America First Multifamily Investors, L.P. Stock

Greetings, and welcome to the Q2 2026 Earnings Call for Greystone Housing Impact Investors LP. [Operator Instructions] Please note that this conference is being recorded. I would now like to turn the conference over to Eric Nielsen, Interim CFO. Thank you, Eric. You may begin.

I would like to welcome everyone to the Greystone Housing Impact Investors LP, NYSE ticker symbol GHI, Second Quarter 2026 Earnings Conference Call.

During the presentation all participants will be in a listen-only-mode. After management presents its overview of Q2 2026, you will be invited to participate in a question-and-answer session. As a reminder, this conference call is being recorded. During this conference call, comments made regarding GHI, which are not historical facts, are forward-looking statements and are subject to risks and uncertainties that could cause the actual future events or results to differ materially from these statements. Such forward-looking statements are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Forward-looking statements can be identified by the use of words like may, should, expect, plan, intend, focus and other similar terms. You are cautioned that these forward-looking statements speak only as of today's date.

Changes in economic, business, competitive, regulatory and other factors could cause our actual results to differ materially from those expressed or implied by the projections or forward-looking statements made today. For more detailed information about these factors and other risks that may impact our business, please review the periodic reports and other documents filed from time to time by us with the Securities and Exchange Commission. Internal projections and beliefs upon which we base our expectations may change, but if they do, you will not be necessarily -- you may not necessarily be informed.

Today's discussion will include non-GAAP measures and will be explained during this call. We want to make you aware that GHI is operating under the SEC Regulation FD and encourage you to take full advantage of the question-and-answer session. Thank you for your participation and interest in Greystone Housing Impact Investors LP.

I would now like to turn the call over to our Chief Executive Officer, Ken Rogozinski.

Good morning, everyone. Welcome to Greystone Housing Impact Investors LP's Second Quarter 2026 Investor Call. Thank you for joining. I will start with an overview of our portfolio and investment strategy. Eric Nielsen, our Interim Chief Financial Officer, will then present the partnership's financial results. I will wrap up with an overview of the market and our investment pipeline. Following that, we look forward to taking your questions. As we've mentioned on our previous calls, we are pursuing a strategy to reposition our investment portfolio.

Specifically, we are focused on exiting our remaining investments in market-rate multifamily JV equity investments while maximizing value to our unitholders from those exits. We will then reinvest the capital returned to us from those exits into additional high-quality tax-exempt mortgage revenue bond investments that are expected to provide longer-term stable tax-advantaged earnings, which we believe will provide long-term value for our unitholders.

We believe this change in investment strategy provides three key benefits to our unitholders. First, by their nature, our tax-exempt mortgage revenue bond investments earn stable returns based on the net interest spread between the bond interest rate and our related debt financing rate. As a result, we expect increasingly stable earnings as compared to the uneven returns on joint venture equity investments due to that income being recognized primarily upon property sales.

Second, in recent years, the majority of income allocated to our unitholders has been taxable because of the taxable income from joint venture equity investment sales. As we allocate more capital to tax-exempt mortgage revenue bond investments, we expect that the proportion of income allocated to our unitholders that is tax exempt for federal income tax purposes will increase in the long term.

In the near term, potential gains from sales of our remaining market-rate multifamily JV equity investments will continue to generate taxable income for unitholders. Third, we are investing capital in a proven investment class that is core to our operations that also leverages the strong relationships and knowledge base of Greystone's other lending platforms.

We currently have eight market-rate multifamily JV equity investments that have completed construction and are either in lease-up or stabilized. Overall occupancy is increasing for these investments, in their initial lease-up phase. On assets that have reached stabilization, we have seen some variability in occupancy as local market factors impact demand and rent levels.

Decisions regarding when to sell an individual property are made by our joint venture partners based on their views of the local market conditions and current leasing trends.

We currently have two market-rate multifamily JV equity investments that are sites for potential development. Our joint venture partners are evaluating the highest and best use for the development sites, which may include a sale of the land or the commencement of construction. Our remaining funding commitments for these investments will be terminated if the land is sold. Meanwhile, we continue to see strong investment opportunities for our traditional investments in tax-exempt mortgage revenue bonds associated with affordable multifamily, properties as well as for seniors housing and skilled nursing properties.

Greystone's strong lending relationships across affordable housing, seniors housing and skilled nursing business lines are also providing investment opportunities for the partnership. We believe these opportunities will allow us to redeploy the capital returned from the market-rate multifamily JV equity investment sales events soon after the capital is received. We and the Board of Managers acknowledge that it will take some time to cycle our capital out of our market-rate JV equity investments and into tax-exempt mortgage revenue bond investments.

We currently report minimal earnings related to our JV equity investments during the holding period. We expect that the reinvestment of capital from sales of JV equity investments into tax-exempt mortgage revenue bond investments will increase the partnership's recurring earnings in the long run. We look forward to providing additional details on our progress in this effort in future communications and on future earnings calls.

With that, I will turn things over to Eric Nielsen, our Interim CFO, to discuss the financial data for the second quarter of 2026.

Thank you, Ken. For our second quarter ended June 30, we reported a net loss of $1.5 million or $0.11 per unit, basic and diluted, and we reported cash available for distribution, or CAD, a non-GAAP measure of $2.4 million or $0.10 per unit. A significant driver of our reported GAAP net loss for the second quarter is our proportionate share of losses from non-Vantage JV equity investments of approximately $3.2 million or $0.14 per unit. As we previously mentioned, we are required to report our proportionate share of losses of such JV equity investments under GAAP. These are not impairments or realized losses to the partnership.

Approximately $2 million or 62% of total reported losses relate to depreciation and amortization expenses at the respective JV equity investment entities, with the remaining reported losses related to interest expense and property operating expense. We add back our share of property operating losses to net income when calculating CAD as such losses are not direct expenses to the partnership, and we expect such losses, which are largely funded by the individual property development budget to be recovered upon future transactional.

Our book value per unit as of June 30 was on a diluted basis, $11.20. I will note that this metric is based on our joint venture equity investments marked at net carrying value. As a result, it does not include any potential gains or additional income that may be realized upon sale or recovery of our share of GAAP operating losses that I previously described, that are also expected to be recovered upon sale.

As of market close yesterday, August 10, our closing unit price on the New York Stock Exchange was $5.71, which is a 49% discount to our net book value per unit as of June 30. We regularly monitor our liquidity to fund our investment commitments and to protect against potential debt deleveraging events if there are significant declines in asset values.

As of June 30, we reported unrestricted cash and cash equivalents of $30.9 million. We had approximately $34.2 million of availability on our secured lines of credit. We also have a significant amount of investments scheduled to mature in the remainder of 2026, which after repayment of the related debt financings will provide additional liquidity. Potential sales of our JV equity investments would provide additional liquidity for investment purposes. At our current liquidity levels, we believe that we are well positioned to meet our future funding commitments.

We regularly monitor our overall exposure to potential increases in interest rates through an interest rate sensitivity analysis, which we report quarterly and is included on Page 103 of our Form 10-Q. The interest rate sensitivity table shows the impact on our net interest income given various changes in market interest rates and various other management assumptions. Our base case uses the forward SOFR yield curve as of June 30, which includes market anticipated SOFR rate declines over the next 12 months. The scenarios we present assume that there is an immediate shift in the yield curve and that we do nothing in response for 12 months.

The analysis shows that an immediate 100 basis point increase in rates will result in a decrease in our net interest income and CAD of approximately $1 million or $0.045 per unit. Conversely, a 100 basis point decrease in rates across the curve will result in an increase in our net interest income and CAD of approximately $1 million or $0.045 per unit. We consider ourselves largely hedged against significant fluctuations in our net interest income from market interest rate movements in all scenarios, assuming no significant credit issues.

Our debt investment portfolio consisting of mortgage revenue bonds, governmental issuer loans and property loans totaled $927.5 million as of June 30 or 67% of our total assets. We owned 80 mortgage revenue bonds as of June 30 that provide financing for affordable multifamily seniors and skilled nursing properties across 12 states with concentrations in California and Texas. We own 2 governmental issuer loans as of June 30 that finance the construction or rehabilitation of affordable multifamily properties. During the second quarter, we acquired a $29 million taxable MRB.

Our outstanding future funding commitments for our MRB, GIL and related investments totaled $9 million as of June 30 before related debt proceeds and excluding investments we expect to transfer to our construction lending joint venture with BlackRock. These commitments will be funded over approximately 12 months and will add to our income-producing asset base. During June and July of 2026, we originated 2 GIL investments totaling $66 million in investment commitments. Once closed, we then transferred these investments together with a separate property loan to our construction lending JV with BlackRock.

In aggregate, these 3 investments represented $95.9 million of commitments and reflect our ongoing ability to source and execute affordable multifamily real estate debt investments. Our overall mortgage investment portfolio performed steadily during the second quarter. All MRB and GIL investments are current on principal and interest payments as of June 30, 2026. Physical occupancy for the stabilized mortgage revenue bond portfolio was 85.8% as of June 30, which is essentially flat to occupancy as of March 31.

The relatively lower physical occupancy rates are due to properties in Texas, where local markets are experiencing higher vacancies due to recent increase in multifamily unit supply. We expect occupancies will recover once available units are absorbed and new supply deliveries decline in the near term. Physical occupancy for the non-Texas stabilized MRB portfolios was 93% as of June 30. As mentioned in our last call, we completed the deed in lieu of foreclosure process on 4 South Carolina MRB properties during the first quarter of 2026.

We believe that by owning and managing the properties directly, we can maximize the value of our investments. The original mortgage revenue bonds were redeemed, the related tender option bond funding trusts were collapsed, and the partnership now owns the underlying multifamily properties directly with first mortgage financing provided by a group of 2 banks. We have retained a third-party property manager to operate the properties on a day-to-day basis under our oversight. We are actively managing the assets and are being assisted in that effort by Greystone's corporate asset management team.

We use various debt financing facilities used to leverage our debt investments. Our outstanding debt financing had an outstanding principal balance totaling approximately $826 million as of June 30, which is down approximately $104 million from March 31. We manage and report our debt financing in 4 main categories on Page 96 of our Form 10-Q. 3 of the 4 categories are designed such that our net return is generally insulated from changes in short-term interest rates. These categories account for $700 million or 85% of our total debt financing.

The fourth category is fixed rate assets with variable rate debt with no designated hedging, which is where we are most exposed to interest rate risk in the near term. This category represents approximately $127 million or 15% of our total debt financing. Of this amount, approximately $38 million is associated with debt investments that are scheduled to mature by December 2026, which will repay the associated outstanding debt financing. As such, we expect the unhedged period to be relatively short.

Ken previously provided updates on our 10 market rate multifamily JV equity investments. In addition, we have 2 market rate seniors housing JV equity investments in Nevada. Our remaining funding commitments for market rate multifamily JV equity investments totaled $19.5 million as of June 30, all related to sites being considered for future development. We will not fund these commitments until a construction contract is signed and construction commences. The managing member may also choose to sell the site and terminate our related funding commitments.

