Greystone Housing Impact Investors LP
For the period ended Mar 31, 2026. Filed May 11, 2026.
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A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Mar 31, 2026 · Filed May 11, 2026
GHI$4.430.0%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2025-09-30; filed 2025-11-06.
0001193125-25-268211
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2026-03-31; filed 2026-05-11.
0001193125-26-216905
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 380 previous paragraphs and 308 current paragraphs.
144 unchanged; 105 reworded; 49 added; 111 removed; 20 previous and 10 current paragraphs rearranged.
Tables are not compared: 31 previous and 28 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (49)
Current report
General
Current report
We acquired the four SC MF Properties via deed in lieu of foreclosure on our original MRB investments in the first quarter of 2026 in order to manage the properties directly and maximize the value of our investments. We and the Greystone asset management team are actively managing property operations with a third-party property management service provider and are implementing various programs to increase occupancy and improve operating results.
Current report
The following table compares Partnership revenue and other income for the periods indicated (dollar amounts in thousands):
Current report
A decrease of approximately $1.5 million in interest income from recent GIL paydowns, offset by an increase of approximately $697,000 in interest income due to recent GIL investments;
Current report
Property revenues. Total property revenues for the three months ended March 31, 2026 were related to the Partnership's acquisition of the four MF Properties via deed in lieu of foreclosure in the first quarter of 2026. There was no property revenues for the three months ended March 31, 2025.
Current report
Gain on deed in lieu of foreclosures. Gain on deed in lieu of foreclosures represents our gain as a result of the deed in lieu of foreclosure of the SC MF Properties during the three months ended March 31, 2026. The gain was equal to the excess amount of the appraised value of the real estate assets acquired over our amortized cost basis of the Windsor Shores MRB and taxable MRB and The Ivy Apartments (a/k/a Century Plaza Apartments) MRB.
Current report
The following table compares Partnership expenses for the periods indicated (dollar amounts in thousands):
Current report
Real estate operating. Real estate operating expenses are related to MF 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 for the three months ended March 31, 2026 related to the Partnership's acquisition of the four MF Properties via deed in lieu of foreclosure in the first quarter of 2026. There were no real estate operating expenses for the three months ended March 31, 2025.
Current report
Provision for credit losses. The provision for credit losses for the three months ended March 31, 2026 includes an asset-specific allowance of approximately $93,000 related to the Opportunity South Carolina property loan offset by a recovery of approximately $2.1 million of our previously recognized allowance for credit loss related to The Park at Sondrio MRB and taxable MRB, The Park at Vietti MRB and taxable MRB, and Windsor Shores Apartments MRB. We also recorded a decrease in our general allowance for credit losses due to a decrease in the weighted average life of the remaining investment portfolio.
Current report
Realized gains on derivatives, net, decreased during the three months ended March 31, 2026 as compared to the same period in 2025 due to generally decreasing spot interest rates during 2025 and 2026. Unrealized gains on derivatives, net, were approximately $1.5 million for the three months ended March 31, 2026 due to generally increasing forward interest rates during the period, compared to unrealized losses of approximately $3.9 million for the three months ended March 31, 2025 due to generally decreasing forward interest rates during the period, resulting in increased gains of approximately $5.4 million between the two periods. See the “Executive Summary” section of this Item 2 for additional discussion.
Current report
General and administrative. The increase in general and administrative expenses for the three months ended March 31, 2026 as compared to the same period in 2025 was primarily due to an increase of approximately $94,000 in professional and consulting fees.
Current report
The gain on deed in lieu of foreclosures for the three months ended March 31, 2026 was equal to the excess amount of the appraised value of the real estate assets acquired over our amortized cost basis of the Windsor Shores MRB and taxable MRB and The Ivy Apartments (a/k/a Century Plaza Apartments) MRB. We have excluded this gain in the calculation of CAD as it is non-cash and relates to fair value estimates of real estate assets.
Current report
In connection with the preparation of the Partnership’s consolidated financial statements as of and for the year ended December 31, 2025, the Partnership identified certain immaterial errors in previously issued financial statements for the three month periods ended March 31, June 30, and September 30, 2025. The Partnership assessed the aggregate effects and materiality of these errors and concluded the errors were not material to the previously issued quarterly consolidated financial statements. The Partnership has voluntarily revising its quarterly condensed consolidated financial statements and the related reconciliations of net income (loss) to CAD for the three months ended March 31, 2025 included above. The following is a summary of the impacts on line items within the reconciliation of net income (loss) to CAD for the three months ended March 31, 2025:
Current report
A decrease in net income (loss) of approximately $924,000; and
Current report
An increase in the adjustment for (earnings) losses from investment in unconsolidated entities of approximately $759,000.
Current report
The net impact of the above line items on the previously reported quarterly CAD amounts was a decrease in CAD of approximately $165,000 for the three months ended March 31, 2025.
Current report
Excluding Texas properties, occupancy metrics have been fairly steady year over year with physical occupancy of 91.1% and 90.1% as of March 31, 2026 and 2025, respectively, and economic occupancy of 92.6% and 93.3% as of March 31, 2026 and 2025, respectively.
Current report
As of March 31, 2026, Agape Helotes is continuing its conversion from market-rate units to rent-restricted units after purchase of the property by a non-profit entity in May 2025. Aventine Apartments and Woodington Garden Apartments are undergoing in-place rehabilitations and will report occupancy during the rehabilitation period. Construction or rehabilitation of the properties in the remainder of the MRB multifamily properties non-stabilized group is complete.
Current report
As of March 31, 2026, Meadow Valley has completed construction and is in lease-up.
Current report
Poppy Grove I and Poppy Grove II completed the permanent conversion process to Freddie Mac’s forward TEL commitment and were fully redeemed in April 2026. Poppy Grove III has substantially completed construction and the permanent conversion process to Freddie Mac’s forward TEL commitment is being finalized. Residency at Sky Village Hollywood is a new construction property that is in the pre-development phase.
Current report
Nine properties have completed construction and are leasing. Three investments are still in the planning phase and have not commenced construction. We regularly discuss operations and lease-up progress with the respectively managing members and property management service providers. Once occupancy is stabilized above 90%, the managing member will likely evaluate options for the sale of the property.
Current report
MF Properties
Current report
As of March 31, 2026, we owned four MF Properties that we report on a consolidated basis. The amounts presented below were obtained from records provided by our property management service provider.
Current report
Physical and economic occupancy information is not available for the periods indicated as the MF property was recently acquired.
Current report
We acquired the four MF Properties via deed in lieu of foreclosure of several MRB and taxable MRB investments. We believe occupancy is lower than local market vacancies due to mismanagement of the properties by the prior owners, which necessitated the deed in lieu of foreclosure process for us to obtain ownership and attempt to improve operations to protect and maximize our investment. We, the Greystone asset management team, and the property management service provider are focused on improving the overall tenant profile at each property to increase occupancy with quality tenants, which will likely result in a temporary decline in occupancies for the properties overall.
Current report
A decrease of approximately $1.5 million in interest income due to recent GIL paydowns, offset by an increase of approximately $697,000 in interest income from recent GIL investments;
Current report
A decrease of approximately $113,000 in other interest income due to less interest earned on cash balances.
