UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

SCHEDULE 13D

Under the Securities Exchange Act of 1934

If the filing person has previously filed a statement on Schedule 13G to report the acquisition that is the subject of this Schedule 13D, and is filing this schedule because of §§ 240.13d-1(e), 240.13d-1(f) or 240.13d-1(g), check the following box ¨.

Note: Schedules filed in paper format shall include a signed original and five copies of the schedule, including all exhibits. See § 240.13d-7 for other parties to whom copies are to be sent.

(Continued on following pages)

Item 1. Security and Issuer

This statement relates to the common stock, par value $0.01 per share (the “Common Stock”), of Clipper Realty Inc. (the “Issuer”). The address of the principal executive offices of the Issuer is 4611 12^th Avenue Brooklyn, New York 11219.

Item 2. Identity and Background

The person filing this statement is David Bistricer in his individual capacity and as co-trustee of the Moric Bistricer 2012 Family Trust and sole trustee of the Moric Bistricer 2016 Family Trust. Mr. Bistricer is a citizen of the United States of America.

Mr. Bistricer’s present principal occupation and employment is Co-Chairman and Chief Executive Officer of the Issuer. The Issuer is a self-administered and self-managed real estate company that acquires, owns, manages, operates and repositions multi-family residential and commercial properties in the New York metropolitan area, with an initial portfolio in Manhattan and Brooklyn. David Bistricer is also currently the Chief Executive Officer of Clipper Equity LLC, which owns interests in and controls and manages entities that own interests in multi-family and commercial properties in the New York metropolitan area. Mr. Bistricer’s principal business address is 4611 12^th Avenue Brooklyn, New York 11219.

Mr. Bistricer has not, during the past five years, (i) been convicted in a criminal proceeding (excluding traffic violations or similar misdemeanors) or (ii) been a party to a civil proceeding of a judicial or administrative body of competent jurisdiction and as a result of such proceeding was or is subject to a judgment, decree, or final order enjoining future violations of, or prohibiting or mandating activities subject to, federal or state securities laws or finding any violation with respect to such laws.

Item 3. Source and Amount of Funds or Other Consideration.

On February 9, 2017, the Securities and Exchange Commission (the “SEC”) issued a notice of effectiveness of the Issuer’s registration statement on Form S-11 (the “IPO”). In connection with the IPO, 333,333 shares of Common Stock were purchased by the Moric Bistricer 2016 Family Trust of which David Bistricer is sole trustee and beneficial owner (as described in Item 5 hereto). The initial public offering price for the Common Stock was $13.50 per share. The source of funding for the 333,333 shares of Common Stock purchased in the IPO was a $4,499,995.50 loan provided by the Moric Bistricer 2012 Family Trust. The loan is reflected by a promissory note (the “Note”) dated February 14, 2017 between David Bistricer, as trustee of the Moric Bistricer 2016 Family Trust (as Maker) and Michael Friedman and David Bistricer, as Trustees of the Moric Bistricer 2012 Family Trust (as Payee).  The Note matures on February 15, 2026 and reflects the February long-term AFR rate of 2.81%. The Maker may prepay the Note at any time. The foregoing terms of the Note do not purport to be complete and is qualified in its entirety by reference to full text of the Note, which is filed as Exhibit 99.1 to this statement and incorporated by reference herein.

318,262 shares of the Common Stock, which are held of record by the Moric Bistricer 2012 Family Trust, of which David Bistricer is co-trustee, were purchased prior to the IPO in a private offering of 10,666,667 shares of Common Stock, which closed on August 3, 2015 (the “Private Offering”). Moric Bistricer initially purchased the shares of Common Stock at $13.50 per share for a total of $4,296,537 and then, on February 4, 2016, sold the shares to the Moric Bistricer 2012 Family Trust for the same $13.50 per share. The source of funding for the purchase of such shares by the Moric Bistricer 2012 Family Trust was cash held in the trust.

In formation transactions effected in connection with the Private Offering, the limited liability company interests held by David Bistricer in the Issuer’s predecessor entities were converted into 4,278,058 class B limited liability company units (the “Class B Units”), which are units of certain limited liability companies that are indirect subsidiaries of the Issuer and are each exchangeable, together with an equal number of shares of special voting stock of the Issuer, for an amount of cash equal to the fair market value of a share of Common Stock or, at the election of the Issuer, one share of Common Stock. The initial source of funding for the Class B Units was Mr. Bistricer’s personal funds.

