UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K
☒ | ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the fiscal year ended December 31, 20202021
OR
☐ | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the transition period from to
Commission File Number: 000-24843
AMERICA FIRST MULTIFAMILY INVESTORS, L.P.
(Exact name of registrant as specified in its charter)
Delaware | 47-0810385 |
(State or other jurisdiction of incorporation or organization) | (I.R.S. Employer Identification No.) |
14301 FNB Parkway, Suite 211, Omaha, Nebraska | 68154 |
(Address of principal executive offices) | (Zip Code) |
(402) (402) 952-1235
(Registrant’s telephone number, including area code)
Securities registered pursuant to Section 12(b) of the Act:
Title of each class | Trading Symbol(s) | Name of each exchange on which registered |
Beneficial Unit Certificates representing assignments of limited partnership interests in America First Multifamily Investors, L.P. | ATAX | The NASDAQ Stock Market, LLC |
Securities registered pursuant to Section 12(g) of the Act:
None
Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. YES ☐ ☐No☒
Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. YES ☐ ☐No☒
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes☒ NO ☐
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of the chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes☒ NO ☐
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or emerging growth company. See definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
Large accelerated filer | ☐ | Accelerated filer | ☐ | |
Non-accelerated filer | ☒ | Smaller reporting company | ☒ | |
Emerging growth company | ☐ |
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Indicate by checkmark whether the registrant has filed a report on and attestation to its management’s assessment of the effectiveness of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its audit report. ☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). YES ☐ NO ☒
The aggregate market value of the registrant’s BUCs held by non-affiliates based on the final sales price of the BUCs on the last business day of the registrant’s most recently completed second fiscal quarter was $250,641,040$410,247,213
DOCUMENTS INCORPORATED BY REFERENCE
None
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INDEX
Item 1 | 4 | ||
Item 1A | 14 | ||
Item 1B |
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Item 2 |
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Item 3 |
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Item 4 |
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Item 5 |
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Item 6 |
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Item 7 | Management’s Discussion and Analysis of Financial Condition and Results of Operations |
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Item 7A |
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Item 8 |
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Item 9 | Changes in and Disagreements with Accountants on Accounting and Financial Disclosure |
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Item 9A |
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Item 9B |
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Item 9C | Disclosure Regarding Foreign Jurisdictions that Prevent Inspections | 120 | |
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Item 10 |
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Item 11 |
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Item 12 | Security Ownership of Certain Beneficial Owners and Management |
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Item 13 | Certain Relationships and Related Transactions, and Director Independence |
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Item 14 |
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Item 15 |
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Item 16 |
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PART I
Forward-Looking Statements
This Annual Report (“Report”) (including, but not limited to, the information contained in “Management’s Discussion and Analysis of Financial Condition and Results of Operations”) contains forward-looking statements. All statements other than statements of historical facts contained in this Report, including statements regarding our future results of operations and financial position, business strategy and plans, and objectives of management for future operations, are forward-looking statements. When used, statements which are not historical in nature, including those containing words such as “anticipate,” “estimate,” “should,” “expect,” “believe,” “intend,” and similar expressions, are intended to identify forward-looking statements. We have based forward-looking statements largely on our current expectations and projections about future events and financial trends that we believe may affect our business, financial condition, and results of operations. This Report also contains estimates and other statistical data made by independent parties and by us relating to market size and growth and other industry data. This data involves several assumptions and limitations, and you are cautioned not to give undue weight to such estimates. We have not independently verified the statistical and other industry data generated by independent parties and contained in this Report, and accordingly, we cannot guarantee their accuracy or completeness. In addition, projections, assumptions and estimates of our future performance and the future performance of the industries in which we operate are necessarily subject to a high degree of uncertainty and risk due to a variety of factors, including those described under the headings “Risk Factors” of Item 1A of this Report.
These forward-looking statements are subject, but not limited to, various risks and uncertainties, including those relating to:
• defaults on the mortgage loans securing our mortgage revenue bonds (“MRBs”) and governmental issuer loans (“GILs”); • the competitive environment in which we operate; • risks associated with investing in multifamily, student, senior citizen residential properties and commercial properties; • changes in business conditions and the general economy, including the current and future impact of the novel coronavirus (“COVID-19”) on business operations, employment, and government-mandated relief and mitigation measures; • changes in interest rates; • our ability to access debt and equity capital to finance our assets; • current maturities of our financing arrangements and our ability to renew or refinance such financing arrangements; • potential exercising of redemption rights by the holders of the Series A Preferred Units; • local, regional, national, and international economic and credit market conditions; • recapture of previously issued Low Income Housing Tax Credits (“LIHTCs”) in accordance with Section 42 of the Internal Revenue Code (“IRC”); • geographic concentration of properties related to our investments; and • changes in the U.S. corporate tax code and other government regulations affecting our business.
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Other risks, uncertainties and factors could cause our actual results to differ materially from those projected in any forward-looking statements we make. We are not obligated to publicly update or revise any forward-looking statements, whether because of new information, future events or otherwise.
All references to “we,” “us,” “our” and the “Partnership” in this Report mean America First Multifamily Investors, L.P. (“ATAX”), its wholly owned subsidiaries and its consolidated variable interest entities. See Item 7, “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” of this Report for additional details.
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Item 1. Business.
Organization
The Partnership was formed in 1998 for the primary purpose of acquiring a portfolio of mortgage revenue bonds (“MRBs”) that are issued by state and local housing authorities to provide construction and/or permanent financing for affordable multifamily housing, seniors housing and commercial properties. We also invest in governmental issuer loans (“GILs”), which are similar to MRBs, to provide construction financing for affordable multifamily properties. We generally refer to affordable multifamily and residential properties associated with our MRBs and GILs as “Residential Properties.” We expect and believe the interest received on our MRBs and GILs is excludable from gross income for federal income tax purposes. The Partnership mayWe also invest in other types of securities 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 the Partnership, to the extent permitted under the terms of the Partnership’s First Amended and Restated Agreement of Limited Partnership dated September 15, 2015, as further amended (the “Partnership Agreement”). In addition, we may acquire interests in multifamily, student, and senior citizenseniors residential properties. properties (“MF Properties”).
Our general partner is America First Capital Associates Limited Partnership Two (“AFCA 2” or the “General Partner”). The general partner of AFCA 2 is Greystone AF Manager LLC (“Greystone Manager”), which is an affiliate of Greystone & Co., Inc. II LLC (“Greystone & Co.”). Greystone & Co., together with its affiliated companies (collectively “Greystone”), is a real estate lending, investment, and advisory company with an established reputation as a leader in multifamily and healthcare finance, having ranked as a top Federal Housing Administration (“FHA”), Federal National Mortgage Association (“Fannie Mae”), and Federal Home Loan Mortgage Corporation (“Freddie Mac”) lender in these sectors.
The Partnership has issued Beneficial Unit Certificates (“BUCs”) representing assigned limited partnership interests to investors (“BUC holders”). Our BUCs are traded on the NASDAQ Global Select Market under the symbol “ATAX.”
The Partnership has also issueddesignated three series of non-cumulative, non-voting, non-convertible Series A Preferred Unitspreferred units (collectively, the “Preferred Units”) that represent limited partnership interests in the Partnership under the Partnership Agreement to financial institutions via private placements. The Series A Preferred Units have no stated maturity, are not subject to any sinking fund requirements, and will remain outstanding indefinitely unless redeemed by the Partnership or by the holder. Upon the sixth anniversaryconsisting of the closing of the sale of Series A Preferred Units to a holder thereof, and upon each anniversary thereafter, each holder of Series A Preferred Units and the Partnership both have the right to redeem, in whole or in part, the Series A Preferred Units, held by such holder at a redemption price equal to $10.00 per unit plus all declaredthe Series A-1 Preferred Units, and unpaid distributions through the date of the redemption.
Series B Preferred Units. There are currently no Series A-1 Preferred Units or Series B Preferred Units issued and outstanding. The holders of the BUCs and Series A Preferred Units are referred to herein as “Unitholders.” Our Unitholders will incur tax liability if any interest earned on our MRBs or GILs is determined to be taxable, for gains related to our MRBs or GILs and for income and gains related to our taxable investments.investments such as our investments in unconsolidated entities and property loans. See Item 1A, “Risk Factors” in this Report for additional details.
Investment Types
Mortgage Revenue Bonds (“MRBs”)
We invest in MRBs that are issued by state and local governments, their agencies, and authorities to finance the construction or acquisition and rehabilitation of income-producing real estatemultifamily rental properties. Each MRB is collateralized by a mortgage on all real and personal property associated with the related property. An MRB is typically a non-recourse obligation of the respective owner of each property and the sole source of the funds to pay principal and interest due on the MRB is the net cash flow generated by the property or the proceeds from a sale or refinancing of the secured property. The MRBs dodoes not constitute an obligation of any state or local government, agency or authority and no state or local government, agency or authority is liable foron them, nor is the taxing power of any state or local government pledged to the payment of principal or interest on an MRB. An MRB is a non-recourse obligation of the MRBs.property owner. Each MRB is collateralized by a mortgage on all real and personal property of the secured property. The sole source of the funds to pay principal and interest on an MRB is the net cash flow or the sale or refinancing proceeds from the secured property. We may commit to provide funding for MRBs on a draw-down basis during construction and/or rehabilitation of secured property.
We expect and believe that the interest received on our MRBs is excludable from gross income for federal income tax purposes. We primarily invest in MRBs that are senior obligations of the associatedsecured properties, though we may also invest in subordinate MRBs. The MRBs predominantly bear interest at fixed interest rates and require regular principal and interest payments on either a monthly or semi-annual basis. The majority of our MRBs have initial contractual terms of 15 years or greater.more. MRBs may have optional call dates that may be exercised by the borrower or the Partnership that are earlier than the contractual maturity at either par or premiums to par.
As of December 31, 2020,2021, we own 7775 MRBs with an aggregate outstanding principal amount of approximately $673.6$697.7 million. Our MRBs are owned either directly by the Partnership or by our consolidated variable interest entities (“VIEs”) associated with our debt financing facilities. Our 75 MRBs relate toare secured by 68 Residential Propertiesmultifamily residential properties containing a total of 11,11410,906 rental units located in 14 states in the
United States. One MRB is secured by a mortgage on the ground, facilities, and equipment of a commercial ancillary health care facility in Tennessee. One MRB is secured by a mortgage on the ground, facilities, and equipment of a to-be-constructed seniors housing property in Michigan.
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The four basic types of MRBs which we may acquire as investments are as follows:
• Private activity bonds issued under Section 142(d) of the Internal Revenue Code (“IRC”); • Bonds issued under Section 145 of the IRC on behalf of not-for-profit entities qualified under Section 501(c)(3) of the IRC; • Essential function bonds issued by a public instrumentality to finance a multifamily residential property owned by such instrumentality; and • Existing “80/20 bonds” that were issued under Section 103(b)(4)(A) of the IRC.
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Each of these structures permit the issuance of MRBs under the IRC to finance the construction or acquisition and rehabilitation of affordable rental housing or other not-for-profit commercial property. Under applicable Treasury Regulations, any affordable multifamily residential project financed with tax-exempt MRBs (other than essential function bonds as described in 3the third bullet above) must set aside a percentage of its total rental units for occupancy by tenants whose incomes do not exceed stated percentages of the median income in the local area. Those rental units of the multifamily residential project not subject to tenant income restrictions may be rented at market rates (unless there are restrictions otherwise imposed by the bond issuer or a governmental entity). With respect to private activity bonds issued under Section 142(d) of the IRC, the owner of the multifamily residential project may elect, at the time the MRBs are issued, whether to set aside a minimum of 20% of the units for tenants making less than 50% of area median income (as adjusted for household size) or 40% of the units for tenants making less than 60% of the area median income (as adjusted for household size). The MRBs that were secured by Residential Properties issued prior to the Tax Reform Act of 1986 (so called “80/20” bonds) require that 20% of the rental units be set aside for tenants whose income does not exceed 80% of the area median income, without adjustment for household size. State and local housing authorities may require additional tenant income or rent restrictions abovemore restrictive than those required by Treasury Regulations. There are no Treasury Regulations related to MRBs that are secured by a commercial property.property owned by a non-profit sponsor.
The borrowers associated with our MRBs are either syndicated partnerships formed to receive allocations of LIHTCs or not-for-profit entities. LIHTC eligible projects are attractive to developers of affordable housing because it helps them raise equity and debt financing. Under the LIHTC program, developers that receive an allocation of private activity bonds will also receive an allocation of federal LIHTCs as a method to encourage the development of affordable multifamily housing. We do not invest in LIHTCs but are attracted to MRBs that are issued in association with federal LIHTC allocations because they bear interest that we expect and believe is exempt from federal income taxes. To be eligible for federal LIHTCs, a property must either be newly constructed or substantially rehabilitated, and therefore, may be less likely to become functionally obsolete in the near term versusas compared to an older property. There are various requirements to be eligible for federal LIHTCs, including rent and tenant income restrictions, which vary by property. Our borrowers that are owned by not-for-profit entities typically have missions to provide affordable multifamily rental units to underserved populations in their market areas. The affordable housing properties securing 501(c)(3) bonds also must comply with the IRS safe harbors for tenant incomes and rents.
Governmental Issuer Loans (“GILs”)
We invest in GILs that are issued by state or local governmental authorities to providefinance the construction financing forof affordable multifamily properties. EachA GIL is collateralized by a mortgage on all real and personal property associated with the related property. An GIL is typically a non-recourse obligation of the respective owner of each property and the sole source of the funds to pay principal and interest due on the GIL is the net cash flow generated by the property or the proceeds from a sale or refinancing of the secured property. The GILs dodoes not constitute an obligation of any state or local government, agency or authority and no unit of state or local government, agency or authority is liable for them, nor is the taxing power of any state or local government pledged to the payment of principal or interest on a GIL. Each GIL is secured by a mortgage on all real and personal property of the GILs. secured property. The GILs may share first mortgage lien positions with taxable property loans and/or taxable GILs also owned by the Partnership. Sources of the funds to pay principal and interest on a GIL consist of the net cash flow or the sale or refinancing proceeds from the secured property and limited-to-full payment guarantees provided by affiliates of the GIL’s borrower. We may commit to provide funding for GILs on a draw-down basis during construction of the related property.secured properties.