Current report
The provision for credit losses for the three months ended March 31, 2026 includes an asset-specific allowance of approximately $93,000 related to the Opportunity South Carolina property loan offset by a recovery of approximately $2.1 million of our previously recognized allowance for credit loss related to The Park at Sondrio MRB and taxable MRB, The Park at Vietti MRB and taxable MRB, and Windsor Shores Apartments MRB. We also recorded a decrease in our general allowance for credit losses due to a decrease in the weighted average life of the remaining investment portfolio.
Current report
A decrease of approximately $691,000 due to a decrease in the average outstanding principal of our debt financing instruments of approximately $74.7 million.
Current report
We had realized losses on derivatives, net, during the three months ended March 31, 2026 as compared to realized gains during the same period in 2025 due to generally decreasing spot interest rates during 2025 and 2026. Unrealized gains on derivatives, net, were approximately $974,000 for the three months ended March 31, 2026 due to generally increasing forward interest rates during the period, compared to unrealized losses of approximately $3.3 million for the three months ended March 31, 2025 due to generally decreasing forward interest rates during the period, resulting in increased gains of approximately $4.3 million between the two periods. See the “Executive Summary” section of this Item 2 for additional discussion.
Current report
The increase in general and administrative expenses for the three months ended March 31, 2026 as compared to the same period in 2025 was primarily due to an increase of approximately $94,000 in professional and consulting fees.
Current report
Gain on deed in lieu of foreclosures represents our gain as a result of the deed in lieu of foreclosure of the SC MF Properties during the three months ended March 31, 2026. The gain was equal to the excess amount of the appraised value of the real estate assets acquired over our amortized cost basis of the Windsor Shores MRB and taxable MRB and The Ivy Apartments (a/k/a Century Plaza Apartments) MRB.
Current report
See the section in this Item 2 titled “Portfolio Information” for discussion of physical and economic occupancy results and trends for our MRB and GIL investments.
Current report
Realized gains on derivatives, net, decreased during the three months ended March 31, 2026 as compared to the same period in 2025 due to generally decreasing spot interest rates during 2025 and 2026. Unrealized gains on derivatives, net, were approximately $235,000 for the three months ended March 31, 2026 due to generally increasing forward interest rates during the period, compared to unrealized losses of approximately $616,000 for the three months ended March 31, 2025 due to generally decreasing forward interest rates during the period, resulting in increased gains of approximately $851,000 between the two periods. See the “Executive Summary” section of this Item 2 for additional discussion.
Current report
Strategic Matters
Current report
As noted in the “Executive Summary” section of this Item 2, we are focused on implementing our strategy to reduce our capital allocation to market rate multifamily JV Equity Investments. We and the respective managing members are managing the 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 to be redeployed into primarily tax-exempt MRB investments.
Current report
As of December 31, 2025, the Partnership did not own any MF Properties. In January and February 2026, we acquired the four SC MF Properties via deed in lieu of foreclosure or our prior MRB investments. The four properties are The Park at Sondrio Apartments in Greenville, SC; The Park at Vietti Apartments in Spartanburg, SC; Windsor Shores Apartments in Columbia, SC; and The Ivy Apartments (a/k/a Century Plaza Apartments) in Greenville, SC. Each property is 99.99% owned by the Partnership via various subsidiaries. Each property has a 0.01% member that is a non-profit entity, which will allow us to pursue a regulatory agreement to continue operating the properties subject to rental restrictions in exchange for an abatement of real estate taxes. The SC MF Properties are consolidated in the Partnership’s condensed consolidated financial statements. We have engaged a third-party property management company to manage the day-to-day operations of each property. We intend to operate the property to maximize the value of our investments, at which time we may look to sell the properties.
Current report
Results for the three months ended March 31, 2026 primarily related to the four MF Properties acquired during the first quarter of 2026. Depreciation expense was approximately $1.2 million for the three months ended March 31, 2026. Amortization of in-place lease assets was approximately $1.6 million for the three months ended March 31, 2026.
Current report
There were no MF Properties owned during the three months ended March 31, 2025, so reported operations are minimal.
Current report
Net operating cash flows from MF Properties;
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Removed paragraphs (111)
Previous report
The macroeconomic environment remains challenging. The Federal Reserve approved 25-basis point reductions in the Federal Funds rate in September and October 2025, though it indicated that future rate setting decisions will continue to be dependent on relevant data and the balance of employment and inflationary risks. As such, the likelihood of any additional rate reductions in 2025 and 2026 is uncertain. Lower short-term interest rates will lower our borrowing costs in the near term. Longer term interest rates have been volatile in recent quarters due to shifting tariff policies, weak employment data, the partial shutdown of the Federal government, and national debt concerns. We continue to employ our hedging strategies to reduce our exposure to changes in the interest cost on debt financing related to our fixed rate investments.
Previous report
In addition, we recognized asset-specific provisions for credit losses totaling approximately $9.9 million in the Affordable Multifamily Investments segment for the nine months ended September 30, 2025, which significantly impacted our reported net income. These provisions are not realized losses but are based on expectations of credit losses after our evaluation of several factors including current and expected operating results of the underlying properties, borrower financial conditions, and estimated collateral values. See the operational matters section of the Affordable Multifamily Investments section discussion in this Item 2.
Previous report
Recent Legislative Developments
Previous report
On July 4, 2025, President Trump signed into law the legislation commonly referred to as the One Big Beautiful Bill Act (“OBBBA”), which is a sweeping federal reconciliation package that permanently extends and expands key provisions of the 2017 Tax Cuts and Jobs Act, introduces new tax benefits (including elevated standard deductions, higher state-and-local tax (SALT) caps, and no taxation on tips and overtime income for certain workers), and enacts broad reductions in government spending. The OBBBA contains provisions that may affect the Partnership and its unitholders. For example, the OBBBA affects the LIHTC program by permanently increasing the state allocation for 9% LIHTC properties by 12% and lowering the private activity bond financing threshold from 50% to 25% for 4% LIHTC projects. In sum, the OBBBA is a complex revision to the U.S. federal income tax laws with potentially far-reaching consequences. The OBBBA will require subsequent rulemaking in a number of areas. The long-term impact of the OBBBA on the Partnership, our unitholders, the developers and owners of the properties underlying our MRBs, GILs, and market-rate joint venture investments, and the multifamily real estate industry in general cannot be reliably predicted at this early stage of the new law’s implementation. Unitholders are urged to consult with their own tax advisors regarding the impact of the OBBBA to them and their acquisition, ownership, and disposition of the Partnership’s units. The Partnership’s management continues to evaluate the impact of the OBBBA on the Partnership and its business, financial condition, and results of operations.
Previous report
The following table compares our revenue and other income for the periods indicated (dollar amounts in thousands):
Previous report
A decrease of approximately $3.0 million in interest income due to recent GIL redemptions, offset by an increase of approximately $589,000 in interest income from recent GIL investments;
Previous report
A decrease of approximately $328,000 in interest income due to lower interest rates on variable-rate MRBs;
Previous report
A decrease of approximately $723,000 of investment income due to certain investments meeting the maximum guaranteed preferred return during 2024 and 2025; and
Previous report
An increase of approximately $439,000 in investment income related to preferred returns on equity contributions during 2024 and 2025.