Item 4. Purpose of Transaction.

The 333,333 shares of Common Stock were purchased in the IPO by the Moric Bistricer 2016 Family Trust, of which David Bistricer is the sole trustee and which is the event triggering the filing of this statement. The 333,333 shares of Common Stock were purchased for the purpose of investment. The purchase of shares of Common Stock in the Private Offering and the purchase of limited liability company interests in the Issuer’s predecessor entities (which have now been converted into Class B Units) were also made for the purpose of investment.

Pursuant to the terms of David Bistricer’s lock-up agreement and as set forth in the registration statement on Form S-11, filed by the Issuer with the SEC on February 9, 2017, Mr. Bistricer has agreed that for a period ending 180 days after the date of the underwriting agreement (dated as of February 12, 2017) he will not without the prior written consent of FBR Capital Markets & Co. and Raymond James & Associates, Inc., the representatives of the underwriters, (the “Representatives”) which may be withheld or delayed in the Representatives’ sole discretion (1) offer, pledge, sell, contract to sell, sell any option or contract to purchase, purchase any option or contract to sell, grant any option, right or warrant for the sale of, lend or otherwise dispose of or transfer, directly or indirectly, any shares of Common Stock, or any securities convertible into or exercisable or exchangeable for Common Stock owned directly by him or with respect to which he has beneficial ownership or (2) enter into any swap or other arrangement that transfers to another, in whole or in part, directly or indirectly, any of the economic consequences of ownership of Common Stock, whether any such transaction described above is to be settled by delivery of Common Stock or such other securities, in cash or otherwise.

The foregoing description of the lock-up agreement does not purport to be complete and is qualified in its entirety by reference to full text of the lock-up agreement, which is filed as Exhibit 99.2 to this statement and incorporated by reference herein.

Mr. Bistricer may modify his plans depending on his evaluation of various factors, including the investment potential of the Common Stock, the Issuer’s business prospects and financial position, other developments concerning the Issuer, opportunities that may be available to the Issuer, the price level and availability of the Common Stock, available opportunities to acquire or dispose of the Common Stock, conditions in the securities markets and general economic and industry conditions, reinvestment opportunities and other factors deemed relevant by Mr. Bistricer. In connection with the activities described above, Mr. Bistricer intends, to the extent permitted under the agreements more fully described in Item 6 below, to communicate with, and express his views to, the board of directors and management of the Issuer and may communicate with, and express his views to, other persons regarding the Issuer, including, without limitation, other stockholders of the Issuer and potential strategic or financing partners.

Except as described in this Item 4, Mr. Bistricer currently has no plans or proposals that relate to or would result in any transaction, event or action set forth in subsections (a) through (j) of Item 4 of Schedule 13D. Mr. Bistricer reserves the right to formulate plans or make proposals, and take such action with respect thereto, including any or all of the items set forth in subsections (a) through (j) of Item 4 of Schedule 13D and any other actions, as he may determine.

Item 5. Interest in Securities of the Issuer.

(a)

Subject to the following paragraph, David Bistricer beneficially owns, in the aggregate, 4,929,653 shares of Common Stock (which includes 4,278,058 Class B Units held by David Bistricer in his individual capacity), representing approximately 23.2% of the Issuer’s outstanding Common Stock (which assumes exchange of only David Bistricer’s Class B Units into shares of Common Stock and assuming 17,012,755 shares of Common Stock outstanding as of February 9, 2017).

Under the rules issued by the SEC regarding beneficial ownership of securities, beneficial ownership of Common Stock includes (i) any shares as to which the individual or entity has sole or shared voting power or investment power and (ii) any shares which could be purchased by the exercise of an option, warrant or right at or within 60 days. Mr. Bistricer has opted to include in this report his beneficial ownership of Class B Units, even though ownership of such units does not constitute beneficial ownership of Common Stock under Rule 13d-3 of the Securities and Exchange Act, as amended (the “Act”) because, pursuant to the relevant LLC agreements, the holder of the Class B Units does not have the right to require the Issuer to exchange such units for shares of Common Stock rather than cash.

