GREYSTONE HOUSING IMPACT INVESTORS LP In this Management's Discussion and Analysis, all references to "we," "us," and the "Partnership" refer toAmerica First Multifamily Investors, L.P. , its consolidated subsidiaries, and consolidated VIEs for all periods presented. See Note 2 and Note 5 to the Partnership's condensed consolidated financial statements for further disclosure. All BUC and per BUC numbers reflect the 1-for-3 Reverse Unit Split effected onApril 1, 2022 .
Critical Accounting Policies and Estimates
The Partnership's critical accounting policies and estimates are the same as those described in the Partnership's Annual Report on Form 10-K for the year endedDecember 31, 2021 . The preparation of financial statements in conformity with generally accepted accounting principles inthe United States of America ("GAAP") requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities as of the date of the Partnership's condensed consolidated financial statements and the reported amounts of revenues and expenses during the reporting periods. Actual results could differ from those estimates. The most significant estimates and assumptions include those used in determining (i) the fair value of MRBs; (ii) investment impairments; (iii) impairment of real estate assets; and (iv) loan loss allowances.
Partnership Summary
The Partnership was formed in 1998 primarily for the purpose of acquiring a
portfolio of mortgage revenue bonds ("MRBs") that are issued by state and local
housing authorities to provide construction and/or permanent financing for
affordable multifamily and commercial properties. We also invest in governmental
issuer loans ("GILs"), which are similar to MRBs, to provide construction
financing for affordable multifamily properties. We expect and believe the
interest received on these MRBs and GILs is excludable from gross income for
federal income tax purposes. We may also invest in other types of securities and
investments that may or may not be secured by real estate to the extent allowed
by the Partnership Agreement.
We also make noncontrolling equity investments in unconsolidated entities for
the construction, stabilization, and ultimate sale of market-rate multifamily
properties. The Partnership is entitled to distributions if, and when, cash is
available for distribution either through operations, a refinance or sale of the
property. In addition, the Partnership may acquire and hold interests in
multifamily, student and senior citizen residential properties ("MF Properties ")
until their "highest and best use" can be determined by management.
The Partnership includes the assets, liabilities, and results of operations of
the Partnership, our wholly owned subsidiaries and consolidated VIEs. All
significant transactions and accounts between us and the consolidated VIEs have
been eliminated in consolidation. See Note 2 to the Partnership's condensed
consolidated financial statements for additional details.
As of June 30, 2022 , we have four reportable segments: (1) Affordable
Multifamily MRB Investments, (2) Seniors and Skilled Nursing MRB Investments,
(3) Market-Rate Joint Venture Investments and (4) MF Properties . The Partnership
presented a fifth reportable segment, Public Housing Capital Fund Trusts, in its
quarterly and annual filings during 2021 and prior. All activity in the Public
Housing Capital Fund Trusts segment ceased with the sale of the Public Housing
Capital Trust Fund investments in January 2020 and information is not presented
for this segment as it had no operations during the periods presented. The
Partnership separately reports its consolidation and elimination information
because it does not allocate certain items to the segments. All "General and
administrative expenses" on the Partnership's condensed consolidated statements
of operations are reported within the Affordable Multifamily MRB Investments
segment. See Notes 2 and 23 to the Partnership's condensed consolidated
financial statements for additional details. The following table presents
summary information regarding activity of our segments for the three and six
months ended June 30, 2022 and 2021 (dollar amounts in thousands):
48
--------------------------------------------------------------------------------
For the Three Months Ended June 30, For the Six Months Ended June 30,
Percentage of Percentage of Percentage of
2022 Percentage of Total 2021 Total 2022 Total 2021 Total
Total revenues
Affordable
Multifamily MRB
Investments $ 12,887 74.8 % $ 11,034 67.3 % $ 27,020 74.2 % $ 21,829 70.9 %
Seniors and Skilled
Nursing MRB
Investments 241 1.4 % - 0.0 % 470 1.3 % - 0.0 %
Market-Rate Joint
Venture Investments 2,161 12.5 % 3,584 21.8 % 5,077 13.9 % 5,482 17.8 %
MF Properties 1,945 11.3 % 1,788 10.9 % 3,872 10.6 % 3,483 11.3 %
Total revenues $ 17,234 $ 16,406 $ 36,439 $ 30,794
Net income (loss)
Affordable
Multifamily MRB
Investments $ 2,758 15.7 % $ 1,291 12.6 % $ 9,724 22.2 % $ 3,840 22.3 %
Seniors and Skilled
Nursing MRB
Investments 240 1.4 % - 0.0 % 469 1.1 % - 0.0 %
Market-Rate Joint
Venture Investments 14,600 82.9 % 9,004 87.7 % 33,762 77.0 % 13,711 79.4 %
MF Properties 8 0.0 % (30 ) -0.3 % (84 ) -0.2 % (293 ) -1.7 %
Net income $ 17,606 $ 10,265 $ 43,871 $ 17,258 Corporate Responsibility
The Partnership is committed to corporate responsibility and the importance of
developing environmental, social and governance ("ESG") policies and practices
consistent with that commitment. We believe the implementation and maintenance
of such policies and practices benefit the employees that serve the Partnership,
support long-term performance for our Unitholders, and have a positive impact on
society and the environment.
Environmental Responsibility
Achieving environmental and sustainability goals in connection with our
affordable housing investment activity is important to us. Opportunities for
positive environmental investments are open to us because private activity bond
volume cap and LIHTC allocations are key components of the capital structure for
most new construction or acquisition/rehabilitation affordable housing
properties financed by our MRB and GIL investments. These resources are
allocated by individual states to our property sponsors through a competitive
application process under a state-specific qualified allocation plan ("QAP") as
required under Section 42 of the IRC. Each state implements its public policy
objectives through an application scoring or ranking system that rewards certain
property features. Some of the common features rewarded under individual state
QAPs are transit amenities (proximity to various forms of public
transportation), proximity to public services (parks, libraries, full scale
supermarkets, or a senior center), and energy efficiency/sustainability. Some
state-specific QAPs have minimum energy efficiency standards that must be met,
such as the use of low water need landscaping, Energy Star appliances and hot
water heaters, and GREENGUARD Gold certified insulation. Since we can only
finance properties with successful applications, we work with our sponsor
clients to maximize these environmental features such that their applications
can earn the most points possible under the individual state's QAP. During 2022,
properties related to our MRB investments in Residency at the Entrepreneur and
our Magnolia Heights GIL investment were awarded both private activity bond cap
and LIHTC allocations through state-specific QAPs.
The Suites on Paseo MF Property, which is wholly owned by the Partnership, is
LEED Silver Certified. LEED provides a framework for healthy, efficient, carbon
and cost-saving green buildings. To achieve LEED certification, a property earns
points by adhering to prerequisites and credits that address carbon, energy,
water, waste, transportation, materials, health and indoor environmental
quality. In addition, the property has three rooftop solar panels arrays to
generate renewable energy for the local power system. Two of the arrays are
owned by the local utility provider on roof space leased by the property and the
third array is owned by the property.
We are committed to minimizing the overall environmental impact of our corporate
operations. As only 13 employees of Greystone Manager are responsible for the
Partnership's operations, we have a relatively modest environmental impact and
have adequate facilities to grow our employee base without acquiring additional
physical space.
49
--------------------------------------------------------------------------------Social Responsibility
Our investments in MRBs and GILs directly support the construction, rehabilitation, and stabilized operation of decent, safe, and sanitary affordable multifamily housing acrossthe United States . Each of the properties securing our MRB and GIL investments is required to maintain a minimum percentage of units set-aside for low-income tenants in accordance with IRC guidelines, and the owners of the properties often agree to exceed the minimum IRC requirements. In addition, the rent charged to low-income tenants at MRB or GIL properties is often restricted to a certain percentage of the tenants' income, making them more affordable. For any newly originated MRBs or GILs associated with a low-income housing tax credit property, restrictions regarding tenant incomes and rents charged to those low-income households are required. These properties provide valuable support to both low-income and market-rate tenants and create housing diversity in the geographic and social communities in which they are located. Corporate Governance Greystone Manager, as the general partner of the Partnership's general partner, is committed to corporate governance that aligns with the interests of our Unitholders and stakeholders.The Board of Managers of Greystone Manager brings a diverse set of skills and experiences across industries in the public, private and not-for-profit sectors. The composition of the Greystone ManagerBoard of Managers complies with NASDAQ listing rules andSEC rules applicable to the Partnership. All the members of theAudit Committee of Greystone Manager are independent under the applicableSEC and NASDAQ independence requirements, two of whom qualify as "audit committee financial experts." Of the seven Managers of Greystone Manager, one Manager is female. 50 --------------------------------------------------------------------------------
Recent Developments Recent Investment Activity
The following table presents information regarding the investment activity of
the Partnership for the six months ended
Notes to the
Partnership's
Tier 2 income condensed
Retired Debt allocable to the consolidated
Amount or Note General Partner financialInvestment Activity # (in 000's) (in 000's)
(in 000's) (1) statements For the Three Months Ended June 30, 2022 Mortgage revenue bond acquisitions and advances 3$ 20,307 N/A N/A 6 Mortgage revenue bond redemption 1 7,100$ 7,100 N/A 6 Governmental issuer loan acquisition and advances 5 39,806 N/A N/A 7 Investments in unconsolidated entities 4 7,824 N/A N/A 9 Return of investment in unconsolidated entity upon sale 1 7,341 N/A $ 190 9 Property loan acquisitions and advances 7 23,527 N/A N/A 10 Taxable mortgage revenue bond acquisition and advance 2 2,000 N/A N/A 12 For the Three Months Ended March 31, 2022 Mortgage revenue bond acquisitions and advances 3$ 69,365 N/A N/A 6 Mortgage revenue bond redemptions 4 70,479$ 45,109 N/A 6 Governmental issuer loan advances 6 16,882 N/A N/A 7 Investments in unconsolidated entities 5 12,777 N/A N/A 9 Return of investment in unconsolidated entity upon sale 1 12,240 N/A $ 2,646 9 Property loan advances 5 38,412 N/A N/A 10 Property loan redemptions and principal paydowns 7 3,251 N/A N/A 10 Taxable mortgage revenue bond acquisition and advance 2 6,325 N/A N/A 12 For the Three Months Ended June 30, 2021 Mortgage revenue bond acquisition and advance 2$ 6,880 N/A N/A 6 Governmental issuer loan advances 5 26,474 N/A N/A 7 Land acquisition for future development 1 1,054 N/A N/A 8 Investments in unconsolidated entities 2 11,641 N/A N/A 9 Return of investment in unconsolidated entity upon sale 1 10,736 N/A $ 1,366 9 Property loan advances 2 1,859 N/A N/A 10 For the Three Months Ended March 31, 2021 Mortgage revenue bond advance 1$ 2,072 N/A N/A 6 Mortgage revenue bond redemptions 2 7,385 N/A N/A 6 Governmental issuer loan advances 6 39,068 N/A N/A 7 Investment in unconsolidated entity 1 1,426 N/A N/A 9 Return of investment in unconsolidated entity upon sale 1 10,425 N/A $ 702 9 Property loan advances 3 3,000 N/A N/A 10 Taxable governmental issuer loan advance 1 1,000 N/A N/A 12 (1)
See "Cash Available for Distribution" in this Item 2 below.
51
--------------------------------------------------------------------------------Recent Financing Activity
The following table presents information regarding the debt financing,
derivatives, Preferred Units and partners' capital activities of the Partnership
for the six months ended
Notes to the
Partnership's
condensed
consolidated
Financing, Derivative and Capital Amount financial
Activity # (in 000's) Secured statements
For the Three Months Ended June 30,
2022
Net borrowing on Acquisition LOC 5 $ 9,255 Yes 14
Proceeds from TOB trust financings with Mizuho 7 51,045 Yes
15
Proceeds from TOB trust financing with Barclays 1 11,875 Yes
15
Repayment of TOB Financings with Mizuho 2 5,079 Yes
15
Exchange of Series A Preferred Units for Series A-1 Preferred Units 1 20,000 N/A
19
For the Three Months EndedMarch 31, 2022 Net repayment on Acquisition LOC 1$ 15,515 Yes
14
Proceeds from TOB trust financings with Mizuho 8 108,530 Yes
15
Proceeds from TOB trust financing with Barclays 1 800 Yes
15
Unrestricted cash from total return swap 1 41,275 Yes 17 Interest rate swaps purchased 2 - N/A 17 For the Three Months Ended June 30, 2021 Net borrowing on secured LOC 1$ 6,500 Yes
14
Proceeds from TOB financings with Mizuho 5 30,983 Yes
15
Termination of unsecured operating LOC 1 - No
N/A
For the Three Months EndedMarch 31, 2021 Net repayment on unsecured LOCs 5$ 7,475 No
N/A
Proceeds from TOB trust financings with Mizuho 5 39,594 Yes 15
Affordable Multifamily MRB Investments Segment
The Partnership's primary purpose is to acquire and hold as investments a portfolio of MRBs which have been issued to provide construction and/or permanent financing forResidential Properties and commercial properties in their market areas. The Partnership has also invested in GILs, a taxable GIL and property loans which are included within this segment. All "General and administrative expenses" on the Partnership's condensed consolidated statements of operations are reported within this segment. The following table compares operating results for the Affordable Multifamily MRB Investments segment for the periods indicated (dollar amounts in thousands): For the Three Months Ended June 30, For the Six Months Ended June 30, 2022 2021 $ Change % Change 2022 2021 $ Change % Change Affordable Multifamily MRB Investments Total revenues$ 12,887 $ 11,034 $ 1,853 16.8 %$ 27,020 $ 21,829 $ 5,191 23.8 % Interest expense 6,307 5,036 1,271 25.2 % 9,779 9,980 (201 ) -2.0 % Segment net income 2,758 1,291 1,467
N/A 9,724 3,840 5,884 153.2 %
Comparison of the three months ended
Total revenues increased for the three months ended
•
An increase of approximately
•
An increase of approximately
•
A decrease of approximately
52
--------------------------------------------------------------------------------
Interest expense increased for the three months ended
•
An increase of approximately
•
An increase of approximately
•
An increase of approximately
•
A decrease of approximately$1.3 million due to an increase in the fair market value of the Partnership's interest rate derivative instruments attributable to rising market interest rates.