Previous report
A net increase of approximately $1.0 million from overall higher average property loan, taxable MRB and taxable GIL investment balances of approximately $53.6 million; and
Previous report
Earnings (losses) on investments in unconsolidated entities. The Partnership reports its proportionate share of earnings (losses) on investments in unconsolidated entities using the equity method of accounting. Our JV Equity Investments typically incur operating losses during development and lease-up, particularly from depreciation, consistent with development plans. The increase in losses for the three months ended September 30, 2025 as compared to the same period in 2024 is primarily due to general and administrative expenses at the Jessam at Hays Farm and non-capitalized interest expense at Freestone Greenville, Freestone Cresta Bella, and Freestone Ladera as the properties have begun operations.
Previous report
Investment income. Investment income increased slightly for the nine months ended September 30, 2025 as compared to the same period in 2024. The individual factors consisted of the following:
Previous report
An increase of approximately $6.7 million in interest income from recent MRB advances, offset by a decrease of approximately $3.6 million in interest income due to MRB redemptions and principal repayments;
Previous report
A decrease of approximately $7.7 million in interest income due to recent GIL redemptions, offset by an increase of approximately $2.4 million in interest income from recent GIL investments;
Previous report
A decrease of approximately $683,000 in interest income due to lower interest rates and accretion on certain MRBs;
Previous report
An increase of approximately $3.0 million of investment income related to unconsolidated entities consisting of:
Previous report
o
Previous report
o
Previous report
An increase of approximately $1.8 million of investment income related to preferred return recognized upon the sale of Vantage at Helotes in May 2025;
Previous report
o
Previous report
An increase of approximately $1.5 million in investment income related to preferred returns on equity contributions during 2024 and 2025; and
Previous report
o
Previous report
A decrease of approximately $2.2 million of investment income due to certain investments meeting the maximum guaranteed preferred return during 2024 and 2025.
Previous report
A decrease of approximately $800,000 in other interest income due to less interest earned on cash balances.
Previous report
Contingent interest income. Contingent interest income for the nine months ended September 30, 2025 related to a premium received upon redemption of the Companion at Thornhill Apartments MRB in June 2025. There was no contingent interest income for the nine months ended September 30, 2024.
Previous report
Other income. Other income for the nine months ended September 30, 2025 and 2024 related to the receipt of non-refundable fees for the extension of various MRB and GIL maturity dates.
Previous report
Gain on sale of real estate assets. There was no gain on sale of real estate assets for the nine months ended September 30, 2025. The gain on sale of real estate assets for the nine months ended September 30, 2024 related to final purchase price adjustments for the Suites on Paseo MF Property that was sold in December 2023.
Previous report
Gain on sale of mortgage revenue bonds. There was no gain on sale for the nine months ended September 30, 2025. The gain on sale of mortgage revenue bond for the nine months ended September 30, 2024 related to the sale of the Brookstone MRB in May 2024.
Previous report
The following table compares our expenses for the periods indicated (dollar amounts in thousands):
Previous report
The decrease in the provision for credit losses for the three months ended September 30, 2024 is primarily due to GIL and property loan redemptions, a decrease in the weighted average life of the remaining investment portfolio, and updates of market data used as quantitative assumptions in our model used to estimate the allowance for credit losses.
Previous report
A decrease of approximately $1.9 million due to lower average interest rates on debt financing; and
Previous report
A decrease of approximately $486,000 due to a decrease in the average outstanding principal of our debt financing instruments of approximately $42.9 million.
Previous report
Realized gains on derivatives, net, decreased during the three months ended September 30, 2025 as compared to the same period in 2024 due to generally decreasing spot interest rates during 2024 and 2025. Unrealized losses on derivatives, net, decreased during the three months ended September 30, 2025 as compared to the same period in 2024 due to generally more stable rates in 2025 as compared to 2024. See the “Executive Summary” section of this Item 2 for additional discussion.
Previous report
General and administrative expenses. The decrease in general and administrative expenses for the three months ended September 30, 2025 as compared to the same period in 2024 was primarily due to a decrease of approximately $281,000 in professional and consulting fees.
Previous report
Provision for credit losses. The provision for credit losses for the nine months ended September 30, 2025 includes asset-specific allowances of approximately $1.2 million related to the Opportunity South Carolina property loan and approximately $8.7 million related to The Park at Sondrio MRB and taxable MRB, The Park at Vietti MRB and taxable MRB, and the Windsor Shores Apartments MRB and taxable MRB. These asset-specific provisions were partially offset by a decline in expected credit losses primarily due to GIL and property loan redemptions and a decrease in the weighted average life of the remaining investment portfolio, and updates of market data used as quantitative assumptions in our model used to estimate the allowance for credit losses.
Previous report
The decrease in the provision for credit losses for the nine months ended September 30, 2024 is primarily due to GIL and property loan redemptions, a decrease in the weighted average life of the remaining investment portfolio, and updates of market data used as quantitative assumptions in our model used to estimate the allowance for credit losses. The provision for credit losses for the nine months ended September 30, 2024 also includes the recovery of approximately $169,000 of prior credit losses in connection with final settlement of the bankruptcy estate of the Provision Center 2014-1 MRB.
Previous report
Realized gains decreased during the nine months ended September 30, 2025 as compared to the same period in 2024 due to generally decreasing spot interest rates during 2024 and 2025. Unrealized losses on derivatives, net, increased during the nine months ended September 30, 2025 as compared to the same period in 2024 due to lower interest rates in 2025 and beyond as compared to forward market interest rates as of September 30, 2024. See the “Executive Summary” section of this Item 2 for additional discussion.
Previous report
General and administrative expenses. The decrease in general and administrative expenses for the nine months ended September 30, 2025 as compared to the same period in 2024 was primarily due to decreases of approximately $379,000 in employee compensation and benefits, and approximately $543,000 in professional and consulting fees. These decreases were partially offset by an increase of approximately $135,000 in administration fees paid to the General Partner due to higher assets under management.
Previous report
The Partnership declared the First Quarter 2024 BUCs Distribution payable in the form of additional BUCs equal to $0.07 per BUC for outstanding BUCs as of the record date of March 28, 2024.
Previous report
Economic occupancy for the nine months ended September 30, 2025 decreased from the same period in 2024 due primarily to decreases in rental revenue at various properties in Texas as a result of the declines in physical occupancy noted above. The overall economic occupancy for Texas properties as of September 30, 2025 is lower than June 30, 2025 due to downward pressure on rental rates from high local competition. Elsewhere, Willow Run reported a large decline in economic occupancy due to significant bad debts recognized in the first quarter of 2025. Such declines were partially offset by improving economic occupancy at Live 929 Apartments as a result of higher physical occupancy.
Showing the first 40 of 111 passages. Open the source sections for the rest.
Reworded paragraphs (105)
Previous wording
The Partnership was formed in 1998 for the purpose of acquiring a portfolio of MRBs that are issued by state and local housing authorities to provide construction and/or permanent financing for affordable multifamily, seniors housing and commercial properties. We also invest in GILs, which, similar to MRBs, provide financing for affordable multifamily and seniors housing properties. We expect and believe the interest received on these MRBs and GILs is excludable from gross income for federal income tax purposes. We also invest in other types of securities and investments that may or may not be secured by real estate and may make property loans to multifamily properties which may or may not be financed by MRBs or GILs held by us and may or may not be secured by real estate. We also make JV Equity Investments for the construction, stabilization, and ultimate sale of market-rate multifamily and seniors housing properties. In addition, the Partnership may acquire and hold interests in multifamily, student or senior citizen residential MF Properties.