We have an outstanding funding commitment of $4 million for our Village Mount Rose seniors housing investment. During July 2026, the 3 Vantage properties located in Texas, Vantage at Helotes, Vantage at Fair Oaks, and Vantage at McKinney Falls, secured a new debt facility to refinance their original construction and bridge loans. We believe this refinancing strengthens the property's financial position and provides increased flexibility as our joint venture partner continues to evaluate potential sales of these assets. Additionally, the partnership was released from the limited guarantee agreements associated with the Vantage at McKinney and Vantage at Hutto bridge loans.

I will now turn the call over to Ken for his update on market conditions and our investment pipeline.

Thanks, Eric. The first 7 months of 2026 have seen a marginally positive performance from the U.S. municipal bond market, notwithstanding the higher level of interest rates in the broader fixed income markets. Muni high-grade and high-yield indices had a tough performance in July, but both managed to stay in the black on a year-to-date basis. As of July 31, the muni high-grade index showed a 0.4% return for 2026, along with a 2.5% return for the high-yield index. At the end of June, 10-year MMD was at 2.95% and 3-year MMD was at 4.19%, which were 20 and 30 basis points lower, respectively, versus March's levels.

As of yesterday's close, 10-year MMD was at 3.24% and 3-year MMD was at 4.45%, reflecting higher levels from second quarter end due to inflation uncertainty stemming from the current conflict in the Middle East. 10-year muni-to-treasury ratio is currently 69% and the 3-year muni-to-treasury ratio is currently 85%, close to the same level since the time of our last call. The MMD housing bond interest rate scale, which is used to mark our core mortgage revenue bonds to market, is correlated to those 2 broader muni bond market indices.

Through 7 months of 2026, there has been $343 billion of gross new issuance, slightly behind last year's record pace and almost $52 billion in fund inflows, well ahead of last year's pace. The market's ability to handle this higher than historical average level of new issue activity is a good sign for the overall secondary market liquidity in muni bonds like the mortgage revenue bonds owned by the partnership.

The HUD appropriation bill fully funding the department's programs, in many cases, at expenditure levels higher than the previous year, for the remainder of the federal fiscal year was passed by Congress and signed by President Trump.

The federal low-income housing tax credit program is beginning to adjust to the new rules set forth in the One Big Beautiful Bill Act with deals in our pipeline seeing larger allocations of taxable debt as part of their capital stack. There continue to be challenges with demand and pricing in the low-income housing tax credit market. We are working closely with our colleagues on the Greystone Real Estate Capital team to be able to deliver a full debt and equity solution to our affordable housing sponsor clients.

With that, Eric and I are happy to take your questions.

[Operator Instructions] Our first questions come from the line of Jason Weaver with JonesTrading.

First, with the portfolio rotation well underway now, I realize it's difficult to forecast, but what inning would you say we're in along this path? And has the time line extended due to those refinancing transactions?

Thanks for your question, Jason. I think we're still very early in the ball game. We haven't reported a sale of a joint venture equity investment since Q2 of last year when the Vantage at Lodges transaction was sold. So in terms of just the implementation of the strategy and the recycling of capital, we really haven't had a lot of capital to recycle at this point in time in terms of moving from JV equity investments into traditional tax-exempt mortgage revenue bond investments.

We have seen the roll-off of some of our governmental issuer loan investments as they've reached maturity, in particular, the three phases of the Poppy Grove transaction that all converted to perm during the second quarter of 2026. So we've seen some reinvestment of that capital. But I think until we show some of the JV equity exits that we are working with our partners to try to implement, I think that's when you'll really see the redeployment into those traditional mortgage revenue bond opportunities that we've been talking about.

Got it. And then would you say that the construction lending JV is becoming sort of the primary origination vehicle? And is there a potential for that JV to grow in size? Or are you discussing others with additional sponsors?

That's an interesting point to make, Jason. I think when you look at our reporting and you look at our balance sheet, you are going to see a shift in that LIHTC construction lending business. Historically, we had kept all of those GIL investments on our balance sheet, funded them with traditional tender option bond debt facilities. Now with the joint venture that we have, that's actually an off-balance sheet vehicle for us.

So when Eric mentioned in his results earlier in the call about originations that have been closed during Q2 and subsequent last month, you're not seeing those flow through the partnership's balance sheet. Those are going into this off-balance sheet vehicle. So our expectation is that the large majority of our construction lending on low-income housing tax credit deals that used to show up on our balance sheet as GILs is now really going to be showing up in the BlackRock joint venture vehicle. So that's going to be a little different moving forward as we scale that.

That joint venture right now owns four assets that have all been funded with tender option bond debt facilities in a gross principal commitment amount of roughly $120 million across those four investments. So we will expect to see that grow in size as we continue to move through the pipeline that we currently have of deals and closing deals in underwriting and deals that we have under application.

Got it. And then just one more, if I might. The South Carolina multifamily properties, where would you say a stabilized yield shakes out on those properties? Or was 2Q representative of that?

I think from a performance perspective, we're still doing what we need to do to reposition those properties. There was a transition in the property management companies. We've retained Asset Living out of Atlanta as the property manager for all four of those assets. There's been some turnover at the individual property level in terms of the management teams there that we're continuing to work through.

As you'd expect, there's also some repositioning that needs to go on there, and we're evaluating opportunities for capital improvements at those properties that we believe will improve rent and leasing potential there. So it's really only been four months at this point in time that we've had operational control of all four assets. And so we're continuing to move through that process there.

Our next questions come from the line of John Baile, investor.

I'm kind of looking at the balance sheet right now, trying to make it clean if we strip out the multifamily and particularly probably the South Carolina properties that you've taken it back over. If I take a look -- and I'm on the balance sheet right now with the supplemental, and I'm seeing real estate assets net of about $110.9 million. And I'm assuming that I'm going to knock off, I think, the mortgage payables net of $83.4 million.

If my math is correct, and I strip that out of the balance sheet, I'm seeing $10.16 per unit and the market hasn't opened yet, but we're probably going to be trading at about 50% of that. I know I've asked this in previous calls, but -- the real estate assets there at $110.9 million, is that a sound number? And if it is, any chance for share buybacks by the partnership with respect to us trading at 50% of book?

John, this is Eric. In terms of your questions regarding the amounts of the real estate assets and the related mortgage payables, you are accurate in those numbers, and I would consider those sound. Those are the reported assets at fair value when we acquired those by deed in lieu during the first quarter of 2026.

John, in terms of your question about potential buybacks, as we start to see activity with the liquidation of our existing market-rate multifamily JV equity investments, we will certainly evaluate the opportunities that are available to the partnership with the return of that capital. I think the Board's direction to us has been to really evaluate all possibilities.

I will say, though, that we are a permanent capital vehicle that by buying units back in the secondary market with return of capital to us, if we are to continue to try to grow the partnership and make future investments, we would basically have to go back to the market and try to raise that capital again, and there would be costs associated with that. So that's something that we as a management team and the Board needs to take into consideration in terms of potentially making a decision like that as well.

Okay. A couple of follow-ups on that. The -- I think a prior questioner asked you what inning you're in? You said you're still in the early innings. It seems like the -- I don't want to call it the deceased housing right here, but what's really costing is the multifamily in South Carolina. Can you quantify time line with early innings? Can we look forward? Is it 6 months to a year? I mean, what would be normal stabilization and marketing time line in your experience?

Well, again, those were not new construction assets. Those were existing properties that were bought by the 501(c)(3) where a light rehab was done and a repositioning of the tenant base occurred in order to come into compliance with the regulatory agreement that was associated with the original mortgage tax-exempt mortgage revenue bond financing that was in place on those assets.

So at this point in time, it's really a question of getting in there, dealing with the legacy tenant base to the extent that there were tenants who are at the properties who didn't necessarily meet the best resident selection criteria. We're working through that process right now, as well as evaluating potential capital improvements. So it's not like I've got a new construction project that I'm trying to lease up, and I can kind of give you an expectation of what that leasing schedule is going to look like based on historic experience.

Here's a situation where, depending on the performance of the properties, we might be at in the low to mid-80s in current occupancy, we may be lower than that depending on what the particulars were at that asset. So it's really hard for me to give you a blanket statement of we expect the projects to be back at what we would call sort of whole economic performance by some period of time because the situation is different in each of the four assets.

Okay. And finally, it might be nice in the supplemental, if you were to break out these -- the closures of the real estate from the operations, I think it make it easier for investors to be able to figure out what this is going to look like on a clean basis going forward. I mean I can call it out after having some experience, but obviously, it's costing when the market priced right there.

But looking forward to better days, getting -- going back to the reservation. And you made some good money with a little editorial here. You made some good money with some of these JVs -- but the market has changed. And I guess going back to your root cause with your primary lending is going to be the way going forward. So I appreciate the hard work and look forward to better days.

[Operator Instructions] There are no further questions at this time. I would now like to turn the floor back over to Ken Rogozinski for closing comments.

Thank you very much, everyone, for your participation today. We look forward to speaking with you again next quarter.

Ladies and gentlemen, thank you so much. This does conclude today's teleconference. We appreciate your participation. Please disconnect your lines at this time, and have a wonderful day.

Greetings. Welcome to the Q1 2026 Earnings Call for Greystone Housing Impact Investors LP. [Operator Instructions] Please note that this conference is being recorded. I will now turn the conference over to Jesse Coury, Chief Financial Officer. Thank you. You may begin.

I'd like to welcome everyone to the Greystone Housing Impact Investors LP, NYSE ticker symbol GHI, First Quarter of 2026 Earnings Conference Call. [Operator Instructions] As a reminder, this conference call is being recorded. During this conference call, comments made regarding GHI, which are not historical facts, are forward-looking statements and are subject to risks and uncertainties that could cause the actual future events or results to differ materially from these statements.

Such forward-looking statements are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Forward-looking statements can be identified by the use of words like may, should, expect, plan, intend, focus and other similar terms. You are cautioned that these forward-looking statements speak only as of today's date. Changes in economic, business, competitive, regulatory and other factors could cause our actual results to differ materially from those expressed or implied by the projections or forward-looking statements made today.

For more detailed information about these factors and other risks that may impact our business, please review the periodic reports and other documents filed from time to time by us with the Securities and Exchange Commission. Internal projections and beliefs upon which we base our expectations may change, but if they do, you will not necessarily be informed.

Today's discussion will include non-GAAP measures and will be explained during this call. We want to make you aware that GHI is operating under the SEC Regulation FD and encourage you to take full advantage of the question-and-answer session. Thank you for your participation and interest in Greystone Housing Impact Investors LP. I will now turn the call over to our Chief Executive Officer, Ken Rogozinski.

Good morning, everyone. Welcome to Greystone Housing Impact Investors LP's First Quarter 2026 Investor Call. Thank you for joining. I will start with an overview of our portfolio and investment strategy. Jesse Coury, our Chief Financial Officer, will then present the partnership's financial results.

I will wrap up with an overview of the market and our investment pipeline. Following that, we look forward to taking your questions. As we've mentioned on our previous calls, we are pursuing a strategy to reposition our investment portfolio. Specifically, we are focused on exiting our remaining investments in market rate multifamily JV equity investments while maximizing value to our unitholders from those exits.

We will then reinvest the capital returned to us from those exits into additional high-quality tax-exempt mortgage revenue bond investments that are expected to provide longer-term stable tax-advantaged earnings, which we believe will provide long-term value for our unitholders. We believe this change in investment strategy provides 3 key benefits to our unitholders.