Pursuant to Rule 13d-3(c) of the Act, all Common Stock beneficially held by David Bistricer, regardless of the form in which beneficial ownership takes, have been aggregated in calculating the number of shares beneficially owned by him for purposes of this statement.

(b)

Subject to the second paragraph of Item 5(a) above, David Bistricer, in his individual capacity, has sole voting power and sole dispositive power with regard to 4,278,058 shares of Common Stock (currently in the form of Class B Units) and shared voting power and shared dispositive power with regard to zero shares of Common Stock.

David Bistricer, as co-trustee of the Moric Bistricer 2012 Family Trust, has sole voting power and sole dispositive power with regard to zero shares of Common Stock and shared voting power and shared dispositive power with regard to 318,262 shares of Common Stock.

David Bistricer, as sole trustee of the Moric Bistricer 2016 Family Trust, has sole voting power and sole dispositive power with regard to 333,333 shares of Common Stock and shared voting power and shared dispositive power with regard to zero shares of Common Stock.

(c) During the past 60 days the Reporting Persons made the below listed open-market purchases:

As noted in Item 4 above, in connection with the IPO, 333,333 shares of Common Stock were purchased by the Moric Bistricer 2016 Family Trust of which David Bistricer is sole trustee.

(d) Not applicable.

(e) Not applicable.

The information contained in Item 3 and Item 4 of this statement are hereby incorporated by reference into this Item 6.

Continuing Investors Registration Rights Agreement

On August 3, 2015, the Issuer entered into a registration rights agreement (the “Continuing Investors Registration Rights Agreement”) with each of the holders of Class B Units, which includes David Bistricer, as holder of 4,278,058 Class B Units. The Continuing Investors Registration Rights Agreement provides for the registration of such shares of Common Stock that are issuable upon the exchange of Class B Units. The foregoing description of the Continuing Investors Registration Rights Agreement does not purport to be complete and is qualified in its entirety by reference to full text of the agreement, which is filed as Exhibit 99.3 to this statement and incorporated by reference herein.

Registration Rights Agreement

All purchasers of Common Stock in the Private Offering, and their transferees, which includes the 318,262 shares of Common Stock held of record by Moric Bistricer 2012 Family Trust, are entitled to the benefits of a registration rights agreement (the “Registration Rights Agreement”) between the Issuer and FBR Capital Markets & Co., the initial purchaser and placement agent in the Private Offering, acting for itself and for the benefit of the investors in that offering. Pursuant to the Registration Rights Agreement, as amended, the Issuer is required, among other things, to use its commercially reasonable efforts to cause a shelf registration statement registering for resale the registrable shares (as defined in the Registration Rights Agreement) that are not sold by the selling stockholders in the IPO, to be declared effective by the SEC as soon as practicable (but in no event later than the earlier of (i) March 31, 2017 and (ii) 60 days after the closing of the IPO; provided that if the IPO occurs within the 60 days prior to March 31, 2017, such date shall be 60 days after the closing of the IPO). The foregoing description of the Registration Rights Agreement does not purport to be complete and is qualified in its entirety by reference to full text of the agreement, including the amendments thereto, which are filed as Exhibits 99.4 – 99.7 to this statement and incorporated by reference herein.

Employment Agreement

On August 3, 2015, Clipper Realty L.P. (the “Operating Partnership”), a direct subsidiary of the Issuer, entered into an employment agreement with David Bistricer. The employment agreement provides for, among other things: (i) an annual base salary of $500,000 (ii) an annual incentive bonus with a target bonus opportunity of 50% of annual base salary, with the actual amount earned ranging from 0% to 200% of target based on actual achievement against performance metrics to be established by the compensation committee, (iii) annual long-term equity incentive compensation awards to be granted beginning in 2016 in form, including vesting restrictions, and amount determined in the sole discretion of the compensation committee and the board of directors and (iv) participation in the Issuer’s employee benefit and welfare plans. Annual incentive bonuses for 2015 were paid to David Bistricer in March 2016 in the amount of $700,000, paid in the form of 51,852 long term incentive plan units (“LTIP Units”), a class of units of the Operating Partnership. Mr. Bistricer also received a one-time grant of 133,334 LTIP Units on August 3, 2015, which are scheduled to cliff vest on August 3, 2018, and are generally subject to continued employment through the vesting date. Subject to certain conditions and restrictions, LTIP units that have vested may be exchanged for shares of Common Stock. Mr. Bistricer’s LTIP Units are convertible, upon vesting, into an equivalent number of units of limited partnership interests (“OP Units”) of the Operating Partnership. Each OP Unit is redeemable at the request of the holder for cash in an amount equal to the price of a share of Common Stock or, at the election of the Issuer, one share of Common Stock. The foregoing description of David Bistricer’s employment agreement does not purport to be complete and is qualified in its entirety by reference to full text of the agreement, which is filed as Exhibit 99.8 to this statement and incorporated by reference herein.