Current wording
The Partnership was formed in 1998 for the purpose of acquiring a portfolio of MRBs that are issued by state and local housing authorities to provide construction and/or permanent financing for affordable multifamily, seniors housing and commercial properties. We also invest in GILs, which, similar to MRBs, provide financing for affordable multifamily and seniors housing properties. We expect and believe the interest received on these MRBs and GILs is excludable from gross income for federal income tax purposes. We also invest in other types of securities and investments that may or may not be secured by real estate and may make property loans to multifamily properties which may or may not be financed by MRBs or GILs held by us and may or may not be secured by real estate.
Previous wording
Because of the challenges in the market rate multifamily markets, we will be implementing a strategy to reduce our capital allocation to market rate multifamily JV Equity Investments going forward. We and the respective managing members will manage the 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 to be redeployed into primarily tax-exempt MRB investments. We believe this reallocation of capital will result in increased stability of earnings from the net interest spread on new MRB investments as compared to the transaction-driven income from JV Equity Investments. We also expect the additional MRB investments to increase the proportion of tax-advantaged income allocated to Unitholders in the long term. We expect to continue leveraging Greystone’s strong lending relationships across affordable housing, seniors housing, and skilled nursing business lines in identifying MRB investment opportunities.
Current wording
We remain focused on implementing our strategy to reduce our capital allocation to market rate multifamily JV Equity Investments. We and the respective managing members are managing the 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 to be redeployed into primarily tax-exempt MRB investments. The timing of the return of our capital from JV Equity Investment sales and the time required to redeploy this capital will impact our reported earnings during this period of transition. Once capital is returned and subsequently redeployed, we believe this reallocation strategy will result in an increased stability of earnings from the regular net interest spread income on new MRB investments as compared to the sporadic transaction-driven income from JV Equity Investments. We also expect additional MRB investments to increase the proportion of tax-advantaged income allocated to Unitholders in the long term. We will continue to leverage Greystone’s strong lending relationships across the affordable housing, seniors housing, and skilled nursing business lines to identify new MRB investment opportunities.
Previous wording
We believe there continues to be significant unmet demand for affordable multifamily and seniors residential housing in the United States. Government programs that provide direct rental support to residents have not kept up with demand. Therefore, investment programs that promote private sector development and support for affordable housing through MRBs, GILs, tax credits and grant funding to developers, have become more prominent. The types of MRBs and GILs in which we invest offer developers of affordable multifamily housing a low-cost source of construction and/or permanent debt financing.
Current wording
We believe there continues to be significant unmet demand for affordable multifamily and seniors residential housing in the United States. Government programs that provide direct rental support to low and moderate income residents have not kept up with need or demand. Therefore, investment programs that promote private sector development and support for affordable housing through MRBs, GILs, tax credits and grant funding to developers, have become more prominent. The types of MRBs and GILs in which we invest offer developers of affordable multifamily housing a low-cost source of construction and/or permanent debt financing. For our leverage programs, we will continue to employ our hedging strategies to reduce our exposure to changes in the interest cost on variable rate debt financing related to our fixed rate investments.
Previous wording
The borrowers of our MRBs and GILs were all current on contractual debt service payments and we have received no requests for forbearance of contractual debt service payments as of September 30, 2025. However, we have recorded asset-specific provisions for credit losses for affordable multifamily investments totaling approximately $9.9 million for the nine months ended September 30, 2025 across three MRBs, three taxable MRBs and one property loan related to certain multifamily properties in South Carolina.
Current wording
The borrowers of our MRBs and GILs were all current on contractual debt service payments as of March 31, 2026.
Previous wording
The leasing market pressures noted above have made it more difficult for the respective managing members of our stabilized market rate multifamily JV Equity Investments to sell the properties, resulting in longer than expected investment holding periods and lower sales prices than in 2022 and 2023. In addition, less available and more expensive debt capital have had pronounced effects on property acquisitions by making it harder for potential buyers to obtain attractive financing. Accordingly, we have observed increasing capitalization rates in recent periods resulting in lower property valuations. Historically, the majority of our income from our JV Equity Investments is recognized at the time of sale and is dependent on the sales prices of the related properties. There were no JV Equity Investment property sales in 2024 and we have recognized significantly less investment income and gains on sale from the two JV Equity Investments sold in 2025 as compared to 2022 and 2023. After the current elevated level of new multifamily supply peaks, we expect net rents and occupancy to increase, capitalization rates to decline, and property valuations to increase.
Current wording
Market dynamics related to our remaining market rate multifamily JV Equity Investments remain challenging. The San Antonio, TX, Austin, TX, and Huntsville, AL markets have experienced record new multifamily unit deliveries in recent years, peaking in 2024. Rental rates and occupancy have declined as these markets absorb new units. This results in downward pressure on leasing velocity and net operating income for these properties. We expect pressure on rental rates and occupancy to lessen at some point in 2026 due to positive unit absorption and limited units from new construction starts in these markets in 2024 and 2025 coming online. The leasing market pressures noted above have made it more difficult for the respective managing members of our stabilized market rate multifamily JV Equity Investments to sell the properties, resulting in longer than expected investment holding periods. In addition, less available and more expensive debt capital have had pronounced effects on property acquisitions by making it harder for potential buyers to obtain attractive financing. Accordingly, we have observed increasing multifamily capitalization rates in recent periods resulting in lower property valuations when compared to the sales prices that were achieved for prior JV Equity Investments sold in 2022 and 2023. Longer holding periods and lower valuations will negatively impact our results of operations. Historically, the majority of our income from our JV Equity Investments is recognized at the time of sale and is largely dependent on the sales prices of the related properties. After the current elevated level of new multifamily supply is absorbed, we expect net rents and occupancy to increase, capitalization rates to decline, and property valuations to increase.
Previous wording
As of September 30, 2025, we had four reportable segments: (1) Affordable Multifamily Investments, (2) Seniors and Skilled Nursing Investments, (3) Market-Rate Joint Venture Investments and (4) MF Properties. We separately report our consolidation and elimination information because we do 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 Investments segment. See Notes 2 and 24 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 nine months ended September 30, 2025 and 2024 (dollar amounts in thousands):
Current wording
As of March 31, 2026, we had four reportable segments: (1) Affordable Multifamily Investments, (2) Seniors and Skilled Nursing Investments, (3) Market-Rate Joint Venture Investments and (4) MF Properties. We separately report our consolidation and elimination information because we do 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 Investments segment. See Notes 2 and 24 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 months ended March 31, 2026 and 2025 (dollar amounts in thousands):
Previous wording
During the nine months ended September 30, 2025 and 2024, our net income was significantly impacted by unrealized losses on our derivative instrument portfolio, which primarily consists of interest rate swaps. Under the applicable accounting guidance, we report our derivatives at fair value as of each reporting date. The fair value is based on a model that considers observable indices and observable market trades for similar arrangements, such as publicly available current SOFR rates and forward SOFR swap rates. The period-over-period change in the fair value of each derivative that is not directly related to net cash settlements are recorded as unrealized (gains) losses within “Net result from derivative transactions” on our condensed consolidated statements of operations and is included as a component of our reported net income. Unrealized (gains) losses can be significant in periods of significant interest rate volatility. The following table summarizes unrealized (gains) losses for the three and nine months ended September 30, 2025 and 2024 by segment:
Current wording
During the three months ended March 31, 2026 and 2025, our net income was impacted by unrealized gains and losses on our derivative instrument portfolio, which primarily consists of interest rate swaps. Under the applicable accounting guidance, we report our derivatives at fair value as of each reporting date. The period-over-period change in the fair value of each derivative that is not directly related to net cash settlements are recorded as unrealized (gains) losses within “Net result from derivative transactions” on our condensed consolidated statements of operations and is included as a component of our reported net income. Unrealized (gains) losses can be significant in periods of significant interest rate volatility. The following table summarizes unrealized (gains) losses for the three months ended March 31, 2026 and 2025 by segment:
Previous wording
Differences between the respective periods is primarily due to market interest rate changes between reporting dates. The 3-year SOFR swap rate is a reasonable proxy for our interest rate swap portfolio as a whole as our derivatives are primarily SOFR-denominated interest rate swaps and the weighted average life of our interest rate swap portfolio is typically between three and four years. The 3-year SOFR swap rate declined 0.70% from 4.05% as of December 31, 2024 to 3.35% as of September 30, 2025, resulting in significant unrealized losses on our interest rate swap portfolio for the nine months ended September 30, 2025. The 3-year SOFR swap rate declined 0.44% from 3.75% as of December 31, 2023 to 3.31% as of September 30, 2024, resulting in significant unrealized losses on our interest rate swap portfolio for the three and nine months ended September 30, 2024.
