Greystone Housing Impact Investors Q3 2025 Earnings Report

Greystone Housing Impact Investors EPS Results

• Actual EPS: $0.03
• Consensus EPS: $0.39
• Beat/Miss: Missed by -$0.36
• One Year Ago EPS: N/A

Greystone Housing Impact Investors Revenue Results

• Actual Revenue: $21.68 million
• Expected Revenue: $24.29 million
• Beat/Miss: Missed by -$2.62 million
• YoY Revenue Growth: N/A

Greystone Housing Impact Investors Announcement Details

• Quarter: Q3 2025
• Date: 11/6/2025
• Time: After Market Closes
• Conference Call Date: Thursday, November 6, 2025
• Conference Call Time: 4:30PM ET

Greystone Housing Impact Investors (NYSE:GHI) (NYSE:GHI) is a publicly traded real estate investment trust focused on financing and preserving affordable and sustainable rental housing in the United States. As the country’s first social‐impact REIT dedicated to housing, GHI aims to deliver stable, long‐term cash flows to its shareholders while supporting underserved communities through strategic capital deployment.

The company originates, underwrites and manages a diversified portfolio of first‐mortgage loans secured by multifamily residential properties, with an emphasis on workforce, affordable and mixed‐income developments. By partnering with local housing authorities, nonprofit organizations and private developers, GHI helps structure financing solutions that leverage government insurance programs and agency debt instruments. Its lending platform spans major U.S. markets and targets properties serving low‐ and moderate‐income tenants, helping to preserve existing affordable stock and promote new development.

GHI is sponsored by Greystone & Company, a commercial real estate finance and investment management firm with decades of experience in multifamily and healthcare lending. Headquartered in New York City, the trust is led by a management team with deep expertise in housing finance, credit underwriting and portfolio management. Through disciplined risk controls and an impact‐driven investment mandate, Greystone Housing Impact Investors seeks to align financial performance with measurable social outcomes in the affordable housing sector.

Greystone Housing Impact Investors Q3 2025 Earnings Call Transcript

Key Takeaways

• Positive Sentiment: All borrowers on multifamily mortgage revenue bonds are current with no forbearance requests and portfolio fiscal occupancy was 87.8% as of Sept 30, with management expecting recovery as new supply is absorbed.
• Positive Sentiment: Management is shifting capital away from market-rate JV multifamily toward tax-exempt mortgage revenue bonds (and a construction JV with BlackRock), aiming for more stable earnings and a higher proportion of tax-exempt distributions to unit holders.
• Negative Sentiment: Market-rate JV multifamily profitability has declined — two 2025 JV property sales returned capital but produced much lower realized returns than prior years, and management expects continued pressure in that segment.
• Negative Sentiment: The partnership recorded significant asset-specific credit reserves: a roughly $8.7M Q2 provision for three South Carolina MRB properties and an additional ~$596k Q3 provision related to a support loan, with owners and managers still working on stabilization or refinancing/sale options.
• Neutral Sentiment: Q3 results: net income $2.0M ($0.03/unit), CAD $4.6M ($0.20/unit), book value $12.36/unit (up $0.53 QoQ) vs. market close price $8.24 (33% discount); liquidity: $36.2M cash, ~$88.6M available credit, and $5M Series B preferred issued in Oct 2025.

Presentation

[Operator]

Greetings and welcome to the Q3 2025 earnings call for Greystone Housing Impact Investors LP. At this time, all participants are in a listen-only mode. A question-and-answer session will follow the formal presentation. If anyone should require operator assistance during the conference, please press star zero on your telephone keypad. Please note this conference is being recorded. I will now turn the conference over to your host, Jesse Corey. Please go ahead.

[Jesse Coury, CFO at Greystone Housing Impact Investors LP]

I would like to welcome everyone to the Greystone Housing Impact Investors LP NYSE ticker symbol GHI third quarter of 2025 earnings conference call. During the presentation, all participants will be in a listen-only mode. After management presents its overview of Q3 2025, you will be invited to participate in a question-and-answer session. As a reminder, this conference call is being recorded. During this conference call, comments made regarding GHI, which are not historical facts, are forward-looking statements and are subject to risks and uncertainties that could cause the actual future events or results to differ materially from these statements. Such forward-looking statements are made pursuant to the Safe Harbor Provisions of the Private Securities Litigation Reform Act of 1995. Forward-looking statements can be identified by the use of words like may, should, expect, plan, intend, focus, and other similar terms.

