-19 pandemic. The Company did not provide any material concessions to its tenants as a result of COVID-19 during the three months ended March 31, 2021; therefore, this guidance did not have a material impact on its consolidated financial statements. The Company continues to evaluate the effect that this guidance may have on its consolidated financial statements.

In January 2021, FASB issued ASU 2017-12, “Derivatives2021-01, “Reference Rate Reform” (Topic 848).ASU 2021-01 modifies ASC 848 (ASU 2020-04), which was intended to provide relief related to “contracts and Hedging (Topic 815) – Targeted Improvementstransactions that reference LIBOR or a reference rate that is expected to Accounting for Hedging Activities.be discontinued as a result of reference rate reform.” This new standard simplifies andASU 2021-01 expands the eligible hedging strategies for financialscope of ASC 848 to include all affected derivatives and nonfinancial risks. It also enhancesgive reporting entities the transparency of how hedging results are presented and disclosed. Further, the new standard provides partial relief on the timing ofability to apply certain aspects of the contract modification and hedge documentation and eliminatesaccounting expedients to derivative contracts affected by the requirementdiscounting transition. ASU 2021-01 also adds implementation guidance to recognize hedge ineffectiveness separatelyclarify which optional expedients in earnings.ASC 848may be applied to derivative instruments that do not reference LIBOR or a reference rate that is expected to be discontinued, but that are being modified as a result of the discounting transition. The ASU becomes effective for public companies for fiscal years beginning after December 15, 2018, and for interim periods within those fiscal years. Early adoption is permitted. TheCompany does not expect the adoption of ASU 2017-05 is not expected2021-01 to have a material impact on ourits consolidated financial statements.

In May 2017, March 2020, FASB issued ASU 2017-09, “Compensation – Stock Compensation (Topic 718) Scope of Modification Accounting.” ASU 2017-09 clarifies Topic 718 such that an entity must apply modification accounting to changes in the terms or conditions of a share-based payment award unless all2020-04, “Reference Rate Reform: Facilitation of the following criteria are met:Effects of Reference Rate Reform on Financial Reporting” (Topic 848). ASU 2020-04 provides temporary optional expedients and exceptions to ease financial reporting burdens related to applying current GAAP to modifications of contracts, hedging relationships and other transactions in connection with the transition from the London Interbank Offered Rate (“LIBOR”) and other interbank offered rates to alternative reference rates. ASU 2020-04 is effective beginning on March 12, 2020, and may be applied prospectively to such transactions through December 31, 2022. We will apply ASU 2020-04 prospectively as and when we enter into transactions to which this guidance applies.

The amendments are effective for all entities for fiscal years beginning after December 15, 2017, including interim periods within those fiscal years. Early adoption is permitted, including adoption in an interim period. The adoption of ASU 2017-05 is not expected2019-01 to have a material impact on ourits consolidated financial statements.

In February 2017, December 2018, FASB issued ASU 2017-05, “Other Income-Gains2018-20,“Leases (Topic 842), Narrow-Scope Improvements for Lessors.” This ASU modifies ASU 2016-02 to permit lessors, as an accounting policy election, not to evaluate whether certain sales taxes and Lossesother similar taxes are lessor costs or lessee costs. Instead, those lessors will account for those costs as if they are lessee costs. Consequently, a lessor making this election will exclude from the Derecognitionconsideration in the contract and from variable payments not included in the consideration in the contract all collections from lessees of Nonfinancial Assets (Subtopic 610-20),” to add guidance for partialtaxes within the scope of the election and will provide certain disclosures (includes sales, of nonfinancial assets, including partial sales ofuse, value-added, and some excise taxes and excludes real estate. Historically, U.S. GAAP contained several different accounting modelsestate taxes). The Company has elected not to evaluate whether the transferaforementioned costs are lessor or lessee costs. This ASU also provides that certain lessor costs require lessors to exclude from variable payments, and therefore revenue, specifically lessor costs paid by lessees directly to third parties. The amendments also require lessors to account for costs excluded from the consideration of certain assets qualified for sale treatment. ASU 2017-05 reducesa contract that are paid by the number of potential accounting models that might applylessor and clarifies which modelreimbursed by the lessee as variable payments. A lessor will record those reimbursed costs as revenue. The Company does apply in various circumstances. ASU 2017-05 is effective for annual reporting periods after December 16, 2017, including interim reporting periods within those reporting periods. Thenot expect the adoption of ASU 2017-05 is not expected2018-20 to have a material impact on ourits consolidated financial statements.