We expect and believe the interest received on our GILs is excludable from gross income for federal income tax purposes. The GILs are senior obligations of the associated Residential Propertiessecured properties and bear interest at variable interest rates. The GILs have initial terms of two to four years.years, though the borrower may prepay all amounts due at any time without penalty. At the closing of each GIL, Freddie Mac, through a servicer, has forward committed to purchase the GIL at maturity at par if the property has reached stabilization and other conditions are met. As of December 31, 2020,2021, an affiliate of Greystone, Greystone Servicing Company LLC, has provided a forward commitment to purchase eachseven of the Partnership’s GILs once certain conditions are met, at a price equal to the outstanding principal balance plus accrued interest.GILs. Greystone Servicing Company LLC will then immediately sell the GILs to Freddie Mac pursuant to a financing commitment between Greystone Servicing Company LLC and Freddie Mac.
As of December 31, 2020,2021, we own threenine GILs with an aggregate outstanding principal amount of approximately $64.9$184.8 million. Our GILs are owned by our consolidated VIEs associated with our debt financing facilities. Such GILs are related to three Residential Propertiesnine affordable multifamily properties containing a total of 7371,832 rental units located in threesix states in the United States.
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The GILs have been issued under Section 142(d) of the Internal Revenue Code (“IRC”) and are subject to the same set aside and tenant income restrictions noted in the “Mortgage Revenue Bonds” description above. The borrowers associated with our GILs are syndicated partnerships formed to receive allocations of LIHTCs.
Investments in Unconsolidated Entities
We invest in membership interests in unconsolidated entities (“Vantage Properties”JV Equity Investments”) for the construction of market-rate multifamily real estate properties. We do not have controlling interests in the Vantage PropertiesJV Equity Investments and account for the membership interests using the equity method of accounting. The Partnership earns a return on its membership interests accruing immediately on its contributed capital, which is guaranteed to an extent and for a period, by an unrelated third party.party through the fifth anniversary of construction commencement. The membership interests entitle the Partnership to shares of certain cash flows generated by the Vantage PropertiesJV Equity Investments from operations and upon the occurrence of certain capital transactions, such as a refinancing or sale. As of December 31, 2020, 2021, we owned membership interests in 12 unconsolidated entities located in four states in the United States. Eight of the 12 JV Equity Investments are located in Texas. In addition, one JV Equity Investment in San Marcos, Texas is reported as a consolidated VIE.
MF Properties
We have and may acquire controlling interests in multifamily, student or senior citizen residential properties (“MF Properties”).properties. We plan to operate the MF Properties in order to position ourselves for a future investment in MRBs issued to finance the acquisition and/or rehabilitation of the properties by new owners or until the opportunity arises to sell the MF Properties at what we believe is their optimal fair value.
As of December 31, 2020,2021, we owned two MF Properties containing a total of 859 rental units located in Nebraska and California.
Property Loans
We have made and may make in the future, taxable property loans which are secured by Residential Properties that are financed by our MRBs and GILs and may make taxable property loans which are unsecured. Such property loans may be made to finance capital improvements, otherwise support property operations, or fund the construction of aproperties securing our MRBs and GILs or other property. We may also make taxable property loans that are unsecured.
PHC Certificates
We previously invested in three Public Housing Capital Fund Trusts’ Certificates (“PHC Certificates”). The PHC Certificates consisted of custodial receipts evidencing loans made to numerous public housing authorities, with principal and interest on these loans payable by the respective public housing authorities out of annual appropriations to the public housing authorities by HUD under HUD’s Capital Fund Program established under the Quality Housing and Work Responsibility Act of 1998 (the “Capital Fund Program”). In January 2020, we sold the PHC Certificates to an unrelated third party and paid off all amounts due on the related debt financing facilities.
General Investment Matters
Our investments in unconsolidated entities and MF Properties are considered “Other Investments” under the terms of our Partnership Agreement. Property loans to borrowersproperties not associated withsecuring our MRBs and GILs are also considered Other Investments. We may invest in other types of securities and investments that may or may not be secured by real estate that are also considered Other Investments. We may also invest in “Tax Exempt Investments,” other than our MRBs and GILs, such as the PHC Certificates, under the terms of our Partnership Agreement. Such Tax Exempt Investments must be rated in one of the four highest rating categories by at least one nationally recognized securities rating agency. Under the terms of the Partnership Agreement, the aggregate value of our Other Investments and Tax-Exempt Investments cannot exceed 25% of our assets at the time of acquisition.
We rely on an exemption from registration under the Investment Company Act of 1940, which has certain restrictions on the types and amounts of securities owned by the Partnership. See the “Regulatory Matters” section included within Item 1 below for further information.
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Business Objectives and Strategy
Investment Strategy
Our primary business objective is to generatemanage our portfolio of investment to achieve the following:
We are pursuing a business strategy of acquiring additional MRBs, GILs and other investments, as permitted by the
Partnership Agreement, on a leveraged basis to increase the amount of cash available for distribution toachieve our Unitholders and reduce risk through interest rate hedging.objective. In allocating our capital and executing our strategy, we seek to balance the risks of owning specific investments with the earnings opportunity on the investment.
We believe there continues to be a significant unmet demand for affordable multifamily and senior citizen residential housing in the United States. Government programs that provide direct rental support to residents have not kept up with demand. Therefore, investment programs such as those pursued by the Partnership, which 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 housing a low-cost source of construction and/or permanent debt financing. We plan to continue to invest in additional MRBs and GILs issued to finance affordable multifamily and senior residential rental housing properties.
In addition, we willWe continue to evaluate opportunities where anfor MRB structure can be utilizedinvestments to fund senior citizen housing projects or skilled nursing facilities. In the senior citizen housing asset class, independent living facilities, assisted living facilities and memory care facilities can all be funded with the same type ofproperties issued as private activity or 501(c)(3) bonds that aresimilar in legal structure to those issued for traditional affordable multifamily housing projects. We planwill continue to leverage Greystone’sthe expertise of Greystone and other reputable third parties in managingevaluating independent living, assisted living, memory care and skilled nursing properties prior to evaluate opportunitiesour MRB acquisitions. During 2021, we acquired our first senior citizen housing MRB, Meadow Valley, that will finance the construction and stabilization of a combined independent living, assisted living and memory care facility in Traverse City, MI. Furthermore, in 2021 we fundeda property loan secured by a 128-bed skilled nursing facility, Magnolia Crossing in Houston, TX, to a 501(c)(3) in order to position ourselves for a future MRB investments in these market segments.investment.
We continually assess opportunities to expand and/or reposition our existing portfolio of MRBs and GILs. Our principal objective is to improve the quality and performance of our portfolio of MRBs and GILs and, ultimately, increase the amount of cash available for distribution to our Unitholders. WeIn certain circumstances, we may selectively allow the borrowers of our MRBs to redeem the MRBs prior to the final maturity date. ASuch MRB redemptions will usually require a sale or refinancing of the underlying property will usually be required to effect such a MRB redemption.property. We may also elect to sell MRBs that have experienced significant appreciation in value. In other cases, we may elect to sell MRBs on properties that are in stagnant or declining real estate markets. The proceeds received from these transactions would be redeployed into other investments consistent with our investment objectives. We anticipate holding our GILs until maturity as the terms are typically for two to four years and have defined forward purchase commitments from Greystone Servicing Company LLC, an affiliate of the General Partner, and Freddie Mac, at maturity.acting through a servicer.
To facilitate our investment strategy of acquiring additional MRBs, we may also acquire ownership positions in multifamily properties as MF Properties. In many cases, we expect to acquire MRBs on these MF Properties at the time of a restructuring of the MF Property’s ownership. Such restructuring may involve the syndication of LIHTCs in conjunction with property rehabilitation or a sale to a not-for-profit owner that will finance their acquisition and/or rehabilitation by arranging for the issuance of MRBs.
We will also continue to make strategic equity investments in market-rate multifamily residential properties, such as the Vantage Properties,JV Equity Investments, through noncontrolling membership interests in unconsolidated entities. We believe such equity investments diversify our investment portfolio while also providing attractive risk-adjusted returns for our Unitholders.
Financing Strategy
We finance our assets with what we believe to be a prudent amount of leverage, the level of which varies from time to time based upon the characteristics of our portfolio, availability of financing, and market conditions. This leverage strategy allows us to generate enhanced returns and lowers our net capital investment, allowing us to make additional investments. We currently obtain leverage on our investments and assets through:
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We may utilize other types of secured or unsecured borrowings in the future, including more complex financing structures and diversification of our leverage sources and counterparties.
We refer to our TEBS, TOB Trust, and Term TOB Trust securitizations and our Secured Notes as our “Debt Financings.”debt financings. The TEBS, TOB Trust and Term TOB Trust securitizations are consolidated VIEs for financial reporting purposes. These arrangements are structured such that we transfer our assets to an entity, such as a trust or special purpose entity, which then issues senior and residual beneficial interests. The senior beneficial interests are sold to third-party investors in exchange for debt proceeds. We retain the residual beneficial interest which entitles us to certain rights to the securitized assets and to residual cash proceeds. We generally structure our Debt Financings
debt financings such that principal, interest, and any trust expenses are payable from the cash flows of the secured assets and we are generally entitled to all residual cash flows for our general use. As the residual interest holder, we may be required to make certain payments or contribute certain assets to the VIEs if certain events occur. Such events include, but are not limited to, a downgrade in the investment rating of the senior securities issued by the VIEs, a ratings downgrade of the liquidity provider for the VIEs, increases in short term interest rates beyond pre-set maximums, an inability to re-market the senior securities or an inability to obtain liquidity support for the senior securities. If such an event occurs in an individual VIE, we may be required to deleverage the VIE by repurchasing some or all of the senior securities. Otherwise, the underlying collateral maywill be sold and, if the proceeds are not sufficient to pay the principal amount of the senior securities plus accrued interest and other trust expenses, the Partnership will be required to fund any such shortfall. If we do not fund the shortfall, the default and liquidation provisions will be invoked against us. For each TEBS securitization, our shortfall funding is limited to the stated amount of our residual interest.
Under the terms of ourThe TOB Trusts and Secured Notes with Mizuho weand Barclays are subject to covenants and requirements under the respective master agreements, primarily related to maintenance of certain levels of partners’ capital, maximum leverage, and remaining listed on the NASDAQ. The TOB Trusts are also subject to margin collateral requirements. We may also be required to post collateral, typically in cash, collateralrelated to the TOB Trusts with Mizuho ifand Barclays. The amount of collateral posting required is dependent on the valueaggregate valuation of our residual intereststhe underlying MRBs, taxable MRB, GILs, taxable GIL and other outstanding positions drops below certain thresholds in the aggregate. In addition, if the value of our residual interest in individual TOB Trusts drops below certain required valuesproperty loans in relation to the total assets in each trust, a termination event of the financing facility would be triggered which would require the Partnership to purchase a portion or all of the senior interests issuedthresholds set by the trust.Mizuho and Barclays.
The willingness of leverage providers to extend financing is dependent on various factors such as their underwriting standards, regulatory requirements, available lending capacity, and existing credit exposure to the Partnership. An inability to access debt financing at an acceptable cost may result in adverse effects on our financial condition and results of operations. There can be no assurance that we will be able to finance additional acquisitions of MRBs, GILs or other investments through additional Debt Financings.debt financings. Although the consequences of market and economic conditions and their impact on our ability to pursue our plan to grow through investments in additional MRBs and GILs are not fully known, we do not anticipate that our existing assets will be adversely affected in the long-term.
We set target constraints for each type of financing utilized by us. Those constraints are dependent upon several factors, including the assets being leveraged, the tenor of the leverage program, whether the financing is subject to marketmargin or collateral calls, and the liquidity and marketability of the financingfinanced collateral. We use target constraints for each type of financing to manage to an overall maximum 75% leverage level (the “Leverage Ratio”), as established by the Board of Managers of Greystone Manager. The Board of Managers of Greystone Manager retains the right to change the leverage constraintLeverage Ratio in the future based on the consideration of factors the Board of Managers considers relevant. We calculate our leverage ratioLeverage Ratio as total outstanding debt divided by total assets using cost adjusted for paydowns for MRBs, GILs, property loans, taxable MRBs and taxable MRBs,GILs, and initial cost for deferred financing costs and MF Properties. real estate assets. As of December 31, 2020,2021, our overall leverage ratioLeverage Ratio was approximately 67%69%.
We actively manage both our fixed and variable rate debt financings and our exposure to changes in market interest rates. Certain leverage sources, such as our TOB Trusts, Secured Notes and one TEBS financing, currently bear interest at variable rates. We may enter into derivative instruments in connection with our risk management activities. These derivative instrumentsactivities to guard against rising interest rates, which may include interest rate caps, interest rate swaps, total return swaps, swaptions, futures, options or other available hedging instruments. When possible, we will obtain variable-rate debt financing for our variable-rate investment assets such that we are at least partially hedged against rising interest rates without the need for separate derivative instruments.
Preferred Units and BUCs Issuances
In addition to leverage, we may obtain additional capital through the issuance of Series AA-1 Preferred Units, Series B Preferred Units or other Partnership securities which may be issued in, among other things, one or more additional series of preferred units, and/or BUCs. We mayfiled a registration statement on Form S-3 for the registration of up to 3,500,000 of Series A-1 Preferred Units, which was
8
declared effective by the SEC on September 9, 2021. The Series A-1 Preferred Units are subject to optional redemption by the holder upon the sixth anniversary of the closing of the sale of Series A-1 Preferred Units and the holders are entitled to distributions at a fixed rate of 3.0% per annum. The Partnership is able to issue additionalSeries 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 or other additional seriesand Series A-1 Preferred Units, inclusive of preferred equity in private placements or public offeringsthe amount to be issued. We have not yet issued any Series A-1 Preferred Units as of December 31, 2021.
In addition, we filed a registration statement on Form S-3 for the registration of up to 10,000,000 of Series B Preferred Units, which was declared effective by the SEC on September 9, 2021. The Series B Preferred Units are registered withsubject to optional redemption by the Securitiesholder upon the eighth anniversary of the closing of the sale of Series B Preferred Units and Exchange Commission (“SEC”). With respectthe holders are entitled to distributions at a fixed rate of 3.4% per annum. The Partnership is able to issue Series B Preferred Units so long as the aggregate market capitalization of the BUCs, inbased 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. We have not yet issued any Series B Preferred Units as of December 2019,31, 2021.