[Jesse Coury, CFO at Greystone Housing Impact Investors LP]

You are cautioned that these forward-looking statements speak only as of today's date. Changes in economic, business, competitive, regulatory, and other factors could cause our actual results to differ materially from those expressed or implied by the projections or forward-looking statements made today. For more detailed information about these factors and other risks that may impact our business, please review the periodic reports and other documents filed from time to time by us with the Securities and Exchange Commission. Internal projections and beliefs upon which we base our expectations may change, but if they do, you will not necessarily be informed. Today's discussion will include non-GAAP measures and will be explained during this call. We want to make you aware that GHI is operating under the SEC Regulation FD and encourage you to take full advantage of the question-and-answer session.

[Jesse Coury, CFO at Greystone Housing Impact Investors LP]

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

[Ken Rogozinski, CEO at Greystone Housing Impact Investors LP]

Good afternoon, everyone. Welcome to Greystone Housing Impact Investors LP's third quarter 2025 investor call. Thank you for joining. I will start with an overview of our portfolio. Jesse Corey, our Chief Financial Officer, will then present the partnership's financial results. I will wrap up with an overview of the market and our investment pipeline. Following that, we look forward to taking your questions. Our overall investment portfolio performed steadily during the third quarter. We have had no forbearance requests for multifamily mortgage revenue bonds, and all of our borrowers are current on their principal and interest payments as of September 30, 2025. Fiscal occupancy for the stabilized mortgage revenue bond portfolio was 87.8% as of September 30th, which is down slightly from 88.4% as of June 30th.

[Ken Rogozinski, CEO at Greystone Housing Impact Investors LP]

The decline is primarily at properties in Texas where local markets are experiencing higher vacancies due to recent increases in multifamily unit supply. We expect occupancies will recover once available units are absorbed and new supply deliveries decline in the near term. Our governmental issuer loans for the financing of affordable multifamily properties continue to progress toward stabilization and ultimately redemption of our loans. Construction at all properties is complete or substantially complete, and leasing velocity is strong. We continue to see progress on the development and lease-up of our joint venture equity investments as well. Of our 11 current investments, seven have completed construction and are leasing. Two have nearly completed construction and begun leasing activities, and two relate to sites for future development. Overall, occupancy is increasing across the portfolio as investments near stabilization.

[Ken Rogozinski, CEO at Greystone Housing Impact Investors LP]

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

[Ken Rogozinski, CEO at Greystone Housing Impact Investors LP]

In more recent periods, market conditions such as higher interest rates and higher multifamily capitalization rates began negatively impacting multifamily asset values, resulting in lower returns upon sales of these properties. There were no sales of joint venture properties in 2024. For the two property sales in 2025, while all invested capital was returned, our realized returns were much lower than we recognized in prior years. We and our investment committee believe these challenging conditions will continue to impact market-rate JV multifamily investment profitability for the foreseeable future. We remain positive on the market-rate seniors' housing segment of the market. We believe market supply trends, potential resident demographics, and expected returns remain encouraging, so we will continue to evaluate joint venture equity investment opportunities in the seniors' housing segment, though lower in volume than our historic capital allocation to market-rate multifamily investments.

[Ken Rogozinski, CEO at Greystone Housing Impact Investors LP]

Meanwhile, we also see strong investment opportunities for our traditional investments in tax-exempt mortgage revenue bonds associated with affordable multifamily properties, as well as for seniors' housing and skilled nursing properties. Greystone's strong lending relationships across affordable housing, seniors' housing, and skilled nursing business lines are also providing investment opportunities for the partnership. We believe these tax-exempt mortgage revenue bond opportunities will allow the partnership to deploy capital and investments with more predictable returns since profitability here is based on the net interest spread between the bond interest rate and our related debt financing rate. Additionally, the partnership's newly established construction lending joint venture with BlackRock is expected to provide future tax-advantaged earnings as well. Based on these factors, we will be implementing a strategy to reduce our capital allocation to joint venture equity investments in market-rate multifamily properties going forward.