First, by their nature, our tax-exempt mortgage revenue bond investments earn stable returns based on the net interest spread between the bond interest rate and our related debt financing rate. As a result, we expect increasingly stable earnings as compared to the uneven returns on joint venture equity investments due to that income being recognized primarily upon property sales.

Second, in recent years, the majority of income allocated to our unitholders has been taxable because of the taxable income from our joint venture equity investment sales. As we allocate more capital to tax-exempt mortgage revenue bond investments, we expect that the proportion of income allocated to our unitholders that is tax-exempt for federal income tax purposes will increase in the long term.

In the near term, potential gains from sales of our remaining market rate multifamily JV equity investments will continue to generate taxable income for unitholders.

Third, we are investing capital in a proven investment class that is core to our operations that also leverages the strong relationships and knowledge base of Greystone's other lending platforms. We currently have 8 market rate multifamily JV equity investments that have completed construction and are either in lease-up or stabilized. Overall occupancy is increasing for these investments in lease-up. On assets that have reached stabilization, we have seen some variability in occupancy as local market factors impact demand and rent levels.

Decisions regarding when to sell an individual property are made by our joint venture partners based on their views of the local market conditions and current leasing trends. We currently have 2 market rate multifamily JV equity investments that are sites for potential development. Our joint venture partners are evaluating the highest and best use for the development sites, which may include a sale of the land or the commencement of construction.

Our remaining funding commitments for these investments will be terminated if the land is sold. Meanwhile, we continue to see strong investment opportunities for our traditional investments in tax-exempt mortgage revenue bonds associated with affordable multifamily properties as well as for seniors housing and skilled nursing properties.

Greystone's strong lending relationships across affordable housing, seniors housing and skilled nursing business lines are also providing investment opportunities for the partnership. We believe that these opportunities will allow us to redeploy the capital returned from market rate multifamily JV equity investment sales events soon after the capital is received.

We and the Board of Managers acknowledge that it will take some time to cycle our capital out of our market rate JV equity investments and into tax-exempt mortgage revenue bond investments. We currently report minimal earnings related to our JV equity investments during the holding period. We expect that the reinvestment of capital from sales of JV equity investments into tax-exempt mortgage revenue and bond investments will increase the partnership's recurring earnings in the long run.

We look forward to providing additional details on our progress in this effort in future communications and on future earnings calls. With that, I will turn things over to Jesse Coury, our CFO, to discuss the financial data for the first quarter of 2026.

Thank you, Ken. For our first quarter ended March 31, we reported net income of $1.3 million or $0.01 per unit basic and diluted, and we reported cash available for distribution, or CAD, a non-GAAP measure of $3.1 million or $0.13 per unit. A significant driver of our reported GAAP income for the first quarter is our proportionate share of losses from non-Vantage JV equity investments of approximately $4.9 million or $0.21 per unit.

As we've mentioned on previous calls, we are required to report our proportionate share of losses of such JV equity investments under GAAP. These are not impairments or realized losses to the partnership and approximately $1.9 million or 39% of total reported losses relate to depreciation and amortization expenses at the respective JV equity investment entities, with the remaining reported losses related to interest expense and property operating expenses that exceeded revenues during the lease-up of these respective properties.

We add back our share of property operating losses to net income when calculating CAD, as such losses are not direct expenses to the partnership, and we expect such losses, which are largely funded by the individual property development budgets to be recovered upon future transactional events.

Our book value per unit as of March 31 was on a diluted basis, $11.30. I will note that this metric is based on our joint venture equity investments marked at net carrying value. As a result, it does not include any potential gains or additional income that may be realized upon sale of a property or recovery of our share of GAAP operating losses that I previously discussed that are also expected to be recovered upon sale.

As of market close yesterday, May 11, our closing unit price on the New York Stock Exchange was $5.09, which is a 55% discount to our net book value per unit as of March 31. We regularly monitor our liquidity to fund our investment commitments and to protect against potential debt deleveraging events if there are significant declines in asset values.

As of March 31, we reported unrestricted cash and cash equivalents of $20.6 million. In addition, in April, we received approximately $18 million as return of our net capital invested in the GIL and taxable GILs for the Poppy Grove I and Poppy Grove II projects after their sale to Freddie Mac and repayment of the related debt financings.

We had approximately $40 million of availability on our secured lines of credit. We also have a significant amount of investment scheduled to mature during the remainder of 2026, which after repayment of the related debt financings will provide additional liquidity. We believe that we are well positioned to meet our current funding commitments.

In addition, potential sales of JV equity investments would provide additional liquidity for investment purposes. We regularly monitor our overall exposure to potential increases in interest rates through an interest rate sensitivity analysis, which we report quarterly and is included on Page 90 of our Form 10-Q. The interest rate sensitivity table shows the impact on our net interest income given various changes in market interest rates and other various management assumptions.

Our base case uses the forward SOFR yield curve as of March 31, which includes market anticipated SOFR projections over the next 12 months. Scenarios we present assume that there is an immediate shift in the yield curve and that we do nothing in response for 12 months. The analysis shows that an immediate 100 basis point increase in rates will result in a decrease in our net interest income and CAD of $736,000 or approximately $0.032 per unit. Conversely, a 100 basis point decrease in rates across the curve will result in an increase in our net interest income and CAD of $736,000 or approximately $0.032 per unit.

We consider ourselves largely hedged against significant fluctuations in our net interest income for market interest rate movements in all scenarios, assuming no significant credit issues. Our debt investments portfolio consists of mortgage revenue bonds, governmental issuer loans and property loans totaling $1.17 billion as of March 31 or 79% of our total assets. We own 80 mortgage revenue bonds as of March 31 that provide financing for affordable multifamily seniors and skilled nursing properties across 12 states with concentrations in California and Texas.

We own 4 Governmental Issuer Loans as of March 31 that finance the construction of affordable multifamily properties in California. Two of the GIL, Governmental Issuer Loan investments and related taxable investments totaling $90 million were redeemed at par in April with the third Governmental Issuer Loan and taxable Governmental Issuer Loan investment expected to redeem at par later in May.

Our outstanding future funding commitments for our mortgage revenue bonds, Governmental Issuer Loans and related investments totaled $12.2 million as of March 31 before related debt proceeds and excluding investments we expect to transfer to our construction lending joint venture with BlackRock. These commitments will be funded over approximately 12 months and will add to our income-producing asset base.

Our overall mortgage investment portfolio performed steadily during the first quarter with the exception of 4 mortgage revenue bonds and related taxable mortgage revenue bond investments in South Carolina, which I will discuss later. All mortgage revenue bond and governmental issuer loan investments are current on principal and interest payments as of March 31. Physical occupancy for the stabilized mortgage revenue bond portfolio was 85.9% as of March 31, which is down slightly from 86.7% as of December 31.

The decline is primarily associated with properties in Texas, where local markets are experiencing higher vacancies due to recent increases in multifamily unit supply. We expect occupancies will recover once available units are absorbed and new supply deliveries decline in the near term.

As I mentioned on our last call, we completed the deed in lieu of foreclosure process on 4 South Carolina mortgage revenue bond properties during the first quarter. We believe that by owning and managing the properties directly, we can maximize the value of our investments. The original mortgage revenue bonds were redeemed, the related debt financings were repaid and the partnership now owns the underlying multifamily properties directly with first mortgage financing provided by a group of 2 banks.

We recorded the assets and liabilities of the acquired properties based on estimated fair values. Based on these estimates, we recorded a recovery of prior provisions for credit losses of approximately $2.1 million related to the Park at Sondrio, the Park at Vietti and the Windsor Shores investments.

In addition, we reported a gain on deed in lieu of foreclosures totaling approximately $2.2 million due to the estimated fair values in excess of our amortized cost basis of our prior mortgage revenue bond investments in Windsor Shores and Century Plaza apartments, also known as the Ivy Apartments.

We have retained a third-party property manager to operate the properties on a day-to-day basis under our oversight. We are being assisted in that effort by Greystone's corporate asset management team. On the liability side of our balance sheet, we use various debt financing facilities to leverage our debt investments. Our outstanding debt financings had an outstanding principal balance totaling approximately $927 million as of March 31, which is down approximately $92 million from December 31.

We manage and report our debt financing in 4 main categories on Page 82 of our Form 10-Q. 3 of the 4 categories are designed such that our net return is generally insulated from changes in short-term interest rates. These categories account for $700 million or 76% of our total debt financing.

The fourth category is fixed rate assets with variable rate debt with no designated hedging, which is where we are most exposed to interest rate risk in the near term. This category represents approximately $227 million or 24% of our total debt financing. Of this amount, approximately $188 million is associated with debt investments that are scheduled to mature during 2026, which will repay the associated outstanding debt financings. As such, we expect the unhedged period to be relatively short.

Ken previously provided updates on our 10 market rate multifamily joint venture equity investments. In addition, we have 2 market rate seniors housing JV equity investments in Nevada. Our remaining funding commitments for market rate multifamily joint venture equity investments totaled $19.5 million as of March 31, all related to sites being considered for future development. We will not fund these commitments until the construction contract is signed and construction commences. Managing member may also choose to sell the sites and terminate our related funding commitments. We have an outstanding funding commitment of approximately $7 million for our Village Mount Rose senior housing JV investment. I'll now turn the call back to Ken for his update on market conditions and our investment pipeline.

Thanks, Jesse. The first 4 months of 2026 have seen a positive performance from the U.S. municipal bond market. The muni high-grade and high-yield indices both recovered well in April from March's underperformance. As of April 30, the Muni High-grade Index showed a 1.0% return for 2026, along with a 2.1% return for the high-yield index. At the end of March, 10-year MMD was at 3.16% and 30-year MMD was at 4.50%, which were 40 and 30 basis points higher, respectively, versus December's levels.

As of yesterday's close, 10-year MMD was at 2.96% and 30-year MMD was at 4.31%, reflecting slightly higher levels from year-end due to inflation uncertainty stemming from the current conflict in the Middle East. The 10-year muni-to-treasury ratio is currently at 67% and the 3-year muni-to-treasury ratio is currently at 87%, a significant improvement in the 10-year ratio since the time of our last call.

The MMD housing bond interest rate scale, which is used to mark our core mortgage revenue bond portfolio to market is correlated to these broader muni bond indices. Through 4 months of 2026, there have been $175 billion of gross new issuance, slightly behind last year's record pace and almost $28 billion in fund inflows, well ahead of last year's pace. The market's ability to handle this higher than historical average level of new issue activity is a good sign for the overall secondary market liquidity in muni bonds, like the mortgage revenue bonds owned by the partnership. There are appropriations bill fully funding the department's programs, in many cases, at expenditure levels higher than the previous year, for the remainder of the federal fiscal year was passed by Congress and signed by President Trump. The federal low-income housing tax credit program is beginning to adjust to the new rules set forth in the One Big Beautiful Bill Act. With that, Jesse and I are happy to take your questions.

[Operator Instructions] Our first questions come from the line of Jason Weaver with Jones Trading.

First, I wanted to ask about the 9 or 10 properties that have completed construction as of now, how many of those are at or nearing stabilized occupancy? And what do you think an ideal sort of monetization timeline would be? Would that stretch into mid-2027 or is that mostly in 2026?