Segment net income increased for the three months ended
•
The changes in total revenue and total interest expense detailed in the tables below;
•
A decrease in the provision for credit loss of approximately
•
A decrease in the provision for loan loss of approximately
•
An increase in general and administrative expenses due to an increase of
approximately
The following table summarizes the segment's net interest income, average balances, and related yields earned on interest-earning assets and incurred on interest-bearing liabilities, as well as other income included in total revenues for the three months endedJune 30, 2022 and 2021. The average balances are based primarily on monthly averages during the respective periods. All dollar amounts are in thousands. For the Three Months Ended June 30, 2022 2021 Average Average Interest Rates Interest Rates Average Income/ Earned/ Average Income/ Earned/ Balance Expense Paid Balance Expense Paid Interest-earning assets: Mortgage revenue bonds$ 688,551 $ 9,650 5.6 %$ 666,383 $ 9,740 5.8 % Governmental issuer loans 218,168 2,014 3.7 % 116,082 974 3.4 % Property loans 102,837 957 3.7 % 16,303 239 5.9 % Other investments 12,138 156 5.1 % 2,705 57 8.4 % Total interest-earning assets$ 1,021,694 $ 12,777 5.0 %$ 801,473 $ 11,010 5.5 % Non-investment income 110 24 Total revenues$ 12,887 $ 11,034 Interest-bearing liabilities: Lines of credit$ 20,837 $ 204 3.9 % $ -$ 25 N/A Fixed TEBS financing 263,037 2,584 3.9 % 287,192 2,783 3.9 % Variable TEBS financing 76,472 420 2.2 % 77,811 281 1.4 % Variable Secured Notes (1) 102,934 1,258 4.9 % 103,307 588 2.3 % Fixed Term A/B & TOB financing 12,907 64 2.0 % 13,002 115 3.5 % Variable TOB financing 457,870 2,667 2.3 % 247,642 1,011 1.6 % Amortization of deferred finance costs N/A 378 N/A N/A 224 N/A Derivative fair value adjustments N/A (1,268 ) N/A N/A 9 N/A Total interest-bearing liabilities$ 934,057 $ 6,307 2.7 %$ 728,954 $ 5,036 2.8 % Net interest income/spread (2)$ 6,470 2.5 %$ 5,974 3.0 % (1) Interest expense is reported net of income/loss on the Partnership's total return swap. (2) Net interest income equals the difference between total interest income from interest-earning assets minus total interest expense from interest-bearing assets. Net interest spread equals annualized net interest income divided by the average interest-bearing assets during the period. 53 -------------------------------------------------------------------------------- The following table summarizes the changes in interest income and interest expense for the three months endedJune 30, 2022 and 2021, and the extent to which these variances are attributable to 1) changes in the volume of interest-earning assets and interest-bearing liabilities, or 2) changes in the interest rates of the interest-earning assets and interest-bearing liabilities. All dollar amounts are in thousands. For the Three Months Ended
Total Volume Rate
Change $ Change $ Change
Interest-earning assets:
Mortgage revenue bonds $ (90 ) $ 324 $ (414 )
Governmental issuer loans 1,040 857 183
Property loans 718 1,269 (551 )
Other investments 99 199 (100 )
Total interest-earning assets $ 1,767 $ 2,649 $ (882 )
Interest-bearing liabilities: Lines of credit $ 179 179 - Fixed TEBS financing (199 ) (234 ) 35 Variable TEBS financing 139 (5 ) 144 Variable Secured Notes (1) 670 (2 ) 672 Fixed Term A/B & TOB financing (51 ) (1 ) (50 ) Variable TOB financing 1,656 858 798 Amortization of deferred finance costs 154 N/A 154 Derivative fair value adjustments (1,277 ) N/A (1,277 ) Total interest-bearing liabilities $ 1,271 $ 795 $ 476 Net interest income $ 496 $ 1,854$ (1,358 ) (1)
Interest expense is reported net of income/loss on the Partnership's two total return swaps.
Comparison of the six months ended
Total revenues increased for the six months ended
•
An increase of approximately
•
An increase of approximately$1.7 million in other interest income for payments received on theOhio Properties and Live 929 Apartments property loans in 2022 that were previously in nonaccrual status;
•
An increase of approximately
•
A decrease of approximately
Interest expense decreased for the six months ended
•
A decrease of approximately$3.7 million due to an increase in the fair market value of the Partnership's interest rate derivative instruments attributable to rising market interest rates;
•
An increase of approximately
•
An increase of approximately
•
An increase of approximately
Segment net income increased for the six months ended
•
The changes in total revenue and total interest expense detailed in the tables below;
•
A decrease in the provision for credit loss of approximately
•
A decrease in the provision for loan loss of approximately
•
An increase in general and administrative expenses related to increases of
approximately
54
--------------------------------------------------------------------------------
The following table summarizes the segment's net interest income, average
balances, and related yields earned on interest-earning assets and incurred on
interest-bearing liabilities, as well as other income included in total revenues
for the six months ended June 30, 2022 and 2021. The average balances are based
primarily on monthly averages during the respective periods. All dollar amounts
are in thousands.
For the Six Months Ended June 30,
2022 2021
Average Average
Interest Rates Interest Rates
Average Income/ Earned/ Average Income/ Earned/
Balance Expense Paid Balance Expense Paid
Interest-earning
assets:
Mortgage revenue bonds $ 690,816 $ 19,462 5.6 % $ 667,775 $ 19,491 5.8 %
Governmental issuer
loans 206,734 3,686 3.6 % 102,968 1,713 3.3 %
Property loans 88,038 3,461 7.9 % (1) 15,996 466 5.8 %
Other investments 10,377 270 5.2 % 2,278 111 9.7 %
Total interest-earning
assets $ 995,965 $ 26,879 5.4 % $ 789,017 $ 21,781 5.5 %
Non-investment income 141 48
Total revenues $ 27,020 $ 21,829
Interest-bearing
liabilities:
Lines of credit $ 24,280 $ 438 3.6 % $ 6,353 $ 102 3.2 %
Fixed TEBS financing 270,779 5,316 3.9 % 287,598 5,573 3.9 %
Variable TEBS
financing 76,636 708 1.8 % 77,965 560 1.4 %
Variable Secured
Notes (2) 102,982 1,990 3.9 % 103,352 1,171 2.3 %
Fixed Term & TOB trust
financing 12,919 128 2.0 % 13,013 230 3.5 %
Variable TOB trust
financing 426,540 4,229 2.0 % 230,721 1,912 1.7 %
Amortization of
deferred finance costs N/A 713 N/A N/A 430 N/A
Derivative fair value
adjustments N/A (3,743 ) N/A N/A 2 N/A
Total interest-bearing
liabilities $ 914,136 $ 9,779 2.1 % $ 719,002 $ 9,980 2.8 %
Net interest
income/spread (3) $ 17,100 3.4 % $ 11,801 3.0 %
(1)
Interest income includes $1.8 million for one-time payments received on property
loans that were previously in nonaccrual status in the first quarter of 2022.
Excluding this one-time item, the average interest rate was 3.8%.
(2)
Interest expense is reported net of income/loss on the Partnership's total
return swap.
(3)
Net interest income equals the difference between total interest income from
interest-earning assets minus total interest expense from interest-bearing
assets. Net interest spread equals annualized net interest income divided by the
average interest-bearing assets during the period.
55
--------------------------------------------------------------------------------
The following table summarizes the changes in interest income and interest
expense for the six months ended June 30, 2022 and 2021, and the extent to which
these variances are attributable to 1) changes in the volume of interest-earning
assets and interest-bearing liabilities, or 2) changes in the interest rates of
the interest-earning assets and interest-bearing liabilities. All dollar amounts
are in thousands.
For the Six Months Ended June 30, 2022 vs. 2021
Average Average
Total Volume Rate
Change $ Change $ Change
Interest-earning assets:
Mortgage revenue bonds $ (29 ) $ 673 $ (702 )
Governmental issuer loans 1,973 1,726 247
Property loans 2,995 2,099 896 (1)
Other investments 159 395 (236 )
Total interest-earning assets $ 5,098 $ 4,893 $ 205
Interest-bearing liabilities:
Lines of credit $ 336 $ 288 $ 48
Fixed TEBS financing (257 ) (326 ) 69
Variable TEBS financing 148 (10 ) 158
Variable Secured Notes (2) 819 (4 ) 823
Fixed Term & TOB trust financing (102 ) (2 ) (100 )
Variable TOB trust financing 2,317 1,623 694
Amortization of deferred finance costs 283 N/A 283
Derivative fair value adjustments (3,745 ) N/A (3,745 )
Total interest-bearing liabilities $ (201 ) $ 1,569 $ (1,770 )
Net interest income $ 5,299 $ 3,324 $ 1,975
(1)
The average change attributable to rate includes $1.8 million for one-time
payments received on property loans that were previously in nonaccrual status in
the first quarter of 2022. This amount has been offset by lower average interest
rates on additional property loan investments made after June 30, 2021 .
(2)
Interest expense is reported net of income/loss on the Partnership's two total
return swaps.
Operational Matters
The multifamily properties securing our MRBs were all current on contractual
debt service payments on our MRBs and we have received no requests for
forbearance of contractual debt service payments as of June 30, 2022 . We
continue to regularly discuss operations and the impacts of COVID-19 with
property owners and property management service providers of multifamily
properties securing our MRBs. We have noted in conversations with certain
property managers that rent payment relief programs are still being utilized by
some of the tenant population. We have noted slight declines in occupancy and
operating results at our multifamily properties securing MRBs due to COVID-19.
However, operating results, plus the availability of reserves, have allowed all
properties to be current on contractual debt service payments. If property
operating results significantly decline, we may choose to provide support to the
properties through supplemental property loans to prevent defaults on the
related MRBs.
Our sole student housing property securing an MRB, Live 929 Apartments, was 89%
occupied as of June 30, 2022 , which is higher than past summer occupancy levels
prior to COVID-19. The property had average occupancy of 95% during the school
term from September 2021 through May 2022 . The property manager is actively
leasing for the Fall 2022 term and as of late July was approximately 83%
pre-leased. This pre-lease level is just slightly lower than the same time in
2021 and slightly above pre-lease levels prior to COVID-19. In January 2022 , the
borrower completed a restructuring of all senior debt secured by the property
and the borrower was current on all contractual MRB principal and interest
payments as of June 30, 2022 .
The provision therapy center securing the Provision Center 2014-1 MRB was
successfully sold out of bankruptcy in July 2022 . Once a final accounting of
bankruptcy proceeds is complete, we will receive our share of net proceeds. We
own approximately 9.2% of the outstanding senior MRBs, and our reported net
carrying value of the MRB was $4.6 million for GAAP purposes, inclusive of
accrued interest, as of June 30, 2022 .
Properties securing our GILs and related property loans are currently under
construction and have not yet commenced leasing operations, or have just begun
leasing operations. To date, these properties have not experienced any material
supply chain disruptions for either construction materials or labor or incurred
material construction cost overruns.