[Ken Rogozinski, CEO at Greystone Housing Impact Investors LP]

We and the respective managing members will manage our remaining portfolio of market-rate multifamily investments to maximize sales prices and returns to the extent possible, with our return of capital from the sale of these investments being redeployed primarily into tax-exempt mortgage revenue bond investments. We believe this change in investment strategy provides three key benefits to our unit holders. First, by their nature, our tax-exempt mortgage revenue bond investments earn stable returns based on the net interest spread between the bond interest rate and our related debt financing rate. As a result, we expect increasingly stable earnings as compared to the uneven returns on joint venture equity investments due to the income being realized primarily upon property sales. Second, in recent years, the majority of income allocated to our unit holders has been taxable because of the taxable income from joint venture equity investment sales.

[Ken Rogozinski, CEO at Greystone Housing Impact Investors LP]

As we allocate more capital to tax-exempt mortgage revenue bond investments, we expect that the proportion of income allocated to our unit holders that is tax-exempt for federal income tax purposes will increase in the long term. In the near term, potential gains from sales of our remaining market-rate multifamily JV equity investments will continue to generate taxable income for unit holders. Third, we are investing capital in a proven asset class—excuse me—proven investment class that is quarter operations that also leverages the strong relationships and knowledge base of Greystone's other lending platforms. We and the board of managers will continue refining our operating strategy in the coming quarters.

[Ken Rogozinski, CEO at Greystone Housing Impact Investors LP]

We and the board of managers are also assessing the potential impact, if any, this change in strategy will have on our short-term and long-term earnings expectations and future unit holder distributions, with a focus on the long-term benefit to our investors in GHI. We look forward to providing additional details on our strategy and updates on our progress in future communications and on future earnings calls. With that, I will turn things over to Jesse Corey, our CFO, to discuss the financial data for the third quarter of 2025.

[Jesse Coury, CFO at Greystone Housing Impact Investors LP]

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

[Jesse Coury, CFO at Greystone Housing Impact Investors LP]

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

[Jesse Coury, CFO at Greystone Housing Impact Investors LP]

We regularly monitor our overall exposure to potential increases in interest rates through an interest rate sensitivity analysis, which we report quarterly and is included on page 103 of our Form 10-Q. The interest rate sensitivity table shows the impact on our net interest income given various changes in market interest rates and other various management assumptions. Our base case uses the forward SOFR yield curve as of September 30th, which includes market-anticipated SOFR rate declines over the next 12 months. The scenarios we present assume there is an immediate shift in the yield curve and that we do nothing in response for 12 months. The analysis shows that an immediate 100 basis point increase in rates will result in a decrease in our net interest income in CAD of approximately $1 million, or $0.044 per unit.

[Jesse Coury, CFO at Greystone Housing Impact Investors LP]

Conversely, a 100 basis point decrease in rates across the curve will result in an increase in our net interest income in CAD of approximately $1 million, or $0.044 per unit. We consider ourselves largely hedged against significant fluctuations in our net interest income from market interest rate movements in all scenarios, assuming no significant credit issues. Our debt investments portfolio consists of mortgage revenue bonds, governmental issuer loans, and property loans that totaled $1.26 billion as of September 30th, or 85% of our total assets. We own 82 mortgage revenue bonds as of September 30th that provide permanent financing for affordable multifamily, seniors, and skilled nursing properties across 12 states, with concentrations in California, Texas, and South Carolina. We own four governmental issuer loans as of September 30th that finance the construction or rehabilitation of affordable multifamily properties in two states.