Thanks, Jason. In terms of properties that have reached stabilization at this point in time, there are 4 assets that we believe are either at or close to stabilized operations at this point in time. The other 4 are still in their initial lease-up phase. .

In terms of a potential timeline from our perspective, spring and early summer has traditionally been peak leasing season for market-rate multifamily properties. We're seeing good velocity at a number of the assets that are in lease-up, and we're watching the property managers deal with normal lease turnover at the stabilized properties.

So something that we're going to continue to keep our eye on. Again, it's not something that we directly control. The timing of exit is up to the discretion of our JV partners as the managing members of the property-owning entities, but my expectation would be as we move further through leasing season that we're going to be taking a hard look at each of the stabilized assets with our JV partners to try to see what the appropriate timeline is for potential monetization of those investments.

And then on the South Carolina properties you took back, what can you tell me regarding the financing there, nonrecourse structure and/or covenant exposure?

Yes, I can take that one. So it is an $84 million mortgage loan secured by all 4 properties under 1 loan with 2 financial institutions. It is a recourse obligation of GHI or the partnership in full recourse with a partial 10% guarantee provided by Greystone affiliate to help us get better terms on that financing.

In terms of covenant levels, there is a debt service coverage test that is in early 2027 and a second that's in mid-2027. And those are kind of traditional debt service coverage where if they're not met, then potential principal paydown would be needed to bring those in line with the debt service covenant test, but those are at very low covenant levels.

I think the first test is at a 1x debt service coverage based on a T3. So we have roughly a year to work through these properties, get them back to a more stable financial footing before any covenant exposure comes into play.

And Jason, I would note that the former tender option bond trust financing that funded the MRBs associated with these 4 properties was full recourse to us as well. So from that exposure perspective, the replacement bank financing has not sort of increased our potential exposure associated with these assets.

Our next question is come from the line of Chris Muller with Citizens JMP.

So nice to see the $2.2 million gain on the deed in lieu of foreclosure. I guess, do you guys expect much in terms of CapEx on these properties? And are they currently profitable? Or will they be a drag on earnings in the near term?

We're still in the process right now, Chris, of working through the transition on the property management level. As Jesse said, we took title to 2 of the assets in January and 2 of the assets at the end of February. The property management transition occurred at the same time. And so we're continuing to work through what the potential CapEx budget might be for these assets.

So we'll be working with the property managers and with the Greystone Asset Management team to take a look at those budgets, identify what the needs are there at the individual asset levels and try to best position them for growth moving forward in order for us to get that return on our investment. I think the one thing that I will note is that our initial mortgage revenue bond investment on these 4 properties were all acquisition rehab transactions where there was a level of rehab that was built into the initial budgets in 2022, 2023 for each of these assets. So it's not like we're sort of taking over assets that haven't been touched for a while.

There was, I think, in each circumstance, at least $2 million to $3 million worth of rehab that was done at the time that our initial mortgage revenue bond investments were funded.

Got it. That's great to hear. And I guess, last quarter, you guys said that about half of the JV losses were depreciation expense. And I think I heard Jesse say $1.9 million was depreciation this quarter. Is that a good run rate for us to model until properties start getting sold?

So from a depreciation perspective, I think that's a good number as the 6 non-Vantage investments have kind of reached that operating -- and so that operating phase. And so I think that will be a fairly consistent depreciation and amortization number going forward. But I think the overall proportionate share of our losses of those investments is going to come down over time because, as Ken mentioned, these are properties that are in lease-up. So some of them are still in that 20% to 40% leased. And so as they're generating quite a bit of losses because there's not revenue to offset the expenses. But as they continue to lease up, particularly through the spring leasing season, we'll see revenues increase and our proportionate share of losses should decrease accordingly.

Got it. That makes a lot of sense. And I just -- I think I just missed that what you guys said book value was, if I could squeeze the last 1 in.

$11.30 per unit.

[Operator Instructions] We have reached the end of our question-and-answer session. I would now like to hand the call back over to Ken Rogozinski for closing comments.

Thank you very much for your participation today. We look forward to speaking with everyone again next quarter.

Thank you, ladies and gentlemen. This does now conclude today's teleconference. We appreciate your participation. You may disconnect your lines at this time. Enjoy the rest of your day.

Greetings, and welcome to the Greystone Housing Impact Investors LP Conference Call. [Operator Instructions] It's now my pleasure to turn the call over to Jesse Coury, CFO. Please go ahead.

I would like to welcome everyone to the Greystone Housing Impact Investors LP, NYSE ticker symbol GHI, Fourth quarter of 2025 Earnings Conference Call. During the presentation, all participants will be in a listen-only mode. After management presents its overview of Q4 2025, you will be invited to participate in a question-and-answer session. As a reminder, this conference call is being recorded.

During this conference call, comments made regarding GHI, which are not historical facts, are forward-looking statements and are subject to risks and uncertainties and that could cause the actual future events or results to differ materially from these statements. Such forward-looking statements are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995.

Forward-looking statements can be identified by the use of words like may, should, expect, plan, intend, focus and other similar terms. You are cautioned that these forward-looking statements speak only as of today's date. Changes in economic, business, competitive, regulatory and other factors could cause our actual results to differ materially from those expressed or implied by the projections or forward-looking statements made today.

For more detailed information about these factors and other risks that may impact our business, please review the periodic reports and other documents filed from time to time by us with the Securities and Exchange Commission. Internal projections and beliefs upon which we base our expectations may change. But if they do, you will not necessarily be informed.

Today's discussion will include non-GAAP measures and will be explained during this call. We want to make you aware that GHI is operating under the SEC Regulation FD and encourage you to take full advantage of the question-and-answer session.

Thank you for your participation and interest in Greystone Housing Impact Investors LP. I'll now turn the call over to our Chief Executive Officer, Kenneth Rogozinski.

Good afternoon, everyone. Welcome to Greystone Housing Impact Investors LP's Fourth Quarter 2025 Investor Call. Thank you for joining. I will start with an overview of our portfolio and investment strategy. Jesse Coury, our Chief Financial Officer, will then present the partnership's financial results. I will wrap up with an overview of the market and our investment pipeline. Following that, we look forward to taking your questions.

As we mentioned on our earnings call in November, we are pursuing a strategy to reposition our investment portfolio. Specifically, we are focused on exiting our remaining investments and market rate multifamily JV equity investments while maximizing value to our unitholders from those exits. We will then reinvest the capital return to us from those exits into additional high-quality tax-exempt mortgage revenue bond investments that are expected to provide longer-term, stable, tax-advantaged earnings, which we believe will provide long-term value for our unitholders.

As we noted in our November earnings call, we believe that this change in investment strategy provides three key benefits for our unitholders. First, by their nature, our tax-exempt mortgage revenue bond investments earned stable returns based on the net interest spread between the bond interest rate and our related debt financing rate. As a result, we expect increasingly stable earnings as compared to the uneven returns on joint venture equity investments due to that income being recognized primarily upon property sales.

Second, in recent years, the majority of income allocated to our unitholders has been taxable because of the taxable income from joint venture equity investment sales. As we allocate more capital to mortgage revenue bond investments, we expect that the proportion of income allocated to our unitholders that is tax exempt for federal income tax purposes, will increase in the long term. In the near term, potential gains from sales of our remaining market rate multifamily JV equity investments will continue to generate taxable income for unitholders.

Third, we are investing capital in a proven asset class that is core to our operations and also leverages the strong relationships and knowledge base of Greystone's other lending platforms. We currently have 8 market rate multifamily JV equity investments that have completed construction and are either in lease-up or stabilized. Overall occupancy is increasing for these investments in lease-up.

On assets that have reached stabilization, we have seen some variability in occupancy as local market factors impact demand and rent levels. Decisions regarding when to sell an individual property are made by our joint venture partners based on their views of the local market conditions and current leasing trends.

We currently have 2 market rate multifamily JV equity investments that are sites for potential development. Our joint venture partners are evaluating the highest and best use for the development sites as of December 31, 2025. This may include a sale of the land or the commencement of construction. Our remaining funding commitments for those investments will be terminated if the land is sold.

Meanwhile, we continue to see strong investment opportunities for our traditional investments in tax-exempt mortgage revenue bonds associated with affordable multifamily properties as well as for seniors housing and skilled nursing properties.

Based on strong lending relationships across affordable housing, seniors housing and skilled nursing business lines, are also providing investment opportunities for the partnership. We believe these opportunities will allow us to redeploy the capital, return from the market rate multifamily JV equity investment sales events soon after the capital was received.

We and the Board of managers acknowledge that it will take some time to cycle our capital out of our market rate JV equity investments and into taxes and mortgage revenue bond investments. We currently report minimal earnings related to our JV equity investments during the holding period.

We expect that the reinvestment of capital from sales of JV equity investments into tax-exempt mortgage revenue bond investments will increase the partnership's recurring earnings in the long run.

The new quarterly unitholder distribution level of $0.14 per BUC is reflective of a level that we and the Board of managers believe is sustainable while the partnership undertakes this repositioning of its investment portfolio. We look forward to providing additional details on our progress in this effort through future communications and on future earnings calls.

With that, I will turn things over to Jesse Coury, our CFO, to discuss the financial data for the fourth quarter of 2025.

Thank you, Ken. For our fourth quarter ended December 31, we reported a net loss of $2.6 million or $0.17 per unit basic and diluted and we reported cash available for distribution, or CAD, a non-GAAP measure; of positive $2.8 million or $0.12 per unit.

A significant driver of our reported GAAP net loss for the fourth quarter is our proportionate share of losses from non-vantage JV equity investments of approximately $7.4 million or $0.32 per unit. We are required to report our proportionate share of losses of such JV equity investments under GAAP. These are not impairments or realized losses to the partnership.

The individual multifamily properties associated with these JV equity investments by design incur operating losses during the development and lease-up phases. Operating expenses such as interest, property taxes and insurance are incorporated into the overall development budgets for each project and are typically funded by reserves and construction loan proceeds. Such losses are also driven by noncash depreciation charges after construction completion when lease-up is in its early phases.

The increase in our share of property operating losses during the fourth quarter is due to the completion of construction of 4 properties during 2025. The large senior living Carson Valley, Jessam at Hays Farm, Freestone Greenville and Freestone Ladera.

We add back our share of property operating losses to net income when calculating CAD as such losses are not direct expenses to the partnership, and we expect such losses, which are largely funded by the development budget, to be recovered upon future transactional events.

Our book value per unit as of December 31 was on a diluted basis, $11.70. We'll note that this metric is based on our joint venture equity investments at net carrying value. As a result, it does not include any potential gains or additional income that may be realized upon sale nor the recovery of our share of GAAP operating losses for JV equity investments that are also expected to be recovered on sale.

As of market close yesterday, March 18, our closing unit price on the New York Stock Exchange was $5.87 to a 50% discount to our net book value per unit as of December 31.

We regularly monitor our liquidity to fund our investment commitments and to protect against potential debt deleveraging events if there are significant declines in asset values. As of December 31, we reported unrestricted cash and cash equivalents of $39.5 million. We also had approximately $49.2 million of availability on our secured lines of credit.

We also have a significant amount of investments scheduled to mature in the first half of 2026, which after repayment of the related debt financings, will provide additional liquidity. At our current liquidity levels, we believe that we are well positioned to meet our current funding commitments.