We have previously issued Series A Preferred Units totaling $94.5 million. The Series A Preferred Units are subject to optional redemption by the holder upon the sixth anniversary of the closing of the sale of Series A Preferred Units and the holders are entitled to distributions at a fixed rate of 3.0% per annum. We filed a registration statement on Form S-4 to register the offering and issuance of up to 9,450,000 of Series A-1 Preferred Units under a shelf registration process that was declared effective by the SEC on July 6, 2021. Under this offering, the Partnership may issue up to 9,450,000 Series A-1 Preferred Units in exchange for the Partnership’s outstanding Series A Preferred Units. If unitholders elect to exchange Series A Preferred Units for Series A-1 Preferred Units, the new Series A-1 Preferred Units will not be eligible for redemption until the sixth anniversary of the date of the exchange, except in certain limited circumstances.
We may also obtain capital through the issuance of additional BUCs pursuant to our Registration Statement on Form S-3 (“Registration Statement”), which was declared effective by the SEC under whichin December 2019. Under the PartnershipRegistration Statement we may offer up to $225.0 million of BUCs for sale from time to time. The Registration Statement will expire in December 2022.
In September 2021, we completed an underwritten public offering of 5,462,500 BUCs for gross proceeds of $33.3 million. In July 2021, the Partnership entered into a Capital on DemandTM Sales Agreement to offer and sell, from time to time at market prices on the date of sale, BUCs up to an aggregate offering price of $30 million via an “at the market offering.” As of December 31, 2021, we have not sold any BUCs under this program. We will continue to assess if and when to issue BUCs under this program going forward.
Reportable Segments
As of December 31, 2020,Historically, we hadoperated in four reportable segments: (1) Mortgage Revenue Bond Investments, (2) MF Properties, (3) Other Investments, and (4) Public Housing Capital Fund Trusts. However, effective as of December 1, 2021 we established a new reportable segment designated as Seniors and Skilled Nursing MRB Investments, which provides acquisition, construction and/or permanent financing for seniors housing and skilled nursing properties. Seniors housing consists of a combination of the independent living, assisted living and memory care units. In addition, as of December 1, 2021, we renamed our Mortgage Revenue Bond Investments segment as “Affordable Multifamily MRB Investments”, and our Other Investments segment was renamed to “Market-Rate Joint Venture Investments”. Therefore, as of December 31, 2021, we had five reportable segments: (1) Affordable Multifamily MRB Investments, (2) Seniors and Skilled Nursing MRB Investments, (3) MF Properties, (4) Market-Rate Joint Venture Investments, and (5) Public Housing Capital Fund Trusts. All activity in the Public Housing Capital Fund Trusts and (4) Other Investments.segment ceased with the sale of the PHC Certificates in January 2020, as described further below. The Partnership separately reports its consolidation and elimination information because it does not allocate certain items to the segments. In January 2020, we sold our PHC Certificates to an unrelated partyAll comparisons and settled all related debt financing obligations. As a result, the Public Housing Capital Fund Trusts segment has no activity after January 2020. See “Management’sdiscussion throughout “Item 1. Business” and “Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations” set forth in Item 7this Annual Report on Form 10-K are based on the new segment presentation implemented during the fourth quarter of this Report for further explanation of our segments.2021, as discussed above.
Competition
We compete with private investors, lending institutions, trust funds, investment partnerships, Freddie Mac, Fannie Mae and other entities with objectives similar to ours for the acquisition of MRBs, GILs and other investments. These competitors often have greater access to capital and can originate investments with interest rates and terms that are belowdo not meet our return requirements. This competition may reduce the availability of investments to the Partnership for acquisition and reduce the interest rate that issuers are willing to pay on our future investments.
9
Through our various investments, in MRBs and GILs secured by Residential Properties, an MRB secured by a commercial property, MF Properties, and unconsolidated entities, we may be in competition with other real estate investments in the same geographic areas. Multifamily residential rental properties also compete with single-family housing that is either owned or leased by potential tenants. To compete effectively, the multifamily residential properties underlying our investments must offer quality apartmentsrental units at competitive rental rates. To maintain occupancy rates and attract quality tenants, the Residential Properties, MF Properties and properties owned by unconsolidated entities may offer rental concessions, such as freereduced rent to new tenants for a stated period. These Residential Properties, MF Properties and properties owned by unconsolidated entities also compete by offering quality apartments in attractive locations and provide tenants with amenities such as recreational facilities, garages, services and pleasant landscaping.
Recent Developments
On February 5, 2021, the Board of Managers of Greystone Manger appointed Kenneth C. Rogozinski to serve as the Partnership’s Chief Executive Officer, effective February 10, 2021. Mr. Rogozinski had been serving as the Partnership’s interim Chief Executive Officer since January 1, 2021.
Recent Investment Activities
The following table presents information regarding the investment activities of the Partnership for the years ended December 31, 20202021 and 2019:2020:
Investment Activity |
| # |
|
| Amount |
|
| Retired Debt |
|
| Tier 2 income (loss) |
|
| Notes to the | ||||
For the Three Months Ended December 31, 2021 |
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||
Mortgage revenue bond acquisitions and advances |
|
| 5 |
|
| $ | 56,726 |
|
| N/A |
|
| N/A |
|
| 6 | ||
Mortgage revenue bond redemption |
| 1 |
|
|
| 4,065 |
|
| $ | 3,553 |
|
| N/A |
|
| 6 | ||
Governmental issuer loan advances |
| 6 |
|
|
| 18,781 |
|
| N/A |
|
| N/A |
|
| 7 | |||
Investments in unconsolidated entities |
| 5 |
|
|
| 17,548 |
|
| N/A |
|
| N/A |
|
| 9 | |||
Property loan acquisition and advances |
| 6 |
|
|
| 36,537 |
|
| N/A |
|
| N/A |
|
| 10 | |||
Taxable mortgage revenue bond advance |
| 1 |
|
|
| 1,000 |
|
| N/A |
|
| N/A |
|
| 12 | |||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||
For the Three Months Ended September 30, 2021 |
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||
Mortgage revenue bond advances |
| 2 |
|
| $ | 3,995 |
|
| N/A |
|
| N/A |
|
| 6 | |||
Mortgage revenue bond redemptions |
| 4 |
|
|
| 32,380 |
|
| $ | 25,690 |
|
| $ | 462 |
|
| 6 | |
Governmental issuer loan advances |
| 6 |
|
|
| 35,582 |
|
| N/A |
|
| N/A |
|
| 7 | |||
Investments in unconsolidated entities |
| 3 |
|
|
| 6,112 |
|
| N/A |
|
| N/A |
|
| 9 | |||
Return of investment in unconsolidated entity upon sale |
| 1 |
|
|
| 8,600 |
|
| N/A |
|
|
| 73 |
|
| 9 | ||
Property loan advances |
| 4 |
|
|
| 14,420 |
|
| N/A |
|
| N/A |
|
| 10 | |||
Taxable mortgage revenue bond advance |
| 1 |
|
|
| 1,000 |
|
| N/A |
|
| N/A |
|
| 12 | |||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||
For the Three Months Ended June 30, 2021 |
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||
Mortgage revenue bond acquisition and advance |
| 2 |
|
| $ | 6,880 |
|
| N/A |
|
| N/A |
|
| 6 | |||
Governmental issuer loan advances |
| 5 |
|
|
| 26,474 |
|
| N/A |
|
| N/A |
|
| 7 | |||
Land acquisition for future development |
| 1 |
|
|
| 1,054 |
|
| N/A |
|
| N/A |
|
| 8 | |||
Investments in unconsolidated entities |
| 2 |
|
|
| 11,641 |
|
| N/A |
|
| N/A |
|
| 9 | |||
Return of investment in unconsolidated entity upon sale |
| 1 |
|
|
| 10,736 |
|
| N/A |
|
| $ | 1,366 |
|
| 9 | ||
Property loan advances |
| 2 |
|
|
| 1,859 |
|
| N/A |
|
| N/A |
|
| 10 | |||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||
For the Three Months Ended March 31, 2021 |
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||
Mortgage revenue bond advance |
| 1 |
|
| $ | 2,072 |
|
| N/A |
|
| N/A |
|
| 6 | |||
Mortgage revenue bond redemptions |
| 2 |
|
|
| 7,385 |
|
| N/A |
|
| N/A |
|
| 6 | |||
Governmental issuer loan advances |
| 6 |
|
|
| 39,068 |
|
| N/A |
|
| N/A |
|
| 7 | |||
Investments in unconsolidated entities |
| 1 |
|
|
| 1,426 |
|
| N/A |
|
| N/A |
|
| 9 | |||
Return of investment in unconsolidated entity upon sale |
| 1 |
|
|
| 10,425 |
|
| N/A |
|
| $ | 702 |
|
| 9 | ||
Property loan advances |
| 3 |
|
|
| 3,000 |
|
| N/A |
|
| N/A |
|
| 10 | |||
Taxable governmental issuer loan advance |
| 1 |
|
|
| 1,000 |
|
| N/A |
|
| N/A |
|
| 12 | |||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||
For the Three Months Ended December 31, 2020 |
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||
Governmental issuer loan advances |
| 2 |
|
| $ | 2,779 |
|
| N/A |
|
| N/A |
|
| 7 | |||
Investments in unconsolidated entities |
| 3 |
|
|
| 6,717 |
|
| N/A |
|
| N/A |
|
| 9 | |||
Property loan advance |
| 1 |
|
|
| 100 |
|
| N/A |
|
| N/A |
|
| 10 | |||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||
For the Three Months Ended September 30, 2020 |
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||
Mortgage revenue bond acquisition |
| 1 |
|
| $ | 2,024 |
|
| N/A |
|
| N/A |
|
| 6 | |||
Mortgage revenue bond redemption |
| 1 |
|
|
| 6,480 |
|
| N/A |
|
| N/A |
|
| 6 | |||
Governmental issuer loan advances |
| 2 |
|
|
| 22,085 |
|
| N/A |
|
| N/A |
|
| 7 | |||
Investment in an unconsolidated entity |
| 1 |
|
|
| 6,379 |
|
| N/A |
|
| N/A |
|
| 9 | |||
Property loan advances |
| 3 |
|
|
| 4,066 |
|
| N/A |
|
| N/A |
|
| 10 | |||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||
For the Three Months Ended June 30, 2020 |
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||
Mortgage revenue bond acquisitions |
| 2 |
|
| $ | 7,475 |
|
| N/A |
|
| N/A |
|
| 6 | |||
Governmental issuer loan advance |
| 1 |
|
|
| 40,000 |
|
| N/A |
|
| N/A |
|
| 7 | |||
Investment in an unconsolidated entity |
| 1 |
|
|
| 893 |
|
| N/A |
|
| N/A |
|
| 9 | |||
Return of investment in unconsolidated entity upon sale |
| 1 |
|
|
| 7,762 |
|
| N/A |
|
| N/A |
|
| 9 | |||
Property loan advance |
| 1 |
|
|
| 1,668 |
|
| N/A |
|
| N/A |
|
| 10 | |||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||
For the Three Months Ended March 31, 2020 |
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||
Mortgage revenue bond redemption |
| 1 |
|
| $ | 3,103 |
|
| N/A |
|
| N/A |
|
| 6 | |||
PHC Certificates sold |
| 3 |
|
|
| 43,349 |
|
| $ | 34,809 |
|
| N/A |
|
| N/A | ||
Investments in unconsolidated entities |
| 3 |
|
|
| 10,270 |
|
| N/A |
|
| N/A |
|
| 9 |
Investment Activity |
| # |
| Amount (in 000's) |
|
| Retired Debt or Note (in 000's) |
|
| Tier 2 income distributable to the General Partner (in 000's) (1) |
|
| Notes to the Partnership's consolidated financial statements | |||
For the Three Months Ended December 31, 2020 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Governmental issuer loan advances |
| 2 |
| $ | 2,779 |
|
| N/A |
|
| N/A |
|
| 7 | ||
Investments in unconsolidated entities |
| 3 |
|
| 6,717 |
|
| N/A |
|
| N/A |
|
| 10 | ||
Property loan advance |
| 1 |
|
| 100 |
|
| N/A |
|
| N/A |
|
| 11 | ||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For the Three Months Ended September 30, 2020 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Mortgage revenue bond acquisition |
| 1 |
| $ | 2,024 |
|
| N/A |
|
| N/A |
|
| 6 | ||
Mortgage revenue bond redemption |
| 1 |
|
| 6,480 |
|
| N/A |
|
| N/A |
|
| 6 | ||
Governmental issuer loan advances |
| 2 |
|
| 22,085 |
|
| N/A |
|
| N/A |
|
| 7 | ||
Investment in an unconsolidated entity |
| 1 |
|
| 6,379 |
|
| N/A |
|
| N/A |
|
| 10 | ||
Property loan advances |
| 3 |
|
| 4,066 |
|
| N/A |
|
| N/A |
|
| 11 | ||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For the Three Months Ended June 30, 2020 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Mortgage revenue bond acquisitions |
| 2 |
| $ | 7,475 |
|
| N/A |
|
| N/A |
|
| 6 | ||
Governmental issuer loan advance |
| 1 |
|
| 40,000 |
|
| N/A |
|
| N/A |
|
| 7 | ||
Investment in an unconsolidated entity |
| 1 |
|
| 893 |
|
| N/A |
|
| N/A |
|
| 10 | ||
Return of investment in unconsolidated entity upon sale |
| 1 |
|
| 7,762 |
|
| N/A |
|
| N/A |
|
| 10 | ||
Property loan advance |
| 1 |
|
| 1,668 |
|
| N/A |
|
| N/A |
|
| 11 | ||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For the Three Months Ended March 31, 2020 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Mortgage revenue bond redemption |