Other than as disclosed in this Item 6, there are no other contracts, arrangements, understandings or relationships (legal or otherwise) between David Bistricer and any person with respect to securities of the Issuer.

The following documents are filed as an exhibit:

*filed herewith 

SIGNATURE

After reasonable inquiry and to the best of my knowledge and belief, I certify that the information set forth in this statement is true, complete and correct.

Dated: February 21, 2017

EXHIBIT INDEX

*filed herewith

Exhibit 99.1

PROMISSORY NOTE

FOR VALUE RECEIVED, David Bistricer, as trustee of the Moric Bistricer 2016 Family Trust, dated September 22, 2016 (the “Maker”), HEREBY PROMISE TO PAY to the order of David Bistricer and Michael Friedman, as trustees of the Moric Bistricer 2012 Family Trust, dated December 20, 2012 (along with any other registered holder hereof, the “Payee”), the principal amount of Four Million Four Hundred Ninety Nine Thousand Nine Hundred Ninety-Five Dollars and Fifty Cents ($4,499,995.50) (the “Principal Amount”) in lawful money of the United States of America, together with (a) interest at two and 81/100 Percent (2.81%) (the “Interest Rate”) compounded annually, and (b) all charges, amounts and other sums due and payable hereunder not later than the Maturity Date. Interest shall be calculated on a 365 day year.

1.             Interest and Maturity. Interest on the Principal Amount shall accrue at the Interest Rate commencing on the day after funding, February 15, 2017 and ending on February 15, 2026 (the “Maturity Date”). The Principal Amount of this Note, together with all accrued but unpaid interest thereon, shall be due and payable on the Maturity Date.

2.             Default.

(a)          Upon Default, as hereinafter defined, the entire unpaid principal amount of this Note, together with all accrued and unpaid interest and all other sums due hereunder at the option of the Payee and after written notice to the Maker, shall become immediately due and payable.

(b)          “Default” shall mean (i) the failure of the Maker to make any payment of principal, interest or other sums due hereunder and to cure such default within thirty (30) Business Days after receipt of a written notice of default from the Payee (the “Cure Period”), or (ii) if the Payee determines in good faith, in the Payee’s sole discretion, that the prospects for payment or performance under this Note are impaired or there has occurred a Material Adverse Event in the business or prospects of the Maker, financial or otherwise. "Material Adverse Event" shall mean any occurrence, circumstance, actions, suits, claims, proceedings and/or investigations that could, individually or in the aggregate, result in (i) any adverse change in the condition (financial or otherwise), assets, liabilities, business, results of operations or prospects of the Maker, or (ii) any event, matter, condition or effect, that impairs the ability of the Maker to perform on a timely basis the Maker’s obligations under this Note.

(c)          Upon the occurrence of any Default, the Principal Amount shall bear interest from and after the date on which the Default occurred, and the Maker shall pay such interest on demand, at an interest rate per annum equal at all times to 2% over the applicable Interest Rate for the Principal Amount (the “Default Rate”), compounded annually, until such time as the unpaid principal amount hereof, together with all accrued and unpaid interest and all sums due hereunder shall have been paid to the Payee.