56
--------------------------------------------------------------------------------Seniors and Skilled Nursing MRB Investments Segment
The Seniors and Skilled Nursing MRB Investments segment provides acquisition, construction and permanent financing for seniors housing and skilled nursing properties. Seniors housing consists of a combination of the independent living, assisted living and memory care units. As ofJune 30, 2022 , we owned one MRB with aggregate outstanding principal of$100,000 , with an outstanding commitment to provide additional funding of$43.9 million on a draw-down basis during construction. This MRB was issued to finance the construction and stabilization of a combined independent living, assisted living and memory care property inTraverse City, MI , with 154 total units. Furthermore, in 2021 we funded a property loan with outstanding principal of$13.9 million as ofJune 30, 2022 , secured by a 128-bed skilled nursing facility inHouston, TX. The following table compares the operating results for the Senior and Skilled Nursing MRB Investments segment for the periods indicated (dollar amounts in thousands): For the Three Months Ended June 30, For the Six Months Ended June 30, 2022 2021 $ Change % Change 2022 2021 $ Change % Change Seniors and Skilled Nursing Investments Total revenues$ 241 $ -$ 241 N/A$ 470 $ -$ 470 N/A Interest expense - - - N/A - - - N/A Segment net income 240 - 240 N/A 469 - 469 N/A Operations in this segment began inDecember 2021 . TheMeadow Valley property securing our MRB is currently funding construction costs using owner equity draws. Once all equity is drawn, we will begin funding the remainder of our MRB funding commitment totaling$43.9 million as construction progresses.
Market-Rate Joint Venture Investments Segment
The Market-Rate Joint Venture Investments segment consists of our noncontrolling
joint venture equity investments in market-rate multifamily properties, also
referred to as our investments in unconsolidated entities, and property loans
due from market-rate multifamily properties. Our joint venture equity
investments are passive in nature. Operational oversight of each property is
controlled by our joint venture partner according to the entity's operating
agreement. All properties are managed by a property management company
affiliated with our joint venture partner. Decisions on when to sell an
individual property are made by our joint venture partner based on its view of
the local market conditions and current leasing trends.
An affiliate of our joint venture partner provides a guarantee of our preferred
returns on our equity investments through a date approximately five years after
commencement of construction. We account for our joint venture equity
investments using the equity method and recognize our preferred returns during
the hold period. Upon the sale of a property, net proceeds will be distributed
according to the entity operating agreement. Sales proceeds distributed to us
that represent previously unrecognized preferred return and gain on sale are
recognized in net income upon receipt. Historically, the majority of our income
from our joint venture equity investments is recognized at the time of sale. As
a result, we may experience significant income recognition in those quarters
when a property is sold and our equity investment is redeemed.
The following table compares operating results for the Market-Rate Joint Venture
Investments segment for the periods indicated (dollar amounts in thousands):
For the Three Months Ended June 30, For the Six Months Ended June 30,
2022 2021 $ Change % Change 2022 2021 $ Change % Change
Market-Rate Joint Venture
Investments
Total revenues $ 2,161 $ 3,584 $ (1,423 ) -39.7 % $ 5,077 $ 5,482 $ (405 ) -7.4 %
Interest expense 201 40 161 402.5 % 394 40 354 885.0 %
Gain on sale of
investments in
unconsolidated entities 12,644 5,463 7,181 131.4 % 29,083 8,273 20,810 251.5 %
Segment net income 14,600 9,004 5,596 62.2 % 33,762 13,711 20,051 146.2 %
57--------------------------------------------------------------------------------
Comparison of the three months ended
The decrease in total revenues for the three months ended
•
A decrease of approximately
•
A decrease of approximately
•
A net increase of approximately
Interest expense for the three months ended
The gain on sale of investments in unconsolidated entities for the three months endedJune 30, 2022 is related to the sale of the Vantage atWestover Hills property inMay 2022 for a gain of approximately$12.7 million . The gain on sale of investments in unconsolidated entities for the three months endedJune 30, 2021 related to the sale of the Vantage at Powdersville inMay 2021 for a gain of approximately$5.5 million . The change in segment net income for the three months endedJune 30, 2022 as compared to the same period in 2021 was primarily due to the change in total revenues and gains on sales of unconsolidated entities discussed above.
Comparison of the six months ended
The decrease in total revenues for the six months ended
•
A decrease of approximately
•
A decrease of approximately
•
An increase of approximately
•
A net increase of approximately
Interest expense for the six months ended
The gain on sale of investments in unconsolidated entities for the six months endedJune 30, 2022 is related to the sale of the Vantage atMurfreesboro property inMarch 2022 for a gain of approximately$16.4 million and the sale of Vantage atWestover Hills for a gain of approximately$12.7 million . The gain on sale of investments in unconsolidated entities for the six months endedJune 30, 2021 is related to the sale of the Vantage atGermantown property inMarch 2021 for approximately$2.8 million and the sale of the Vantage at Powdersville property inMay 2021 for approximately$5.5 million .
The change in segment net income for the six months ended
Operational Matters
We have noted no material construction cost overruns to date, despite generally volatile market prices for construction materials, particularly lumber and commodities. In addition, we have noted no issues in securing materials and labor needed to construct the properties underlying our investments in unconsolidated entities, despite general supply chain constraints noted in the current business environment. As ofJune 30, 2022 , four investments have stabilized occupancy of 90% or above. One property, Vantage atTomball , completed construction inMay 2022 and is 48% occupied as ofJune 30, 2022 . We will continue to look for other opportunities to deploy capital in this segment. We are evaluating opportunities to expand beyond our traditional investment footprint inTexas and through seeking other experienced joint venture partners, expanding into other markets, or exploring other asset classes in order to achieve more scale in this segment. 58 --------------------------------------------------------------------------------
MF Properties Segment
As ofJune 30, 2022 and 2021, the Partnership owned the Suites on Paseo and The 50/50MF Properties containing a total of 859 rental units that serve primarily university students.
The following table compares operating results for the
For the Three Months Ended June 30, For the Six Months Ended June 30,
2022 2021 $ Change % Change 2022 2021 $ Change % Change
MF Properties
Total revenues $ 1,945 $ 1,788 $ 157 8.8 % $ 3,872 $ 3,483 $ 389 11.2 %
Interest expense 269 282 (13 ) -4.6 % 542 564 (22 ) -3.9 %
Segment net income (loss) 8 (30 ) 38 126.7 % (84 ) (293 ) 209 71.3 %
Comparison of the three months ended
The increase in total revenues for the three months ended
The decrease in interest expense is due to a decrease in the average outstanding principal.
The improvement in segment net income (loss) for the three months endedJune 30, 2022 as compared to the same period in 2021 was due to the changes in total revenue and interest expense described above and an increase of approximately$86,000 in general operating expenses at the MF properties and increasing variable costs as a result of higher occupancy.
Comparison of the six months ended
The increase in total revenues for the six months ended
The decrease in interest expense is due to a decrease in the average outstanding principal.
The improvement in segment net loss for the six months endedJune 30, 2022 as compared to the same period in 2021 was due to the changes in total revenue and interest expense described above and an increase of approximately$113,000 in general operating expenses at the MF properties and increasing variable costs as a result of higher occupancy.
Operational Matters
BothMF Properties have generated sufficient operating cash flows to meet all operational and mortgage payment obligations throughJune 30, 2022 . Both properties are adjacent to universities and are actively leasing for the Fall 2022 term. The 50/50 MF Property, which is adjacent to theUniversity of Nebraska-Lincoln , was approximately 100% pre-leased as of late July. The Suites on Paseo MF Property, which is adjacent toSan Diego State University , was approximately 97% pre-leased as of late July.
Discussion of Occupancy at
The following tables summarize occupancy and other information regarding the properties underlying our various investment classes. The narrative discussion that follows provides a brief operating analysis of each investment class as of and for the six months endedJune 30, 2022 and 2021.
The owners of the following properties either do not meet the definition of a VIE and/or we have evaluated and determined we are not the primary beneficiary of the VIE. As a result, we do not report the assets, liabilities and results of operations of these properties on a consolidated basis. These properties have met the stabilization criteria (see footnote 3 below the table) as ofJune 30, 2022 . Debt 59 -------------------------------------------------------------------------------- service on our MRBs for the non-consolidated stabilized properties was current as ofJune 30, 2022 . The amounts presented below were obtained from records provided by the property owners and their related property management service providers. Number of Units as of Physical Occupancy (1) Economic Occupancy (2) June 30, as of June 30, for the six months ended June 30, Property Name State 2022 2022 2021 2022 2021 MRB Multifamily Properties-Stabilized (3) CCBA Senior Garden Apartments (4) CA 45 100 % n/a 97 % n/a Courtyard CA 108 100 % 99 % 97 % 92 % Glenview Apartments CA 88 98 % 97 % 91 % 96 % Harden Ranch CA 100 100 % 99 % 95 % 97 % Harmony Court Bakersfield CA 96 99 % 98 % 92 % 89 % Harmony Terrace CA 136 99 % 99 % 134 % 117 % Las Palmas II CA 81 100 % 100 % 98 % 98 % Lutheran Gardens (4) CA 76 92 % n/a 91 % n/a Montclair Apartments CA 80 99 % 99 % 94 % 95 %Montecito atWilliams Ranch Apartments CA 132 95 % 98 % 106 % 101 % Montevista CA 82 95 % 95 % 96 % 110 % San Vicente CA 50 100 % 100 % 93 % 93 % Santa Fe Apartments CA 89 93 % 99 % 89 % 92 % Seasons at Simi Valley CA 69 100 % 97 % 118 % 110 % Seasons Lakewood CA 85 100 % 100 % 96 % 101 % Seasons San Juan Capistrano CA 112 99 % 100 % 99 % 97 % Solano Vista CA 96 93 % 98 % 89 % 98 % Summerhill CA 128 100 % 97 % 94 % 89 % Sycamore Walk CA 112 99 % 98 % 90 % 90 % The Village at Madera CA 75 99 % 100 % 101 % 99 % Tyler Park Townhomes CA 88 99 % 95 % 98 % 97 % Vineyard Gardens CA 62 100 % 100 % 100 % 95 % Westside Village Market CA 81 99 % 96 % 91 % 94 % Brookstone IL 168 99 % 97 % 100 % 95 % Copper Gate Apartments IN 129 99 % 97 % 102 % 94 % Renaissance LA 208 93 % 94 % 93 % 92 % Live 929 Apartments MD 575 89 % 59 % 78 % 72 % Gateway Village NC 64 91 % 97 % 86 % 98 % Greens Property NC 168 99 % 97 % 86 % 92 % Lynnhaven Apartments NC 75 93 % 89 % 76 % 87 % Silver Moon NM 151 98 % 95 % 96 % 96 % Village at Avalon NM 240 95 % 99 % 96 % 98 % Columbia Gardens SC 188 92 % 93 % 97 % 98 % Companion atThornhill Apartments SC 179 99 % 99 % 84 % 88 % Cross Creek SC 144 93 % 98 % 77 % 91 % The Palms at Premier Park Apartments SC 240 100 % 100 % 91 % 92 % Village at River's Edge SC 124 90 % 99 % 96 % 104 % Willow Run SC 200 90 % 92 % 100 % 95 % Arbors atHickory Ridge (5) TN 348 n/a n/a n/a n/a Avistar at Copperfield TX 192 97 % 92 % 86 % 82 % Avistar at the Crest TX 200 98 % 100 % 82 % 77 % Avistar at the Oaks TX 156 99 % 99 % 88 % 88 % Avistar at the Parkway TX 236 95 % 93 % 84 % 82 % Avistar at Wilcrest TX 88 94 % 82 % 77 % 71 % Avistar at Wood Hollow TX 409 95 % 88 % 88 % 84 % Avistar in 09 TX 133 99 % 97 % 94 % 88 % Avistar on the Boulevard TX 344 97 % 96 % 83 % 80 % Avistar on the Hills TX 129 97 % 94 % 84 % 85 % Bruton Apartments TX 264 91 % 89 % 62 % 73 % Concord at Gulfgate TX 288 99 % 91 % 87 % 80 % Concord at Little York TX 276 91 % 83 % 77 % 78 % Concord at Williamcrest TX 288 93 % 95 % 83 % 87 % Crossing at 1415 TX 112 96 % 96 % 88 % 86 % Decatur Angle TX 302 88 % 84 % 64 % 74 % Esperanza at Palo Alto TX 322 88 % 93 % 79 % 88 % Heights at 515 TX 96 100 % 97 % 89 % 90 % Heritage Square TX 204 95 % 97 % 82 % 75 % Oaks at Georgetown TX 192 96 % 97 % 94 % 93 % Runnymede TX 252 99 % 100 % 97 % 95 % Southpark TX 192 97 % 98 % 93 % 95 % 15 West Apartments WA 120 99 % 98 % 98 % 99 % 10,067 95 % 93 % 88 % 88 % (1) Physical occupancy is defined as the total number of units occupied divided by total units at the date of measurement. (2) Economic occupancy is defined as the net rental income received divided by the maximum amount of rental income to be derived from each property. This statistic is reflective of rental concessions, delinquent rents and non-revenue units such as model units and employee units. Physical occupancy is a point in time measurement while economic occupancy is a measurement over the period presented. Therefore, economic occupancy for a period may exceed the actual occupancy at any point in time. (3) A property is considered stabilized once it reaches 90% physical occupancy for 90 days and an achievement of 1.15 times debt service coverage ratio on amortizing debt service for a period after construction completion or completion of the rehabilitation. (4) Prior year occupancy data is not available as the related investment was recently acquired and not owned by the Partnership during the prior year. (5) The MRB is defeased and as such, the Partnership will not report property occupancy information. Physical occupancy as ofJune 30, 2022 increased compared toJune 30, 2021 due primarily to the large increase in physical occupancy at Live 929 Apartments and recovering occupancy at variousTexas properties that had declined during the COVID-19 pandemic. Economic occupancy for the six months endedJune 30, 2022 was consistent with the same period in 2021. The Decatur Angle andBruton Apartments properties experienced significant declines due to higher than historical bad debt reserve write-offs and declining physical occupancy.The Gateway Village andLynnhaven Apartments properties experienced significant declines as part of a transition to new property management and higher than historical bad debt expenses. These declines were offset with improving economic occupancy at other properties recovering from the effects of the COVID-19 pandemic. 60 --------------------------------------------------------------------------------