We regularly monitor our overall exposure to potential increases in interest rates through an interest rate sensitivity analysis, which we report quarterly, it is included on Page 83 of our Form 10-K. The interest rate sensitivity table shows the impact on our net interest income, given various changes in market interest rates and other various management assumptions.

Our base case uses the forward SOFR yield curve as of December 31, which includes market anticipated SOFR rate declines, if any, over the next 12 months. The scenarios we present assume that there is an immediate shift in the yield curve and that we do nothing in response for 12 months. This analysis shows that an immediate 100 basis point increase in rates will result in a decrease in our net interest income and cash of $1.1 million or approximately $0.049 per unit.

Conversely, a 100 basis point decrease in rates across the curve will result in an increase in our net interest income and CAD of $1.1 million or approximately $0.049 per unit. We consider ourselves largely hedged against significant fluctuations in our net interest income from market interest rate movements in all scenarios, assuming no significant [Audio Gap].

Our debt investment portfolio consists of mortgage revenue bonds governmental issuer loans and property loans that totaled $1.28 billion as of December 31 or 85% of our total assets. We own 83 mortgage revenue bonds as of December 31 that provide financing for affordable multifamily seniors and skilled nursing properties across 12 states, concentrations in California, Texas, South Carolina.

We own 4 governmental issuer loans as of December 31 to finance the construction of affordable multifamily properties in California. 3 such properties are 100% complete and nearing maturity when their Freddie Mac permanent loan forward commitments will be exercised and will redeem our governmental issuer loans at par.

During the fourth quarter of 2025, we funded approximately $38.7 million of our mortgage revenue bonds and governmental issuer loan-related commitments, which was offset by redemptions and paydowns of approximately $12.1 million in the normal course.

Our outstanding future funding commitments for our mortgage revenue bonds, governmental issuer loans and related investments totaled $11.6 million as of December 31 before consideration of related debt proceeds and exclusive of investments we expect to transfer to our construction lending joint venture with BlackRock. These commitments will be funded over approximately 12 months and will add to our income-producing asset base.

Our overall mortgage investment portfolio performed steadily during the fourth quarter. with the exception of 4 mortgage revenue bond investments in South Carolina, which I will discuss in a bit. One mortgage revenue bonds and governmental issuer loan investments were current on principal and interest payments as of December 31, 2025.

Physical occupancy for the stabilized mortgage revenue bond portfolio was 86.7% as of December 31, which is down from 87.8% as of September 30. The decline is primarily at properties in Texas, where local markets are experiencing higher vacancies due to recent increases in multifamily unit supply. We expect occupancies will recover once available units are absorbed and new supply deliveries declined in the near term.

As mentioned in our previous earnings call, we reported asset-specific provisions for credit losses for 3 501(c)(3) nonprofit mortgage revenue bonds secured by properties in South Carolina. The rehabilitation of each property was completed and each property is working to stabilize operations. However, actual property operations operating results did not meet originally underwritten levels.

Similarly, a fourth South Carolina mortgage revenue bond property, the [ IB ] apartments, also known as Century Plaza apartments; failed to meet its originally underwritten levels as well.

In January and February of 2026, we completed the deed in lieu of foreclosure process on these 4 South Carolina mortgage revenue bond properties. We believe that by owning and managing these properties directly, we can maximize the value of our investments.

Upon closing, the original mortgage revenue bonds were redeemed and the related tender option bond financing trusts were collapsed, and the partnership now owns the underlying multifamily properties directly, funded with first mortgage financing provided by a group of two banks. This is similar to the process that the partnership followed for the [Sweet on Paseo ] student housing property in San Diego in 2015.

We have retained a third-party property manager to operate the properties on a day-to-day basis under our oversight. We are also being assisted in this effort by Greystone's corporate asset management team. The results of operations for these properties will be reported in our MF Properties segment going forward.

On the liability side of our balance sheet, we use various debt financing facilities to leverage our debt investments. Our outstanding debt financing had an outstanding principal balance of approximately $1.02 billion as of December 31, which is relatively unchanged from September 30.

We manage and report our debt financing in four main categories on Page 74 of our Form 10-K. Three of the four categories are designed such that our net return is generally insulated from changes in short-term interest rates. These categories account for $802 million or 79% of our total debt financing.

The fourth category is fixed rate assets with variable rate debt, with no designated hedging, which is where we are most exposed to interest rate risk in the near term. This category represents approximately $217 million or 21% of our total debt financing. Of this amount, approximately $150 million is associated with debt investments that are scheduled to mature on or before May 2026, which will repay the associated outstanding debt financing. As such, we expect the unhedged period to be relatively short.

Ken previously provided updates on our 10 market rate multifamily joint venture equity investments. The remaining funding commitments for these investments totaled $19.5 million as of December 31. These remaining market rate multifamily commitments relate to sites being considered for future development. We will not fund these commitments until a construction contract is signed and construction commences. Managing member may also choose to sell the sites and terminate our related funding commitments.

In addition, we have 2 market rate seniors housing joint venture equity investments, which includes our newest investment in [ Village ] Mount Rose located in Reno, Nevada that closed in December 2025. We have an outstanding funding commitment of $7.7 million for [ Village ] Mountain Rose as of December 31, 2025.

I'll now turn the call over to Ken for his update on market conditions.

Thanks, Jesse. The fourth quarter of 2025 saw the year-end with a nice recovery in the performance of the U.S. municipal bond market. Through the first 6 months of 2025, the muni high-grade and high-yield indices were both in the red. Improved performance in the second half of the year allowed the high-grade index to show a 4.3% return for 2025, along with a 2.5% return for the high-yield index.

The performance of the high-yield index was negatively impacted by the performance of MSA tobacco bonds and bonds associated with the Brightline rail system, which are included in the index. MMD housing bond interest rate scale, which is used to mark our core mortgage revenue bonds to market, is correlated to these 2 broader muni-bond market indices.

At the end of December, 10-year MMD was at 2.76% and 30-year MMD was at 4.24%, which were basically flat to November's levels. As of yesterday's close, 10-year MMD was 2.87% and 30-year MMD was at 4.3%, reflecting slightly higher levels from year-end due to inflation uncertainty stemming from the current conflict in the Middle East.

The 10-year muni-to-treasury ratio is currently at 81%, and the 30-year muni-to-treasury ratio is currently at 89%. The both wider from last quarter's levels with a significantly larger cheapening or the 10-year ratio.

2025 saw another record year of muni bond issuance at a total of $582 billion. Fund flows into the muni market remained high with a full fund flows for 2025 at a level of positive $49 billion. The market's ability to handle this increased level of new issue activity is a good sign for the overall secondary market liquidity in muni bonds like the mortgage revenue bonds owned by the Partnership.

The HUD appropriation bill fully funding the department's programs in many cases at expenditure levels higher than the previous year for the remainder of the current federal fiscal year was passed by Congress and signed by President Trump.

Federal low income housing tax credit program is beginning to adjust to the new rules set forth in the One Big Beautiful Bill Act.

With that, Jesse and I are happy to take your questions.

[Operator Instructions] Our first question is coming from Matthew Erdner from JonesTrading.

I appreciate the color as always. Jesse, could you get into a little more specifics around the kind of $7 million there. I guess, what came online during the quarter, how do you guys, I guess, expect to get so-called losses back upon the realization of a sale? And then how should we look at it going forward with other properties as they start to come online?

Thanks for the question, Matt. So yes, the driver of that was as I mentioned, 4 properties that really came online or completed construction in the second half of 2025. And so as soon as they complete construction, they start having depreciation charges and they're no longer capitalizing interest in the cost basis of the assets. And so that's generating operating losses.

Just rough breakdown of those numbers particularly for the Q4 amount, roughly half of those operating losses are noncapitalized interest expense and roughly the other half is noncash depreciation charges.

So we're -- really, fourth quarter is kind of the biggest period in which we'll take that hit because as these properties can start complete construction, occupancy is low in the 10-ish percent level. So they're not generating a lot of revenue to offset their expenses. And so you've got a real big hit there on GAAP operating losses.

As occupancy increases at these properties, we expect those losses to narrow and hopefully, by the time they stabilize the near breakeven from a GAAP perspective. But I would say that the value of the underlying real estate is not impacted by operating losses directly. We still think these properties will lease up, they'll stabilize.

And then based on those stabilized operating results, we'll sell to other investors at levels at which we'll recover the original cost basis of the assets before even considering any of these GAAP losses that a road GAAP basis.

Got it. That's very helpful there. And then if you guys are able to kind of speak to the leasing trends that you guys are seeing so far, I guess with spring leasing coming up, going into summer, it's kind of the strength of leasing for some of these guys. So any insight that you can provide there, what you guys are expecting would be helpful.

Yes, Matt, it's Ken. I think what we can say on that front is you're right, this sort of March to June or July time period is traditionally the strong point of leasing in the annual multifamily cycle. We have a number of these assets that are still in lease-up, where we're starting to see those trends in terms of traffic at the individual properties and leases being signed. So that's something that we're having a weekly dialogue with the property management firms about.

I think it's a little early for us to say, given that we're here in mid-March. But it's certainly something that we and our joint venture partners are having weekly dialogue with the individual property managers about to see what the trends are in their particular marketplace, see if there are adjustments that need to be made from a pricing perspective to be as competitive as possible and to take advantage of this window of opportunity.

Next question coming from Chris Muller from Citizens Capital.

I guess on the 4 properties that you guys foreclosed on in the first quarter, will that flow through as a loss in the first quarter? And if so, is the provision -- $8.7 million provision you guys took for that last quarter, is that a good ballpark for what a realized loss would flow through at?

Thanks for the question, Chris. Yes, we're still finalizing our accounting for those properties that came on to our books. I think our initial basis in those properties will be around $112 million to $150 million, which is the $120 million of mortgage revenue bonds less the $8 million credit loss that we took on those.

I still think that we'll manage those properties to the best of our ability and hopefully get out at the original basis of the mortgage revenue bonds at $120 million or even higher.

I think, Chris, it's Ken; what I'll add there is that we believe there are long-term value in these assets, they are well located, they're in good markets, they're in Greenville and Spartanburg and [ Columbia ]. I really do think that it was just a situation where the ownership and the multiple property managers that they had just did not focus on getting these deals stabilized the right way after the app was completed.

So there are our books now. We're exercising that same level of weekly oversight on these projects. We've retained a third-party property management firm that we have had good experience with and that Greystone as a firm has had a good experience with. And so we're going to keep at it. And that is certainly our goal, is to get the properties operating to a point where just like the Suites on Paseo deal, we can list it for sale and hopefully recover our original basis.

Got it. And is it too early for any timeline on when those sales could occur?

I think it's really too early for us to say at this point in time. We've only had fee ownership for anywhere from 75 to 20 days at this point in time. And the new property manager is still kind of getting settled in and going through the transition from the previous property manager companies. So I think it's a little too soon to tell.

But I think as we start seeing any leasing trends there into the course of 2026 that we can report to people, that we'll certainly focus on sharing what operational data we can through that MF Properties section of our financial reporting.

Got it. That makes a lot of sense. And then I guess the other question I have is, I did not see any mention of any JV property sales, and I think you guys mentioned it in your prepared remarks either.