Current wording
Differences between the respective periods is primarily due to market interest rate changes between reporting dates. The 3-year SOFR swap rate is a reasonable proxy for our interest rate swap portfolio as a whole as our derivatives are primarily SOFR-denominated interest rate swaps and the weighted average life of our interest rate swap portfolio is typically between three and four years. The 3-year SOFR swap rate increased 0.24% from 3.34% as of December 31, 2025 to 3.58% as of March 31, 2026, resulting in unrealized gains on our interest rate swap portfolio for the three months ended March 31, 2026. The 3-year SOFR swap rate decreased 0.40% from 4.05% as of December 31, 2024 to 3.65% as of March 31, 2025, resulting in significant unrealized losses on our interest rate swap portfolio for the three months ended March 31, 2025.
Previous wording
Though unrealized (gains) losses may impact our reported net income period-to-period, the net cash settlements on our interest rate swaps are less variable. Our interest rate swaps are designed such that changes in the monthly net cash settlements will offset the changes in monthly interest costs on our variable-rate debt financings. Our interest rate swaps are subject to monthly net cash settlements whereby we pay a stated fixed rate and our counterparty pays a variable rate equal to the compounded SOFR rate for the settlement period. If short-term interest rates decline, the interest cost of our variable-rate debt financings will typically decline. Meanwhile, the variable rate payment by the counterparty on our interest rate swap will decline such that our benefit from the monthly net settlement payment will decline. The change in interest cost on our variable-rate debt financing generally offsets the reduced monthly net cash settlement payments associated with the related interest rate swap, such that our net cash flow for the period is not materially impacted by changes in short term interest rate changes. For this reason, we adjust net income for unrealized losses on our derivative instruments when calculating CAD, a non-GAAP performance measure discussed later in this Item 2, which we consider to be a useful measure of our operating performance.
Current wording
Though unrealized gains or losses may impact our reported net income period-to-period, the net cash settlements on our interest rate swaps are less variable. Our interest rate swaps are designed such that changes in the monthly net cash settlements will offset the changes in monthly interest costs on our variable-rate debt financings. Our interest rate swaps are subject to monthly net cash settlements whereby we pay a stated fixed rate and our counterparty pays a variable rate equal to the compounded SOFR rate for the settlement period. If short-term interest rates decline, the interest cost of our variable-rate debt financings will typically decline. Meanwhile, the variable rate payment by the counterparty on our interest rate swap will decline such that our benefit from the monthly net settlement payment will decline. The change in interest cost on our variable-rate debt financing generally offsets the reduced monthly net cash settlement payments associated with the related interest rate swap, such that our net cash flow for the period is not materially impacted by changes in short term interest rate changes. For this reason, we adjust net income for unrealized losses on our derivative instruments when calculating CAD, a non-GAAP performance measure discussed later in this Item 2, which we consider to be a useful measure of our operating performance.
Previous wording
The following table presents information regarding the investment activity of the Partnership for the three and nine months ended September 30, 2025 and 2024:
Current wording
The following table presents information regarding the investment activity of the Partnership for the three months ended March 31, 2026 and 2025:
Previous wording
The following table presents information regarding the debt financing, derivatives, Preferred Units and partners’ capital activities of the Partnership for the three and nine months ended September 30, 2025 and 2024, exclusive of retired debt amounts listed in the investment activity table above:
Current wording
The following table presents information regarding the debt financing, derivatives, Preferred Units and partners’ capital activities of the Partnership for the three months ended March 31, 2026 and 2025, exclusive of retired debt amounts listed in the investment activity table above:
Previous wording
In 2021, we acquired an MRB investment secured by Meadow Valley, a to-be-constructed 174-bed seniors housing facility in Traverse City, MI. Part of the construction financing is provided through a C-PACE program, which is a state policy-enabled financing mechanism that allows developers to access the capital needed to make renewable energy accessible and cost-effective. In the case of Meadow Valley, C-PACE financing of $24.8 million will be provided to finance energy conservation features including high efficiency windows, roof, walls, heating, cooling, indoor and outdoor lighting, water heating and low-flow fixtures. The C-PACE financing is repaid through a property tax assessment over the life of the property. Many lenders are averse to financing properties with C-PACE financing as the tax assessment is a senior obligation of the property. We have developed underwriting procedures that allow for the borrower to obtain C-PACE financing and still meet our security and underwriting requirements. We will continue to evaluate investment opportunities related to properties that utilize C-PACE financing for future investment as we want to encourage our borrowers to utilize clean energy design and construction practices.
Current wording
In 2021, we acquired an MRB investment secured by Meadow Valley, a to-be-constructed 164 bed seniors housing facility in Traverse City, MI. Part of the construction financing is provided through a C-PACE program, which is a state policy-enabled financing mechanism that allows developers to access the capital needed to make renewable energy accessible and cost-effective. In the case of Meadow Valley, C-PACE financing of $24.8 million will be provided to finance energy conservation features including high efficiency windows, roof, walls, heating, cooling, indoor and outdoor lighting, water heating and low-flow fixtures. The C-PACE financing is repaid through a property tax assessment over the life of the property. Many lenders are averse to financing properties with C-PACE financing as the tax assessment is a senior obligation of the property. We have developed underwriting procedures that allow for the borrower to obtain C-PACE financing and still meet our security and underwriting requirements. We will continue to evaluate investment opportunities related to properties that utilize C-PACE financing for future investment as we want to encourage our borrowers to utilize clean energy design and construction practices.
Previous wording
We are committed to minimizing the overall environmental impact of our corporate operations. The Partnership’s operations are primarily managed by 17 employees of Greystone Manager, so we have a relatively modest environmental impact and have adequate facilities to grow our employee base without acquiring additional physical space.
Current wording
We are committed to minimizing the overall environmental impact of our corporate operations. The Partnership’s operations are primarily managed by 16 employees of Greystone Manager, so we have a relatively modest environmental impact and have adequate facilities to grow our employee base without acquiring additional physical space.
Previous wording
Greystone and the Partnership are committed to building a workplace that allows all employees to feel supported and valued, regardless of any identity, by focusing on our culture of ‘where people matter’ to build belonging. Specific initiatives include training and employee resources groups to support our workforce as well as a formal Culture and Community Committee and Culture and Community Executive Advisory Council to lead and advise all belonging related work, events, and learning. Of the 17 employees of Greystone Manager responsible for the Partnership’s operations, three are women and two employees identify as ethnically diverse.