In January 2017, February 2016, FASB issued ASU 2017-01, "Business Combinations – Clarifying2016-02, “Leases.” ASU 2016-02 supersedes the Definitioncurrent accounting for leases and while retaining two distinct types of leases, finance and operating, requires lessees to recognize most leases on their balance sheets and makes targeted changes to lessor accounting. In July 2018, FASB issued ASU 2018-10, “Codification Improvements to Topic 842, Leases,” which provides minor clarifications and corrections to ASU 2016-02, “Leases (Topic 842).” Further, in July 2018, the FASB issued ASU 2018-11, “Leases (Topic 842): Targeted Improvements.” This amendment provides a Business." ASU 2017-01 clarifiesnew practical expedient that allows lessors, by class of underlying asset, to be consideredavoid separating lease and associated non-lease components within a business,contract if certain criteria are met: (i) the elements must include, at a minimum, an inputtiming and a substantive process that together significantly contribute topattern of transfer for the ability to create output. The new standard illustratesnon-lease component and the circumstances under which real estate with in-place leasesassociated lease component are the same and (ii) the stand-alone lease component would be considered a business and provides guidanceclassified as an operating lease if accounted for the identification of assets and liabilities in purchase accounting. ASU 2017-01 isseparately. These pronouncements are effective for periodsfiscal years beginning after December 15, 2017, 2021, and early adoption is permitted. The Company adopted ASU 2017-01 in 2017. The newwill adopt this standard is expected to reduce the number of future real estate acquisitions that will be accounted for as business combinations and, therefore, reduce the amount of acquisition costs that will be expensed.

In November 2016, FASB issued ASU 2016-18, “Statement of Cash Flows (Topic 230) – Restricted Cash.” ASU 2016-18 requires that a statement of cash flows explain the change during the period in the total of cash, cash equivalents and amounts generally described as restricted cash or restricted cash equivalents. Therefore, amounts generally described as restricted cash and restricted cash equivalents should be included with cash and cash equivalents when reconciling the beginning-of-period and end-of-period total amounts shown on the statement of cash flows. ASU 2016-18 does not provide a definition of restricted cash or restricted cash equivalents. ASU 2016-18 is effective for public business entities for fiscal years beginning after December 15, 2017, including interim periods within those fiscal years. For all other entities, ASU 2016-18 is effective for fiscal years beginning after December 15, 2018, January 1, 2022 and for interim periods within fiscal years beginning after December 15, 2019. Early adoption is permitted, including adoption in an interim period. The Company is currently evaluating when to adopt ASU 2016-18.

4. Acquisitions

On June 27, 2016,the impact of adoption on its consolidated financial statements. As lessor, the Company acquiredexpects that the Aspen property for $103,000.

The purchase price was allocated as follows:

We have preparedadoption of ASU 2016-02 (as amended by subsequent ASUs) will not change the following unaudited pro forma income statement information for the nine months ended September 30, 2016, as if the acquisition had occurred astiming of January 1, 2016. This pro forma data is not necessarily indicativerevenue recognition of the results that actually would have occurred if the acquisition had been consummated on January 1, 2016.

On May 9, 2017,Company’s rental revenues. For lease payments deemed uncollectible, the Company purchased 107 Columbia Heights, in vacant condition,will record bad debt expense as a reduction of revenue. As lessee, the Company is party to certain office equipment leases with future payment obligations for $87.5 million. In connection withwhich the acquisitionCompany expects to record right-of-use assets and redevelopmentlease liabilities at the present value of the property, the Company obtained acquisition and construction financing secured by mortgages on the property (see Note 7). The purchase price was preliminarily allocated 50% to land and 50% to building.remaining minimum rental payments upon adoption of this standard. 

5. Deferred4. Deferred Costs and Intangible Assets

Deferred costs and intangible assets consist of the following:

Amortization of deferred costs, lease origination costs and in-place lease intangible assets was $228$56 and $360$73 for the three months ended September 30, 2017 March 31, 2021 and 2016, respectively, and $688 and $801 for2020, respectively; $10 of deferred costs were written off during the ninethree months ended September 30, 2017 March 31, 2021, and 2016, respectively. Amortizationare included in transaction pursuit costs in the consolidated statements of operations. Amortization of real estate tax abatements of $392$120 and $518$119 for the three months ended September 30, 2017 March 31, 2021 and 2016, respectively, and $1,176 and $1,186 for the nine months ended September 30, 2017 and 2016,2020, respectively, is included in real estate taxes and insurance in the consolidated statements of operations. Amortization of above-market leases of $15$0 and $11$30 for the three months ended September 30, 2017 March 31, 2021 and 2016, respectively, and $43 and $11 for the nine months ended September 30, 2017 and 2016,2020, respectively, is included in commercial rental income in the consolidated statements of operations. $444 of fully amortized above-market leases was written off during the three months ended March 31, 2020.

Deferred costs and intangible assets as of September 30, 2017, March 31, 2021, amortize in future years as follows:

6.5. Below-Market Lease IntangiblesLeases, Net

The Company’s below-market lease intangibles liabilities are as follows:

Rental income includesincluded amortization of below-market leases of $446$31 and $449$129 for the three months ended September 30, 2017 March 31, 2021 and 2016, respectively, and $1,340 and $1,368 for the nine months ended September 30, 2017 and 2016,2020, respectively.

Below-marketBelow-market leases as of September 30, 2017, March 31, 2021, amortize in future years as follows:

7. 6.Notes Payable

The first mortgages,, loans and mezzanine notes payable collateralized by the respective properties, or the Company’s interest in the entities that own the properties and assignment of leases, wereare as follows:

(a) The $150,000$329,000 mortgage note agreement with New York Community Bank (“(��NYCB”), entered into on May 8, 2020, matures on OctoberJune 1, 2024, 2032, and bears interest at 3.88%. The note requires interest-only payments3.125% through April 2017 and monthly principal and interest payments of $705 thereafter based on a 30-year amortization schedule.