3.             Waiver. The Maker hereby waives (i) presentment and demand for payment, notice of dishonor, valuation and appraisement, protest and notice of protest with respect to this Note, (ii) any right that the Maker may have to demand a jury trial with respect to the enforcement of, or any controversy arising under or relating to, this Note and (iii) all rights to the benefits of any statute of limitations and any moratorium, appraisement and exemption now provided or which may hereafter be provided by any federal or state statute, including, without limitation, exemptions provided by or allowed under the Bankruptcy Code of 1978 (11 U.S.C.), as amended, both as to the Maker and as to all of the Maker’s property, whether real or personal, against the enforcement and collection of the obligations evidenced and provided by this Note and all extensions, renewals and modifications hereof and thereof. Without limiting the generality of the foregoing, the Maker hereby waives any defense that may arise by reason of (a) the incapacity, lack of authority, death or disability of, or revocation hereof by, any interested third party, (b) the failure of the Payee to file or enforce any claim against the estate (in probate, bankruptcy or any other proceedings) of any interested third party, or (c) any defense based upon an election of remedies by the Payee. The Payee hereby waives any right that the Payee may have to demand a jury trial with respect to the enforcement of, or any controversy arising under or relating to, this Note.

4.             Voluntary Prepayment. Subject to Section 5 below, the Maker may prepay this Note without premium or penalty, in whole or in part, at any time, together with all accrued and unpaid interest at the time of such prepayment and all other sums due hereunder.

5.             Application of Payments. Unless the Payee elects otherwise, all payments and prepayments on account of the indebtedness evidenced by this Note shall be applied in the following order of priority: first, to the payment of all fees, costs and expenses incurred by the Payee pursuant to this Note; second, to the payment of any accrued and unpaid interest (applied to pay interest outstanding on the Principal Amount, as determined by the Maker); and third, to repayment of the then remaining principal balance of the indebtedness evidenced by this Note.

6.             Registration and Transfer.

(a)          This Note is a registered instrument and not a bearer instrument. The Maker shall cause this Note, and all principal and interest due thereon, to be registered in the Maker’s personal records. A manually signed copy of this Note shall be evidence only of the Payee’s rights and is not a bearer instrument. The Maker will keep a register in which the Maker will register any transfer of this Note and which identifies the registered person as the owner of this Note.

(b)          The transfer of the Note, and interest due thereon, can be effected only by the surrender of the Note and the reissuance of the Note or the issuance of a new note to the transferee to be registered by the Maker in the name of such transferee. Furthermore, no transfer by any Payee of this Note or of the right to receive payment of principal and interest hereunder shall be effective unless and until made upon the register maintained by the Maker and only then shall a transferee succeed to the rights of such Payee. Prior to such registration, the Maker shall treat the registered owner of the Note as the absolute owner thereof for all purposes, and the Maker shall have no obligation of any kind to any purported transferee.

(c)          If at any time the Payee is a foreign beneficial owner within the meaning of Treas. Reg. §1.1441-1(e)(1)(ii) such Payee shall provide the Maker with a completed IRS Form W-8BEN (and any other statements that may be required under applicable U.S. tax law to evidence that such payment of interest is not subject to U.S. withholding tax under Internal Revenue Code Section 1441) for each year in which payment is received and such payment includes interest earned under this Note.

7.             Indemnity. The Maker shall indemnify and defend the Payee and hold the Payee harmless from and against all damages, losses, liabilities, obligations, penalties, claims, demands, defenses, judgments, suits, proceedings, penalties, expenditures, costs, disbursements and expenses (including, without limitation, reasonable attorneys' fees, disbursements and court costs) of any kind or nature whatsoever (collectively, “Damages”) that may, at any time and from time to time, be imposed upon, incurred by or asserted or awarded against the Payee by reason of or arising from or out of, the Payee's enforcement (or attempted enforcement) of this Note or the preservation of the Payee's rights hereunder or thereunder if the Maker is found to be responsible for the Damages by a final non-appealable determination by a court of competent jurisdiction.

8.             Miscellaneous.

(a)          Time is of the essence as to all dates set forth herein, provided, however, that whenever any payment to be made under this Note shall be due on a Saturday, a Sunday or a public holiday or the equivalent for banks generally under the laws of the State of New York (any other day being a “Business Day”), such payment may be made on the next succeeding Business Day, and such extension of time shall in such case be included in the computation of payment of interest. All payments shall be made in lawful money of the United States of America, in immediately available funds, prior to the close of business (Eastern Standard Time); any payment made after such time shall be deemed to have been made on the next succeeding Business Day.