| 1 |
| $ | 3,103 |
|
| N/A |
|
| N/A |
|
| 6 | ||
PHC Certificates sold |
| 3 |
|
| 43,349 |
|
| $ | 34,809 |
|
| N/A |
|
| 8, 16 | |
Investments in unconsolidated entities |
| 3 |
|
| 10,270 |
|
| N/A |
|
| N/A |
|
| 10 | ||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For the Three Months Ended December 31, 2019 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Investments in unconsolidated entities |
| 2 |
| $ | 6,971 |
|
| N/A |
|
| N/A |
|
| 10 | ||
Return of investment in unconsolidated entity upon sale |
| 1 |
|
| 7,360 |
|
| N/A |
|
| N/A |
|
| 10 | ||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For the Three Months Ended September 30, 2019 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Investment in an unconsolidated entity |
| 1 |
| $ | 1,018 |
|
| N/A |
|
| N/A |
|
| 10 | ||
Return of investment in unconsolidated entity upon sale |
| 1 |
|
| 9,714 |
|
| N/A |
|
| $ | 1,265 |
|
| 10 | |
Property loan advance |
| 1 |
|
| 406 |
|
| N/A |
|
| N/A |
|
| 11 | ||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For the Three Months Ended June 30, 2019 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Mortgage revenue bond acquisitions |
| 2 |
| $ | 13,200 |
|
| N/A |
|
| N/A |
|
| 6 | ||
Mortgage revenue bond redemption |
| 1 |
|
| 6,228 |
|
| N/A |
|
| N/A |
|
| 6 | ||
Mortgage revenue bonds restructured |
| 3 |
|
| 13,960 |
|
| N/A |
|
| N/A |
|
| 6 | ||
Investments in unconsolidated entities |
| 3 |
|
| 10,692 |
|
| N/A |
|
| N/A |
|
| 10 | ||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For the Three Months Ended March 31, 2019 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Mortgage revenue bond acquisitions |
| 2 |
| $ | 6,050 |
|
| N/A |
|
| N/A |
|
| 6 | ||
Mortgage revenue bond redemption |
| 1 |
|
| 5,574 |
|
| N/A |
|
| N/A |
|
| 6 | ||
Investments in unconsolidated entities |
| 3 |
|
| 6,594 |
|
| N/A |
|
| N/A |
|
| 10 | ||
Property loan redemption |
| 1 |
|
| 8,368 |
|
| N/A |
|
| $ | 753 |
|
| 11 |
10 |
|
Recent Financing Activities
The following table presents information regarding the debt financing, derivatives, Series A Preferred Units and partners’ capital activities of the Partnership for the years ended December 31, 20202021 and 2019,2020, exclusive of retired debt amounts listed in the recent investment activities table above:
Financing, Derivative and Capital Activity |
| # |
|
| Amount |
|
| Secured |
| Maximum |
| Notes to the | ||
For the Three Months Ended December 31, 2021 |
|
|
|
|
|
|
|
|
|
|
|
| ||
Net borrowing on secured LOC |
|
| 1 |
|
| $ | 39,214 |
|
| Yes |
| N/A |
| 15 |
Proceeds from TOB financings with Mizuho |
|
| 6 |
|
|
| 61,419 |
|
| Yes |
| N/A |
| 16 |
Proceeds from TOB financing with Barclays |
|
| 1 |
|
|
| 3,175 |
|
| Yes |
| N/A |
| 16 |
|
|
|
|
|
|
|
|
|
|
|
|
| ||
For the Three Months Ended September 30, 2021 |
|
|
|
|
|
|
|
|
|
|
|
| ||
Proceeds from TOB financings with Mizuho |
|
| 7 |
|
| $ | 46,223 |
|
| Yes |
| N/A |
| 16 |
Proceeds on issuance of BUCs, net of issuance costs |
|
| 1 |
|
|
| 31,243 |
|
| N/A |
| N/A |
| 21 |
|
|
|
|
|
|
|
|
|
|
|
|
| ||
For the Three Months Ended June 30, 2021 |
|
|
|
|
|
|
|
|
|
|
|
| ||
Net borrowing on secured LOC |
|
| 1 |
|
| $ | 6,500 |
|
| Yes |
| N/A |
| 15 |
Proceeds from TOB financings with Mizuho |
|
| 5 |
|
|
| 30,983 |
|
| Yes |
| N/A |
| 16 |
Termination of unsecured operating LOC |
|
| 1 |
|
|
| - |
|
| No |
| N/A |
| 14 |
|
|
|
|
|
|
|
|
|
|
|
|
| ||
For the Three Months Ended March 31, 2021 |
|
|
|
|
|
|
|
|
|
|
|
| ||
Net repayment on unsecured LOCs |
|
| 5 |
|
| $ | 7,475 |
|
| No |
| N/A |
| 14 |
Proceeds from TOB financings with Mizuho |
|
| 5 |
|
|
| 39,594 |
|
| Yes |
| N/A |
| 16 |
|
|
|
|
|
|
|
|
|
|
|
|
| ||
For the Three Months Ended December 31, 2020 |
|
|
|
|
|
|
|
|
|
|
|
| ||
Net repayment on unsecured LOCs |
|
| 1 |
|
| $ | 4,368 |
|
| No |
| N/A |
| 14 |
Proceeds from TOB Financings with Mizuho |
|
| 2 |
|
|
| 8,207 |
|
| Yes |
| N/A |
| 16 |
|
|
|
|
|
|
|
|
|
|
|
|
| ||
For the Three Months Ended September 30, 2020 |
|
|
|
|
|
|
|
|
|
|
|
| ||
Net repayment on unsecured LOCs |
|
| 1 |
|
| $ | 6,852 |
|
| No |
| N/A |
| 14 |
Extension of TOB Financings with Mizuho |
|
| 10 |
|
|
| - |
|
| Yes |
| N/A |
| 16 |
Proceeds from new TOB Financings with Mizuho |
|
| 5 |
|
|
| 82,345 |
|
| Yes |
| N/A |
| 16 |
Repayment of TOB Financings with Mizuho |
|
| 3 |
|
|
| 55,867 |
|
| Yes |
| N/A |
| 16 |
Proceeds from new Secured Financings with Mizuho |
|
| 1 |
|
|
| 103,500 |
|
| Yes |
| N/A |
| 16 |
Total return swaps executed |
|
| 2 |
|
|
| - |
|
| N/A |
| N/A |
| 18 |
|
|
|
|
|
|
|
|
|
|
|
|
| ||
For the Three Months Ended June 30, 2020 |
|
|
|
|
|
|
|
|
|
|
|
| ||
Net borrowing on unsecured LOCs |
|
| 1 |
|
| $ | 6,155 |
|
| No |
| N/A |
| 14 |
Proceeds from new TOB Financings with Mizuho |
|
| 6 |
|
|
| 91,386 |
|
| Yes |
| N/A |
| 16 |
Repayment of Term TOB & Term A/B Financings with Deutsche Bank |
|
| 6 |
|
|
| 51,714 |
|
| Yes |
| N/A |
| 16 |
|
|
|
|
|
|
|
|
|
|
|
|
| ||
For the Three Months Ended March 31, 2020 |
|
|
|
|
|
|
|
|
|
|
|
| ||
Net repayment on unsecured LOCs |
|
| 1 |
|
| $ | 660 |
|
| No |
| N/A |
| 14 |
Refinancing of The 50/50 Mortgage and TIF loans |
|
| 2 |
|
|
| - |
|
| Yes |
| N/A |
| 17 |
Financing, Derivative and Capital Activity |
| # |
| Amount (in 000's) |
|
| Secured |
| Maximum SIFMA Cap Rate (1) |
| Notes to the Partnership's consolidated financial statements | |
For the Three Months Ended December 31, 2020 |
|
|
|
|
|
|
|
|
|
|
|
|
Net repayment on unsecured LOCs |
| 1 |
|
| 4,368 |
|
| No |
| N/A |
| 15 |
Proceeds from TOB Financings with Mizuho |
| 2 |
| $ | 8,207 |
|
| Yes |
| N/A |
| 16 |
|
|
|
|
|
|
|
|
|
|
|
|
|
For the Three Months Ended September 30, 2020 |
|
|
|
|
|
|
|
|
|
|
|
|
Net repayment on unsecured LOCs |
| 1 |
| $ | 6,852 |
|
| No |
| N/A |
| 15 |
Extension of TOB Financings with Mizuho |
| 10 |
|
| - |
|
| Yes |
| N/A |
| 16 |
Proceeds from new TOB Financings with Mizuho |
| 5 |
|
| 82,345 |
|
| Yes |
| N/A |
| 16 |
Repayment of TOB Financings with Mizuho |
| 3 |
|
| 55,867 |
|
| Yes |
| N/A |
| 16 |
Proceeds from new Secured Financings with Mizuho |
| 1 |
|
| 103,500 |
|
| Yes |
| N/A |
| 16 |
Total return swaps executed |
| 2 |
|
| - |
|
| N/A |
| N/A |
| 18 |
|
|
|
|
|
|
|
|
|
|
|
|
|
For the Three Months Ended June 30, 2020 |
|
|
|
|
|
|
|
|
|
|
|
|
Net borrowing on unsecured LOCs |
| 1 |
| $ | 6,155 |
|
| No |
| N/A |
| 15 |
Proceeds from new TOB Financings with Mizuho |
| 6 |
|
| 91,386 |
|
| Yes |
| N/A |
| 16 |
Repayment of Term TOB & Term A/B Financings with Deutsche Bank |
| 6 |
|
| 51,714 |
|
| Yes |
| N/A |
| 16 |
|
|
|
|
|
|
|
|
|
|
|
|
|
For the Three Months Ended March 31, 2020 |
|
|
|
|
|
|
|
|
|
|
|
|
Net repayment on unsecured LOCs |
| 1 |
| $ | 660 |
|
| No |
| N/A |
| 15 |
Refinancing of The 50/50 Mortgage and TIF loans |
| 2 |
|
| - |
|
| Yes |
| N/A |
| 17 |
|
|
|
|
|
|
|
|
|
|
|
|
|
For the Three Months Ended December 31, 2019 |
|
|
|
|
|
|
|
|
|
|
|
|
No significant financing transactions |
| N/A |
| N/A |
|
| N/A |
| N/A |
| N/A | |
|
|
|
|
|
|
|
|
|
|
|
|
|
For the Three Months Ended September 30, 2019 |
|
|
|
|
|
|
|
|
|
|
|
|
Net repayment on unsecured LOCs |
| 1 |
| $ | 10,000 |
|
| No |
| N/A |
| 15 |
Refinancing of M24 TEBS Financing |
| 1 |
|
| - |
|
| Yes |
| N/A |
| 16 |
Refinancing of M33 TEBS Financing and Premium Proceeds |
| 1 |
|
| 435 |
|
| Yes |
| N/A |
| 16 |
Proceeds from new TOB Financings with Mizuho |
| 8 |
|
| 104,056 |
|
| Yes |
| N/A |
| 16 |
Repayment of TOB Financings with Deutsche Bank |
| 3 |
|
| 34,185 |
|
| Yes |
| N/A |
| 16 |
Repayment of Term TOB Financing with Deutsche Bank |
| 1 |
|
| 37,553 |
|
| Yes |
| N/A |
| 16 |
Repayment of Term A/B Financings with Deutsche Bank |
| 2 |
|
| 10,516 |
|
| Yes |
| N/A |
| 16 |
Derivative financial instruments purchased |
| 1 |
|
| 30 |
|
| N/A |
| 4.5% |
| 18 |
|
|
|
|
|
|
|
|
|
|
|
|
|
For the Three Months Ended June 30, 2019 |
|
|
|
|
|
|
|
|
|
|
|
|
Net repayments on unsecured LOCs |
| 2 |
| $ | 12,459 |
|
| No |
| N/A |
| 15 |
Proceeds from new Term TOB Financings with Morgan Stanley |
| 1 |
|
| 13,167 |
|
| Yes |
| N/A |
| 16 |
|
|
|
|
|
|
|
|
|
|
|
|
|
For the Three Months Ended March 31, 2019 |
|
|
|
|
|
|
|
|
|
|
|
|
Proceeds from new Term A/B Financings with Deutsche Bank |
| 2 |
| $ | 5,264 |
|
| Yes |
| N/A |
| 16 |
11
|
|
Regulatory Matters
We conduct our operations in reliance on an exemption from registration as an investment company under the Investment Company Act of 1940, as amended (the “Investment Company Act”). In this regard, we believe that we and our wholly owned subsidiaries will not be considered investment companies under either Section 3(a)(1)(A) or Section 3(a)(1)(C) of the Investment Company Act. Under Section 3(a)(1)(A) of the Investment Company Act, a company is not deemed to be an “investment company” if it neither is, nor holds itself out as being, engaged primarily, nor proposes to engage primarily, in the business of investing, reinvesting or trading in securities. Under Section 3(a)(1)(C) of the Investment Company Act, a company is not deemed to be an “investment company” if it neither is engaged, nor proposes to engage, in the business of investing, reinvesting, owning, holding or trading in securities and does not own or propose to acquire “investment securities” having a value exceeding 40% of the value of its total assets (exclusive of government securities and cash items) on an unconsolidated basis. For these purposes, “investment securities” excludes U.S. government securities and securities of majority-owned subsidiaries that are not themselves investment companies and are not relying on the exception from the definition of investment company for private funds under Section 3(c)(1) or Section 3(c)(7) of the Investment Company Act. In addition, we and our wholly owned subsidiaries operate our business under an exclusion from the definition of investment company pursuant to Section 3(c)(5)(C) of the Investment Company Act. Under Section 3(c)(5)(C), as interpreted by the SEC staff, a company is required to invest at least 55% of its assets in mortgages and other liens on and interests in real estate, and other real estate-related interests, which are deemed to be “qualifying interests,” and at least 80% of its assets in qualifying interests plus a broader category of “real estate-related assets” in order to qualify for this exception. We monitor our compliance with the foregoing provisions and the holdings of our subsidiaries to ensure that we and each of our subsidiaries are in compliance with an applicable exemption or exclusion from registration as an investment company under the Investment Company Act.
Environmental Matters
We believe each of the MF Properties, the Residential Properties associated withproperties securing our MRBs and GILs, the commercial property associated with an MRB, and properties owned by unconsolidated entities comply, in all material respects, with federal, state and local regulations regarding hazardous waste and other environmental matters. We are not aware of any environmental contamination at any of these properties that would require any material capital expenditure by the underlying properties, and therefore the Partnership, for the remediation thereof.
Management
Management
We are managed by our General Partner, AFCA 2, which is controlled by its general partner, Greystone Manager. The members of the Board of Managers of Greystone Manager act as the managers (and effectively as the directors) of the Partnership, in compliance with all NASDAQ listing rules and SEC rules applicable to the Partnership. In addition, certain employees of Greystone Manager act as executive officers of the Partnership. Certain services are provided to the Partnership by employees of Greystone Manager and the Partnership reimburses Greystone Manager for its allocated share of their salaries and benefits. The Partnership’s initial limited partner, which has the obligation to perform certain actions on behalf of the BUC holders under the Partnership Agreement, is Greystone ILP, Inc., a Delaware corporation.
AFCA 2 is entitled to an administrative fee equal to 0.45% per annum of the average outstanding principal balance of any MRBs, GILs, property loans, tax-exempt investments or other investments for which an unaffiliated party is not obligated to pay. When the administrative fee is payable by a property owner, it is subordinated to the payment of all interest due to the Partnership for the MRB, on thatGIL or property loan associated with the property. Our Partnership Agreement provides that the administrative fee will be paid directly by us with respect to any investments for which the administrative fee is not payable by the property owner or a third party. In addition, our Partnership Agreement provides that we will pay the administrative fee to the General Partner with respect to any foreclosed MRBs.