The owners of the followingResidential Properties do not meet the definition of a VIE and/or we have evaluated and determined we are not the primary beneficiary of each VIE. As a result, we do not report the assets, liabilities and results of operations of these properties on a consolidated basis. As ofJune 30, 2022 , theseResidential Properties have not met the stabilization criteria (see footnote 3 below the table). As ofJune 30, 2022 , debt service on the Partnership's MRBs and GILs for the non-consolidated, non-stabilized properties was current. The amounts presented below were obtained from records provided by the property owners and their related property management service providers. Number of Units as of Physical Occupancy (1) Economic Occupancy (2) June 30, as of June 30, for the six months ended June 30, Property Name State 2022 2022 2021 2022 2021 MRB Multifamily Properties-Non Stabilized (3) Ocotillo Springs (4) CA 75 n/a n/a n/a n/a Residency at the Entrepreneur (4) CA 200 n/a n/a n/a n/a Residency at the Mayer (4) CA 79 n/a n/a n/a n/aJackson Manor Apartments (5) MS 60 97 % n/a 95 % n/a 414 GIL Multifamily Properties-Non Stabilized (3) Hope on Avalon (4) CA 88 n/a n/a n/a n/a Hope on Broadway (4) CA 49 n/a n/a n/a n/a Centennial Crossings (4) CO 209 n/a n/a n/a n/a Osprey Village (4) FL 383 n/a n/a n/a n/a Magnolia Heights (4) GA 200 n/a n/a n/a n/aWillow Place Apartments (4) GA 182 n/a n/a n/a n/a Oasis at Twin Lakes (5) MN 228 100 % n/a 60 % n/aLegacy Commons at Signal Hills (4) MN 247 n/a n/a n/a n/a Hilltop atSignal Hills (4) MN 146 n/a n/a n/a n/a Scharbauer Flats Apartments (5) TX 300 1 % n/a 0 % n/a 2,032MRB Seniors Housing and Skilled Nursing Properties-Non Stabilized (3) Meadow Valley (4) MI 154 n/a n/a n/a n/a Grand total 2,600 (1) Physical occupancy is defined as the total number of units occupied divided by total units at the date of measurement. (2) Economic occupancy is defined as the net rental income received divided by the maximum amount of rental income to be derived from each property. This statistic is reflective of rental concessions, delinquent rents and non-revenue units such as model units and employee units. Physical occupancy is a point in time measurement while economic occupancy is a measurement over the period presented. Therefore, economic occupancy for a period may exceed the actual occupancy at any point in time. (3) The property is not considered stabilized as it has not met the criteria for stabilization. A property is considered stabilized once it reaches 90% physical occupancy for 90 days and an achievement of 1.15 times debt service coverage ratio on amortizing debt service for a period after completion of the rehabilitation. (4) Physical and economic occupancy information is not available for the six months endedJune 30, 2022 and 2021 as the property is under construction or rehabilitation. (5) Physical and economic occupancy information is not available for the six months endedJune 30, 2021 as the related investment was under construction or rehabilitation. As ofJune 30, 2022 , all non-stabilized properties except forJackson Manor ,Oasis atTwin Lakes andScharbauer Flats Apartments were under construction and have no operating metrics to report.Jackson Manor has commenced a tenant-in-place rehabilitation that is nearing completion.Oasis atTwin Lakes andScharbauer Flats Apartments have substantially completed construction and are in lease-up. 61 --------------------------------------------------------------------------------
Investments in Unconsolidated Entities
We are the only noncontrolling equity investor in various unconsolidated entities formed for the purpose of constructing market-rate, multifamily real estate properties. The Partnership determined the unconsolidated entities are VIEs but that the Partnership is not the primary beneficiary. As a result, the Partnership does not report the assets, liabilities and results of operations of these properties on a consolidated basis. The one exception is Vantage atSan Marcos , for which the Partnership is deemed the primary beneficiary and reports the entity's assets and liabilities on a consolidated basis. Our noncontrolling equity investments entitle us to shares of certain cash flows generated by the entities from operations and upon the occurrence of certain capital transactions, such as a refinance or sale. The amounts presented below were obtained from records provided by the property management service providers. Physical Occupancy (1) as of June 30, Construction Planned Revenue for the Property Completion Number of Three Months Ended Per-unit Name State Date Units 2022 2021 June 30, 2022 (2) Sale Date Sale Price Sold Properties Vantage at Germantown TN March 2020 n/a n/a n/a n/a March 2021$ 149,000 Vantage at February Powdersville SC 2020 n/a n/a n/a n/a May 2021 170,000 Vantage at Bulverde TX August 2019 n/a n/a 99 % n/a August 2021 170,000 Vantage at Murfreesboro TN October 2020 n/a n/a 94 % n/a March 2022 273,000 Vantage at Westover Hills TX July 2021 n/a n/a 69 % n/a May 2022 (3) Operating Properties Vantage at Stone Creek NE April 2020 294 97 % 79 % $ 1,211,413 n/a n/a Vantage at February Coventry NE 2021 294 97 % 76 % 1,166,746 n/a n/a Vantage at Conroe TX January 2021 288 91 % 66 % 1,004,942 n/a n/a Vantage at O'Connor TX June 2021 288 97 % 70 % 1,149,388 n/a n/a Vantage at Tomball TX April 2022 288 48 % n/a 326,894 n/a n/a Properties Under Construction Vantage at Hutto TX n/a 288 n/a n/a n/a n/a n/a Vantage at Loveland CO n/a 288 n/a n/a n/a n/a n/a Vantage at Helotes TX n/a 288 n/a n/a n/a n/a n/a Vantage at Fair Oaks TX n/a 288 n/a n/a n/a n/a n/a Vantage at McKinney Falls TX n/a 288 n/a n/a n/a n/a n/a Properties in Planning Vantage at San Marcos (4) TX n/a 288 n/a n/a n/a n/a n/a 3,180 (1) Physical occupancy is defined as the total number of units occupied divided by total units at the date of measurement. (2) Revenue is attributable to the property underlying the Partnership's equity investment and is not included in the Partnership's income. (3) Disclosure of the per-unit sale price is not permitted according to provisions in the purchase agreement executed by the entity's managing member and the buyer. (4) The property is reported as a consolidated VIE as ofJune 30, 2022 (see Note 5 to the Partnership's condensed consolidated financial statements). 62 -------------------------------------------------------------------------------- The Vantage properties atHutto , Loveland,Helotes ,Fair Oaks andMcKinney Falls are currently under construction and have yet to commence leasing activities as ofJune 30, 2022 . Vantage atTomball was completed inApril 2022 , and is leasing up in line with expectations. Vantage at San Macros remains in the planning phase. Four other properties are considered stabilized as ofJune 30, 2022 , of which, Vantage at O'Connor was sold inJuly 2022 .
As ofJune 30, 2022 , we owned twoMF Properties . The Partnership reports the assets, liabilities, and results of operations of these properties on a consolidated basis. The 50/50 MF property is encumbered by mortgage loans with an aggregate principal balance of approximately$24.7 million as ofJune 30, 2022 . Debt service on our mortgage payables was current as ofJune 30, 2022 . Number of Units as of Physical Occupancy (1) Economic Occupancy (2) June 30, as of June 30, for the year ended June 30, Property Name State 2022 2022 2021 2022 2021MF Properties Suites on Paseo CA 384 88 % 78 % 89 % 72 % The 50/50 Property NE 475 88 % 90 % 84 % 87 % 859 88 % 85 % 87 % 79 % (1) Physical occupancy is defined as the total number of units occupied divided by total units at the date of measurement. (2) Economic occupancy is defined as the net rental income received divided by the maximum amount of rental income to be derived from each property. This statistic is reflective of rental concessions, delinquent rents and non-revenue units such as model units and employee units. Physical occupancy is a point in time measurement while economic occupancy is a measurement over the period presented. Therefore, economic occupancy for a period may exceed the actual occupancy at any point in time. The physical occupancy and economic occupancy as of and for the six months endedJune 30, 2022 increased as compared to the same period in 2021 due to an increase in occupancy at the Suites on Paseo MF Property. Both properties are currently pre-leasing units for the upcoming Fall 2022 term. The 50/50 MF Property, which is adjacent to theUniversity of Nebraska-Lincoln , was approximately 100% pre-leased as of late July. The Suites on Paseo MF Property, which is adjacent toSan Diego State University , was approximately 97% pre-leased as of late July.
Results of Operations
The tables and following discussions of our changes in results of operations for the three and six months endedJune 30, 2022 and 2021 should be read in conjunction with the Partnership's condensed consolidated financial statements and notes thereto included in Item 1 of this report, as well as the Partnership's Annual Report on Form 10-K for the year endedDecember 31, 2021 .
The following table compares our revenue and other income for the periods indicated (dollar amounts in in thousands):
For the Three Months Ended June 30, For the Six Months Ended June 30,
2022 2021 $ Change % Change 2022 2021 $ Change % Change
Revenues and Other
Income:
Investment income $ 13,825 $ 14,298 $ (473 ) -3.3 % $ 28,229 $ 26,686 $ 1,543 5.8 %
Property revenues 1,945 1,788 157 8.8 % 3,872 3,483 389 11.2 %Other interest income 1,463 321 1,142 355.8 % 4,339 625 3,714 594.2 % Gain on sale of investments in unconsolidated entities 12,644 5,463 7,181
131.4 % 29,083 8,273 20,810 251.5 % Total Revenues and Other Income$ 29,877 $ 21,870 $ 8,007 36.6 %$ 65,523 $ 39,067 $ 26,456 67.7 % 63
--------------------------------------------------------------------------------
Discussion of Total Revenues and Other Income for the Three Months Ended
Investment income. The decrease in investment income for the three months endedJune 30, 2022 as compared to the same period in 2021 was due to the following factors:
•
A decrease of approximately
o
A decrease of approximately
o
A decrease of approximately
o
A net increase of approximately
•
An increase of approximately
•
A decrease of approximately
Property revenues. The increase in total revenues for the three months endedJune 30, 2022 as compared to the same period in 2021 is due to improved occupancy at the Suites on Paseo MF Property as on-campus enrollment recovers from declines caused by the COVID-19 pandemic. Other interest income. Other interest income is comprised primarily of interest income on property loans and taxable MRBs held by us. The increase in other interest income for the three months endedJune 30, 2022 as compared to the same period in 2021 was due to an increase of approximately$1.1 million from higher average property loan, taxable MRB and taxable GIL investment balances of$109.6 million . Gain on sale of investments in unconsolidated entities. The gain on sale of investments in unconsolidated entities for the three months endedJune 30, 2022 is primarily related to the sale of Vantage atWestover Hills inMay 2022 for a gain of approximately$12.7 million . The gain on sale of investments in unconsolidated entities for the three months endedJune 30, 2021 related to the sale of Vantage at Powdersville inMay 2021 for a gain of approximately$5.5 million .
Discussion of Total Revenues and Other Income for the Six Months Ended
Investment income. The increase in investment income for the six months endedJune 30, 2022 as compared to the same period in 2021 was due to the following factors:
•
An increase of approximately
•
A decrease of approximately
o
A decrease of approximately
o
A decrease of approximately
o
An increase of approximately
o
A net increase of approximately
•
A decrease of approximately
Property revenues. The increase in total revenues for the six months endedJune 30, 2022 as compared to the same period in 2021 is due to improved occupancy at the Suites on Paseo MF Property as on-campus enrollment recovers from declines caused by the COVID-19 pandemic. 64 -------------------------------------------------------------------------------- Other interest income. Other interest income is comprised primarily of interest income on property loans and taxable MRBs held by us. The increase in other interest income for the six months endedJune 30, 2022 as compared to the same period in 2021 was due to the following:
•
An increase of approximately
•
An increase of approximately
Gain on sale of investments in unconsolidated entities. The gain on sale of investments in unconsolidated entities for the six months endedJune 30, 2022 is related to the sale of Vantage atMurfreesboro inMarch 2022 for a gain of approximately$16.4 million and the sale of Vantage atWestover Hills for a gain of approximately$12.7 million . The gain on sale of investments in unconsolidated entities for the six months endedJune 30, 2021 is related to the sale of Vantage atGermantown inMarch 2021 for a gain of approximately$2.8 million and the sale of Vantage at Powdersville inMay 2021 for a gain of approximately$5.5 million .