(b)          This Note shall be binding upon and inure to the benefit of the Maker and the Payee and their respective successors and permitted assigns (in the case of the Payee, permitted registered assigns), and shall not be assigned by the Maker or the Payee without the prior written consent of the other party.

(c)          This Note shall be governed by and construed in accordance with the laws of the State of New York, without regard to principles of conflict of laws.

(d)          This Note may not be changed or terminated orally, but only by an agreement in writing signed by the party against whom enforcement of such change or termination is sought. No waiver of any provision of this Note, and no consent to any departure by the Maker therefrom, shall be effective unless it is in writing and signed by the Payee, and then such waiver or consent shall be effective only in the specific instance and for the specific purpose for which given.

(e)          The terms and provisions of this Note are severable. In the event of the unenforceability or invalidity of any one or more of the terms, covenants, conditions or provisions of this Note under federal, state or other applicable law, such unenforceability or invalidity shall not render any other term, covenant, condition or provision hereunder unenforceable or invalid.

(f)          The Maker represents that the Maker has full power, authority and legal right to execute and deliver this Note and that the indebtedness evidenced hereby constitutes a valid and binding obligation of the Maker. All representations, warranties and covenants by the Maker herein shall run to the benefit of the Payee's successors and permitted assigns and be enforceable by such successors and assigns against the Maker.

(g)          Whenever used, the singular number shall include the plural, the plural the singular, and the words “Payee” and “Maker” shall include their respective successors and permitted assigns, as appropriate.

[Signatures appear on the following page.]

IN WITNESS WHEREOF, the Maker has duly executed and delivered this Note as of the day and year first written above.

Exhibit 99.2

CONFIDENTIAL

Form of Lock-Up Agreement

February 9, 2017

FBR Capital Markets & Co.
Raymond James & Associates, Inc.

c/o FBR Capital Markets & Co.

1300 N. 17^th Street, Suite 1400

Arlington, Virginia 22209

Ladies and Gentlemen:

The undersigned understands and agrees as follows:

1. FBR Capital Markets & Co. and Raymond James & Associates, Inc. (the “Representatives”) propose to enter into an Underwriting Agreement (the “Agreement”) with Clipper Realty Inc., a Maryland corporation (the “Company”) and Clipper Realty L.P., a Delaware limited partnership, providing for (a) the public offering by the several Underwriters of shares of the Company’s common stock, $0.01 par value per share (“Common Stock”) pursuant to a registration statement on Form S-11 filed with the Securities and Exchange Commission (the “Commission”) and (b) an option for the several underwriters named in the Agreement (the “Underwriters”) to offer additional shares of the Company’s common stock (the transactions referred to in (a) and (b) are collectively referred to as the “Offering”).

2. In recognition of the benefit that the Offering will confer upon the undersigned and for other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged by the undersigned, the undersigned hereby agrees that, without the prior written consent of the Representatives (which consent may be withheld or delayed in the Representatives’ sole discretion), he, she or it will refrain during the period commencing on the date of the Agreement and ending on the date that is 180 days after the date of the Agreement (the “Restricted Period”), from (i) offering, pledging, selling, contracting to sell, selling any option or contract to purchase, purchasing any option or contract to sell, granting any option, right or warrant for the sale of, lending or otherwise disposing of or transferring, directly or indirectly, any Common Stock, or any securities convertible into or exercisable or exchangeable for Common Stock owned directly by the undersigned or with respect to which the undersigned has beneficial ownership within the rules and regulations of the Commission (collectively, “Securities”), or (ii) entering into any swap or other arrangement that transfers to another, in whole or in part, directly or indirectly, any of the economic consequences of ownership of Common Stock, whether any such transaction described in clause (i) or (ii) above is to be settled by delivery of Common Stock or such other Securities, in cash or otherwise.

