Greystone Housing Impact Investors LP Q3 FY2025 earnings call

• Portfolio overview: The overall investment portfolio performed steadily in Q3. No forbearance requests for multifamily mortgage revenue bonds, and all borrowers were current on payments. Physical occupancy for the stabilized mortgage revenue bond portfolio was 87.8% as of September 30, down slightly from 88.4% in Q2, primarily due to higher vacancies in Texas properties. Governmental issuer loans for affordable multifamily properties were progressing towards stabilization. - Investment pipeline: Strategy to reduce capital allocation to joint venture equity investments in market rate multifamily properties, with redeployment to tax-exempt mortgage revenue bonds for more predictable returns. Evaluating joint venture equity investment opportunities in the seniors housing segment. - Financial results: Net income was $2 million or $0.03 per unit basic and diluted, cash available for distribution was $4.6 million or $0.20 per unit. Book value per unit was $12.36 as of September 30, 2025, with a 33% discount to market price. Liquidity: Unrestricted cash and cash equivalents of $36.2 million, $88.6 million availability on secured lines of credit, and $5 million gross proceeds from Series B preferred units issued in October 2025. - Market conditions: Muni bond market improved in Q3, with 10-year and 30-year MMD rates down. Federal shutdown had minimal impact on the portfolio, and the low-income housing tax credit program was not impacted.

The debt investments portfolio, consisting of mortgage revenue bonds, governmental issuer loans, and property loans, totaled $1.26 billion as of September 30, 2025, accounting for 85% of total assets. Unrestricted cash and cash equivalents were $36.2 million, and there was approximately $88.6 million of availability on secured lines of credit. There were 82 mortgage revenue bonds providing permanent financing for affordable multifamily, seniors, and skilled nursing properties across 12 states. There were 4 governmental issuer loans financing the construction or rehabilitation of affordable multifamily properties in 2 states. The market rate joint venture equity investments portfolio had 10 properties with a carrying value of approximately $154 million as of September 30, 2025, and remaining funding commitments of $19.5 million, with all remaining commitments related to sites for future development.

• Reducing capital allocation to joint venture equity investments in market rate multifamily properties, with redeployment to tax-exempt mortgage revenue bonds for more stable returns. - Tax-exempt mortgage revenue bond investments expected to provide predictable returns based on the net interest spread between bond interest rate and related debt financing rate. - Construction lending joint venture with BlackRock expected to provide future tax-advantaged earnings.

• Interest rate risk: Sensitivity analysis shows impact on net interest income with 100 basis point changes in rates. - Credit risk: Provision for credit losses of $596,000 in Q3 related to a support loan to an MRB borrower, with ongoing discussions for property improvement and refinancing of South Carolina properties. - Market conditions: Higher interest rates and multifamily capitalization rates impacting market rate multifamily asset values.

Q: Matthew Erdner asks about capital allocation target and expected pace of asset sales.

A: Ken Rogozinski responds that capital allocation is driven by timing of capital return from JV equity exits and current opportunities, with senior housing JV equity allocation lower on a case-by-case basis.

Q: Christopher Muller asks about earnings pickup from redeployment and seniors housing investments.

A: Ken Rogozinski mentions stability from tax-exempt income and lower allocation in seniors housing, with opportunities in seniors housing JV equity.

Q: Rick Stone asks about cap rates in senior investments.

A: Ken Rogozinski clarifies that investments were in to-be-built properties on pro forma basis, and cap rates on seniors housing are higher than traditional multifamily but evaluated based on risk-adjusted returns.

Q: John Cullinan asks about credit losses.

A: Jesse Coury explains a $8.7 million provision in Q2 related to South Carolina properties, with $600,000 additional provision in Q3 for a support loan to the same borrower, and ongoing efforts to improve property operations and refinance.