The following table compares our expenses for the periods indicated (dollar amounts in thousands):
For the Three Months Ended June 30, For the Six Months Ended June 30,
2022 2021 $ Change % Change 2022 2021 $ Change % Change
Expenses:
Real estate
operating (exclusive
of items shown
below) $ 979 $ 761 $ 218 28.6 % $ 2,043 $ 1,768 $ 275 15.6 %
Provision for credit - 900 (900 )
loss -100.0 % - 900 (900 ) -100.0 %
Provision for loan - 330 (330 )
loss -100.0 % - 330 (330 ) -100.0 %
Depreciation and 684 685 (1 )
amortization -0.1 % 1,368 1,368 - 0.0 %
Interest expense 6,777 5,358 1,419 26.5 % 10,714 10,585 129 1.2 %
General and 3,809 3,464 345
administrative 10.0 % 7,491 6,750 741 11.0 %
Total Expenses $ 12,249 $ 11,498 $ 751 6.5 % $ 21,616 $ 21,701 $ (85 ) -0.4 %
Discussion of Total Expenses for the Three Months Ended
Real estate operating expenses. Real estate operating expenses are related toMF Properties and are comprised principally of real estate taxes, property insurance, utilities, property management fees, repairs and maintenance, and salaries and related employee expenses of on-site employees. Real estate operating expenses increased the three months endedJune 30, 2022 as compared to the same period in 2021 primarily due to general increases in operating costs.
Provision for credit loss. There was no provision for credit loss recognized for
the three months ended
Provision for loan loss. There was no provision for loan loss recognized for the three months endedJune 30, 2022 . The provision for loan loss for the three months endedJune 30, 2021 is related to an increase in the loan loss allowance for the Live 929 Apartments property loan.
Depreciation and amortization expense. Depreciation and amortization relate
primarily to the
Interest expense. The increase in interest expense for the three months endedJune 30, 2022 as compared to the same period in 2021 was due to the following factors:
•
An increase of approximately
•
An increase of approximately
•
An increase of approximately
•
A decrease of approximately$1.3 million due to an increase in the fair market value of the Partnership's interest rate derivative instruments attributable to rising market interest rates. 65 -------------------------------------------------------------------------------- General and administrative expenses. The increase in general and administrative expenses for the three months endedJune 30, 2022 as compared to the same period in 2021 was primarily due an increase of approximately$275,000 in administration fees paid to AFCA2 due to greater assets under management.
Discussion of Total Expenses for the Six Months Ended
Real estate operating expenses. Real estate operating expenses are related toMF Properties and are comprised principally of real estate taxes, property insurance, utilities, property management fees, repairs and maintenance, and salaries and related employee expenses of on-site employees. Real estate operating expenses increased slightly for the six months endedJune 30, 2022 as compared to the same period in 2021 primarily due to general increases in operating costs. Provision for credit loss. There was no provision for credit loss recognized for the six months endedJune 30, 2022 . The provision for credit loss for the six months endedJune 30, 2021 is related to the other-than-temporary impairment of the Provision Center 2014-1 MRB. Provision for loan loss. There was no provision for loan loss recognized for the six months endedJune 30, 2022 . The provision for loan loss for the six months endedJune 30, 2021 is related to an increase in the loan loss allowance for the Live 929 Apartments property loan.
Depreciation and amortization expense. Depreciation and amortization relate
primarily to the
Interest expense. The decrease in interest expense for the six months ended
•
An increase of approximately
•
An increase of approximately
•
An increase of approximately
•
A decrease of approximately$3.7 million due to an increase in the fair market value of the Partnership's interest rate derivative instruments attributable to rising market interest rates. General and administrative expenses. The increase in general and administrative expenses for the six months endedJune 30, 2022 as compared to the same period in 2021 was primarily due to increases of approximately$527,000 in administration fees paid to AFCA2 due to greater assets under management and approximately$150,000 related to salaries and benefits.
Discussion of Income Tax Expense for the Three and Six Months Ended
A wholly owned subsidiary of the Partnership, the Greens Hold Co, is a corporation subject to federal and state income tax. The Greens Hold Co owns The 50/50 MF Property and certain property loans. There was minimal taxable income for the Greens Hold Co for the three and six months endedJune 30, 2022 and 2021. 66 --------------------------------------------------------------------------------
Cash Available for Distribution
The Partnership believes that Cash Available for Distribution ("CAD") provides
relevant information about the Partnership's operations and is necessary, along
with net income, for understanding its operating results. To calculate CAD, the
Partnership begins with net income as computed in accordance with GAAP and
adjusts for non-cash expenses consisting of depreciation expense, amortization
expense related to deferred financing costs, amortization of premiums and
discounts, non-cash interest rate derivative expense or income, provisions for
credit and loan losses, impairments on MRBs, GILs, real estate assets and
property loans, deferred income tax expense (benefit) and restricted unit
compensation expense. The Partnership also deducts Tier 2 income (see Note 3 to
the Partnership's condensed consolidated financial statements) distributable to
the General Partner as defined in the Partnership Agreement and distributions
and accretion for the Preferred Units. Net income is the GAAP measure most
comparable to CAD. There is no generally accepted methodology for computing CAD,
and the Partnership's computation of CAD may not be comparable to CAD reported
by other companies. Although the Partnership considers CAD to be a useful
measure of the Partnership's operating performance, CAD is a non-GAAP measure
that should not be considered as an alternative to net income calculated in
accordance with GAAP, or any other measures of financial performance presented
in accordance with GAAP.
The following table shows the calculation of CAD (and a reconciliation of the
Partnership's net income, as determined in accordance with GAAP, to CAD) for the
three and six months ended June 30, 2022 and 2021 (all per BUC amounts are
presented giving effect to the one-for-three Reverse Unit Split on a retroactive
basis for all periods presented):
For the Three Months Ended June 30, For the Six Months Ended June 30,
2022 2021 2022 2021
Net income $ 17,606,681 $ 10,264,680 $ 43,870,699 $ 17,257,534
Change in fair value of
derivatives (1,232,433 ) 9,494 (3,707,564 ) 2,043
Depreciation and amortization
expense 684,362 684,884 1,368,024 1,368,344
Provision for credit loss (1) - 900,080 - 900,080
Provision for loan loss (2) - 330,116 - 330,116
Amortization of deferred financing
costs 492,720 247,997 944,192 454,383
Restricted unit compensation
expense 165,509 190,970 339,407 269,084
Deferred income taxes (13,973 ) (19,442 ) (6,707 ) (35,670 )
Redeemable Preferred Unit
distributions and accretion (716,500 ) (717,763 ) (1,434,244 ) (1,435,526 )
Tier 2 Income allocable to the
General Partner (3) (189,569 ) (1,365,870 ) (2,835,548 ) (2,068,147 )
Recovery of prior credit loss (4) (17,344 ) - (22,623 ) -
Bond premium, discount and
origination fee amortization, net
of cash received (59,341 ) (18,185 ) (137,716 ) (36,706 )
Total CAD $ 16,720,112 $ 10,506,961 $ 38,377,920 $ 17,005,535
Weighted average number of BUCs
outstanding, basic 22,017,873 20,192,179 22,017,255 20,211,233
Net income per BUC, basic $ 0.75 $ 0.40 $ 1.79 $ 0.67
Total CAD per BUC, basic $ 0.76 $ 0.52 $ 1.74 $ 0.84
Distributions declared, per BUC
(5) $ 0.57 $ 0.33 $ 0.90 $ 0.60
(1)
The provision for credit loss for the three and six months ended
(2)
The provision for loan loss for the three and six months ended
(3)
As described in Note 3 to the Partnership's condensed consolidated financial statements, Net Interest Income representing contingent interest and Net Residual Proceeds representing contingent interest (Tier 2 income) will be distributed 75% to the limited partners and BUC holders, as a class, and 25% to the General Partner. This adjustment represents the 25% of Tier 2 income due to the General Partner. For the six months endedJune 30, 2022 , Tier 2 income allocable to the General Partner consisted of approximately$2.6 million related to the gain on sale of Vantage atMurfreesboro inMarch 2022 and approximately$190,000 related to the gain on sale of Vantage atWestover Hills inJune 2022 . For the six months endedJune 30, 2021 , Tier 2 income allocable to the General Partner consisted of approximately$703,000 related to the gain on sale of Vantage atGermantown inMarch 2021 and approximately$1.4 million related to the gain on sale of Vantage at Powdersville inMay 2021 .
(4)
The Partnership compared the present value of cash flows expected to be collected to the amortized cost basis of the Live 929 Apartments Series 2022A MRB as ofMarch 31, 2022 , which indicated a recovery of value. The Partnership will accrete the recovery of prior credit loss into investment income over the term of the MRB. The accretion of recovery of value is presented as a reduction to current CAD as the original provision for credit loss was an addback for CAD calculation purposes in the period recognized.
(5)
The three month period endedJune 30, 2022 includes a quarterly distribution of$0.37 per BUC and a supplemental distribution of$0.20 per BUC. The six month period endedJune 30, 2022 includes quarterly distributions of$0.70 per BUC and a supplemental distribution of$0.20 per BUC. During 2021, the first and second quarterly distributions were$0.27 and$0.33 per BUC, respectively, for total distributions of$0.60 per BUC for the six months endedJune 30, 2021 . The Provision Center, a proton therapy cancer treatment center inKnoxville, TN , that secures our mortgage revenue bond investment, was sold inJuly 2022 and sales proceeds transferred to the bankruptcy court. We expect to receive our proportional share of final sale proceeds and other funds held under the lien of the bond indenture upon a final accounting by the bankruptcy court and 67 -------------------------------------------------------------------------------- bond trustee. As ofJune 30, 2022 , the net carrying value of the MRB was$4.6 million for GAAP purposes, inclusive of accrued interest, and is based on our expected proceeds upon final resolution of the bankruptcy case. If ultimate proceeds equal our reported carrying value, we will realize a loss of approximately$5.7 million on the MRB investment. The realized loss will not impact our net income as computed in accordance with GAAP as the loss was previously recognized through provisions for credit loss. However, the realized loss will be reported as a reduction of Cash Available for Distribution when we receive final proceeds, consistent with our treatment of prior realized losses on investment assets.
Liquidity and Capital Resources
We continually evaluate our potential sources and uses of liquidity, including current and potential future developments related to COVID-19 and the general economic and geopolitical environment. The information below is based on the Partnership's current expectations and projections about future events and financial trends, which could materially differ from actual results. Our short-term liquidity requirements over the next 12 months will be primarily operational expenses, investment commitments net of leverage secured by the investments, debt service (principal and interest payments) related to our debt financings, the potential exercise of redemption rights by the holders of the Series A Preferred Units, and distribution payments. We expect to meet these liquidity requirements primarily using cash on hand, operating cash flows from our investments andMF Properties , and potentially additional debt financing issued in the normal course of business. In addition, we will consider the issuance of additional BUCs, Series A-1 Preferred Units, Series B Preferred Units, or other series of limited partnership interests in the Partnership based on needs and opportunities for executing our strategy. Our long-term liquidity requirements will be primarily for maturities of debt financings and mortgages payable; the potential exercise of redemption rights by the holders of the Series A Preferred Units; additional investments in MRBs, GILs, property loans, net of leverage secured by the investments; and additional investments in unconsolidated entities. We expect to meet these liquidity requirements primarily through refinancing of maturing debt financings with the same or similar lenders; principal and interest proceeds from investments in MRBs, GILs and property loans; and proceeds from asset sales and redemptions. In addition, we will consider the issuance of additional BUCs, Series A-1 Preferred Units, Series B Preferred Units, or other series of limited partnership interests in the Partnership based on needs and opportunities for executing our strategy. Sources of Liquidity
The Partnership's principal sources of liquidity consist of:
•
Unrestricted cash on hand;
•
Operating cash flows from investments in MRBs, GILs, property loans and investments in unconsolidated entities;
•
Net operating cash flows from
•
Secured lines of credit;
•
Proceeds from the sale or redemption of assets;
•
Proceeds from obtaining additional debt; and
•
Issuances of BUCs, Series A-1 Preferred Units, Series B Preferred Units, or other series of limited partnership interests.
Unrestricted Cash on Hand
As ofJune 30, 2022 , the Partnership had unrestricted cash on hand of approximately$104.6 million . The Partnership is required to keep a minimum of$5.0 million of unrestricted cash on hand under the terms of certain guaranty obligations. There are no other contractual restrictions of the Partnership's ability to use cash on hand.