Notwithstanding the foregoing, subject to applicable securities laws and the restrictions contained in the Company’s charter, the undersigned may transfer any Securities (including, without limitation, notes, options, warrants, preferred stock and Common Stock, including any securities into which the foregoing may be converted) as follows: (i) pursuant to the exercise or conversion of securities of the Company or any subsidiary of the Company, including, without limitation, options, warrants, notes, preferred stock, partnership interests or limited liability company interests; (ii) as a bona fide gift or gifts, provided that the donee or donees thereof agree to be bound in writing by the restrictions set forth herein; (iii) to any affiliate of the undersigned, which affiliate is a controlling person of the undersigned or a person or entity controlled by the undersigned, provided that the transferee agrees to be bound in writing by the restrictions set forth herein; (iv) to any trust for the direct or indirect benefit of the undersigned or the immediate family of the undersigned, provided that the trustee of the trust agrees to be bound in writing by the restrictions set forth herein; (v) to or from any grantor retained annuity trust established by the undersigned or to or from continuing trusts for the undersigned’s immediate family members, provided that the trustee of any trust agrees to be bound in writing by the restrictions set forth herein; (vi) as an indirect or direct distribution to stockholders, partners or members of the undersigned, provided that such stockholders, partners, or members agree to be bound in writing by the restrictions set forth herein; (vii) any transfer required under any benefit plans or the Company’s charter or bylaws; (viii) as required by participants in the Company’s stock incentive plan in order to reimburse or pay federal income tax and withholding obligations in connection with vesting of restricted stock grants, LTIP units or the exercise of stock options or warrants (ix) as collateral for any loan, provided that the lender agrees in writing to be bound by the restrictions set forth herein; (x) in or in connection with any merger, consolidation, combination or sale of all or substantially all the assets of the Company where all the shareholders will receive equal consideration for their interests and in or in connection with any tender offer or other offer to purchase at least 90% of the Common Stock of the Company; or (xi) with respect to sales of Securities acquired after the closing of the Offering in the open market; provided, however, that in the case of any transfer or disposition pursuant to clauses (i) through (ix) no filing under Section 16 of the Securities Exchange Act of 1934, as amended, reporting a reduction in beneficial ownership of Securities, is required as a result of such transfer or otherwise made. For purposes of this agreement, “immediate family” shall mean any relationship by blood, marriage or adoption, not more remote than first cousin.

Notwithstanding the foregoing, nothing shall prevent the undersigned from, or restrict the ability of the undersigned to, (i) purchase securities on the open market or (ii) exercise or convert any options, warrants or other convertible securities issued to or held by the undersigned, including those granted under any benefit plan of the Company.

3. The undersigned hereby authorizes the Company during the Restricted Period to cause any transfer agent for the Common Stock to decline to transfer, and to note stop transfer restrictions on the stock register and other records relating to the Securities.

4. The undersigned hereby further agrees that, without the prior written consent of the Representatives, during the Restricted Period the undersigned will not file or cause to be filed with the Commission any registration statement, or circulate or cause to be circulated any preliminary or final prospectus or other disclosure document with respect to any proposed offering or sale of Securities.

5. The undersigned acknowledges that the Underwriters are relying on the agreements of the undersigned set forth herein in making their decisions to enter into the Agreement and to continue their efforts in connection with the Offering. Any obligations of the undersigned shall be binding upon the successors, assigns, heirs or personal representatives of the undersigned from the date first above written.

6. This Lock-Up Agreement shall automatically terminate and the undersigned will be released from all of his, her or its obligations hereunder upon the earliest to occur, if any, of the following: (i) prior to the execution of the Agreement, the Company advises the Representatives in writing, that it has determined not to proceed with the Offering, (ii) the Company files an application with the Commission to withdraw the registration statement related to the Offering, (iii) the Agreement is executed but is terminated (other than with respect to the provisions thereof which survive termination) prior to payment for and delivery of the shares of Common Stock to be sold thereunder, or (iv) March 17, 2017, in the event that the Agreement has not been executed by such date.

6. This Lock-Up Agreement shall be governed by and construed in accordance with the laws of the State of New York without regard to principles of conflict of laws.

7. This Lock-Up Agreement may be executed in one or more counterparts and delivered by facsimile or pdf, each of which shall be deemed to be an original but all of which shall constitute one and the same agreement.

[SIGNATURE PAGE FOLLOWS]

IN WITNESS WHEREOF, the undersigned has executed this Lock-Up Agreement, or caused this Lock-Up Agreement to be executed, as of the date first written above.

[Clipper Realty Inc. Initial Public Offering Lock-Up Signature Page]