Current wording
Greystone and the Partnership are committed to building a workplace that allows all employees to feel supported and valued, regardless of any identity, by focusing on our culture of ‘where people matter’ to build belonging. Specific initiatives include training and employee resources groups to support our workforce as well as a formal Culture and Community Committee and Culture and Community Executive Advisory Council to lead and advise all belonging related work, events, and learning. Of the 16 employees of Greystone Manager responsible for the Partnership’s operations, three are women and two employees identify as ethnically diverse.
Previous wording
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 Board of Managers is in compliance with the NYSE listing rules and SEC rules applicable to the Partnership. The majority of the members of the Board of Managers meet the independence standards established by the New York Stock Exchange listing rules and the rules of the SEC. All the members of the Audit Committee are independent under the applicable SEC and NYSE independence requirements, two of whom qualify as “audit committee financial experts.” Of the seven Managers of Greystone Manager, one Manager is female.
Current wording
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 Board of Managers is in compliance with the NYSE listing rules and SEC rules applicable to the Partnership. The majority of the members of the Board of Managers meet the independence standards established by the New York Stock Exchange listing rules and the rules of the SEC. All the members of the Audit Committee are independent under the applicable SEC and NYSE independence requirements, two of whom qualify as “audit committee financial experts.” Of the eight Managers of Greystone Manager, one Manager is female.
Previous wording
The Board of Managers is highly engaged in the governance and operations of the Partnership. Our non-independent Managers are employees of Greystone that regularly monitor developments in our operating environment and capital markets and discuss such developments with management on a regular basis. One of our Managers is a member of our investment committee that pre-approves all new investments. We regularly monitor and assess risks to achieving our business objectives and such risk assessments are discussed with both the Audit Committee and the full Board of Managers at regularly held meetings and in regular informal discussions. The Audit Committee had 100% attendance at meetings during 2024 and to date in 2025. The Board of Managers had 100% and 95% attendance during 2024 and to date in 2025, respectively.
Current wording
The Board of Managers is highly engaged in the governance and operations of the Partnership. Our non-independent Managers are employees of Greystone that regularly monitor developments in our operating environment and capital markets and discuss such developments with management on a regular basis. One of our Managers is a member of our investment committee that pre-approves all new investments. We regularly monitor and assess risks to achieving our business objectives and such risk assessments are discussed with both the Audit Committee and the full Board of Managers at regularly held meetings and in regular informal discussions. The Audit Committee had 100% attendance at meetings during 2025 and to date in 2026. The Board of Managers had 96% and 100% attendance during 2025 and to date in 2026, respectively.
Previous wording
The tables and following discussions of our changes in results of operations for the three and nine months ended September 30, 2025 and 2024 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 ended December 31, 2024.
Current wording
The tables and following discussions of our changes in results of operations for the three months ended March 31, 2026 and 2025 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 ended December 31, 2025.
Previous wording
A decrease of approximately $2.2 million in interest income due to MRB redemptions and principal repayments, offset by an increase of approximately $1.8 million in interest income from recent MRB advances;
Current wording
A decrease of approximately $2.7 million in interest income due to MRB redemptions and principal repayments, offset by an increase of approximately $832,000 in interest income from recent MRB advances;
Previous wording
A decrease of approximately $284,000 of investment income related to unconsolidated entities consisting of:
Current wording
A decrease of approximately $2.0 million of investment income related to investments in unconsolidated entities consisting of:
Previous wording
An increase of approximately $1.9 million of investment income due to a preferred return distribution from Vantage at Loveland in March 2025;
Current wording
A decrease of approximately $2.2 million of investment income due to a preferred return distribution from Vantage at Loveland in March 2025; and
Previous wording
A decrease of approximately $169,000 in other interest income due to less interest earned on cash balances.
Current wording
An increase of approximately $169,000 in investment income related to preferred returns on equity contributions during 2025 and 2026.
Previous wording
Other interest income. Other interest income is comprised primarily of interest income on our property loan, taxable MRB, and taxable GIL investments. The increase in other interest income for the three months ended September 30, 2025 as compared to the same period in 2024 was primarily due to:
Current wording
Other interest income. Other interest income is comprised primarily of interest income on our property loan, taxable MRB, and taxable GIL investments. The increase in other interest income for the three months ended March 31, 2026 as compared to the same period in 2025 was primarily due to an increase of approximately $947,000 from recent property loan, taxable MRB and taxable GIL investment advances, offset by a decrease of approximately $100,000 due to recent property loan, taxable MRB and taxable GIL investment redemptions and principal repayments.
Previous wording
Other income. Other income for the three months ended September 30, 2025 and 2024 related to the receipt of non-refundable fees for the extension of various MRB and GIL maturity dates.
Current wording
Other income. Other income for the three months ended March 31, 2026 and 2025 related to the receipt of non-refundable fees for the extension of various MRB, GIL, and property loan maturity dates.
Previous wording
Gain on sale of investments in unconsolidated entities. The gain on sale for the nine months ended September 30, 2025 related to the sale of Vantage at Helotes in May 2025 for a gain of approximately $163,000 and final settlement of the Vantage at O'Connor and Vantage at Coventry sales that occurred in July 2022 and January 2023, respectively. The gain on sale of investments in unconsolidated entities for the nine months ended September 30, 2024 related to final settlement of the Vantage at Coventry and Vantage at Westover Hills sales that occurred in January 2023 and May 2022, respectively.
Current wording
Gain on sale of investments in unconsolidated entities. There was no gain on sale of investments in unconsolidated entities for the three months ended March 31, 2026. The gain on sale of investments in unconsolidated entities for the three months ended March 31, 2025 is related to final settlement of the Vantage at Coventry sale that occurred in January 2023.
Previous wording
Earnings (losses) on investments in unconsolidated entities. The Partnership reports its proportionate share of earnings (losses) on investments in unconsolidated entities using the equity method of accounting. Our JV Equity Investments typically incur operating losses during development and lease-up, particularly from depreciation, consistent with development plans. The increase in losses for the nine months ended September 30, 2025 as compared to the same period in 2024 is primarily due to general and administrative expenses at Valage Senior Living Carson Valley and the Jessam at Hays Farm and non-capitalized interest expense at Freestone Greenville, Freestone Cresta Bella, and Freestone Ladera as the properties have begun operations.
Current wording
Earnings (losses) on investments in unconsolidated entities. The Partnership reports its proportionate share of earnings (losses) on investments in unconsolidated entities using the equity method of accounting. Our JV Equity Investments typically incur operating losses during development and lease-up, particularly from depreciation, consistent with development plans. The increase in losses for the three months ended March 31, 2026 as compared to the same period in 2025 is primarily due to non-capitalized interest and depreciation expense at Valage Senior Living Carson Valley, The Jessam at Hays Farm, Freestone Greenville, Freestone Cresta Bella, and Freestone Ladera as the properties began primary operations in mid to late 2025. Depreciation and amortization expenses accounted for approximately $1.5 million and $394,000 of our proportionate share of losses for the three months ended March 31, 2026 and 2025, with the remaining losses related to non-capitalized interest expense and general operating expenses.