AFCA 2 may also earn mortgage placement fees resulting from the identification and evaluation of additional investments that we acquire. Any fees related to the origination of financing facilities are paid by the property owner out of the gross proceeds of the financing. The fees, if any, will be subject to negotiation between AFCA 2 and such property owners.
Human Capital Resources
As of December 31, 2020,2021, the Partnership had no employees. Approximately 12Thirteen employees of Greystone Manager are responsible for the Partnership’s operations, inclusive of the Partnership’s Chief Executive Officer and Chief Financial Officer. Such employees are subject to the policies and compensation practices of Greystone.
Greystone has implemented evaluation and compensation policies designed to attract, retain, and motivate employees that provide services to the Partnership to achieve superior results. Such policies are designed to balance both short-term and long-term performance of the Partnership. Annual incentive compensation is based on defined performance metrics and certain employees earn discretionary bonuses based upon various quantitative and qualitative metrics. Employees providing services to the Partnership are
eligible for awards under the America First Multifamily Investors, L.P. 2015 Equity Incentive Plan (the “Plan”), which is designed to provide incentive compensation awards that encourage superior performance. The Plan is also intended to attract and retain the services of individuals
12
who are essential for the Partnership’s growth and profitability and to encourage those individuals to devote their best efforts to advancing the Partnership’s business.Greystone also supports employees with an annual confidential employee survey, Employee Assistance Program and ethics hotline.
Greystone provides formal and informal training programs to enhance the skills of employees providing services to the Partnership and to instill GreystoneGreystone’s corporate policies.policies and practices. The Partnership also reimburses the cost of formal training for those programs that are directly related to the tasks and responsibilities of the employees related to operations of the Partnership.
Greystone and the Partnership are committed to diversity, equity and inclusion (“DEI”). Specific Greystone DEI initiatives include formal diversity training and employee resources groups to support a diverse workforce as well as a formal DEI committee and DEI Leadership Council to lead and advise all DEI related work, events, and learning. Of the 13 employees of Greystone Manager responsible for the Partnership’s operations, two are women and one employee identifies as ethnically diverse.
Greystone Manager is responsible for filling open positions as it relates to the Partnership and considers both internal and external candidates. Greystone Manager may contract with third party search firms to identify candidates for open positions as needed.
Tax Status
We are a partnership for federal income tax purposes. This means that we do not pay federal income taxes on our income. Instead, our profits and losses are allocated to our partners, including the holders of Series A Preferred Units, under the terms of the Partnership Agreement. The distributive share of our income, deductions and credits is included in each Unitholder’s income tax return and is reported to our Unitholders on Internal Revenue Service (“IRS”) Schedule K-1.K-1 and Unitholders should include such amount in their respective federal and state income tax returns.
We hold interests in The 50/50 MF Property and certain property loans through a wholly owned subsidiary that is a “C” corporation for income tax purposes. TheThis subsidiary files separate federal and state income tax returns and is subject to federal and state income taxes.
We consolidate separate legal entities that record and report income taxes based upon their individual legal structure which may include corporations, limited partnerships, and limited liability companies. We do not believe the consolidation of these entities for reporting under accounting principles generally accepted in the United States of America (“GAAP”) will impact our tax status, amounts reported to Unitholders on IRS Schedule K-1, our ability to distribute income to Unitholders that we believe is tax-exempt or the current level of quarterly distributions.
All financial information in this Annual Report on Form 10-K is presented on the basis of Accounting Principles Generally Accepted in the United States of America, with the exception of identified Non-GAAP information disclosed in Item 7 of this Report.
General Information
The Partnership is a Delaware limited partnership. The affairs of the Partnership and the conduct of its business are governed by the Partnership Agreement. The Partnership maintains its principal corporate office at 14301 FNB Parkway, Suite 211, Omaha, NE 68154, and its telephone number is (402) 952-1235.
Our Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K, and other reports are filed with the SEC. Copies of our filings with the SEC may be obtained from the SEC’s website at www.sec.gov, or from our website at www.ataxfund.com as soon as reasonably practical after filed with the SEC. Access to these filings is free of charge. The information on our website is not incorporated by reference into this Report.
13
Item 1A. Risk Factors
Set forth below are the risks that we believe are material to Unitholders and prospective investors. You should carefully consider the following risk factors and the various other factors identified in or incorporated by reference into any other documents filed by us with the SEC in evaluating our company and our business. The risks discussed herein can materially adversely affect our business, liquidity, operating results, prospects, financial condition and ability to make distributions to our Unitholders, and may cause the market price of our securities to decline. The risk factors described below are not the only risks that may affect us. Additional risks and uncertainties not presently known to us, or not presently deemed material by us, also may materially adversely affect our business, liquidity, operating results, prospects, financial condition and ability to make distributions to our Unitholders.
Summary Risk Factors
These risks are discussed more fully below and include, but are not limited to, risks related to:
Risks Related to our Business and Investments
We engage in transactions with related parties.
The Partnership’s general partner is owned entirely by affiliates of Greystone. The Partnership’s general partner manages our investments, performs administrative services for us and earns administrative fees that are paid by either the borrowers related to our MRBs, GILs or by us. The Partnership may enter into various arrangements for services provided by entities controlled by or affiliates of Greystone. Our arrangements with Greystone and its affiliates are considered related party transactions. By their nature, related party transactions may not be considered to have been negotiated at arm’s length. These relationships may also cause a conflict of interest in other situations where we are negotiating with Greystone or its affiliates. See Note 23 of the Partnership’s consolidated financial statements for additional details.
Risks Related to Debt Financings and Derivative Instruments
14
Risks Related to Ownership of Beneficial Unit Certificates and Preferred Units
Risks Related to Income Taxes
Risks Related to Governmental and Regulatory Matters
General Risk Factors
15
Risks Related to our Business and Investments
Our MRBs, GILs, property loans and investments in unconsolidated entities are illiquid assets and our valuation estimates are subject to inherent uncertainty.
Our MRBs, GILs, property loans and investments in unconsolidated entities are relatively illiquid, and there is no existing trading market for them. There are no market makers, price quotations, or other indications of a developed trading market for these investments. In addition, no rating has been issued on any of the existing MRBs or GILs and we do not expect to obtain ratings on MRBs or GILs which we may acquire in the future.our investment assets. Accordingly, any buyer of these MRBs or GILsinvestment assets would need to perform its own due diligence prior to a purchase. The Partnership’s ability to sell its MRBs, GILs, property loans and investments in unconsolidated entitiesinvestment assets and the price it may receive upon their sale, will be affected by the number of potential buyers, the number of similar securities on the market at the time and by other market conditions. SuchAs a result, a sale of an investment could result in a loss to the Partnership.
We estimate values of MRBs, GILs, property loans, and investments in unconsolidated entities in the preparation of our financial statements. While the determination of the fair value of our investment assets generally takes into consideration data from third-party pricing services or internally developed models using commonly accepted valuation techniques, the final determination of fair values for our investment assets is based on our judgment, and such valuations may differ from those provided by other pricing services and the true exit price for such investments. Due to the illiquid nature of our investments, valuations may be difficult to obtain, may not be reliable, or may be sensitive to assumptions used in our valuation processes. Depending on the complexity and illiquidity of an asset, valuations of the same asset can vary substantially from one market participant to another. Our results of operations, financial condition and business could be materially adversely affected if our fair value determinations of these assets are materially higher than what could actually be realized in the market.
The receipt of contractual interest and principal payments on our MRBs, GILs and property loans related to our GILs will be affected by the economic results of the underlying Residential Properties and a commercial property.secured properties.
Our MRBs require the borrower to make regular principal and interest payments during thetheir contractual term. Although our MRBs are issued by state or local housinggovernments, their agencies, and authorities, they are not general obligations of these governmental entities and are not backed by any taxing authority. Instead, each of these MRBsMRB is backed by a non-recourse loan made toobligation of the owner of the underlying Residential Properties and commercialsecured property. Because of the non-recourse nature, of the underlying mortgage loans, the sole source of cash to make regular principal and interest on the MRB is the net cash flow generated by the operation of the financedsecured property and the net proceeds from the ultimate sale or refinancing of the property (except in cases where a property owner or its affiliates has provided a limited guarantee of certain payments). This makes our investments in these MRBs subject to risks usually associated with direct investments in multifamily real estate.such properties. If a property is unable to sustain net cash flow at a level necessary to pay its debt service obligations on our MRB, a default may occur. Net cash flow and net sale proceeds from a property are applied only to debt service payments of the MRB secured by that property and are not available to satisfy debt service obligations on other MRBs that we hold. In addition, the value of a property at the time of its sale or refinancing will be a direct function of its perceived future profitability. Therefore, the amount of interest that we earn on our MRBs, and whether or not we will receive the entire principal balance of the MRBs as and when due, will depend to a large degree on the economic results of the underlying Residential Properties.secured properties.
Our GILs and related property loans require regular interest payments during thetheir contractual term. Although our GILs are issued by state or local housinggovernments, their agencies, and authorities, they are not general obligations of these governmental entities and are not backed by any taxing authority. Instead, each of these GILsGIL is backed by a non-recourse loan made toobligation of the owner of the underlying multifamily residentialsecured property. In addition, the property loans related to Residential Properties that secureproperties securing our GILs are on parity with the related GILs and share a first mortgage lien position on all real and personal property associated with the underlying property. Contractual interest payments during the contractual term are initially payablepaid using capitalized interest in the property’s development budget. However, once the capitalized interest has been exhausted for each property, interest is payable from net operating cash flows of the underlying Residential Propertiessecured property, which is dependent to a large degree on the economic results of the underlying properties.property’s operating results.
The net cash flow from the operation of a multifamily property may be affected by many things, such as the number of tenants, the rental and fee rates, payroll costs, operating expenses, the cost of repairs and maintenance, taxes, government regulation, competition from other similar multifamily or student residential properties, mortgage rates for single-family housing, adverse developments or conditions resulting from or associated with climate change,and general and local economic conditions. In most of the markets in which the Residential Properties financed byproperties securing our MRBs and GILs are located, there is significant competition from other multifamily and single-family housing that is either owned or leased by potential tenants. Low mortgage interest rates and federal tax deductions for interest and real estate taxes make single-family housinghome ownership more accessible to persons who may otherwise rent apartments.
The rent restrictions and occupant income limitations imposed on Residential Properties financed byproperties securing our MRBs and GILs may limit the revenues of such properties.
All Residential Properties securing our MRBs and GILs are subject to certain federal, state and/or local requirements with respect to the permissible income of their tenants. Since federal rent subsidies are not generally available on these properties, tenant rents are limited in the LIHTC properties to 30% of the related tenant income for athe designated portion of the property.property’s units. The issuing state or local government, agency or authority may also impose additional rent restrictions as a condition to the allocation of LIHTCs and private activity bond volume cap. As a result, the income from these restricted rents in combination with rents on market rate units may not be sufficient to cover all operating costs of the property and debt service on the applicable MRB or GIL.
16
There are many risks related to the lease-up of newly constructed or renovated Residential Propertiesproperties that may affect the MRBs.MRBs, GILs and related property loans issued to financesecured by these properties.
We may acquire MRBs, GILs and property loans associated with our GILs that are intended to finance properties in various stages of construction or renovation. As construction or renovation is completed, these properties will move into the lease-up phase. The lease-up of these properties may not be completed on schedule or at anticipated rent levels, resulting in a greater risk of default versus investments secured by mortgages on properties that are stabilized or fully leased-up.leased. The underlying propertyproperties may not achieve expected occupancy or debt service coverage levels. While we may require property developersowners and their affiliates to provide us with a guarantee covering operating deficits of the propertycertain payment guarantees during the construction and lease-up phase,phases, we may not be able to do so in all cases or such guarantees may not fully protect us in the event a property is not leased to an adequate level of rents or economic occupancy as anticipated.
Changes in market interest rates pose various risks to our GILs.MRBs, GILs and property loans.
Our GILs and certain MRBs and property loans bear interest at variable rates based on various market indices. Some GILsCertain investments have interest floors which set a minimum interest rate such that if market interest rates fall below the floor rate, we will not experience further decline in interest received. However, in situations in which floor ratesfloors are not involved,in place, decreases in market interest rates will cause a decrease in our interest income and will reduce our operating cash flows.
Furthermore, increases in market interest rates will increase the interest rate of our GILs and certain MRBs and property loans and may increase the cost of construction of the underlying multifamily property.secured properties. Each underlyingsecured property has established capitalized interest reserves as part of the construction financing structure, but such reserves may be insufficient if the interest rate is significantly higher than anticipated and may cause cost overruns, which could negatively impact the property’sborrower’s ability to make contractual debt service payments.
The repayment of principal of our MRBs, GILs, and property loans associated with our GILs is principally dependent upon proceeds from the sale or refinancing of the underlyingsecured properties.
The principal of most of our MRBs does not fully amortize by their stated maturity dates. This meansdates such that all or some of the balance of our MRBs will be repaid asthere is a lump-sum “balloon” payment due at the end of their term.maturity. The ability of the property owners to repay the MRBs with balloon payments is dependent upon their ability to sell the properties securing our MRBs or obtain adequate refinancing. The MRBs are not personal obligations of the property owners, and we rely solely on the value of the properties pledged tosecuring these MRBs for security.collection. Accordingly, if an MRB goes into default, our only recourse is to foreclose on the underlying property. If the value of the underlying property securing the MRB is less than the outstanding principal balance plus accrued interest on the MRB, we will incur a loss.