[Jesse Coury, CFO at Greystone Housing Impact Investors LP]

During the third quarter, we funded approximately $27 million of our mortgage revenue bond, governmental issuer loan, and related commitments, which was offset by redemptions and paydowns of approximately $29 million in the normal course. Our outstanding future funding commitments for our debt investments totaled $20.3 million as of September 30th before related debt proceeds, excluding one investment we expect to transfer to our construction lending joint venture with BlackRock. These commitments will be funded over approximately 12 months and will add to our income-producing asset base. We have had no forbearance requests for mortgage revenue bonds and governmental issuer loans, and all of our borrowers are current on their principal and interest payments as of September 30th. Our reported provision for credit losses was $596,000 for the third quarter, primarily related to a support loan to an MRB borrower.

[Jesse Coury, CFO at Greystone Housing Impact Investors LP]

As mentioned in our call in August, we reported asset-specific provisions for credit losses in the second quarter related to three 501(c)(3) nonprofit mortgage revenue bonds secured by properties in South Carolina. The rehabilitation of each property has been completed, and each property is working to stabilize operations, though property operating results have not met the originally underwritten levels. We continue to have discussions with the owners regarding options to improve property operations and potential refinancing and sales options to maximize the value of our mortgage revenue bond investments. Our market-rate joint venture equity investments portfolio consisted of 10 properties as of September 30th, with a reported carrying value of approximately $154 million, exclusive of one investment, Vantage at San Marcos, that is reported on a consolidated basis. Our remaining funding commitments for JV equity investments totaled $19.5 million as of September 30.

[Jesse Coury, CFO at Greystone Housing Impact Investors LP]

All remaining commitments relate to sites being considered for future development. We only fund these commitments if a construction contract is signed and construction commences. The managing member may also choose to sell the sites and terminate our related funding commitments. Recently, the Vantage at Loveland property was listed for sale, and the marketing process is ongoing. We reported our proportionate share of operating losses from these investments, which totaled $1.3 million during the third quarter. Our joint venture equity investments, by design, typically incur operating losses during development and lease-up. Such losses are incorporated into the development budget for each project and are typically funded by interest reserves and construction loan proceeds. We add back these proportionate losses to net income when calculating CAD, as they are primarily a result of depreciation expense and are expected to be recovered upon future transactional events.

[Jesse Coury, CFO at Greystone Housing Impact Investors LP]

On the liability side of our balance sheet, our debt financing facilities are used to leverage our investments. Our debt financing facilities had outstanding principal balances totaling $1.02 billion as of September 30th. This is down approximately $9 million from June 30th. We manage and report our debt financing in four main categories on page 97 of our Form 10-Q. Three of the four categories are designed such that our net return is generally insulated from changes in short-term interest rates. These categories account for $813 million, or 79% of our total debt financing. The fourth category is fixed-rate assets with variable-rate debt with no designated hedging, which is where we are most exposed to interest rate risk in the near term. This category represents $212 million, or 21% of our total debt financing.

[Jesse Coury, CFO at Greystone Housing Impact Investors LP]

Of this amount, $153 million is associated with debt investments that are scheduled to mature on or before April 2026, which will repay the outstanding debt financings. As such, we expect the unhedged period to be relatively short. On the preferred capital front, we successfully issued $5 million of Series B preferred units to a new investor in October 2025. We intend to use the net proceeds from this offering to acquire additional investments, fund our existing investment commitments, and support general partnership operations. I'll now turn the call back to Ken for his update on market conditions.

[Ken Rogozinski, CEO at Greystone Housing Impact Investors LP]

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

[Ken Rogozinski, CEO at Greystone Housing Impact Investors LP]

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

[Ken Rogozinski, CEO at Greystone Housing Impact Investors LP]

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

[Operator]

Thank you. We will now be conducting a question-and-answer session. If you would like to ask a question, please press star one on your telephone keypad. A confirmation tone will indicate your line is in the question queue. You may press star two if you would like to remove your question from the queue. For participants using speaker equipment, it may be necessary to pick up your handset before pressing the star keys. Our first question comes from Matthew Erdner with JonesTrading.