(b) The additional $20,000 note with NYCB matures coterminous with the $150,000 mortgage, and bears interest at 3.88% through September 2019 May 2027 and thereafter at the prime rate plus 2.75%, subject to an option to fix the rate. The note requires interest-only payments through April 2017, monthly principal and interest payments of $94 from May 2017 through September 2019 based on a 30-year amortization schedule 2027, and monthly principal and interest payments thereafter based on a 30-year amortization schedule. The Company has the remaining periodoption to prepay all (but not less than all) of the initial 30-year amortization schedule.unpaid balance of the note prior to the maturity date, subject to certain prepayment premiums, as defined.

(c)

(b) The $37,500$125,000 mortgage note agreement with Citigroup Global Markets Realty Corp. Citi Real Estate Funding Inc., entered into on May 31, 2019, matures on MayJune 6, 2023, and 2029, bears interest at 4.00%.3.63% and requires interest-only payments for the entire term. The Company has the option to prepay all (but not less than all) of the unpaid balance of the note within three months of maturity, without a prepayment premium.

(c) On February 18, 2021, the Company refinanced the $79,500 mortgage note agreement with NYCB, with a $100,000, ten-year secured first mortgage note with Citi Real Estate Funding Inc. The note matures on March 6, 2031, bears interest at 3.21% and requires monthly principal and interestinterest-only payments for the entire term. The Company has the option to prepay all (but not less than all) of $179.the unpaid balance of the note within three months of maturity, without a prepayment premium.

(d) On May 11, 2016, the Company repaid a $55,000 The $360,000 loan secured by the property with the proceeds of a $79,500 loan from NYCB. The NYCB loan Deutsche Bank, entered into on February 21, 2018, matures on June 1,March 6, 2028, and bears interest at 3.875%. The note4.506% and requires interest-only payments through June 2017, and monthly principal and interest paymentsfor the entire term. The Company has the option to prepay all (but not less than all) of $374 thereafter based onthe unpaid balance of the loan prior to the maturity date, subject to a 30-year amortization schedule.prepayment premium if it occurs prior to December 6, 2027.

(e) On November 9, 2016, the Company repaid $360,000 of mortgage notes and $100,000 of mezzanine notes assumed in connection with the acquisition of the Tribeca House properties, with the proceeds of a $410,000 loan package with Deutsche Bank and SL Green Finance, and cash on hand. The loan package matures on November 9, 2018, is subject to three one-year extension options and bears interest at one-month LIBOR plus 3.75% (5.0% as of September 30, 2017).

(f) On June 27, 2016, the Company entered into a $70,000 mortgage note agreement with Capital One Multifamily Finance LLC related to the Aspen property acquisition. The note matures on July 1, 2028, and bears interest at 3.68%. The note requiresrequired interest-only payments through July 2017, and monthly principal and interest payments of $321 thereafter based on a 30-year30-year amortization schedule. The Company has the option to prepay the note prior to the maturity date, subject to a prepayment premium.

(f) The $82,000 mortgage note agreement with MetLife Investment Management, entered into on November 8, 2019, matures on December 1, 2029, bears interest at 3.53% and requires interest-only payments for the entire term. The Company has the option, commencing on January 1, 2024, to prepay the note prior to the maturity date, subject to a prepayment premium if it occurs prior to September 2, 2029.

(g) On May 9,October 27, 2017, the Company entered into a $59,000$34,350 mortgage note agreement with NYCB, related to the 10 West 65^th Street acquisition. The note matures on November 1, 2027, and bears interest at 3.375% through October 2022 and thereafter at the prime rate plus 2.75%, subject to an option to fix the rate. The note required interest-only payments through November 2019, and monthly principal and interest payments of $152 thereafter based on a unit30-year amortization schedule. The Company has the option to prepay all (but not less than all) of Blackstone Mortgage Trust, Inc.the unpaid balance of the note prior to the maturity date, subject to certain prepayment premiums, as defined.

(h) On December 24, 2019, the Company entered into a $18,600 mortgage note agreement with CIT Bank, N.A., related to the 1010 Pacific Street acquisition. The Company also entered into a constructionpre-development bridge loan secured by the buildingproperty with the same lender that will provide up to $14,700$2,987 for eligible capital improvementspre-development and carrying costs, of which $347$2,023 was drawn as of September 30, 2017. March 31, 2021. The notes mature on May 9, 2020, are subject to two one-year extension optionsJune 24, 2021, require interest-only payments and bear interest at one-monthone-month LIBOR (with a floor of 1.25%) plus 3.85% (5.1%3.60% (4.85% as of September 30, 2017)March 31, 2021).The Company has guaranteed this mortgage note and has complied with the financial covenants therein. The Company is in negotiations with third parties to refinance the notes with a construction loan prior to maturity, although there are no assurances that the Company will be able to do so.