Greystone Housing Impact Investors LP Q4 FY2024 earnings call

• Portfolio performance: No forbearance requests for multifamily mortgage revenue bonds, 91.2% physical occupancy in stabilized portfolio; Vantage JV had 6 properties, with Vantage at Tomball sold in Jan 2025, and refinancings of Vantage at McKinney Falls and Hutto; Freestone JV had 4 investments with progress in construction and leasing; Valage Senior Living nearing completion with 72 lease deposits, and The Jessam at Hays Farm approaching completion and leasing.
• Financial results: GAAP net income $10.1M and $0.39 per unit in Q4 2024; CAD $4.2M and $0.18 per unit; impact of $7M noncash unrealized gains on interest rate derivatives and $613k transactional expenses; book value per unit $13.15, 4% discount to NYSE closing price; liquidity: $14.7M unrestricted cash, $31M secured line availability, and $31M net liquidity from Jan 2025 events.
• Market and pipeline: Muni bond yields didn't rally as expected; new construction lending JV with BlackRock closed 2 deals in Q4, capital allocation based on accretive investments, and monitoring tax bill impacts on muni market.

The debt investment portfolio, comprising mortgage revenue bonds, governmental issuer loans, and property loans, totaled $1.35 billion as of December 31, 2024, accounting for 85% of total assets. There were 86 mortgage revenue bonds, with 30% of portfolio value in California, 25% in Texas, and 18% in South Carolina. During the fourth quarter, $36.8 million was advanced for mortgage revenue bond and related taxable investments, and $32 million for governmental issuer loan and related commitments. The joint venture equity investments portfolio had 12 properties with a carrying value of approximately $179.4 million as of December 31, with $11.2 million in capital advanced during the quarter and remaining funding commitments of $27.2 million.

• Funding commitments: $100M outstanding future commitments for mortgage revenue bonds, etc., to be funded over 12 months.
• Redemptions: Expect $120M+ governmental issuer loan redemptions and $40M+ property loan redemptions in 2025, to be redeployed.
• Hedging: Continuation of hedging strategy to provide stable net cash flows from investments.

• Interest rate risk: Exposure to interest rate movements, with analysis showing impact on net interest income; $18M of debt financing exposed to near-term interest rate risk.
• Tax bill impact: Uncertainty regarding tax bill changes affecting muni bond market, industry proactive in lobbying but potential supply/demand shifts.
• GSE privatization: Potential negative impact on interest rates and pricing of securitization products used in construction lending strategy.

Q: Stephen Laws asked about returns on the new construction lending JV and capital allocation.

A: Ken said the JV strategy is similar to past governmental issuer loan investments, with promotes providing additional return, and capital allocation based on accretive investments.

Q: Matthew Erdner inquired about redemption timing and 2025 redemptions.

A: Jesse said Osprey Village and Willow Place redeemed in Jan 2025, with ~$120M governmental issuer loan redemptions and $40M+ property loan redemptions expected later in 2025, to be redeployed.

Q: Chris Muller asked about desired industry changes and GSE privatization impact.

A: Ken mentioned wanting tax credit reform and separate affordable multifamily PAB allocation; GSE privatization could impact interest rates and perm loan pricing for sponsors.

Q: Unidentified analyst asked about CAD and distribution policy.

A: Ken said distributions are based on long-term evaluation, with lumpiness in JV equity investments affecting CAD, and board focusing on sustainable cash distributions.

Q: Unidentified analyst asked about unit price below book value and distribution forms.

A: Jesse said board evaluates distribution forms, historically defaulting to cash but open to occasional unit distributions considering tax impacts.