Operating Cash Flows from Investments
Cash flows from operations are primarily comprised of regular interest payments received on our MRBs, GILs and property loans that provide consistent cash receipts throughout the year. All MRBs, GILs and property loans are current on contractual debt service payments as ofJune 30, 2022 , except for the Provision Center 2014-1 MRB. Receipts, net of interest expense on related debt financings and lines of credit, are available for our general use. We also receive distributions from investments in unconsolidated entities if, and when, cash is available for distribution at the unconsolidated entities. 68 -------------------------------------------------------------------------------- Receipt of cash from our investments in MRBs and investments in unconsolidated entities is dependent upon the generation of net cash flows at multifamily properties that underlie our investments. These underlying properties are subject to risks usually associated with direct investments in multifamily real estate, which include (but are not limited to) reduced occupancy, tenant defaults, falling rental rates, and increasing operating expenses. Receipt of cash from GILs and construction financing property loans is dependent on the availability of interest reserves and the funding of certain equity commitments by the owners of the underlying properties.
Net Operating Cash Flows from
Cash flows generated by
Secured Lines of Credit
We maintain a secured line of credit ("General LOC") with two financial
institutions of up to $40.0 million to purchase additional investments and to
meet general working capital and liquidity requirements. We may borrow, prepay
and reborrow amounts at any time through the maturity date, subject to the
limitations of a borrowing base. The aggregate available commitment cannot
exceed a borrowing base calculation, which is equal to 40% multiplied by the
aggregate value of a pool of eligible encumbered assets. Eligible encumbered
assets consist of (i) the net book value of the Suites on Paseo MF Property, and
(ii) 100% of our equity capital contributions to unconsolidated entities,
subject to certain limits and restrictions. The General LOC is secured by first
priority security interests in the Partnership's investments in unconsolidated
entities, a mortgage and assignment of leases and rents of the Suites on Paseo
MF Property, and a security interest in a bank account at BankUnited, N.A. , in
which the Partnership must maintain a balance of not less than $5.0 million . We
are subject to various affirmative and negative covenants that, among others,
require the Partnership to maintain liquidity of not less than $5.0 million ,
maintain a consolidated tangible net worth of not less than $100.0 million , and
to notify BankUnited, N.A. if our consolidated net worth declines by (a) more
than 20% from the immediately preceding quarter, or (b) more than 35% from the
date at the end of two consecutive calendar quarters ending immediately
thereafter. We were in compliance with all covenants as of June 30, 2022 . The
balance of the General LOC was $6.5 million with the ability to draw an
additional $33.5 million as of June 30, 2022 . The General LOC has a maturity
date of June 2023 , with options to extend for up to two additional years.
We maintain a secured non-operating line of credit ("Acquisition LOC") with a
financial institution of up to $50 million . The Acquisition LOC may be used to
fund purchases of MRBs, taxable MRBs, or loans issued to finance the
acquisition, rehabilitation, or construction of affordable housing or which are
otherwise secured by real estate or mortgage-backed securities (i.e., GILs and
property loans). Advances on the Acquisition LOC are due on the 270th day
following the advance date but may be extended for up to an additional 270 days
by making certain payments. The Acquisition LOC contains a covenant, among
others, that the Partnership's senior debt will not exceed a specified
percentage of the market value of the Partnership's assets, as defined in the
credit agreement. We were in compliance with all covenants as of June 30, 2022 .
There was a $33.0 million outstanding balance on the Acquisition LOC and
approximately $17.0 million was available as of June 30, 2022 .
In July 2022 , we executed an amendment to the credit agreement related to the
Acquisition LOC that extended the maturity date to June 2024 ; provides the
Partnership two one-year extension options, subject to certain terms and
conditions; removed certain restricted payment provisions; modified the covenant
requiring senior debt to not exceed a specified percentage of the market value
of the Partnership's assets to be consistent with the Leverage Ratio (as defined
by the Partnership) and increased the threshold percentage; modified certain
notification provision regarding defaults under agreements with other creditors;
added certain events of default that are consistent with our other secured
financing arrangements; and eliminated our ability to finance purchases of
existing or to-be-constructed multi-family property improvements under the
credit agreement. In addition, the amendment included a modification of the
interest rate to be 2.50% plus a variable component that is based on the 1-month
forward looking term Secured Overnight Financing Rate as published by CME Group
Benchmark Administration Limited .
Proceeds from the Sale or Redemption of Assets
We may, from time to time, sell or redeem our investments in MRBs, GILs, property loans, investments in unconsolidated entities andMF Properties consistent with our strategic plans. Our MRB portfolio is marked at a premium to cost, adjusted for paydowns, primarily due to higher stated interest rates when compared to current market interest rates for similar investments. We may consider selling certain MRBs in exchange for cash at prices that approximate our currently reported fair value. However, we are contractually prevented from selling the MRBs included in our TEBS financings. 69 -------------------------------------------------------------------------------- Our ability to dispose of investments on favorable terms is dependent upon several factors including, but not limited to, the number of potential buyers and the availability of credit to such potential buyers to purchase investments at prices we consider acceptable. Recent volatility in market interest rates, recent inflation and the potential for an economic recession may negatively impact the potential prices we could realize upon the disposition of our various assets. The following table summarizes the proceeds from sales of our investments in unconsolidated entities during 2022, inclusive of the return of our initial equity investments: Gross Proceeds to Property Name Location Units Month Sold the Partnership Vantage at Murfreesboro Murfreesboro, TN 288 March 2022$ 29,258,279 Vantage at Westover Hills San Antonio, TX 288 May 2022 20,923,784$ 50,182,063 InMarch 2022 , theOhio Properties property loans were repaid in full. We received approximately$2.4 million of principal and approximately$4.3 million of accrued interest upon redemption.The Ohio Properties - Series A MRB was redeemed inMarch 2022 , though all principal proceeds were applied as a paydown of our M24 TEBS financing.The Ohio Properties - Series B MRB was redeemed and we received approximately$3.5 million of principal and approximately$29,000 of accrued interest upon redemption.
Proceeds from Obtaining Additional Debt
We hold certain investments that are not associated with our debt financings, mortgages payable, or secured LOCs. We may obtain leverage for these investments by posting the investments as security. As ofJune 30, 2022 , our primary unleveraged assets were certain MRBs with outstanding principal totaling approximately$22.0 million . Of these MRBs, approximately$10.0 million is principal outstanding on the Provision Center 2014-1 MRB, for which the borrower has declared Chapter 11 bankruptcy, and which could limit our ability to obtain leverage related to this MRB.
Issuances of BUCs, Series A-1 Preferred Units or Series B Preferred Units
We may, from time to time, issue additional BUCs in the public market at prices or quantities that are consistent with our strategic goals. InDecember 2019 , the Partnership's Registration Statement on Form S-3 ("Registration Statement") was declared effective by theSEC under which the Partnership may offer up to$225.0 million of BUCs for sale from time to time. The Registration Statement will expire inDecember 2022 . InJuly 2021 , we entered into a Capital on DemandTM Sales Agreement to offer and sell, from time to time at market prices on the date of sale, BUCs up to an aggregate offering price of$30 million via an "at the market offering." As ofJune 30, 2022 , we have not sold any BUCs under this program. We will continue to assess if and when to issue BUCs under this program going forward. InSeptember 2021 , we completed an underwritten public offering of 5,462,500 BUCs. The offering resulted in net cash proceeds of approximately$31.2 million for the Partnership, after the payment of underwriting discounts, commissions and offering expenses.
We have two registration statements on Form S-3 covering the offering of
Preferred Units that have been declared effective by the
Initial
Preferred Registration Unit Optional Units Available Units Issued
Unit Effectiveness Offering Redemption to Issue as of as of
Series Date Expiration Date Price Distribution Rate Date
September Sixth -
Series A-1 2021 September 2024 $ 10.00 3.00% anniversary 3,500,000 (1)
September Eighth -
Series B 2021 September 2024 10.00 3.40% anniversary 10,000,000 (2)
Total 13,500,000 -
(1)
The Partnership is able to issue Series A-1 Preferred Units so long as the
aggregate market capitalization of the BUCs, based on the closing price on the
trading day prior to issuance of the Series A-1 Preferred Units, is no less than
three times the aggregate book value of all Series A Preferred Units and Series
A-1 Preferred Units, inclusive of the amount to be issued.
(2)
The Partnership is able to issue Series B Preferred Units so long as the
aggregate market capitalization of the BUCs, based on the closing price on the
trading day prior to issuance of the Series B Preferred Units, is no less than
two times the aggregate book value of all Series A Preferred Units, Series A-1
Preferred Units and Series B Preferred Units, inclusive of the amount to be
issued.
70
--------------------------------------------------------------------------------We may also designate and issue additional series of preferred units representing limited partnership interests in the Partnership in accordance with the terms of the Partnership Agreement.
Uses of Liquidity
Our principal uses of liquidity consist of:
•
General and administrative expenses;
•
Investment funding commitments;
•
Debt service on debt financings, Secured Notes, mortgages payable, and secured lines of credit;
•
Distributions paid to holders of Preferred Units and BUCs;
•
Potential redemptions of Series A Preferred Units; and
•
Other contractual obligations.
General and Administrative Expenses
We use cash to pay general and administrative expenses of the Partnership's operations. For additional details, see Item 1A, "Risk Factors" in the Partnership's Annual Report on Form 10-K for the year endedDecember 31, 2021 and the section captioned "Cash flows from operating activities" in the Partnership's condensed consolidated statements of cash flows set forth in Item 1 of this report. General and administrative expenses are typically paid from unrestricted cash on hand and operating cash flows. Included in general and administrative expenses is operating lease expenses for ourMF Properties , of which the most significant is a ground lease associated with The 50/50 MF Property. Such expenses are paid from operating cash flows. The following table summarizes our outstanding contractual lease obligations by year as ofJune 30, 2022 : Remainder of 2022$ 71,084 2023 143,561 2024 144,706 2025 147,598 2026 150,548 Thereafter 4,219,127 Total$ 4,876,624 71
--------------------------------------------------------------------------------
Investment Funding Commitments
Our overall strategy is to invest in quality multifamily properties through either the acquisition of MRBs, GILs, property loans and equity investments in both existing and new markets. We evaluate investment opportunities based on, but not limited to, our market outlook, including general economic conditions, development opportunities and long-term growth potential. Our ability to make future investments is dependent upon identifying suitable acquisition and development opportunities, access to long-term financing sources, and the availability of investment capital. We may commit to fund additional investments on a draw-down or forward basis. The following table summarizes our outstanding investment commitments as ofJune 30, 2022 : Projected Funding by Year (1) Remaining Commitment Maturity Total Initial as of June 30, Interest Related Debt Property Name Commitment Date Date Commitment 2022 Remainder of 2022 2023 2024 Rate (2) Financing (3) Mortgage Revenue Bonds Residency at the April SOFR + Mayer - Series A October 2021 2039$ 29,500,000 $ 4,500,000 $ 4,500,000 $ - $ - 3.60% Variable TOB Meadow Valley December December 2021 2029 44,000,000 43,900,000 6,900,000 18,600,000 18,400,000 6.25% (6) Residency at the Entrepreneur- Series March J-3 April 2022 2040 26,080,000 26,080,000 11,400,000 14,680,000 - 6.00% Variable TOB Residency at the Entrepreneur- Series March SOFR + J-4 April 2022 2040 16,420,000 16,420,000 1,000,000 10,400,000 5,020,000 3.60% (4) Variable TOB Subtotal 116,000,000 90,900,000 23,800,000 43,680,000 23,420,000 Taxable Mortgage Revenue Bonds Ocotillo Springs - August LIBOR + Series A-T July 2020 2023$ 7,000,000 $ 2,300,000 $ 2,300,000 $ - $ - 3.55% Variable TOB Residency at the April SOFR + Mayer Series A-T October 2021 2024 (5) 12,500,000 11,500,000 11,500,000 - - 3.70% Variable TOB Residency at the Entrepreneur Series April SOFR + J-T April 2022 2025 (5) 13,000,000 12,000,000 - - 12,000,000 3.65% Variable TOB Subtotal 32,500,000 25,800,000 13,800,000 - 12,000,000 Governmental Issuer Loans Hope on Avalon February SIFMA + January 2021 2023 (5)$ 23,390,000 $ 6,408,800 $ 6,408,800 $ - $ - 3.75% Variable TOB Hope on Broadway February SIFMA + January 2021 2023 (5) 12,105,623 1,414,378 1,414,378 - - 3.75% Variable TOB Osprey Village August SOFR + July 2021 2024 (5) 60,000,000 35,636,873 17,195,785 18,441,088 - 3.07% Variable TOB Willow Place October SOFR + Apartments September 2021 2024 (5) 25,000,000 16,531,137 11,331,892 5,199,245 - 3.30% Variable TOB Magnolia Heights July 2024 SOFR + June 2022 (5) 20,400,000 5,599,086 5,599,086 - - 3.85% (6) Subtotal 140,895,623 65,590,274 41,949,941 23,640,333 - Taxable Governmental Issuer Loans Hope on Avalon February SOFR + January 2021 2023 (5)$ 10,573,000 $ 9,573,000 $ 9,573,000 $ - $ - 3.55% Variable TOB Subtotal 10,573,000 9,573,000 9,573,000 - - Property Loans Scharbauer Flats January LIBOR + Apartments June 2020 2023 (5)$ 24,160,000 $ 3,519,106 $ 3,519,106 $ - $ - 2.85% Variable TOB Oasis at Twin Lakes August LIBOR + July 2020 2023 (5) 27,704,180 3,685,523 3,685,523 - - 2.50% Variable TOB Centennial Crossings September LIBOR + August 2020 2023 (5) 24,250,000 2,230,428 2,230,428 - - 2.50% Variable TOB Hilltop at Signal August SOFR + Hills January 2021 2023 (5) 21,197,939 5,838,631 5,838,631 - - 3.07% Variable TOB Legacy Commons at February SOFR + Signal Hills January 2021 2024 (5) 32,233,972 8,884,337 8,884,337 - - 3.07% Variable TOB Osprey Village August SOFR + July 2021 2024 (5) 25,500,000 24,500,000 - 24,500,000 - 3.07% Variable TOB Willow Place October SOFR + Apartments September 2021 2024 (5) 21,351,328 20,351,328 - 20,351,328 - 3.30% Variable TOB Magnolia Crossing (7) December SOFR + December 2021 2022 (5) 14,500,000 608,262 608,262 - - 6.50% N/A Magnolia Heights July 2024 SOFR + June 2022 (5) 10,300,000 9,300,000 3,286,266 6,013,734 3.85% (6) Subtotal 201,197,419 78,917,615 28,052,553 50,865,062 - Equity Investments Vantage at Hutto November 2020 N/A$ 11,233,000 $ 1,136,576 $ 1,136,576 $ - $ - N/A N/A Vantage atSan Marcos (8) November 2020 N/A 9,914,529 8,943,914 8,943,914 - - N/A N/A Vantage at McKinney Falls December 2021 N/A 11,431,272 1,387,124 1,387,124 - - N/A N/A Subtotal 32,578,801 11,467,614 11,467,614 - - Bond Purchase Commitments Anaheim & Walnut Q3 2024 September 2021 (9)$ 3,900,000 $ 3,900,000 $ - $ -$ 3,900,000 4.85% N/A Subtotal 3,900,000 3,900,000 - - 3,900,000 Total Commitments$ 537,644,843 $ 286,148,503 $ 128,643,108 $ 118,185,395 $ 39,320,000 (1) Projected fundings by year are based on current estimates and the actual funding schedule may differ materially due to, but not limited to, the pace of construction, adverse weather conditions, delays in governmental approvals or permits, the availability of materials and contractors, and labor disputes. (2) The variable index interest rate components are typically subject to floors that range from 0% to 0.50%. (3) The Partnership has securitized the indicated assets in TOB trust financing facilities that allow for additional principal proceeds as the remaining investment commitments are funded by the Partnership. See Note 15 for further details on debt financing. (4) Upon stabilization, the MRB will convert to a fixed rate of 8.0% and become subordinate to the other senior MRBs. (5) The borrower may elect to extend the maturity date for a period ranging between six and twelve months upon meeting certain conditions, including payment of a non-refundable extension fee. 72 --------------------------------------------------------------------------------
(6)
The initial draw on this investment was funded with available cash or proceeds from the Acquisition LOC. InJuly 2022 , theMagnolia Heights assets were securitized in a TOB trust financing facility that allow for additional principal proceeds as the remaining investment commitments are funded by the Partnership. (7) The remaining loan commitment will be used to cover debt service over the twelve-month term of the property loan. (8) The property became a consolidated VIE effective during the fourth quarter of 2021 (Note 5). A development site has been identified for this property but construction had not commenced as ofJune 30, 2022 . (9) This is the estimated closing date of the associated bond purchase commitment.