But looking at the slide deck, I see a $4.5 million return of capital. So what's going on there? And then the flip side of that, on the contributions, do you guys have an estimate for how much additional capital you guys expect to contribute to existing projects?

I'll take the first part of that on the $4.5 million return of capital, that relates to 2 projects, the large senior living Carson Valley and Freestone Greenville. We had the opportunity for both of those deals once they got through their construction phase to refinance or rightsize the construction loan financing on those deals.

And so they were actually able to get additional construction loan pricing -- or proceeds, that they then could return to us to minimize our capital in the deal and increase our returns.

So those were two circumstances, Chris, where our JV partners did a great job, projects got delivered on time and under budget. And as Jesse said, the construction lenders were willing to make sort of final rightsizing construction loan advances reflecting that allowed those loan proceeds to be used to return capital to GHI.

Got it. And then just any expectations on additional contributions going forward?

That really depends on a case-by-case basis. Chris, a lot at this point in time. particularly on the deals that have reached stabilization or close to stabilization is the timing of property tax payments, in particular, in Texas. And so the need for for additional capital contributions is really driven by the timeline of those local property tax payments.

So if we get to a situation where a lot of jurisdictions that payment is due in November, if we still have those investments on the books then, we may need to look to make additional contributions to pay property taxes if the operations of the properties are not able to support those payments from free cash flow.

So it's a little early for us to tell at this point in time. As I said, a lot depends on the timing of what potentially may happen with our exits from those properties.

Our next question is coming from Larry Linden of private investor.

Thank you very much. I have a factual background to my question. In February 2019, when GHI was still ATAX, I invested at the price of $19.49 per book share and continue to invest until it reached a high of $23.05. Today, the current bulk share price is $5.89.

My question, why should I continue to have confidence to face and extend my credibility to a GHI management team that turned a basically safe and sound municipal revenue bond core investment strategy, producing excellent dividends into a speculative, questionable and volatile joint venture equity investment in market rate multifamily properties that has resulted in a financial disaster for its investors?

Why should I believe that the same team that created this disaster has the ability and common sense to turn this into a profitable investment even in the next 5-plus years? Why are we granting a mulligan to a losing team? The honorable and realistic course would be for the entire management team to resign and be replaced with fresh new leadership. I say this respectfully and not on a personal basis. I would like an answer to that question.

Mr. Linden, I'm not sure how I can answer that question for you. We serve at the pleasure of the Board. If the Board decides that, that is the right for the partnership to take, that's a decision for them to make.

In terms of your comment about changing the investment strategy of the partnership from 2019 to present what i'll metion is that, at 2019, the partnership did have significant investments in market rate multifamily JV equity investments at that point in time.

And in fact, if you look at a lot of the ad that was generated by the partnership in 2021, 2022 and 2023; a significant amount of that CAD that was distributed to unitholders came from that investment strategy. The 4 properties that we currently have on our balance sheet, that are at stabilization or close to stabilization, the initial investment committee decisions to invest in those properties were made from Q4 2020 to Q3 of 2021.

So it's not like we woke up yesterday and decided to put more money into the market rate multifamily business. If anything, we clearly communicated last quarter, the Board's direction to us as a management team to try to exit those investments as efficiently and as profitably as possible and to recycle that capital into those traditional tax-exempt mortgage revenue bond investments.

Okay. I just have to -- question, the proceeding, how this thing is going to move forward? I don't think anything is going to turn around in many, many years. I don't want to jump ship now at a tremendous loss. But I don't see -- I'm between a rock and a hard place. So I'm going to have to make my own decision as to whether or not to go forward with your group. Thank you.

Our next question is from [ John Baum ], a private investor.

I don't think I'm going to be a stinging of that last commentator. I might say that the market has been declining for some time when it's open Monday through Friday, and everybody is able to buy or sell a see fit. I've been around since 2010, as you probably know and excellent distribution paying investment. I think the foray into the JV was well intentioned, but the market changed. I'm not going to hold you guys to that.

But have -- regarding the current valuation right now, as I look at the balance sheet, I see investment in unconsolidated entities. I assume that's the JV of $146 million. If I divide that a 23.6 million units outstanding at $6.20 and if I take it -- if I deduct that from the net book value per buck as of 12/31 of a little under $12, I arrive at a figure of $5.57, in the current price right now closing is $5.89 per buck, which impliedly means that the market is giving you zero credit for $146 million on the balance sheet of investments and unconsolidated entities.

My question, obviously, is twofold. First, are you required to market test the valuation of your investment in unconsolidated entities such that the $146 million is the lesser of what you're carrying a book or fair market value? And secondarily, it seems incredulous that there is this much disparity between the net book value as at [ 12 31 ] in the current closing price as of today, and I'd be welcome to listen to your commentary.

Yes. Thanks for the question, John. The numbers that you cited there in terms of investments in unconsolidated entities, which is the joint venture equity investments that we're referring to, and the math that you presented does seem correct, based on my understanding. We are required under the accounting guidance to assess that $146 million of carrying value of our investments in unconsolidated entities or impairment at each reporting date.

And so we do detailed analysis internally of what do we think the stabilized exit values for those properties will be? And will those exit values support the return of our capital at a minimum? And if not, then we are required to report impairments. And we have not, to date, reported any such impairment.

But John, it's Ken, to your point about the math, you went through there. I think that's a fair way to say that we would have to have a total loss of all of our invested capital on all of our joint venture market rate multifamily transactions in order for the book value to reduce to that level.

And as Jesse just said, we do have to go through that quarterly evaluation for impairment process on all those investments.

I mean these are tangible properties, here comes a comment. I mean your cash, your mortgage revenue bonds, those trade. But I mean the math has to be a user here, if the JV -- you write them down to zero, and we're close to the current price. I mean I understood tax loss selling last year. I'm a big boy, I get it. But the market -- and I don't want to get into speculation market can do anything.

But it appears -- I'm just incredulous as to how the market can write these investment in JV entities down to zero. You've -- I'll listen to any response and one or two things as possible, either that $146 million figure is incorrect or the market has you guys off by 50%. I'll listen.

I don't think we can say that the $146 million figure is incorrect because we're reporting it in our audited financial statements. So I don't think that that's really a possibility. So that leaves your other options.

Okay. I agree with that. And obviously, to the gentleman before and myself, this looks to be like a screaming buy. You don't -- I'm not seeing goodwill or other intangible assets contained to the $95 million of other assets, if I could pursue that. Is there -- is that figure -- is that -- I'm not sure what comprises that.

But is that a tangible figure right there? And is that tested? So I guess if the era of truth has to point anywhere, it's got to be the market is dramatically undervaluing the $146 million of JV assets.

Not quite sure I caught all of that.

I see you know what -- I say fair enough. I got my answer right there. And each investor is free to do what they are to do. But I consider the the management to be cracker-jack when it comes to the mortgage revenue bonds. I welcome your redirection back into the core business because management of real estate can be -- can have its own vicissitudes. Thank you, and I look forward to your next quarter.

Our next question is coming from Jeffrey Neal from Merrill Lynch.

Actually, the heart of my question was covered by the last caller who I want to complement with regards to looking at book value. I missed the early part of the call. The book value figure at the end of the fourth quarter was what exactly per share?

$11.77.

Okay. And so my follow-on question, and maybe you've already addressed this in the last response, when you look at book value, I guess how do you think investors should be looking at book value when making investment decisions in your stock?

At this stage of the cycle, my personal opinion is it's extraordinarily important. And accepting the fact that the stock is dislocated from fundamentals for a very, very long period of time, the stock traded at a premium to book value. And while book value has declined over the last several years, it hasn't been dramatically so. It certainly doesn't -- is not reflective of the performance of the stock, as previously described.

How do you guys think about book value? And moving forward what do you think you can do with that book value to improve market perceptions?

Jeff, it's Ken. I mean I think from our perspective, repositioning of the investment portfolio strategy that we've been talking about last quarter and again today is really at the core of the actions that we have as a management team are going to be taking.

We understand the volatility in earnings and the longer hold period that we've seen with these remaining JV market rate multifamily investments. And so I think by exiting them as quickly as and efficiently and profitably as we can in recycling that capital I think will go a long way towards giving people confidence in that more reliable income stream versus what we've seen in the past.

But just factually in terms of the computation of the book value, as Jesse said, our mortgage revenue bonds are mark-to-market by a third-party evaluation firm and we do have to go through this impairment analysis on a quarterly basis on the JV equity investments. So in terms of the presentation or the calculation of the book value itself, I believe that we feel very confident in that.

Maybe just a follow-on question. Given this big discount to book value, will the Board of Directors get consideration to utilizing, let's say, cash proceeds from sales of the apartment to repurchase stock as opposed to either maintaining or paying out dividends?

I don't want to speak for the Board, Jeff, but I think depending on the timing of those sales and the amount of capital that's returned, I think it's certainly something, given the the discount to book value that we're currently at that has to be open for consideration.

Next question is coming from Nathan Beam from Capital Management.

A lot of the questions had thus far have already been answered, but I just had two on my side of things themselves.

The first one is going to be in regards to the distribution rate of the business here moving forward. As the company continues to move further into the mortgage revenue bond side of things and reduce the JV investments themselves, how long does the Board or management itself determine or believe that the current rate of $0.14 per unit will continue before a potential increase would occur? That's my first question.

I think the question from that perspective is it's really dependent on how quickly and how much capital we can recycle from the existing JV equity investments into more traditional fixed income investments. I think, as Jesse mentioned during his remarks, we're currently recognizing a minimum level of of income associated with the JV equity investments given where they are in their life cycle.

So taking taking capital from investments that are generating a modest amount of current income and reinvesting them into mortgage revenue bonds, which I think will generate a more regular, higher level of income associated with that capital, then the board will be able to make decisions about what they want to do with the distribution at that point in time. based on the improved potential earnings power of the partnership.

Thank you for that clarification. The only other question that I had was from the perspective and somewhat was asked by the individuals before me, is going to be in the aspect of, obviously, there's been a huge move in the stock price of the company itself, especially when looking over the past 12 months, 14 months or so.

When looking at insider management, both from the executive side as well as the Board of Directors, could you give us your guys' thinking as to why or why there has not been, I guess, more insider management and the business, considering the drastic move inside the stock price? That's all as my questions today. And thank you for your time as well.

I think, Nathan, the one thing that you need to be mindful of there is that both the Board and individual employees are subject to a variety of trading restrictions. We're not able to just go into the market and buy units whenever we want to. We have rules that we have to follow and there are specified time periods when the trading window was open for those individuals.

So we don't make public announcements regarding that, but it's certainly something that that we are subject to and we have to be mindful of. So I would just make that point to you that to the extent that you may not have seen a significant amount of inside our activity over, say, the past 3 or 6-month time period that there may be other reasons behind that other than we just didn't feel like buying any shares.

Yes. I appreciate that. And I wasn't necessarily looking at 3 to 6 months. If you just look back, I mean the last insider purchase from an executive was August of 2024. There was a board purchase back in October, November 2025. But the stock since that time period has obviously moved downward. And so completely understand the blackout and obviously, other provisions that you guys have to administer. But the stock has consistently moved lower, even though book value stayed relatively constant or consistent.

So just was looking for any color on that as far as the confidence level of the both the Board and then also to current management and buying the stock at its current levels as well.