Our GILs and related property loans only require interest payments during their contractual term and do not require the borrower to make principal payments. Accordingly,payments, so all principal will be repaid at the end of thetheir term. The GILs are primarily repaid through a conversion to permanent financing pursuant to a forward commitment from an affiliate toFreddie Mac. Through a Freddie Mac-approved seller/servicer, Freddie Mac will purchase each of the Partnership’s GILs once certain conditions are met, at a price equal to the outstanding principal plus accrued interest and immediately sellconvert the GILs toGIL into a Freddie Mac pursuantTax Exemption Loan (“TEL”) financing. The execution of Freddie Mac’s forward commitments is dependent on completion of construction and various other conditions that each property must meet. If such conditions are not met, then Freddie Mac is not required to a financing commitment betweenpurchase the affiliateGIL and Freddie Mac.we will pursue collection via other means. The related property loans related to our GILs are primarily to be repaid from future equity contributions by investors and other forward financing commitments provided by various parties. In addition, affiliates of each borrower have guaranteed 100%If Freddie Mac is not required to purchase the GIL and payment of the payment of principal and accrued interest on the GILs and related property loans at origination, decreasing to 50% upon receipt offrom available sources is not made, the certificate of occupancy,GIL and decreasing to 25% upon achievement of 90% occupancy for 30 consecutive days. We rely on the values of the properties securing these GILsproperty loan will have defaulted and the guarantees provided by affiliates of the borrowers for security. Accordingly, if a GIL goes into default, our recourse is to foreclose on the underlying property and enforce the guarantee provisions against affiliates of the individual property borrower. If the combined value of the underlyingsecured property securing the GIL is less than the outstanding principal balance plus accrued interest on the GIL and related property loan, and we are unable to recoup any shortfall through enforcement of guarantees against affiliates of the borrower, then we will incur a loss.
We are subject to various risks associated with our MRB and property loan investments secured by seniors housing and skilled nursing properties.
We have begun acquiring MRBs and properties secured by seniors housing and skilled nursing properties. By their nature, such properties have different operational and financial risks than traditional affordable multifamily properties. The financial and operational risks of such properties may negatively impact a property’s ability to pay contractual debt service on our MRB or property loan investment. Such differences will also impact the availability and interest rates for debt financing associated with such investments.
The net cash flow from the operation of a seniors housing property may be affected by many things, such as the number of tenants, rental rates, service revenues, payroll costs, operating expenses, the cost of repairs and maintenance, taxes, government regulation, competition from other seniors housing properties, the availability of alternative housing options such as single-family housing, adverse developments or conditions resulting from or associated with climate change, and general and local economic conditions. In most of the
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markets in which the properties securing our MRBs and property loans are located, there is significant competition from other multifamily and single-family housing that is either owned or leased by potential tenants.
The net cash flow from the operation of a skilled nursing property may be affected by many things, such as the number of patient care days, patient acuity mix, patient payor mix and insurance reimbursement rates, availability and cost of nurses and staff, costs of care, general operating expenses, the cost of repairs and maintenance, taxes, government regulation, competition from similar properties, adverse developments or conditions resulting from or associated with climate change, and general and local economic conditions. Many such properties are reliant on relationships with physician and hospital networks for patient referrals and support, a lack of which could negatively impact operating results.
There are various risks associated with our investments in unconsolidated entities.
Our investments in unconsolidated entities represent equity investments in limited liability companies created to develop, construct and operate market-rate multifamily rental properties. We are entitled to certain distributions under the terms of the investees’property-specific limited liability company’s governing documents based on the availability of cash to pay such distributions. The only sources of cash flows for such distributions are either the net cash flows from the operation of the property, the cash proceeds from a sale of the property, or through permanent financing in the form of an MRB or other permanent financing. The net cash flow from the operation of a property may be affected by many factors, such as the number of tenants, the rental and fee rates, operating expenses, the cost of repairs and maintenance, taxes, debt service requirements, competition from other similar multifamily rental properties and general and local economic conditions. Sale proceeds are primarily dependent, among other things, on the value of a property to a prospective buyer at the time of its sale. If there are no net cash flows from operations or insufficient proceeds from a sale or a refinancing event, we are unlikely to receive distributions from our investments and we may be unable to recover our investments in these entities.
There are many risks related to the construction of Residential Properties that may affect theproperties securing our MRBs, GILs and GILs issued to finance these propertiesproperty loans and the multifamily properties that underlie our equity investments in unconsolidated entities.
We may invest in MRBs, GILs and GILsproperty loans secured by Residential Properties,new construction or acquisition/rehabilitation multifamily and seniors housing properties, and we make equity investments in limited liability companies created to develop, construct and operate multifamily rental properties. Construction of such properties generally takes approximately twelve18 to eighteen months. The principal36 months to complete. There is a risk associated with these investment activities is that construction of the underlying properties may be substantially delayed or never completed. This may occur for many reasons including (i) insufficient financing to complete the project due to underestimated construction costs or cost overruns; (ii) failure of contractors or subcontractors to perform under their agreements; (iii) availability of construction materials and appliances; (iv) inability to obtain governmental approvals; (iv)(v) labor disputes; and (v)(vi) adverse weather and other unpredictable contingencies beyond the control of the developer. While we may be able to protect ourselves from some of these risks by obtaining construction completion guarantees from developers or other parties, agreements of construction lenders to purchase our bonds if construction is not completed on time, and/or payment and performance bonds from contractors, we may not be able to do so in all cases, or such guarantees or bonds may not fully protect us in the event a property is not completed. In other cases, we may decide to forego certain types of available security if we determine that the security is not necessary or is too expensive to obtain in relation to the risks covered.
If a property is not completed on time or costs more to complete than anticipated, it may cause us to receive less than the full amount of interest owed to us on the MRB, GIL and/or GIL financingproperty loan secured by such property or otherwise result in a default under the mortgage loan that secures our MRB on the property.default. In such case, we may be forced to foreclose on the incomplete property and sell it in order to recover the principal and accrued interest on our MRB, GIL and/or GIL.property loan. We may suffer a loss of capital as a result. Alternatively, we may decide to finance the remaining construction of the property, in which event we will need to invest additional funds into the property, either as equity or as a taxable property loan. Any return on this additional investment would be taxable. Also, if we foreclose on a property, we will no longer receive interest on the MRB, GIL and/or GIL issued to financeproperty loan secured by the property. The overall return to us from our investment in this circumstance is likely to be less than if the construction had been completed on time or within budget.
As it relates to our equity investments, if a property is not completed or costs more to complete than anticipated, it may cause us to receive a lower distribution than expected. Furthermore, we may be prevented from receiving a return on our investments or recovering our initial investment, which would likely adversely affect our results of operations.
An increaseIncreases in interest rates may make it difficult for us to finance or refinance our debt obligations and could reduce the number of investments we can acquire as well as cash flow from operations.
If debt is unavailable at acceptable rates, we may not be able to purchase and finance the purchase of additional investments.investments at an acceptable levered return. If we have previously financed the acquisition of our investments,an investment, we may be unable to refinance thesuch debt at maturity or may be unable to refinance at acceptable terms. If we refinance our debt at higher rates of interest, our interest expense will increase and our cash flows from operations will be reduced.
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Our variable-rate debt financing and the market value of assets may be adversely impacted by increasing interest rates.
We have financed the acquisition of certain assets using variable-rate debt financing. The interest that we pay on these financings fluctuates with either the market or specific interest rate indices. The majority of our investmentsCertain MRBs securing variable-rate debt financings earn income at fixed rates and the amount of interest we earn on these investments will not change with general movements in market-based interest rates. Accordingly, an increase in the applicable interest rate index used forcost of our variable ratevariable-rate debt financing will cause an increase in our interest expense and will reduce our operating cash flows. We may use derivatives designed to mitigate some but not all the exposure we may have to the negative impact of rising interest rates. In addition, certain GILs and property loans with variable interest rates have floors on the variable rate indices that are greater than the current variable rate index. For such investments, increases in the variable rate index will result in greater interest expense without similar increases in interest income on the GILs and property loans until the variable rate indices exceed the floor rates.
An increase in interest rates could also cause a decrease in the market value of our assets, owned by the Partnership. A decrease in the market value of assets owned by the Partnership couldwhich may decrease the amount realized on the sale of our investments and would thereby
decrease the amount of our cash flows.investments. During periods of low prevailing interest rates, the interest rates we earn on new interest-bearing assets we acquire may be lower than the interest rates on our existing portfolio of interest-bearing assets.
Inflation, and its resulting impact on interest rates, could adversely affect the Partnership’s business and financial results.
Inflation typically is accompanied by higher interest rates, which could adversely impact borrowers’ ability to obtain financing on favorable terms, thereby decreasing MRBs, GILs and property loan investment opportunities. Such higher interest rates due to inflation may also cause an increase the Partnership’s borrowing costs which will decrease the net return on our investments. Higher interest rates due to inflation may also depress investment asset values due to a decrease in demand or increasing cost of operations, such that the Partnership may record charges against its earnings for asset impairments that may be material.
Inflation could cause increases in the operating costs at our MF Properties, investments in unconsolidated entities, and the Partnership’s general operations, decreasing the Partnership’s operating cash flows. The majority of tenant leases at our MF Properties and investments in unconsolidated entities are for one year or less. The short-term nature of these leases generally serves to reduce the risk to the properties of the adverse effects of inflation; however, market conditions may prevent such properties from increasing rental rates in amounts sufficient to offset higher operating expenses.
Conditions in the low income housing tax credit markets due to known or potential changes in U.S. corporate tax rates may increase our cost of borrowing, make financing difficult to obtain or restrict our ability to invest in MRBs and other investments, each of which may have a material adverse effect on our results of operations and our business.
Conditions in the low income housing tax credit market due to changes in the U.S. corporate tax rates have previously had, and may in the future have, an adverse impact on our cost of borrowings and may also restrict our ability to invest in MRBs and other investments. These conditions, as well as the cost and availability of creditfinancing has been, and may continue to be, adversely affected in all markets in which we operate. Concern about the stability of the low income housing tax credit markets has led many lenders and institutional investors to reduce, and in some cases cease providing, funding to borrowers. Our access to debt and equity financing may be adversely affected. Changes in the U.S. tax rates, and the resulting impacts to the low income housing tax credit market, may limit our ability to replace or renew maturing debt financing on a timely basis, may impair our ability to acquire MRBs and other investments and may impair our access to capital markets to meet our liquidity and growth requirements which may have an adverse effect on our financial condition and results of operations.
There are various risks associated with our commitments to fund investments on a draw-down or forward basis.
We may commithave committed to advance funds for ourvarious investments in MRBs, taxable MRBs, GILs, investments in unconsolidated entities and property loans on a draw-down basis during construction. We may also forward commit to purchase MRBs at a future date, contingent upon stabilization of a to-be-constructedan affordable multifamily rental property. Our total outstanding investment commitments were approximately $154.5$350.3 million as of December 31, 2020.2021. We manage our debt financing arrangements and liquidity sources to maintain the financial capacity to fund our investment commitments over time. However, if our traditional liquidity sources are insufficient to fund our investment commitments, we will need to obtain funds by other methods, including, but not limited to, alternative financing arrangements or sales of assets in order to meet our investment commitments. This could negatively impact our results of operations through higher costs or lower investment returns.
If we acquire ownership of Residential Properties associated withproperties securing our MRBs, GILs and/or GILs,property loans, we will be subject to all the risks normally associated with the ownership of multifamily real estate.such properties.
We may acquire ownership of Residential Properties financed bymultifamily, seniors housing or skilled nursing properties securing our MRBs, or GILs held by usand property loans in the event of a default. Wedefault, which will be subject us to all the risks normally associated with the ownership and operation of multifamily real estate includingsuch properties. Such risks include, but are not limited to, declines in property values, occupancy and rental rates, increases in operating expenses, and the ability to finance or refinance related debt, if needed. We may also be subject to government regulations, natural
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disasters, and environmental issues, any of which could have an adverse effect on our financial results, property cash flows and our ability to sell a property.the properties.
Geographic concentration of Residential Properties securing our MRBs and investments in unconsolidated entities are geographically concentrated in certain states.
The Residential Propertiesproperties securing our MRBs are geographically dispersed throughout the United States, with significant concentrations in Texas, California, and South Carolina. Such concentrations expose us to potentially negative effects of local or regional economic downturns, which could prevent us from collecting principal and interest on our MRBs.
SevenEight of our 12 investments in unconsolidated entities as of December 31, 20202021 are related to multifamily properties in Texas. In addition, one of our JV Equity Investments for a property in Texas is reported as a consolidated VIE as of December 31, 2021. Such concentration exposes us to potentially negative effects of local or regional economic downturns, which could prevent us from realizing returns on our investments and recovery of our investment capital.
There is a concentration risk for guarantees related to our GILs and property loans.
Two entities, which are affiliates of one of our developer relationships, have provided limited-to-full payment guarantees of the principal and interest for nine of our GILs and seven property loans. The entities are required to meet certain net worth and liquidity covenants under the terms of the guarantees. However, significant defaults causing enforcement of guarantees against the two entities will negatively impact our ability to enforce our guarantees in the event of multiple defaults on our GIL and property loan investments.
There is a risk that a third-party developer that has provided guarantees of our returns on investments in unconsolidated entities may not perform on the guarantees.perform.
A third party guarantor has provided a guarantee of returns on each of our investments in unconsolidated entities for a period of time ranging fromthrough the secondfifth anniversary of construction completion to five years from the initial investment date. The guarantees arecommencement, up to a maximum amount for each investment. If the underlying multifamily rental properties do not generate sufficient cash proceeds, either through net cash flows from operations or upon a sale event or through the permanent financing in the form of an MRB,refinancing, then we are entitled to enforce the guarantee against the guarantor. If the guarantor is unable to perform on the guarantee, we may be prevented from realizing the returns earned on our investments in unconsolidated entities during the guarantee period,, which maywill result in the recognition of losses.
There are risks associated with the financial performance of our investments in MF Properties.
The financial performance of our investments in MF Properties depends on the rental and occupancy rates of the properties and the level of operating expenses. Occupancy rates and rents are directly affected by the supply of, and demand for, apartments in the market area in which a property is located. This, in turn, is affected by several factors such as local or national economic conditions, and the amount of new apartment construction and interest rates on single-family mortgage loans. In addition, factors such as government regulation, inflation, real estate and other taxes, labor problems, and natural disasters can affect the economic operations of the properties. The MF Properties are adjacent to universities and serve primarily university students. The implementation of remote learning due to COVID-19, or for any other reason, would have a negative impact on economic occupancy and physical occupancy. We may be in competition with other residential rental properties located in the same geographic areas as the properties financed withsecuring our MRBs, GILs and GILs.property loans.
There are additional risks when we make property loans to Residential Properties associated withproperties securing our MRBs.
The property loans that we make to owners of the Residential Properties that secureproperties securing our MRBs held by us are recourse obligations of the property owner. As a result,owner and may not be secured by the related property. However, the primary source of principal and interest payments on these property loans is the net cash flow generated by these properties or the net proceeds from the sale or refinancing of these properties.properties after payment of the related MRBs. The net cash flow from the operation of a property may be impacted by many factors as previously discussed. In addition, any payment of principal and interest is subordinate to payment of all principal and interest (including contingent interest) onof the MRB secured by the property. As a result, there is a greater risk of default on a property loan than on the associated MRB. If a property is unable pay current debt service obligations on its property loan, a default may occur. Property loans aremay not be secured by the underlying properties and we do not expect to pursue foreclosure or other remedies against a property upon default of a property loan if the property is not in default on its MRB financing.the MRB.