Previous wording
Provision for credit losses. The provision for credit losses for the three months ended September 30, 2025 includes an asset-specific allowance of approximately $596,000 related to the Opportunity South Carolina property loan. This asset-specific provision was partially offset by a decrease in our general allowance for credit losses from a decrease in the weighted average life of the remaining investment portfolio.
Current wording
The provision for credit losses for the three months ended March 31, 2025 is primarily due to GIL and property loan redemptions, a decrease in the weighted average life of the remaining investment portfolio, and updates of market data used as quantitative assumptions in our model used to estimate the allowance for credit losses.
Previous wording
Depreciation expense. Depreciation expense for the three months ended September 30, 2025 and 2024 related to furniture and equipment owned by the Partnership.
Current wording
Depreciation and amortization. Depreciation expense for the three months ended March 31, 2026 related primarily to the four SC MF Properties and totaled approximately $1.2 million. Amortization of in-place lease intangible assets for the SC MF Properties was approximately $1.6 million for the three months ended March 31, 2026. Depreciation expense for the three months ended March 31, 2025 related to furniture and equipment owned by the Partnership.
Previous wording
An increase of approximately $2.0 million due to higher average principal outstanding of approximately $34.0 million.
Current wording
A decrease of approximately $609,000 due to lower average principal outstanding of approximately $52.3 million; and
Previous wording
A decrease of approximately $4.6 million due to lower average interest rates on debt financing, net of cash receipts received on interest rate derivatives; and
Current wording
An increase of approximately $267,000 due to higher average interest rates on debt financing, net of cash receipts received on interest rate derivatives.
Previous wording
Income Tax Expense for the three and nine months ended September 30, 2025 and 2024
Current wording
Income Tax Expense for the three months ended March 31, 2026 and 2025
Previous wording
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 certain property loans and real estate assets. The Greens Hold Co sold its ownership interest in The 50/50 MF Property to an unrelated non-profit organization in December 2022 and deferred a gain on sale of approximately $6.6 million. There was minimal taxable income for the Greens Hold Co for the three and nine months ended September 30, 2025 and 2024.
Current wording
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 certain property loans and real estate assets. There was minimal taxable income for the Greens Hold Co for the three months ended March 31, 2026 and 2025.
Previous wording
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 nine months ended September 30, 2025 and 2024 (all per BUC amounts are presented giving effect to the BUCs Distributions on a retroactive basis for all periods presented):
Current wording
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 months ended March 31, 2026 and 2025:
Previous wording
The adjustments reflect the change in allowances for credit losses under the CECL standard which requires the Partnership to update estimates of expected credit losses for its investment portfolio at each reporting date. Credit losses are not reported within CAD until such losses are realized. The provision for credit loss includes asset-specific provisions for credit losses for affordable multifamily investments totaling approximately $596,000 and $9.9 million for the three and nine months ended September 30, 2025, respectively. In connection with the final settlement of the bankruptcy estate of the Provision Center 2014-1 MRB in July 2024, the Partnership recovered approximately $169,000 of its previously recognized allowance credit loss which is not included as an adjustment to net income in the calculation of CAD for the nine months ended September 30, 2024.
Current wording
The adjustments reflect the change in allowances for credit losses under the CECL standard which requires the Partnership to update estimates of expected credit losses for its investment portfolio at each reporting date. Credit losses are not reported within CAD until such losses are realized. The provision for credit loss for the three months ended March 31, 2026 includes an asset-specific provision for credit loss of approximately $93,000 offset by a recovery of approximately $2.1 million of our previously recognized allowance for credit losses related to The Park at Sondrio MRB and taxable MRB, The Park at Vietti MRB and taxable MRB, and Windsor Shores Apartments MRB.
Previous wording
As described in Note 22 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 25% of Tier 2 income due to the General Partner. Tier 2 income for the nine months ended September 30, 2025 related to the gain on sale of Vantage at Helotes and the premium received upon redemption of the Companion at Thornhill Apartments MRB. There was no Tier 2 income for the three months ended September 30, 2025 and 2024 and the nine months ended September 30, 2024
Current wording
As described in Note 22 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 25% of Tier 2 income due to the General Partner. There was no Tier 2 income for the three months ended March 31, 2026 and 2025.
Previous wording
The following tables summarize occupancy and other information regarding the properties underlying our various investments. The narrative discussion that follows provides a brief operating analysis of each investment as of and for the nine months ended September 30, 2025 and 2024.
Current wording
The following tables summarize occupancy and other information regarding the properties underlying our various investments. The narrative discussion that follows provides a brief operating analysis of each investment as of and for the three months ended March 31, 2026 and 2025.
Previous wording
The physical occupancy and economic occupancy amounts are based on the latest available occupancy and financial information, which is as of June 30, 2025.
Current wording
The economic occupancy amounts are based on the latest available financial information, which is as of December 31, 2025.
Previous wording
Comparison of the nine months ended September 30, 2025 and 2024
Current wording
Comparison of the three months ended March 31, 2026 and 2025
Previous wording
Physical occupancy as of September 30, 2025 decreased from the same period in 2024 due primarily to occupancy declines at various properties located in Texas - primarily in San Antonio and Houston. These markets have experienced large increases in the supply of available multifamily units in recent periods. Overall higher vacancy levels in these markets is putting pressure on leasing at the properties related to our MRBs. We observed new construction starts in these markets declined sharply starting in late 2023 in San Antonio and mid-2024 in Austin and we expect that occupancy will recover once available units are absorbed and new supply deliveries decline in the near term. The overall physical occupancy for Texas properties as of September 30, 2025 is slightly lower than physical occupancy as of June 30, 2025 due to these market factors. The borrowers are still current on MRB debt service. If there are continuing declines in operating results of the properties such that the borrowers are unable to make contractual principal and interest payments on our MRBs, we may receive forbearance requests or experience MRB defaults. We may choose to provide support to the borrowers through supplemental property loans to prevent such MRB defaults, which will be considered on a case-by-case basis. We will continue to monitor results and discuss property operations with the individual borrowers.
Current wording
Occupancy metrics as of March 31, 2026 decreased from the same period in 2025 due primarily to occupancy declines at various properties located in Texas - primarily in San Antonio and Houston. These markets have experienced large increases in the supply of available multifamily units in recent periods. Overall higher vacancy levels in these markets are putting pressure on leasing at the properties related to our MRBs. We observed new construction starts in these markets declined sharply starting in late 2023 in San Antonio and mid-2024 in Austin and we expect that occupancy will recover once available units are absorbed and new supply deliveries decline in the near term. Despite these declines in occupancy, all Texas borrowers are still current on MRB debt service. If there are continuing declines in operating results of the properties such that the borrowers are unable to make contractual principal and interest payments on our MRBs, we may receive forbearance requests or experience MRB defaults. We may choose to provide support to the borrowers through supplemental property loans to prevent such MRB defaults, which will be considered on a case-by-case basis. We will continue to monitor results and discuss property operations with the individual borrowers.
Previous wording
Restricted rents at affordable multifamily properties are tied to changes in AMI, which has generally been increasing in the United States as overall wages increased significantly in 2021 through 2024. AMI is updated on a one-year lag, so restricted rental rates will increase on a similar lag and is realized upon annual lease renewals. On an overall basis, we noted same-property maximum rental income amounts increased 5.8% during the nine months ended September 30, 2025 as compared to the same period in 2024, which is higher than average historical annual rent increases. However, we observed a decrease in same-property net rental revenue of 0.3% during the nine months ended September 30, 2025 as compared to the same period in 2024 due to lower physical occupancy.