Again, I really can't give you any direction on what might happen when insiders have the ability to transact again in the future. I think what I can say to you is that as you've evidenced that there's really only been buying activity. There hasn't been any sale activity. So take what you will from that.

We've reached end of our question-and-answer session. I'd like to turn the floor back over to Ken for any further closing comments.

Thank you, everyone, for joining us today. We look forward to speaking with you again soon for the Q1 2026 results.

Thank you. That does conclude today's teleconference and webcast. You may disconnect your line at this time, and have a wonderful day. We thank you for your participation today.

Greetings, and welcome to the Q3 2025 Earnings Call for Greystone Housing Impact Investors LP. [Operator Instructions] Please note, this conference is being recorded.

I will now turn the conference over to your host, Jesse Coury. Please go ahead.

I would like to welcome everyone to the Greystone Housing Impact Investors LP, NYSE Ticker Symbol GHI, Third Quarter of 2025 Earnings Conference Call. As a reminder, this conference call is being recorded. During this conference call, comments made regarding GHI, which are not historical facts, are forward-looking statements and are subject to risks and uncertainties that could cause the actual future events or results to differ materially from these statements. Such forward-looking statements are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Forward-looking statements can be identified by the use of words like may, should, expect, plan, intend, focus and other similar terms. You are cautioned that these forward-looking statements speak only as of today's date. Changes in economic, business, competitive, regulatory, and other factors could cause our actual results to differ materially from those expressed or implied by the projections or forward-looking statements made today. For more detailed information about these factors and other risks that may impact our business, please review the periodic reports and other documents filed from time to time by us with the Securities and Exchange Commission. Internal projections and beliefs upon which we base our expectations may change, but if they do, you will not necessarily be informed.

Today's discussion will include non-GAAP measures and will be explained during this call. We want to make you aware that GHI is operating under the SEC Regulation FD, and encourage you to take full advantage of the question-and-answer session. Thank you for your participation and interest in Greystone Housing Impact Investors LP.

I will now turn the call over to our Chief Executive Officer, Ken Rogozinski.

Good afternoon, everyone. Welcome to Greystone Housing Impact Investors LP's Third Quarter 2025 Investor Call. Thank you for joining.

I will start with an overview of our portfolio. Jesse Coury, our Chief Financial Officer, will then present the partnership's financial results. I will wrap up with an overview of the market and our investment pipeline. Following that, we look forward to taking your questions.

Our overall investment portfolio performed steadily during the third quarter. We have had no forbearance requests for multifamily mortgage revenue bonds, and all of our borrowers are current on their principal and interest payments as of September 30, 2025. Physical occupancy for the stabilized mortgage revenue bond portfolio was 87.8% as of September 30, which is down slightly from 88.4% as of June 30. The decline is primarily at properties in Texas, where local markets are experiencing higher vacancies due to recent increases in multifamily unit supply. We expect occupancies will recover once available units are absorbed and new supply deliveries decline in the near term.

Our governmental issuer loans for the financing of affordable multifamily properties continue to progress towards stabilization and ultimately, redemption of our loans. Construction at all properties is complete or substantially complete. and leasing velocity is strong. We continue to see progress on the development and lease-up of our joint venture equity investments as well. Of our 11 current investments, 7 have completed construction and are leasing, 2 have nearly completed construction and begun leasing activities and 2 relate to sites for future development. Overall occupancy is increasing across the portfolio as investments near stabilization. Recently, the Vantage at Loveland property was listed for sale and the marketing process is ongoing.

In 2015, GHI began investing in joint ventures related to the construction of market rate multifamily properties. Based largely on the overall low-interest rate environment and high investor demand for market rate multifamily properties, these investment structures provided the partnership with the opportunity for attractive returns once properties were fully developed and sold to third parties. These investments resulted in uneven earnings for the partnership as the majority of our returns are recognized upon the sale of the respective properties. Since the establishment of the joint venture program, the partnership has realized significant gains on most of the 17 properties sold to date. We currently have 11 properties in various stages of development and lease-up, which we expect to be sold over the next 3 years.

In more recent periods, market conditions such as higher interest rates and higher multifamily capitalization rates began negatively impacting multifamily asset values, resulting in lower returns upon sales of these properties. There were no sales of joint venture properties in 2024. For the 2 property sales in 2025, while all invested capital was returned, our realized returns were much lower than we recognized in prior years.

We and our investment committee believe these challenging conditions will continue to impact market rate JV multifamily investment profitability for the foreseeable future. We remain positive on the market rate in seniors housing segment of the market. We believe market supply trends, potential resident demographics and expected returns remain encouraging. So we will continue to evaluate joint venture equity investment opportunities in the seniors housing segment, though lower in volume than our historic capital allocation to market rate multifamily investments. Meanwhile, we also see strong investment opportunities for our traditional investments in tax-exempt mortgage revenue bonds associated with affordable multifamily properties, as well as for seniors housing and skilled nursing properties.

Greystone's strong lending relationships across affordable housing, seniors housing and skilled nursing business lines are also providing investment opportunities for the partnership. We believe these tax-exempt mortgage revenue bond opportunities will allow the partnership to deploy capital in investments with more predictable returns, since profitability here is based on the net interest spread between the bond interest rate and our related debt financing rate. Additionally, the partnership's newly established construction lending joint venture with BlackRock is expected to provide future tax advantaged earnings as well. Based on these factors, we will be implementing a strategy to reduce our capital allocation to joint venture equity investments in market rate multifamily properties going forward. We and the respective managing members will manage our remaining portfolio of market rate multifamily investments to maximize sales prices and returns to the extent possible, with our return of capital from the sale of these investments being redeployed primarily into tax-exempt mortgage revenue bond investments.

We believe this change in investment strategy provides three key benefits to our unitholders. First, by their nature, our tax-exempt mortgage revenue bond investments earn stable returns based on the net interest spread between the bond interest rate and our related debt financing rate. As a result, we expect increasingly stable earnings as compared to the uneven returns on joint venture equity investments due to the income being realized primarily upon property sales. Second, in recent years, the majority of income allocated to our unitholders has been taxable because of the taxable income from joint venture equity investment sales. As we allocate more capital to tax-exempt mortgage revenue bond investments, we expect that the proportion of income allocated to our unitholders, that is tax-exempt for federal income tax purposes, will increase in the long term. In the near term, potential gains from sales of our remaining market rate multifamily JV equity investments will continue to generate taxable income for unitholders. Third, we are investing capital in a proven asset class -- excuse me, proven investment class that is core to our operations, that also leverages the strong relationships and knowledge base of Greystone's other lending platforms.

We and the Board of Managers will continue refining our operating strategy in the coming quarters. We and the Board of Managers are also assessing the potential impact, if any, this change in strategy will have on our short-term and long-term earnings expectations and future unitholder distributions with a focus on the long-term benefit to our investors and GHI. We look forward to providing additional details on our strategy and updates on our progress in future communications and on future earnings calls.

With that, I will turn things over to Jesse Coury, our CFO, to discuss the financial data for the third quarter of 2025.

Thank you, Ken. Earlier today, we reported earnings for our third quarter ended September 30. We reported net income of $2 million or $0.03 per unit basic and diluted, and we reported cash available for distribution, or CAD, a non-GAAP measure, of $4.6 million or $0.20 per unit. Our book value per unit as of September 30, was on a diluted basis, $12.36, which is an increase of $0.53 from June 30. The increase is primarily the result of an increase in the unrealized gain on our mortgage revenue bond portfolio during the quarter. I will note that this metric is based on our joint venture equity investments at carrying value. As a result, it does not include any potential gains or additional income that may be realized upon transactional events in the future.

As of market close yesterday, November 5, our closing unit price on the New York Stock Exchange was $8.24, which is a 33% discount to our book value per unit as of September 30. We regularly monitor our liquidity to fund our investment commitments and to protect against potential debt deleveraging events if there are significant declines in asset values. As of September 30, we reported unrestricted cash and cash equivalents of $36.2 million. We also had approximately $88.6 million of availability on our secured lines of credit. Also, in October 2025, we issued Series B preferred units to a new investor for gross proceeds of $5 million, which I will comment on later. At our current liquidity levels, we believe that we are well positioned to fund our current financing commitments.

We regularly monitor our overall exposure to potential increases in interest rates through an interest rate sensitivity analysis, which we report quarterly, and is included on Page 103 of our Form 10-Q. The interest rate sensitivity table shows the impact on our net interest income given various changes in market interest rates and other various management assumptions. Our base case uses the forward SOFR yield curve as of September 30, which includes market anticipated SOFR rate declines over the next 12 months. The scenarios we present assume there is an immediate shift in the yield curve and that we do nothing in response for 12 months.

The analysis shows that an immediate 100 basis point increase in rates will result in a decrease in our net interest income in CAD of approximately $1 million or $0.044 per unit. Conversely, a 100-basis point decrease in rates across the curve will result in an increase in our net interest income in CAD of approximately $1 million or $0.044 per unit. We consider ourselves largely hedged against significant fluctuations in our net interest income from market interest rate movements in all scenarios, assuming no significant credit issues.

Our debt investments portfolio consists of mortgage revenue bonds, governmental issuer loans and property loans that totaled $1.26 billion as of September 30, or 85% of our total assets. We own 82 mortgage revenue bonds as of September 30, that provide permanent financing for affordable multifamily, seniors and skilled nursing properties across 12 states with concentrations in California, Texas and South Carolina. We own 4 governmental issuer loans as of September 30, that finance the construction or rehabilitation of affordable multifamily properties in 2 states.

During the third quarter, we funded approximately $27 million of our mortgage revenue bond, governmental issuer loan, and related commitments which was offset by redemptions and paydowns of approximately $29 million in the normal course. Our outstanding future funding commitments for our debt investments totaled $20.3 million as of September 30, before related debt proceeds; and excluding one investment, we expect to transfer to our construction lending joint venture with BlackRock. These commitments will be funded over approximately 12 months and will add to our income-producing asset base. We have had no forbearance requests for mortgage revenue bonds and governmental issuer loans, and all of our borrowers are current on their principal and interest payments as of September 30.

Our reported provision for credit losses was $596,000 for the third quarter, primarily related to a support loan to an MRB borrower. As mentioned in our call in August, we reported asset-specific provisions for credit losses in the second quarter related to 3 501(c)(3) nonprofit mortgage revenue bonds secured by properties in South Carolina. The rehabilitation of each property has been completed and each property is working to stabilize operations, though property operating results have not met the originally underwritten levels. We continue to have discussions with the owners regarding options to improve property operations and potential refinancing and sales options to maximize the value of our mortgage revenue bond investments.

Our market rate joint venture equity investments portfolio consisted of 10 properties as of September 30, with a reported carrying value of approximately $154 million, exclusive of one investment, Vantage at San Marcos, that is reported on a consolidated basis. Our remaining funding commitments for JV equity investments totaled $19.5 million as of September 30. All remaining commitments relate to sites being considered for future development. We only fund these commitments if the construction contract is signed and construction commences. The managing member may also choose to sell the sites and terminate our related funding commitments.