Certain Residential Properties funded bysecuring our MRBs, GILs, and GILs,property loans as well as certainour MF Properties and investments in unconsolidated entities, aremay not be completely insured against damages from hurricanes and other major storms.natural disasters.
If a property underlying an investment was to be damaged by a natural disaster, such as a hurricane, or a major storm or wildfire, the amount of uninsured losses could be significant, and the property owner may not have the resources to fully rebuild the property. In addition, the damage to a property may result in all or a portion of the rental units not being rentable for a period of time. If a property
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owner does not carry rental interruption insurance, the loss of rental income would reduce the cash flow available to pay principal and interest on MRBs, GILs and GILs collateralizedproperty loans secured by these Residential Properties.properties. In addition, the property owner could also lose their LIHTCs if the property was not repaired. A loss of rental income would also reduce the ability of our MF Properties and investments in unconsolidated entities to pay us distributions.
The properties securing our MRBs, GILs, and property loans, our MF Properties and our investments in unconsolidated entities may be subject to liability for environmental contamination which could increase the risk of default or loss on our investment.
The owner or operator of real property may become liable for the costs of removal or remediation of hazardous substances released on its property. Various federal, state and local laws often impose such liability without regard to whether the owner or operator of real property knew of, or was responsible for, the release of such hazardous substances. We cannot assure you that the properties that secure our MRBs, GILs, and property loans, our MF Properties and our investments in unconsolidated entities are or will not be contaminated. The costs associated with the remediation of any such contamination may be significant and may exceed the value of a property or result in the property owner defaulting on the MRBMRB. GIL or GILproperty loan secured by the property or otherwise result in a loss of our investment in the property.
We are subject to reinvestment risk from maturities and prepayments of our investments.
MRBs may have optional call dates that may be exercised by either the borrower or the Partnership that are earlier than the contractual maturity at either par or premiums to par. In addition, our GILs and most property loans are prepayable at any time without penalty. Borrowers may choose to redeem our investments if prevailing market interest rates are lower than the interest rate on our investment asset or for other reasons. In order to maintain or grow our investment portfolio size and earnings, we must reinvest repayment proceeds in new assets. New MRB, GIL and property loan opportunities may not generate the same returns as our current investments such that our reported operating results may decline over time.
Similarly, we are subject to reinvestment risk on the return of capital from sales of investments in unconsolidated entities. Our strategy involves making equity investments in unconsolidated entities for the development, stabilization and sale of market-rate multifamily rental properties. Our initial equity contributions are returned upon sale of the properties underlying the unconsolidated entities, at which time we will reinvest the capital into new unconsolidated entities or other investments. New investment opportunities may not generate the same returns as our prior investments due to factors including, but not limited to, increasing competition in the development of market-rate multifamily rental properties, rising interest rates and increasing construction costs. Lower returns on new investment opportunities will result in declining operating results over time.
We are managed by our general partner and engage in transactions with related parties.
The Partnership’s general partner is controlled by affiliates of Greystone. Employees of Greystone Manager are responsible for the Partnership’s operations, including the Partnership’s Chief Executive Officer and Chief Financial Officer. The Partnership’s general partner manages our investments, performs administrative services for us and earns administrative fees that are paid by either the borrowers related to our MRBs, GILs or by us. The Partnership may enter into various arrangements for services provided by entities controlled by or affiliates of Greystone. Our arrangements with Greystone and its affiliates are considered related party transactions. By their nature, related party transactions may not be considered to have been negotiated at arm’s length. These relationships may also cause a conflict of interest in other situations where we are negotiating with Greystone or its affiliates. See Note 23 of the Partnership’s consolidated financial statements for additional details.
The effects of the outbreak and continued spread of the novel coronavirus ("COVID-19"), or an outbreak of another highly infectious or contagious disease, may adversely affect our business activities, financial condition and results of operations.
Our business is dependent in large part on the willingness and ability of real estate developers to construct and operate the multifamily, residential,seniors housing, skilled nursing and commercial properties underlying thesecuring MRBs, GILs, property loans and other investments in the Partnership’s portfolio.investments. The spread of a highly infectious or contagious disease, such as COVID-19, may cause severe disruptions in the U.S. economy, which may in turn disrupt the business, activities, and operations of properties securing or related to our underlying investments, as well as our business and operations.
Since the first quarter of 2020, the COVID-19 pandemic has caused significant disruption in the financial and credit markets both globally and in the United States. The spread of COVID-19 has resulted in widespreador another highly contagious disease may cause elevated levels of unemployment or reduced economic output in many regions of the U.S.our market areas and has causedor will cause financial hardship for tenants of multifamily real estateand seniors housing properties, which in many cases has caused amay decrease in rent collections. While economic activity in the U.S. is in the midst of a recovery since the initial outbreak of COVID-19, economic uncertainties resulting from recent events and government policies persist and are likely to continue for the foreseeable future. An outbreak of another highly infectious or contagious disease may have similar adverse effects. The U.S. government has instituted andor may continue to institute various relief measures intended to provide economic assistance to businesses and individuals, but it is uncertain if such relief measures will be sufficient for the tenants of multifamily real estateand seniors housing properties to avoid defaulting on their rent obligations, which would result in lower rent collections by project owners. In addition, many state and local governments have issued andor may continue to issue regulations preventing the eviction of tenants for a period of time, which limits the ability of
multifamily and seniors housing properties to replace non-paying tenants, which may further negatively impact rent collections. In
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addition, shelter-in-place and social distancing measures imposed as a result of COVID-19, or another highly infectious or contagious disease, will create challenges for the leasing of units and stabilization of projects that have completed construction. Lower rent collections and occupancy will negatively impact the ability of the Residential Propertiesproperties securing our MRBs to meet debt service obligations, which may cause MRBs to default or require us to provide supplemental property loans to avoid defaults. In such cases, our returns may be negatively impacted. In addition, defaults of MRBs, GILs, and property loans in securitized trust financing arrangements may trigger requirements for us to post collateral to support the trusts or may cause a covenant default under our financing programs such that we may be required to collapse the financing arrangements or sell the underlying MRBs and cover any shortfall in proceeds. In March 2020, we were required to post additional collateral for a short period of time related to the TOB Trust financings due to fluctuations in MRB market prices and the impact to the value of posted collateral. Similar fluctuations in the future may require us to post additional collateral, which may adversely impact our liquidity position.meet debt service obligations. Lower rent collections atand occupancy will also negatively impact the operating results of our MF Properties will decreaseand the net cash flows available to the Partnership for operationsdistributions and additional investments. Lower rent collections at properties associated withreturns from our investments in unconsolidated entities will decrease the distributions received on our investments and negatively impact our returns. If COVID-19, or an outbreak of another infectious or contagious disease, causes prolonged disruptions in the general economy, overall occupancy rates and rental rates may decrease at multifamily properties and further negatively impact net cash flows. The outbreak of an infectious or contagious disease may cause colleges and universities to limit or suspend on-campus, in-person classes, which may negatively impact occupancy, rental rates and net cash flows at student properties, specifically our MF Properties and the Live 929 Apartments MRB property.
COVID-19, or another highly infectious or contagious disease, may cause significant volatility in the financial markets and the operating performance of properties related to our underlying investments, which may negatively impair the value of variousour investments and cause us to recognize impairments. Such impairments may also require us to post additional collateral for our securitized trust securitization financing arrangements, inhibit our ability to renew or obtain leverage for our investments, and lower the potential proceeds received on the sale of our investments. In addition, financial market volatility may prevent us from issuing additional BUCs or Series A Preferred Units, which would negatively impact our access to additional capital and liquidity.
COVID-19, or another highly infectious or contagious disease, may disrupt the supply chain for materials and labor required for the construction of Residential Properties ormultifamily and seniors housing properties securing our MRBs, GILs, and property loans and multifamily properties that underlie our investments in unconsolidated entities, causing delays in construction leading to additional costs to complete construction. If such disruptions are severe, it may result in a default under the mortgage loans that secure our MRBs, GILs and certain property loans and cause us to foreclose on the properties or require us to provide supplemental financial support. If a property associated with an investment in an unconsolidated entity is not completed or costs more to complete than anticipated, it may cause us to receive smaller distributions than expected or prevent us from receiving a return on our investments or recovering our initial investment, which would adversely affect our results of operations. If such disruptions are severe and a managing member is unable to continue operating the property, we may take over ownership of or sell the property. In addition, the Partnership may be required to reverse previously recognized preferred return investment income associated with these investments, negatively impacting our results of operations. In general, our overall return from our MRBs, GILs, property loans, and investments in unconsolidated entities is likely to be less than if the construction had been completed on time or within budget. Shelter-in-place and social distancing measures imposed as a result of COVID-19, or another highly infectious or contagious disease, will create challenges for the leasing of units and stabilization of projects that have completed construction. If such challenges persist for an extended period of time, it will negatively impact our returns and cash flows from these investments and may cause impairment losses in future periods.
COVID-19, or another highly infectious or contagious disease, may negatively impactnecessitate employees of Greystone that manage our cash flows, financial position and results of operations to work remotely or, if such an extent that the General Partner of the Partnershipemployees are infected, may determinelimit their ability to reduce distributions to the holders of our Series A Preferred Units and BUCs. Althoughperform essential tasks. Though we maintain contingency plans, a spread ofpolicies and contingencies if such employees are unavailable, there may be temporary disruptions to our day-to-day operations. In addition, COVID-19, or an outbreak of another highly infectious or contagious disease could also negatively impact the availability of key personnel necessary to conduct our business activities. Such a spread or outbreak couldmay also negatively impact the business and operations of third-party service providers who perform critical services for us.
The extent to which COVID-19, or another highly infectious or contagious disease impacts our operations and those of our borrowers, tenants and investments will depend on future developments, which are highly uncertain and cannot be predicted with any reasonable degree of certainty at this time, including the scope, severity and duration of the pandemic, the actions taken to contain the pandemic or mitigate its impact, and the direct and indirect economic effects of the pandemic and containment measures, among others. Nevertheless, if COVID-19, or another highly infectious or contagious disease, continues to spread or the containment responses are unsuccessful, there could be significant negative impacts to our business, financial condition, and results of operations.
Risks Related to Debt Financings and Derivative Instruments
Our investment strategy involves significant leverage, which could adversely affect our financial condition and results of operations.
We may increase our investment risk exposure by funding a portion of new investments with debt financing or other borrowing arrangements. To the extent that income derived from such levered assets exceeds our interest expense, hedging expense and other costs of the financing, our net income will be greater than if we had not borrowed funds and had not invested in such assets on a leveraged basis. Conversely, if the revenue from our investment do not sufficiently cover the interest expense, hedging expense and other costs of the financing, our net income will be less or our net loss will be greater than if we had not borrowed funds. Because of the credit and interest rate risks inherent in our investment strategies, we closely monitor the leverage of our investment portfolio. From time to time, our leverage ratio may increase or decrease due to several factors, including changes in the value of the underlying portfolio, changes in investment allocations and the timing and amount of acquisitions.
There are risks associated with debt financing programs that involve securitization of our MRBs, GILs and property loans.investment assets.
We obtain debt financing through various securitization programs related to our MRBs, GILs and certain property loans. The terms of these securitization programs differ, but in general require our investment assets be placed into a trust or other special purpose entity that issues a senior security to unaffiliated investors while we retain thea residual interest. The trust administrator receives all the principal and interest payments from the underlying assets and distributes proceeds to holders of the various security interests. The senior securities are paid contractual principal and interest at a variable or fixed rate, depending on the terms of the security. As the holder of the residual interest, we are entitled to any remaining principal and interest after payment of all trust-related fees (i.e. trustee fees, remarketing agent fees, liquidity provider fees, credit enhancement fees, etc.). Specific risks generally associated with these asset securitization programs include the following:
Changes in interest rates can adversely affect the cost of the asset securitization financing.
The interest rates payable on certain senior securities are variable. The senior securities associated with our M33 TEBS and TOB Trust securitizations have variable interest rates that are reset on a weekly basis. The interest rate on the senior securities is determined by the respective remarketing agents based on the rate third party purchasers are willing to receive to purchase the senior securities at par. Changes in such rates are generally, though not always, consistent with movements in market interest rate indices. In addition, because the senior securities may typically be tendered back to the trust, causing the trust to remarket the senior securities from time to time, an increase in interest rates may be required in order to successfully remarket these securities. Any increase in the interest rate payable on the senior securities will resultcause an increase in moreour interest expense and decrease the amount of the underlying interest being used to pay interest on the senior securities and, after payment of all trust-related fees, leaving less interestresidual cash flows available to us. Higher short-term interest rates will reduce, and could even eliminate, our return on residual interests in this type of financing.interests.
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Payments on our residual interests are subordinate to payments on the senior securities and to payment of all trust-related fees.
Our residual interests are subordinate to the senior securities and payment of all trust-related fees. As a result, none of the interest received by such a trust will be paid to us as the holder of a residual interest until all payments currently due on the senior securities have been paid in full and all trust expenses satisfied. As the holder of residual interests in these trusts, we can look only to the assets of the trust remaining after payment of these senior obligations for payment on the residual interests. No third party guarantees the payment of any return to be received for our residual interests.
Termination of an asset securitization financing can occur for many reasons which could result in the liquidation of the securitized assets and result in additional losses.
In general, the trust or other special purpose entity formed for an asset securitization financing can terminate for many different reasons relating to issues with the assets or issues with the trust itself. Issues withPotential termination triggers related to the securitized assets that could cause the trust to collapse include non-payment of debt service or other defaults or a determination that the interest on the assets is taxable. Issues withPotential termination triggers related to a trust include a downgrade in the investment rating of the senior securities that it has issued due to a ratings downgrade of the trust credit enhancer, a ratings downgrade of the liquidity provider for the trust, increases in short term interest rates in excess of the interest paid on the underlying assets, an inability to remarket the senior securities or an inability to obtain credit or liquidity support for the trust. In each of these cases, the trust will be collapsed and the underlyingsecuritized assets held by the trusts will be sold. If the proceeds from the sale of the trust collateral are not sufficient to pay the principal amount of the senior securities plus accrued interest and all trusttrust-related expenses then, we will be required, through our guarantee of the trusts, to fund any such shortfall. The Partnership, as holder of the residual interest in the trust, may lose our investment in the residual interest and realize additional losses to fully repay senior trust obligations.