Current wording
Restricted rents at affordable multifamily properties are tied to changes in AMI, which has generally been increasing in the United States as overall wages increased significantly in 2021 through 2024. AMI is updated on a one-year lag, so restricted rental rates will increase on a similar lag and is realized upon annual lease renewals. On an overall basis, we noted same-property maximum rental income amounts increased 2.7% during the three months ended March 31, 2026 as compared to the same period in 2025. However, we observed a decrease in same-property net rental revenue of 4.3% during the three months ended March 31, 2026 as compared to the same period in 2025 due to lower physical occupancy at properties in Texas.
Previous wording
Meadow Valley is a seniors housing property with 174 beds in 154 units.
Current wording
Meadow Valley is a seniors housing property with 164 beds in 154 units.
Showing the first 40 of 105 pairs. Open the source sections for the rest.
Rearranged current paragraphs (10)
Current report — wording carried from elsewhere
We also make JV Equity Investments for the construction, stabilization, and ultimate sale of market-rate multifamily and seniors housing properties. We are 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 or senior citizen residential MF Properties.
Current report — wording carried from elsewhere
The physical occupancy is based on the latest available occupancy information, which is as of December 31, 2025.
Current report — wording carried from elsewhere
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.
Current report — wording carried from elsewhere
The provision for credit losses for the three months ended March 31, 2025 is primarily due to GIL and property loan redemptions, a decrease in the weighted average life of the remaining investment portfolio, and updates of market data used as quantitative assumptions in our model used to estimate the allowance for credit losses.
Current report — wording carried from elsewhere
Depreciation expense was minimal for the three months ended March 31, 2026 and 2025.
Current report — wording carried from elsewhere
Interest expense decreased for the three months ended March 31, 2026 as compared to the same period in 2025 primarily due to lower average interest rates on debt financing.
Current report — wording carried from elsewhere
An increase of approximately $169,000 in investment income related to preferred returns on equity contributions during 2025 and 2026.
Current report — wording carried from elsewhere
There was no gain on sale of investments in unconsolidated entities for the three months ended March 31, 2026. The gain on sale of investments in unconsolidated entities for the three months ended March 31, 2025 is related to final settlement of the Vantage at Coventry sale that occurred in January 2023.
Current report — wording carried from elsewhere
Cash flows generated by MF Properties, net of operating expenses and mortgage debt service payments, are unrestricted for use by the Partnership. The MF 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.
Current report — wording carried from elsewhere
Under the terms of our Partnership Agreement, we are authorized 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. Additionally, we are authorized 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. As of May 8, 2026, the market capitalization of our BUCs was $127.5 million and the book value of our outstanding Series A-1 Preferred Units and Series B Preferred Units was $55.0 million and $47.5 million, respectively. At these levels, we are not currently authorized to issue additional Series A-1 Preferred Units or Series B Preferred Units, though we may be able to issue such units in the future if there is sufficient increase in market capitalization of our BUCs.
Rearranged previous paragraphs (20)
Previous report — wording carried elsewhere
Current market dynamics related to our market rate multifamily JV Equity Investments are challenging. The San Antonio, TX, Austin, TX, and Huntsville, AL markets experienced record new multifamily unit supply in recent years, peaking in 2024. Rental rates and occupancy have declined as these markets absorb new units, which is putting downward pressure on leasing velocity and net operating income for these properties. We expect rental rates and occupancy to remain under pressure throughout 2025. However, we expect this trend to lessen in 2026 due to limited new construction starts in these markets in 2024 and 2025.
Previous report — wording carried elsewhere
Total Revenues and Other Income comparison for the nine months ended September 30, 2025 and 2024
Previous report — wording carried elsewhere
Other interest income. Other interest income is comprised primarily of interest income on our property loan, taxable MRB, and taxable GIL investments. The increase in other interest income for the nine months ended September 30, 2025 as compared to the same period in 2024 was primarily due to:
Previous report — wording carried elsewhere
An increase of approximately $3.4 million from recent property loan, taxable MRB and taxable GIL investment advances, offset by a decrease of approximately $2.0 million due to recent property loan, taxable MRB and taxable GIL investment redemptions and principal repayments; and
Previous report — wording carried elsewhere
Total Expenses comparison for the Nine Months Ended September 30, 2025 and 2024
Previous report — wording carried elsewhere
Depreciation expense. Depreciation expense for the nine months ended September 30, 2025 and 2024 related to furniture and equipment owned by the Partnership.
Previous report — wording carried elsewhere
Interest expense. The decrease in interest expense for the nine months ended September 30, 2025 as compared to the same period in 2024 was due to the following factors:
Previous report — wording carried elsewhere
Net result from derivative transactions. The net result from derivative transactions consists of realized and unrealized (gains) losses from our derivative financial instruments. Realized (gains) losses represent receipts or payments related to our interest rate swaps during the period. Unrealized (gains) losses are generally a result of changes in current and forward interest rates during the period. Increasing interest rates generally result in unrealized gains while decreasing interest rates generally result in unrealized losses. The following table summarizes the components of this line item for the nine months ended September 30, 2025 and 2024 (dollar amounts in thousands):
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We report the Partnership’s proportionate share of earnings from our Construction Lending JV within this segment. The first capital call and investment for the Construction Lending JV occurred in April 2025.
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A decrease of approximately $169,000 in other interest income due to less interest earned on cash balances.
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Total revenues decreased for the nine months ended September 30, 2025 as compared to the same period in 2024 primarily due to:
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A decrease of approximately $4.2 million due to lower average interest rates on debt financing, net of cash receipts received on interest rate derivatives; and
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Earnings (losses) from investments in unconsolidated entities represent our proportionate share of net loss of the Construction Lending JV for the period. The Construction Lending JV began activities in April 2025.
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The following table summarizes the segment's net interest income, average principal 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 nine months ended September 30, 2025 and 2024. The average balances are based primarily on monthly averages during the respective periods. All dollar amounts are in thousands.
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Net interest spread equals interest income less interest expense, excluding amortization of deferred finance costs, and adjusted for realized gains (losses) on derivative instruments.
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The following table summarizes the changes in interest income and interest expense for the nine months ended September 30, 2025 and 2024, and the extent to which these variances are attributable to 1) changes in the volume of interest-earning assets and interest-bearing liabilities, and 2) changes in the interest rates of the interest-earning assets and interest-bearing liabilities. All dollar amounts are in thousands.
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Interest expense decreased for the three months ended September 30, 2025 as compared to the same period in 2024 primarily due to:
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Interest expense for the three months ended September 30, 2025 and 2024 is related to our General LOC that is primarily secured by the JV Equity Investments. The slight decrease in interest expense is primarily due to lower average outstanding balances.
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We do not see these same challenges for market rate senior housing JV Equity Investments, like our investment in Valage Senior Living Carson Valley. We believe market rate seniors housing industry trends, potential resident demographics, and expected returns remain encouraging.
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We maintain a General LOC with a commitment of up to $50.0 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 35% multiplied by the aggregate value of a pool of eligible encumbered assets. Eligible encumbered assets consist of 100% of our equity capital contributions to JV Equity Investments, subject to certain limits and restrictions. The General LOC is secured by first priority security interests in our JV Equity Investments. We have the ability to increase the total maximum commitment by an additional