Debt Service on Debt Financings, Secured Notes, Mortgages Payable, and Secured Lines of Credit
Our debt financing arrangements consist of various secured financing transactions to leverage our portfolio of MRBs, taxable MRBs, GILs, a taxable GIL and certain property loans. The financing arrangements generally involve the securitization of these investment assets into trusts whereby we retain beneficial interests in the trusts that provide us certain rights to the underlying investment assets. The senior beneficial interests are sold to unaffiliated parties in exchange for debt proceeds. The senior beneficial interests require periodic interest payments that may be fixed or variable, depending on the terms of the arrangement, and scheduled principal payments. We are required to fund any shortfall in principal and interest payable to the senior beneficial interests of the TEBS financings in the case of non-payment, forbearance or default of the borrowers' contractual debt service payments of the related MRBs, up to the value of our residual interests. In the case of forbearance or default on an underlying investment asset in a Term TOB or TOB trust financing, we may be required to fund shortfalls in principal and interest payable to the senior beneficial interests, repurchase a portion of the outstanding senior beneficial interests, or repurchase the underlying investment asset and seek alternative financing. We anticipate that cash flows from the securitized investment assets will fund normal, recurring principal and interest payments to the senior beneficial interests and all trust-related fees. Our debt financing arrangements include various fixed and variable debt arrangements. Increases in short-term interest rates will generally result in similar increases in the interest costs associated with our variable debt financing arrangements. We actively manage our portfolio of fixed and variable rate debt financings and our exposure to changes in market interest rates. The following table summarizes our fixed and variable rate debt financings as ofJune 30, 2022 andDecember 31, 2021 : June 30, 2022 December 31, 2021 Related Debt Securitized Assets - Financing - Fixed % of Total % of Total
Fixed or Variable or Variable Outstanding Debt
Outstanding Debt
Interest Rates Interest Rates Principal Financing
Principal Financing
Fixed Fixed $ 271,668,986 29.1 % $ 293,999,683 35.8 %
Variable (1) Variable (1) 335,289,000 35.8 % 242,204,000 29.4 %
Fixed Variable 224,085,548 24.0 % 286,567,660 34.8 %
Variable - Hedged 103,840,000 -
Fixed (2) 11.1 % 0.0 %
Total $ 934,883,534 $ 822,771,343 (1)
The securitized assets and related debt financings each have variable interest rates, though the variable rate indices may differ. As such, the Partnership is at least partially hedged against rising interest rates. (2) As ofJune 30, 2022 , we have two interest rate swaps indexed to SOFR with notional amounts totaling$103.8 million with terms through 2024 and 2027. Though the variable rate indices may differ, these interest rate swaps have effectively fixed the interest rate of the related debt financing principal outstanding. We may be required to post collateral if the value of investment assets securitized in TOB trust financings, plus our net exposure on our interest rate derivatives, drops below a threshold in the aggregate. We posted collateral totaling$6.2 million during the six months endedJune 30, 2022 due to volatility in asset pricing, though$3.2 million of collateral was returned to us inJune 2022 with an additional$930,000 that was eligible to be returned as ofJune 30, 2022 . Continuing volatility in market interest rates and potential deterioration of general economic conditions may cause the value of our investment assets to decline and result in the posting of additional collateral in the future. Our Secured Notes are secured by the cash flows from the residual certificates of our TEBS financings. Interest due on the Secured Notes, net of amounts due to the Partnership on the related total return swap transactions, will be paid from receipts related to the TEBS financing residual certificates. Future receipts of principal related to the TEBS financing residual certificates will be used to pay down the principal of the Secured Notes. The Partnership has guaranteed the payment and performance of the responsibilities under the Secured Notes and related documents. Our mortgages payable financing arrangements are used to leverage The 50/50 MF Property. The mortgages are entered into with financial institutions and are secured by the MF Property. The mortgages bear interest at fixed rates and include scheduled principal payments. The mortgages mature inMarch 2025 andApril 2027 . We anticipate that cash flows from The 50/50 MF Property will be sufficient to pay all normal, recurring principal and interest payments. Our General LOC and Acquisition LOC require monthly interest payments on outstanding balances and certain quarterly commitment fees. Such obligations are paid primarily from operating cash flows. The Acquisition LOC requires principal payments as previously described in this Item 2. The General LOC does not require principal payments until maturity inJune 2023 as long as the outstanding principal does not exceed the borrowing base calculation. 73 --------------------------------------------------------------------------------
Distributions Paid to Holders of Preferred Units and BUCs
Distributions to the holders of Series A Preferred Units and Series A-1 Preferred, if declared by the General Partner, are paid quarterly at an annual fixed rate of 3.0%. If the Partnership were to issue Series B Preferred Units, holders of such units will be paid quarterly distributions, if declared by the General Partner, at an annual fixed rate of 3.4%. The Series A Preferred Units, Series A-1 Preferred Units and Series B Preferred Units are non-cumulative, non-voting and non-convertible. OnJune 15, 2022 , we announced that theBoard of Managers of Greystone Manager, which is the general partner of the General Partner, declared a quarterly distribution of$0.37 per BUC and a supplemental distribution of$0.20 per BUC to unitholders of record onJune 30, 2022 and payable onJuly 29, 2022 .
The Partnership and its
Potential Redemptions of Series A Preferred Units
Upon the sixth anniversary of the closing of the sale of Series A Preferred Units to a subscriber, and upon each anniversary thereafter, each holder of Series A Preferred Units has the right to redeem, in whole or in part, the Series A Preferred Units held by such holder at a per unit redemption price equal to$10.00 per unit plus an amount equal to all declared and unpaid distributions through the date of the redemption. The next optional redemption dates for the currently outstanding Series A Preferred Units range fromMarch 2023 throughDecember 2023 and the holders must provide notice of the election to redeem no less than 180 days prior to such redemption dates. No Unitholders have given notice of their election to redeem Series A Preferred Units as ofJune 30, 2022 . If the holders of the Series A Preferred Units elect to redeem, we will be required, subject to certain restrictions, to secure funds to redeem from unrestricted cash on hand, proceeds from our General LOC, additional borrowings or through additional capital raising options. InJuly 2021 , our registration statement on Form S-4 to register the offering and issuance of up to 9,450,000 of Series A-1 Preferred Units under a shelf registration process was declared effective by theSEC . Under this offering, the Partnership may issue up to 9,450,000 Series A-1 Preferred Units in exchange for the Partnership's outstanding Series A Preferred Units. If unitholders elect to exchange Series A Preferred Units for Series A-1 Preferred Units, the new Series A-1 Preferred Units will not be eligible for redemption until the sixth anniversary of the date of the exchange, except in certain limited circumstances. InApril 2022 , we issued 2,000,000 Series A-1 Preferred Units in exchange for 2,000,000 outstanding Series A Preferred Units held by a financial institution. These Series A-1 Preferred Units were issued in a registered offering pursuant to a registration statement on Form S-4, which was declared effective by theSecurities and Exchange Commission (the "Commission") onJuly 6, 2021 , and subsequently amended pursuant to a Post-Effective Amendment to the Form S-4, which was declared effective by the Commission onApril 13, 2022 (as amended, the "Form S-4"). The remaining 7,450,000 of outstanding Series A Preferred Units are eligible for exchange under the Form S-4.
Other Contractual Obligations
We are subject to various guarantee obligations in the normal course of business, and, in most cases, do not anticipate these obligations to result in significant cash payments by the Partnership.
Cash Flows
For the six months endedJune 30, 2022 , we used cash of$2.3 million , which was the net result of$14.3 million provided by operating activities,$96.5 million used in investing activities, and$79.8 million provided by financing activities. Cash provided by operating activities totaled$14.3 million for the six months endedJune 30, 2022 , as compared to$15.6 million generated for the six months endedJune 30, 2021 . The change between periods was primarily due to the following factors:
•
An increase of
•
An increase of
•
A decrease of
•
A total decrease of
74
--------------------------------------------------------------------------------•
A decrease of
Cash used in investing activities totaled
•
A decrease of
•
A decrease of$57.1 million of cash due to continued advances on property loans, offset by an increase of$8.9 million of cash due to less advances on GILs and increase of$3.3 million due to property loan principal payments received;
•
A decrease of
•
A decrease of
•
An increase of
•
An increase of
Cash provided by financing activities totaled$79.8 million for the six months endedJune 30, 2022 , as compared to cash provided of$53.6 million for the six months endedJune 30, 2021 . The change between periods was primarily due to the following factors:
•
A net increase of
•
A net increase of
•
A net decrease of
•
A decrease of
We believe our cash balance and cash provided by the sources discussed herein will be sufficient to pay, or refinance, our debt obligations and to meet our liquidity needs over the next 12 months.
Leverage Ratio
We set target constraints for each type of financing utilized by us. Those constraints are dependent upon several factors, including the assets being leveraged, the tenor of the leverage program, whether the financing is subject to margin collateral calls, and the liquidity and marketability of the financed collateral. We use target constraints for each type of financing to manage to an overall maximum 75% leverage level (the "Leverage Ratio"), as established by theBoard of Managers of Greystone Manager.The Board of Managers of Greystone Manager retains the right to change the maximum Leverage Ratio in the future based on the consideration of factors theBoard of Managers considers relevant. We calculate our Leverage Ratio as total outstanding debt divided by total assets using cost adjusted for paydowns for MRBs, GILs, property loans, taxable MRBs and taxable GILs, and initial cost for deferred financing costs and real estate assets. As ofJune 30, 2022 , our overall Leverage Ratio was approximately 70%.