[Matthew Erdner, Director, Specialty Finance, and Real Estate Equity Research Analyst at JonesTrading]

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

[Ken Rogozinski, CEO at Greystone Housing Impact Investors LP]

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

[Matthew Erdner, Director, Specialty Finance, and Real Estate Equity Research Analyst at JonesTrading]

Got it. Could you talk a little bit about, I guess it kind of sits more on the JV partner side, but just the expected pace of asset sales and kind of where you guys sit today in terms of occupancy stabilization? I know you touched on this a little bit earlier. I guess going forward, as these things kind of do stabilize, it seems like the timeline has been extended. Just from a modeling perspective, should we expect these to take a little more time to sell than what we saw in 2021 through 2023?

[Ken Rogozinski, CEO at Greystone Housing Impact Investors LP]

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

[Ken Rogozinski, CEO at Greystone Housing Impact Investors LP]

What the proper time is for a property to be listed for sale.

[Matthew Erdner, Director, Specialty Finance, and Real Estate Equity Research Analyst at JonesTrading]

Got it. Thank you. Appreciate the comments.

[Operator]

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

[Chris Muller, Director Equity Research at Citizens Capital Markets]

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

[Ken Rogozinski, CEO at Greystone Housing Impact Investors LP]

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

[Ken Rogozinski, CEO at Greystone Housing Impact Investors LP]

Becoming more active lenders again as we rotate this capital away from the JV equity investments.

[Chris Muller, Director Equity Research at Citizens Capital Markets]

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

[Ken Rogozinski, CEO at Greystone Housing Impact Investors LP]

I think it's really more the latter at this point in time, Chris. I mean, we have the one existing seniors' housing investment in the Village at Carson Valley transaction. I think from the occupancy data, you can see there that that project has moved well through the construction and the initial lease-up phase. I think at a high level, with regard to that asset, we're not seeing the same challenges in the seniors' housing market space that we're seeing in traditional market-rate multifamily. Strong investor demand for those assets, both on the operator side and on the private equity side. We're seeing strong demographic trends in terms of more and more seniors needing care. We're seeing more opportunities going forward in terms of, as that universe of, I guess, age-appropriate people grows, that there'll be more demand for that type of lifestyle.

[Ken Rogozinski, CEO at Greystone Housing Impact Investors LP]

I think, at least from our perspective, we see a much different set of sort of macro dynamics in that asset class than in traditional market-rate multifamily. That is why we are going to continue to look opportunistically there.

[Chris Muller, Director Equity Research at Citizens Capital Markets]

Got it. Makes a lot of sense. I think I just missed what Jesse said the book value figure was in the quarter, if I could get that.

[Jesse Coury, CFO at Greystone Housing Impact Investors LP]

Yes. $12.36.

[Chris Muller, Director Equity Research at Citizens Capital Markets]

$12.36. All right. Thank you very much. Thanks for taking the questions.

[Jesse Coury, CFO at Greystone Housing Impact Investors LP]

Thanks, Chris.

[Operator]

As a reminder, if you would like to ask a question, please press star one. We will go next to Vic Stone, private investor.

[Vic Stone, Investor at Private]

Hello?

[Ken Rogozinski, CEO at Greystone Housing Impact Investors LP]

Yes. Hello.

[Vic Stone, Investor at Private]

Oh, hi there. Oh, sorry. It's Vic, actually. I thought you were talking to somebody else. I had a question about the cap rates. I was concerned about the cap rates that we invested in. 2019, 2021, 2022 or so. They were some of the lowest cap rates almost ever. We chose to make a decision to invest at that time. What makes you think that the senior investments are going to be good now? Are we seeing higher cap rates on those right now, or are they also low?

[Ken Rogozinski, CEO at Greystone Housing Impact Investors LP]

Just to be clear, Mr. Stone, we did not purchase any properties during that time period. We made investments in to-be-built properties. It is not like other investors where we were buying properties at cap rates based on a certain income stream that they were currently generating. Everything was on a pro forma basis in terms of what our expectations were about the income level that the projects would generate upon stabilization and our projections and our partner's projections about what the markets for those properties would be at that point in time. I just wanted to make clear on that, that we were not necessarily buying stabilized assets there. I mean, historically, there always is a spread between cap rates on seniors' housing properties and traditional multifamily because they are viewed by the market as a riskier asset class.