Recently, the Vantage at Loveland property was listed for sale and the marketing process is ongoing. We reported our proportionate share of operating losses from these investments, which totaled $1.3 million during the third quarter. Our joint venture equity investments by design, typically incur operating losses during development and lease-up. Such losses are incorporated into the development budget for each project and are typically funded by interest reserves and construction loan proceeds. We add back these proportionate losses to net income when calculating CAD, as they are primarily a result of depreciation expense and are expected to be recovered upon future transactional events.

On the liability side of our balance sheet, our debt financing facilities are used to leverage our investments and had outstanding principal balances totaling $1.02 billion as of September 30. This is down approximately $9 million from June 30. We manage and report our debt financing in 4 main categories on Page 97 of our Form 10-Q; 3 of the 4 categories are designed such that our net return is generally insulated from changes in short-term interest rates. These categories account for $813 million, or 79% of our total debt financing.

The fourth category is fixed rate assets with variable rate debt with no designated hedging, which is where we are most exposed to interest rate risk in the near term. This category represents $212 million, or 21% of our total debt financing. Of this amount, $153 million is associated with debt investments that are scheduled to mature on or before April 2026, which will repay the outstanding debt financings. As such, we expect the unhedged period to be relatively short.

On the preferred capital front, we successfully issued $5 million of Series B preferred units to a new investor in October 2025. We intend to use the net proceeds from this offering to acquire additional investments, fund our existing investment commitments and support general partnership operations. I'll now turn the call back to Ken, for his update on market conditions.

Thanks, Jesse. The third quarter of 2025, saw some improvement in the performance of the U.S. municipal bond market. At the time of last quarter's call in August, 10-year MMD was at 3.21%, and 30-year MMD was at 4.58%. At the end of September, those levels were at 2.92% and 4.24%, respectively, which were both a little over 30 basis points lower following the Q3 fixed income market rally. As of yesterday's close, 10-year MMD was at 2.78% and 30-year MMD was at 4.18%. The 10-year muni-to-treasury ratio was currently 67% and the 30-year muni-to-treasury ratio is currently 88%, both improved from last quarter's levels.

The trend of heavy muni bond issuance that began last year continued into the third quarter of 2025, and funds flows into the muni market remains high. These positive trends in the broader muni market were reflected in the increase in unrealized gains for the quarter in our core mortgage revenue bond portfolio.

The continued federal government shutdown so far hasn't had a significant impact on either the broader U.S. municipal bond market or the performance of our mortgage revenue bond portfolio. As we move further into November, we may begin to see issues with Section 8 rent subsidy payments from HUD to individual project owners. Only 9% of our debt investments are secured by projects receiving Section 8 subsidies. The federal low-income housing tax credit program is not impacted by the shutdown as U.S. Treasury makes a full allocation of both tax credits and private activity bond volume cap to individual state allocating agencies on January 1 of each year with no further action by a federal agency required.

With that, Jesse and I are happy to take your questions.

[Operator Instructions] Our first question comes from Matthew Erdner with JonesTrading.

I want to talk a little bit about capital allocation. So as these multifamily units kind of sell off and get redeployed, do you guys have an allocation target percentage in mind? I know you mentioned the senior housing kind of carrying that lower percentage than the multifamily. So I was just wondering if you guys have any idea of where you want to sit out at.

Matt, it's Ken. I think from our perspective, a lot of that's going to be driven by the timing of when the capital comes back to us from those existing JV equity exits as well as the opportunities that we're currently seeing at the time. As I mentioned during the remarks, we expect our capital allocation going forward to any joint venture equity investments that we do in the senior housing space to be lower than the current level that we have committed to our JV equity, JV equity investments. But we don't have a set percentage at this point in time from the Board or from a management team perspective in terms of what that looks like. It will really be on a case-by-case basis.

Could you talk a little bit about -- I guess, it kind of sits more on the JV partner side, but just the expected pace of asset sales and kind of where you guys sit today in terms of occupancy stabilization. I know you touched on this a little bit earlier, but I guess going forward, as these things kind of do stabilize, it seems like the time line has been extended. So just from a modeling perspective, should we expect these to take a little more time to sell than what we saw in '21 through '23?

Well, I think, Matt, looking at current conditions, we do have the Vantage at Loveland property listed for sale. But as we look at some of the other assets in the portfolio, I believe we have in the 10-Q, the reported occupancy for where those assets are. As we mentioned about, in particular, the Texas markets, we've seen sort of slower leasing activity there and needing to get to that critical 90% occupancy level typically before our partners have engaged an investment sales firm to list those properties for sale, that's a key part of the time line there as well. So I think as always, we're going to do everything we can with our partners to optimize the result that we get here and look at the overall market trends in terms of supply of units, other available listings of the submarkets and where interest rates are when we determine what the proper time is for a property to be listed for sale.

Our next question comes from Chris Muller with Citizens Capital Markets.

So I guess on the strategic shift away from the JV investments, do you guys have any expectations for what the pickup in earnings would be from redeploying that capital? Or is the benefit more coming from the stability of earnings there?

I think from our perspective, Chris, as we chatted about in my comments, I think the two big benefits that we see are, number one, the elimination of the lumpiness on a quarter-over-quarter basis that we've seen based on the income recognized from the -- those investments basically, largely occurring upon the sale date. But then also the increased level of tax-exempt income that the partnership will be earning on those new tax-exempt mortgage revenue bond investment opportunities. So I think it's too early for us to give you any kind of guidance in terms of what that -- what, if any, pickup there might be as a result of that. But we're excited about the opportunities that we're seeing.

We think it will be a good investment profile for the partnership as a whole based on -- primarily on those two factors. And so we're looking forward to becoming more active lenders again as we rotate this capital away from the JV equity investments.

It sounds like you guys would still be willing to make JV investments in the senior housing side of things. Should we expect to see a pickup in investments here? Or is that more so just not part of the wind-down strategy?

I think it's really more of the latter at this point in time, Chris. I mean we have the one existing seniors housing investment in the Valage at Carson Valley transaction. I think the -- from the occupancy data, you can see there that, that project has moved well through the construction and the initial lease-up phase. So I think at a high level, with regard to that asset, we're not seeing the same challenges in the seniors housing market space that we're seeing in traditional market rate multifamily, strong investor demand for those assets, both on the operator side and on the private equity side.

We're seeing strong demographic trends in terms of more and more seniors needing care, and we're seeing more opportunities going forward in terms of as that universe of, I guess, age-appropriate people grows that there'll be more demand for that type of lifestyle. So I think at least from our perspective, we see a much different set of sort of macro dynamics in that asset class than in traditional market rate multifamily. So that's why we're going to continue to look opportunistically there.

I think I just missed what Jesse said the book value figure was in the quarter, if I could get that.

Yes, $12.36.

[Operator Instructions] We'll go next to Rick Stone, private investor.

Sorry, it actually -- I thought you were talking to somebody else. I had a question about the cap rates.

I was concerned about the cap rates that we invested in 2019, '20, '21, '22 or so. They were some of the lowest cap rates almost ever. We chose to make a decision to invest at that time. What makes you think that the senior investments are going to be good now? Are we seeing higher cap rates on those right now? Or are they also low?

So just to be clear, Mr. Stone, we did not purchase any properties during that time period. We made investments in to-be-built properties. So it's not like other investors where we were buying properties at cap rates based on a certain income stream that they were currently generating. Everything was on a pro forma basis in terms of what our expectations were about the income level that the projects would generate upon stabilization and our projections and our partners' projections about what the markets for those properties would be at that point in time.

So I just wanted to make clear on that, that we were not necessarily buying stabilized assets there. But I mean, historically, there always is a spread between cap rates on seniors housing properties and traditional multifamily because they are viewed by the market as a riskier asset class. But I think just in and of itself, the fact that cap rates are higher on seniors housing property than on traditional multifamily properties doesn't mean that it's not a potentially attractive asset class for us when we can find via our partners, good development opportunities in good markets where we think the risk-adjusted returns to us will be appropriate and will meet our criteria for making an investment like that. So I think that's the philosophy we've always had in this asset class, and that's the philosophy that we'll continue to have moving forward as we evaluate this smaller group of potential JV equity opportunities.

So I mean, it just makes sense that when the spreads are low, that in general, it's riskier overall. And I think we're seeing that as a result in the last couple of years on our joint venture partnerships, we're not doing as well as we did in the past. So I'm just wondering just the senior opportunity that you're looking at right now, what are the cap rates that we're seeing compared to its own history, not compared to multifamily, but compared to its own history. Are we seeing levels that are higher than before? Are they lower now? Are they right in the middle? Because that seems to be a good indicator of just general risk and our ability to exit our joint venture partnerships in the future.

I mean, what I would say is that as a general rule, if you compare where the market sits today versus where the market was 3 years ago, across every real estate investment class, multifamily, seniors, office, retail, hospitality, cap rates are generally higher today than they were then. So I think just as a basic fact, that's where the market sits today. But again, we're looking at opportunities where construction would start at some point in time in the future with -- based on our typical investment horizons, looking for a liquidation to happen anywhere from 3.5 to 4 years into the future. So it's really hard for me to sit here today and make a forecast for you as to whether or not I think cap rates in any particular real estate asset class are going to be higher or lower 4 years from now than they are today.

But you could agree when they're at all-time lows as it was a few years ago, in general, is usually a riskier time. Correct?

Well, certainly, there's more opportunity for movement to the downside than there is to the upside if you're starting at a relatively low starting point for your cap rate assumption. I mean, as a general principle, I would agree with that.

Moving on to John Cullinan with UBS.

Can you hear me?

Yes, we can.

Great. The provision for credit losses, I guess I'm still trying to understand you have credit losses in the third quarter, even though the municipal bond market, basically rates came down. Can you just talk about that? And I missed the call last quarter about the big credit loss allocation provision. But those -- that's the big number that stands out in your returns, your revenue. And so just trying to understand that, where that comes from.

John, this is Jesse. I could take that one. So I'll start with Q2, just to set the stage. So as we mentioned on last call, and I alluded to in my prepared remarks this call, we took roughly $8.7 million provision for credit loss against 3 specific mortgage revenue bond properties located in South Carolina. So these were properties that had asset-specific performance issues that weren't quite meeting underwriting goals and collateral values were down originally from our underwriting. And so based on that information and the performance of those properties at that time, we, under the accounting guidance, made a provision for expected potential shortfalls in cash flows based on the information we had, which was a sub performing asset. That is a provision for credit loss. That is not a realized credit loss. If the properties can be managed to the point where there's a recovery in that value, we may get out whole on that investment. But under the accounting guidance, you are required to take a provision at that time if that is uncertain. So in Q3, there is a support loan that is related to those 3 properties where we took an additional asset-specific reserve of roughly $600,000 for those same properties. If you take out that specific provision for credit loss, we had no provision in the third quarter. It was essentially flat because the quality of our portfolio stayed consistent.

The support loan was to the same 3 entities?

It was to the 501(c)(3) owner that is the borrower on all 3 properties.

But you say in your remarks that there's no request for forbearance, that's in the rest of the portfolio.

Correct.

This now concludes our question-and-answer session. I would like to turn the floor back over to Ken Rogozinski for closing comments.

Thank you very much, everyone, for joining us today. We look forward to speaking with you again next quarter. Ladies and gentlemen, thank you for your participation.

This does conclude today's teleconference. You may disconnect your lines, and have a wonderful day.