Off Balance Sheet Arrangements
As ofJune 30, 2022 andDecember 31, 2021 , we held MRBs, GILs, taxable MRBs, a taxable GIL and certain property loans that are secured by affordable multifamily and seniors housing properties and one commercial property, which are owned by entities that are not controlled by us. We have no equity interest in these entities and do not guarantee any obligations of these entities.
The Partnership has entered into various commitments and guarantees. For additional discussions related to commitments and guarantees, see Note 18 to the Partnership's condensed consolidated financial statements.
We do not engage in trading activities involving non-exchange traded contracts.
As such, we are not materially exposed to any financing, liquidity, market, or
credit risk that could arise if we had engaged in such relationships.
We do not have any relationships or transactions with persons or entities that
derive benefits from their non-independent relationships with us or our related
parties, other than those disclosed in Note 21 to the Partnership's condensed
consolidated financial statements.
75
--------------------------------------------------------------------------------Recently Issued Accounting Pronouncements
For a discussion of recently issued accounting pronouncements that will be adopted in future periods, see Note 2 to the Partnership's condensed consolidated financial statements.
Community Investments
The Partnership has invested and intends to invest in assets which are and will be purchased in order to support underlying community development activities targeted to low- and moderate-income individuals, such as affordable housing, small business lending, and job creating activities in areas ofthe United States . These investments may be eligible for regulatory credit under the Community Reinvestment Act of 1977 ("CRA") and available for allocation to holders of our Preferred Units (see Note 19 to Partnership's condensed consolidated financial statements). The following table sets forth the assets of the Partnership the General Partner believes are eligible for regulatory credit under the CRA and are available for allocation to Preferred Unit investors as ofJune 30, 2022 : 76 --------------------------------------------------------------------------------
Senior
Investment Bond
Available for Maturity
Property Name Allocation Date (1) Street City County State Zip
CCBA Senior Garden
Apartments $ 3,807,000 7/1/2037 438 3rd Ave San Diego San Diego CA 92101
Glenview
Apartments 670,000 12/1/2031 2361 Bass Lake Rd Cameron Park El Dorado CA 95682
Harden Ranch
Apartments 460,000 3/1/2030 1907 Dartmouth Way Salinas Monterey CA 93906
Harmony Court
Apartments 3,730,000 12/1/2033 5948 Victor Street Bakersfield Kern CA 93308
Harmony Terrace 941 Sunset Garden
Apartments 3,400,000 1/1/2034 Lane Simi Valley Ventura CA 93065
12225-12227 South
Hope on Avalon 17,981,200 2/1/2023 Avalon Blvd Los Angeles Los Angeles CA 90061
5138 South
Hope on Broadway 10,691,245 2/1/2023 Broadway Los Angeles Los Angeles CA 90037
Lutheran Gardens 2347 E. El Segundo
Apartments 10,352,000 2/1/2025 Boulevard Compton Los Angeles CA 90222
Montclair
Apartments 1,630,000 12/1/2031 150 S 19th Ave Lemoore Kings CA 93245
Montecito at
Williams Ranch 7,690,000 10/1/2034 1598 Mesquite Dr Salinas Monterey CA 93905
13728 San Pablo Contra
Montevista 6,720,000 7/1/2036 Avenue San Pablo Costa CA 94806
Ocotillo Springs
(2) 19,700,000 8/1/2037 1615 I St Brawley Imperial CA 92227
Residency at the 1657-1661 North
Entrepreneur (3) 17,500,000 3/31/2040 Western Avenue Hollywood Los Angeles CA 90027
Residency at the 5500 Hollywood
Mayer (4) 26,000,000 4/1/2039 Boulevard Hollywood Los Angeles CA 90028
San Vicente 250 San Vicente
Townhomes 495,000 11/1/2033 Road Soledad Monterey CA 93960
Santa Fe San
Apartments 265,000 12/1/2031 16576 Sultana St Hesperia Bernardino CA 92345
Seasons At Simi
Valley 4,376,000 9/1/2032 1606 Rory Ln Simi Valley Ventura CA 93063
Solano Vista 40 Valle Vista
Apartments 2,655,000 1/1/2036 Avenue Vallejo Solano CA 94590
Summerhill Family
Apartments 3,623,000 12/1/2033 6200 Victor Street Bakersfield Kern CA 93308
Sycamore Walk 632,000 1/1/2033 380 Pacheco Road Bakersfield Kern CA 93307
Tyler Park
Townhomes 75,000 1/1/2030 1120 Heidi Drive Greenfield Monterey CA 93927
Village at Madera
Apartments 85,000 12/1/2033 501 Monterey St Madera Madera CA 93637
2800 E Vineyard
Vineyard Gardens 3,995,000 1/1/2035 Ave Oxnard Ventura CA 93036
Westside Village
Apartments 1,970,000 1/1/2030 595 Vera Cruz Way Shafter Kern CA 93263
Centennial
Crossings Senior 15475 East Fair
Apartments 55,099,572 9/1/2023 Place Centennial Arapahoe CO 80016
151 N. Osprey
Osprey Village 25,363,127 8/1/2024 Village Road Kissimmee Osceola FL 34758
10156 Magnolia
Magnolia Heights 15,800,914 7/1/2024 Heights Circle Covington Newton GA 30014
Willow Place 150 South Zack
Apartments 9,468,863 10/1/2024 Hinton Parkway McDonough Henry GA 30253
Brookstone 4200 Hickory Hills
Apartments 7,351,468 5/1/2040 Drive Waukegan Lake IL 60087
Copper Gate 3140 Copper Gate
Apartments 5,220,000 12/1/2029 Circle Lafayette Tippecanoe IN 47909
East Baton
Renaissance 650 N. Ardenwood Rouge
Gateway Apartments 11,500,000 6/1/2050 Drive Baton Rouge Parish LA 70806
Hilltop at Signal 50 Signal Hills
Hills 39,809,308 8/1/2023 Center West Saint Paul Dakota MN 55118
Legacy Commons at 50 Signal Hills
Signal Hills 57,969,635 2/1/2024 Center West Saint Paul Dakota MN 55118
Oasis at Twin 2705,2725, & 2745
Lakes 58,018,657 8/1/2023 Herschel St. N Roseville Ramsey MN 55113
Jackson Manor
Apartments (5) 6,900,000 5/1/2038 332 Josanna Street Jackson Hinds MS 39202
Gateway Village
Apartments 2,600,000 4/1/2032 400 Lakeside Drive Hillsborough Orange NC 27278
Greens of Pine 6201 Pine Glen
Glen 10,315,000 10/1/2047 Trail Durham Durham NC 27713
Lynnhaven 719 Wadesboro
Apartments 3,450,000 4/1/2032 Street Durham Durham NC 27703
Silver Moon
Apartments 8,500,000 8/1/2055 901 Park Avenue SW Albuquerque Bernalillo NM 87102
Village at Avalon 16,400,000 1/1/2059 915 Park SW Albuquerque Bernalillo NM 87102
Columbia Gardens
Apartments 15,000,000 12/1/2050 4000 Plowden Road Columbia Richland SC 29205
Companion at
Thornhill 930 East Main
Apartments 11,500,000 1/1/2052 Street Lexington Lexington SC 29072
Cross Creek
Apartment Homes 5,871,004 3/1/2049 325 Ambrose Run Beaufort Beaufort SC 29906
The Palms at 1155 Clemson
Premier Park 20,152,000 1/1/2050 Frontage Road Columbia Richland SC 29229
Village at River's Gibson & Macrae
Edge 10,000,000 6/1/2033 Streets Columbia Richland SC 29203
Willow Run 15,000,000 12/18/2050 511 Alcott Drive Columbia Richland SC 29203
Arbors of Hickory 6296 Lake View
Ridge Apartments 11,581,925 1/1/2049 Trail Memphis Shelby TN 38115
4250 Old Decatur
Angle Apartments 23,000,000 1/1/2054 Rd Fort Worth Tarrant TX 76106
Avistar at
Copperfield 6416 York Meadow
(Meadow Creek) 14,000,000 5/1/2054 Drive Houston Harris TX 77084
Avistar at the
Crest Apartments 11,211,961 3/1/2050 12660 Uhr Lane San Antonio Bexar TX 78217
Avistar at the 3935 Thousand Oaks
Oaks 8,985,774 8/1/2050 Drive San Antonio Bexar TX 78217
Avistar at
Wilcrest (Briar 1300 South
Creek) 3,470,000 5/1/2054 Wilcrest Drive Houston Harris TX 77042
Avistar at Wood
Hollow (Oak 7201 Wood Hollow
Hollow) 40,260,000 5/1/2054 Circle Austin Travis TX 78731
Avistar in 09 6700 North
Apartments 7,808,622 8/1/2050 Vandiver Road San Antonio Bexar TX 78209
9511 Perrin Beitel
Avistar on Parkway 13,425,000 5/1/2052 Rd San Antonio Bexar TX 78217
Avistar on the 5100 USAA
Blvd 17,559,976 3/1/2050 Boulevard San Antonio Bexar TX 78240
Avistar on the 4411 Callaghan
Hills 5,769,327 8/1/2050 Road San Antonio Bexar TX 78228
Berrendo Square 6,435,000 12/1/2052 515 Exeter Road San Antonio Bexar TX 78209
Concord at Gulf
Gate Apartments 19,185,000 2/1/2032 7120 Village Way Houston Harris TX 77087
Concord at Little 301 W Little York
York Apartments 13,440,000 2/1/2032 Rd Houston Harris TX 77076
Concord at
Williamcrest
Apartments 20,820,000 2/1/2032 10965 S Gessner Rd Houston Harris TX 77071
SWC of Loop 410
Esperanza at Palo and Highway 16
Alto Apartments 19,540,000 7/1/2058 South San Antonio Bexar TX 78224
Heritage Square
Apartments 11,185,000 9/1/2051 515 S. Sugar Rd Edinburg Hidalgo TX 78539
Laurel Crossing 7,590,000 12/1/2052 1415 Babcock Road San Antonio Bexar TX 78201
Oaks at Georgetown
Apartments 12,330,000 1/1/2034 550 W 22nd St Georgetown Williamson TX 78626
Runnymede
Apartments 10,825,000 10/1/2042 1101 Rutland Drive Austin Travis TX 78758
Scharbauer Flats 2300 N.
Apartments 60,640,894 1/1/2023 Fairgrounds Road Midland Midland TX 79705
South Park Ranch
Apartment Homes 11,919,860 12/1/2049 9401 S 1st Street Austin Travis TX 78748
15
$ 920,625,332
(1)
The date reflects the stated contractual maturity of the Partnership's senior debt investment in the property. For various reasons, including, but not limited to, call provisions that can be exercised by both the borrower and the Partnership, such debt investments may be redeemed prior to the stated maturity date. The Partnership may also elect to sell certain debt investments prior to the contractual maturity, consistent with its strategic purposes.
(2)
The Partnership has committed to provide funding of an MRB up to$15.0 million and of a taxable MRB up to$7.0 million during construction and lease-up of the property on a drawdown basis. The taxable MRB has a maturity date of8/1/2023 with an option to extend the maturity up to one year. Upon stabilization of the property, the MRB will be partially repaid and the maximum balance of the MRB after stabilization is approximately$3.5 million and will have a maturity date of 8/1/2037.
(3)
The Partnership committed to provide total funding of MRBs up to$59.0 million and a taxable MRB up to$13.0 million during the acquisition and rehabilitation phase of the property on a draw-down basis. The taxable MRB has a maturity date of4/1/2025 with an option to extend the maturity six months if stabilization has not occurred. Upon stabilization of the property, the MRB will be partially repaid and the maximum balance of the MRB after stabilization will not exceed$44.1 million and will have a maturity date of 3/31/2040.
(4)
The Partnership committed to provide total funding of an MRB up to$29.5 million and a taxable MRB up to$12.5 million during the acquisition and rehabilitation phase of the property on a draw-down basis. The taxable MRB has a maturity date of4/1/2024 with an option to extend the maturity six months if stabilization has not occurred. Upon stabilization of the property, the MRB will be partially repaid and the maximum balance of the MRB after stabilization will not exceed$18.1 million and will have a maturity date of 4/1/2039.
(5)
The Partnership committed to provide total funding of the MRB up to$6.9 million during the acquisition and rehabilitation phase of the property on a draw-down basis. Upon stabilization of the property, the MRB will be partially repaid and the maximum balance of the MRB after stabilization will not exceed$4.8 million and will have a maturity date of 5/1/2038. 77
--------------------------------------------------------------------------------
© Edgar Online, source