[Ken Rogozinski, CEO at Greystone Housing Impact Investors LP]

I think just in and of itself, the fact that cap rates are higher on seniors' housing property than on traditional multifamily properties doesn't mean that it's not a potentially attractive asset class for us when we can find, via our partners, good development opportunities in good markets where we think the risk-adjusted returns to us will be appropriate and will meet our criteria for making an investment like that. I think that's the philosophy we've always had in this asset class. That's the philosophy that we'll continue to have moving forward as we evaluate this smaller group of potential JV equity opportunities.

[Vic Stone, Investor at Private]

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

[Ken Rogozinski, CEO at Greystone Housing Impact Investors LP]

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

[Ken Rogozinski, CEO at Greystone Housing Impact Investors LP]

Cap rates in any particular real estate asset class are going to be higher or lower four years from now than they are today.

[Vic Stone, Investor at Private]

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

[Ken Rogozinski, CEO at Greystone Housing Impact Investors LP]

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

[Vic Stone, Investor at Private]

Okay. Appreciate your time.

[Operator]

Moving on to John Cochrane with UBS.

[John Cochrane, Senior Vice President and Wealth Management Financial Advisor at UBS]

Great. Thanks for taking my call. Can you hear me?

[Ken Rogozinski, CEO at Greystone Housing Impact Investors LP]

Yes, we can.

[John Cochrane, Senior Vice President and Wealth Management Financial Advisor at UBS]

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

[Jesse Coury, CFO at Greystone Housing Impact Investors LP]

Hey, John. This is Jesse. I could take that one. I'll start with Q2 just to set the stage. As we mentioned on last call, and I alluded to in my prepared remarks this call, we took a roughly $8.7 million provision for credit loss against three specific mortgage revenue bond properties located in South Carolina. These were properties that had asset-specific performance issues that were not quite meeting underwriting goals, and collateral values were down originally from our underwriting. Based on the information.

[John Cochrane, Senior Vice President and Wealth Management Financial Advisor at UBS]

Please go ahead. Sorry.

[Jesse Coury, CFO at Greystone Housing Impact Investors LP]

Based on that information and the performance of those properties at that time, we, under the accounting guidance, made a provision for expected potential shortfalls in cash flows based on the information we had, which was a subperforming asset. That is a provision for credit loss. That is not a realized credit loss. If the properties can be managed to the point where there's a recovery in that value, we may get out whole on that investment. Under the accounting guidance, you are required to take a provision at that time if that is uncertain. In Q3, there is a support loan that is related to those three properties where we took an additional asset-specific reserve of roughly $600,000 for those same properties. If you take out that specific provision for credit loss, we had no provision in the third quarter. It was essentially flat.

[Jesse Coury, CFO at Greystone Housing Impact Investors LP]

Because the quality of our portfolio stayed consistent.

[John Cochrane, Senior Vice President and Wealth Management Financial Advisor at UBS]

Okay. And the support loan was to the same three entities?

[Jesse Coury, CFO at Greystone Housing Impact Investors LP]

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

[John Cochrane, Senior Vice President and Wealth Management Financial Advisor at UBS]

Okay. Okay. You say in your remarks that there's no request for forbearance. That's the rest of the portfolio.

[Jesse Coury, CFO at Greystone Housing Impact Investors LP]

Correct.

[John Cochrane, Senior Vice President and Wealth Management Financial Advisor at UBS]

Okay. All right. Thank you.

[Operator]

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

[Ken Rogozinski, CEO at Greystone Housing Impact Investors LP]

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

[Operator]

Ladies and gentlemen, thank you for your participation. This does conclude today's teleconference. You may disconnect your lines and have a wonderful day.

Participants

Executives

• Jesse Coury, CFO
• Ken Rogozinski, CEO

Analysts

• Matthew Erdner, Director, Specialty Finance, and Real Estate Equity Research Analyst at JonesTrading
• John Cochrane, Senior Vice President and Wealth Management Financial Advisor at UBS
• Chris Muller, Director Equity Research at Citizens Capital Markets
• Vic Stone, Investor at Private