An insolvency or receivership of the program sponsor could impair our ability to recover the assets and other collateral pledged by it in connection with a bond securitization financing.
In the event the sponsor of an asset securitization financing program becomes insolvent, it could be placed in receivership. In that situation, it is possible that we would not be able to recover the investment assets or other collateral pledged in connection with the securitization financing or that we will not receive all payments due on our residual interests.
We may be required to post additional collateral if the securitized assets experience a decline in value.
The Partnership may be required to post collateral, typically in cash, related to the TOB Trusts with Mizuho.Mizuho and Barclays. The amount of collateral posting required is dependent on the valuation of the underlying MRBs, GILs and property loanssecuritized assets in relation to thresholds set by Mizuhothe lenders on each business day. The Partnership’sOur net exposure, as calculated by Mizuho, was a positive position of approximately $15.6$4.6 million as of December 31, 2020.2021. If the value of the Partnership’s positions with Mizuho, having an aggregate principal of approximately $223.1$500.0 million as of December 31, 2021, decreases by over $15.6$4.6 million then the Partnership will be required to post cash collateral for the net negative exposure. Our net exposure, as calculated by Barclays was zero as of December 31, 2021.
There is risk that we will not meet financial covenants, non-financial covenants and risk retention requirements.
We are subject to various financial and non-financial covenants according to our master agreements with Mizuho and Barclays. Such covenants included, but are not limited to, maintaining minimum partners’ capital balances, certain limits on declines in net assets over specified time periods, certain limitations on leverage, and requiring that the Partnership remained listed on the NASDAQ. Failure to comply with these covenants could result in an event of default, termination of the trust securitizations, acceleration of all amounts owed, and generally would give the counterparty the right to exercise certain other remedies under the master agreements. Further, certain of our master agreements have cross-default, cross-acceleration or similar provisions, such that if we were to violate a covenant under one trust securitization, that violation could lead to defaults, accelerations, or other adverse events under other trust securitizations as well.
Certain regulations related to our TOB trust securitizations require that we maintain a minimum economic interest in the residual and/or senior interests issued by the trust. Declines in the value of the securitized assets below certain levels will require us to purchase senior securities to satisfy our minimum risk retention requirements, which will negatively impact our liquidity and leveraged returns
We are subject to various risks associated with our derivative agreements.
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We purchase derivative instruments to either (i) mitigate some, but not all, of our exposure to rising interest rates, or (ii) reduce the net interest cost related to our Secured Notes.Notes. There is no assurance these instruments will fully insulate us from any adverse financial consequences resulting from rising interest rates. In addition, our risks from derivative instruments include the following:
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We are required to record the fair value of the Secured Notes below the outstanding principal amount.
We report our derivative instruments at fair value on our financial statements with changes recorded in current earnings. This can result in significant period to period volatility in our reported net income over the term of these instruments.
We are subject to various risks associated with our secured line of credit arrangements.
We have two secured line of credit facilities that we utilize as temporary financing for our investment acquisitions and for general working capital needs. Balances on our secured line of credit facilities are secured by certain investments assets pledged as collateral. We are subject to certain financial and non-financial covenants, which if not maintained, will cause a default and acceleration of amounts due, negatively impacting our liquidity. Furthermore, declines in collateral values may trigger requirements that we repay balances or a portion of balances early or limit the amount that can be drawn under a borrowing base calculation for one of the facilities. One of our secured line of credit facilities has a deficiency guaranty provided by an affiliate, Greystone Select Incorporated (“Greystone Select”), and is subject to various financial and non-financial covenants. A covenant default by Greystone Select will trigger a default on our obligations under the line of credit facility and accelerate amounts owed to the lenders.
Risks Related to Ownership of Beneficial Unit Certificates and Series A Preferred Units
Cash distributions related to BUCs may change at the discretion of the Partnership’s general partner.
The amount of the cash per BUC distributed by the Partnership may increase or decrease at the determination of the Partnership’s general partner based on its assessment of the amount of cash available to us for this purpose, as well as other factors it deems to be relevant. We may supplement our cash available for distribution with unrestricted cash. If we are unable to generate sufficient cash from operations, we may need to reduce the level of cash distributions per BUC from current levels. In addition, there is no assurance that we will be able to maintain our current level of annual cash distributions per BUC even if we complete our current investment plans. Any change in our distribution policy could have a material adverse effect on the market price of our BUCs.
Any future issuances of additional BUCs could cause their market value to decline.
We may issue additional BUCs from time to time to raise additional equity capital. The issuance of additional BUCs will cause dilution of the existing BUCs and may cause a decrease in the market price of the BUCs.
Certain rights of our BUC holders are limited by and subordinate to the rights of the holders of our Series A Preferred Units and, if issued, our Series A-1 Preferred Units and Series B Preferred Units, and these rights may have a negative effect on the value of the BUCs.
The holders of our Preferred Units, and any other class or series of Partnership interests or securities we may issue in the future that are expressly designated as ranking senior to the BUCs, have rights with respect to anticipated quarterly distributions and rights upon liquidation, dissolution, or the winding-up of the Partnership’s affairs which are senior to those of the holders of BUCs. In addition, upon a liquidation of the Partnership, lenders with respect to our borrowings will be entitled to receive our available assets prior to any
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distributions to the holders of our Preferred Units and BUCs. The holders of our Preferred Units also have the right to have their units redeemed by the Partnership under certain circumstances. The existence of these senior rights and preferences may have a negative effect on the value of the BUCs.
Holders of Series A Preferred Units have extremely limited voting rights.
The voting rights of a holder of Series A Preferred Units isare extremely limited. Our BUCs are the only class of our partnership interests carrying full voting rights.
The Partnership’s general partner has the authority to declare cash distributions related to the Series A Preferred Units.
The holders of Series A Preferred Units are entitled to receive non-cumulative cash distributions, when, as, and if declared by the Partnership’s general partner, out of funds legally available therefor, at anstated annual rate of 3.0%.rates. Under the terms of the Partnership Agreement, the Partnership’s General Partner has the authority, based on its assessment of the amount of cash available to us for distributions, not to declare distributions to the holders of the Series A Preferred Units.
Holders of Series A Preferred Units may have liability to repay distributions.
Under certain circumstances, holders of the Series A Preferred Units may have to repay amounts wrongfully returned or distributed to them. Under Section 17-607 of the Delaware Revised Uniform Limited Partnership Act, we may not make a distribution if the distribution would cause the Partnership’s liabilities to exceed the fair value of its assets. Liabilities to partners on account of their partnership interests and liabilities that are non-recourse to the Partnership are not counted for purposes of determining whether a distribution is permitted.
Delaware law provides that for a period of three years from the date of an impermissible distribution, limited partners who received the distribution and who knew at the time of the distribution that it violated Delaware law will be liable to the limited partnership for the distribution amount. A purchaser of Series A Preferred Units who becomes a limited partner is liable for the obligations of the transferring limited partner to make contributions to the Partnership that are known to such purchaser of Series A Preferred Units at the time it became a limited partner and for unknown obligations if the liabilities could be determined from our Partnership Agreement.
We may be required to redeem Series A Preferred Units in the future.
Under the terms of the Series A and Series A-1 Preferred Units, upon the sixth anniversary of the closing of the sale of Series A Preferred Units to an investor, and upon each anniversary thereafter, each holder of Series Asuch Preferred Units will have the right, but not the obligation, to cause the Partnership to redeem, in whole or in part, the Series A Preferred Unitsunits held by such holder at a per unit redemption price equal to $10.00 per unit plus an amount equal to all declared and unpaid distributions thereon to the date of redemption. The sixthUnder the terms of the Series B Preferred Units, upon the eighth anniversary of our initial issuancethe closing of Series Athe sale to an investor, and upon each anniversary thereafter, each holder of such Preferred Units iswill have the right, but not the obligation, to cause the Partnership to redeem, in March 2022.whole or in part, the units held by such holder at a per unit redemption price equal to $10.00 per unit plus an amount equal to all declared and unpaid distributions thereon to the date of redemption. Holders of the Preferred Units must provide written notice to the General Partner of their intent to redeem at least 180 days prior to the redemption date. In addition, if the General Partner determines that the ratio of the aggregate market value of issued and outstanding BUCs to the aggregate value of issued and outstanding Series A Preferred Units and Series A-1 Preferred Units has fallen below 1.0 and has remained below 1.0 for a period of 15 consecutive business days, then each holder of Series A, Series A-1 and Series B Preferred Units will have the right to redeem, in whole or in part, the Preferred Units held by such holder at a per unit redemption price equal to $10.00 per unit plus all declared and unpaid distributions thereon to the date of redemption. If such redemptions occur, we will be required to fund redemption proceeds using, including, but not limited to, our unsecuredsecured line of credit, cash on hand, alternative financing, or the sale of assets. Such actions may limit our ability to make additional investments with accretive returns and may negatively impact our results of operations through higher costs or lower investment returns.
Certain holders of our Series A Preferred Units are nearing the sixth anniversary of the original issuance of their units and, therefore, will become eligible to redeem their units at the option of the holders. We have received no redemption notices from holders as of December 31, 2021.
If we do not have sufficient funds available to fulfill these obligations, we may be unable to satisfy an investor’s redemption right.
The assets held by the Partnership may not be considered qualified investments under the Community Reinvestment Act (“CRA”) by the bank regulatory authorities.
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In most cases, “qualified investments,” as defined by the CRA,investments” are required to be responsive to the community development needs of a financial institution’s delineated CRA assessment area or a broader statewide or regional area that includes the institution’s assessment area. For an institution to receive CRA credit with respect to the Series APartnership’s Preferred Units, the Partnership must hold CRA qualifying investments that relate to the institution’s assessment area.
As defined in the CRA, qualified investments are any lawful investments, deposits, membership shares, or grants that have as their primary purpose community development. The term “community development” is defined in the CRA as: (1) affordable housing (including multifamily rental housing) for low- to moderate-income individuals; (2) community services targeted to low- or moderate-income individuals; (3) activities that promote economic development by financing businesses or farms that meet the size eligibility standards of 13 C.F.R. §121.802(a)(2) and (3) or have gross annual revenues of $1 million or less; or (4) activities that revitalize or stabilize low- or moderate-income geographies, designated disaster areas, or distressed or underserved non-metropolitan middle-income geographies designated by the federal banking regulators.
In June 2020, the OCC adopted amendments to its CRA regulations that resulted in the financial institutions for which it is the primary federal regulator (i.e., national banks and federal savings associations) to be subject to different CRA standards than those that apply to the state-chartered banks for which either the FDIC or FRB is the primary federal regulator. The OCC’s 2020 regulations, among other things, replaced the term “qualified investments” with “community development investments,” which the regulation defined to include lawful investments or legally binding commitments to invest that are reported on the Call Report, Schedule RC–L that meet the expanded community development “qualifying activities” criteria in the rule.
Parts of this June 2020 amendment to the OCC’s CRA regulations became effective on October 1, 2020, but the more material provisions would not have taken effect until January 1, 2023 or January 1, 2024. On September 8, 2021, the OCC issued a proposal to rescind its June 2020 final rule and replace it with a rule largely based on its CRA regulations that existed prior to the adoption of its June 2020 amendments. The OCC stated in the preamble to this proposal that it intended to align its CRA rules with the FRB’s and FDIC’s CRA rules, and thereby reinstitute the regulatory uniformity for all insured depository institutions that existed prior to the OCC’s adoption of its June 2020 rule. On December 14, 2021, the OCC adopted a final rule implementing these changes to its CRA regulations, which became effective on January 1, 2022.
Investments are not typically designated as qualifying investments by the OCC, FRB or FDIC at the time of issuance by any governmental agency.issuance. Accordingly, the General Partner must evaluate whether each potential investment may be a qualifying investmentsinvestment with respect to a specific Unitholder. The final determinations that assets held by the Partnership units are qualifying investments are made by the federalOCC, FRB or FDIC and, where applicable, state bank supervisory agencies during their periodic examinations of financial institutions. There is no assurance that the agencies will concur with the General Partner’s evaluation of anydeterminations.
Each holder of the Partnership’s assets as qualifying investments.
Each holder of Series A Preferred Units is a limited partner of the Partnership, not just of the investments in its Designated Target Region(s). The financial returns on an investor’s investment will be determined based on the performance of all the assets in the
Partnership’s geographically diverse portfolio, not just by the performance of the assets in the Designated Target Region(s) selected by the investor.
In determining whether a particular investment is qualified, the General Partner will assess whether the investment has as its primary purpose community development. The General Partner will consider whether the investment: (1) provides affordable housing for low- to moderate-income individuals; (2) provides community services targeted to low- to moderate-income individuals; (3) funds activities that (a) finance businesses or farms that meet the size eligibility standards of the Small Business Administration’s Development Company or Small Business Investment Company programs or have annual revenues of $1 million or less and (b) promote economic development; or (4) funds activities that revitalize or stabilize low- to moderate-income areas. For institutions whose primary regulator is the Federal Reserve Board (“FRB), Office of the Comptroller of the Currency (“OCC”), or Federal Deposit Insurance Corporation (“FDIC”), theThe General Partner may also consider whether an investment revitalizes or stabilizes a designated disaster area or an area designated by those agencies as a distressed or underserved non-metropolitan middle-income area.
An activity may be deemed to promote economic development if it supports permanent job creation, retention, and/or improvement for persons who are currently low- to moderate-income, or supports permanent job creation, retention, and/or improvement in low- to moderate-income areas targeted for redevelopment by federal, state, local, or tribal governments. Activities that revitalize or stabilize a low- to moderate-income geography are activities that help attract and retain businesses and residents. The General Partner maintains documentation, readily available to a financial institution or an examiner, supporting its determination that a Partnership asset is a qualifying investment for CRA purposes.
TheAn investment in the Series A Preferred Units is not a deposit or obligation of, or insured or guaranteed by, any entity or person, including the U.S. Government and the FDIC. The value of the Partnership’s assets will vary, reflecting changes in market conditions, interest rates, and other political and economic factors. There is no assurance that the Partnership can achieve its investment objective, since all
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investments are inherently subject to market risk. There also can be no assurance that either the Partnership’s investments or Series A Preferred Units of the Partnership will receive investment test credit under the CRA.
Under certain circumstances, investors may not receive CRA credit for their investment in the Series A Preferred Units.
The CRA requires the three federal bank supervisory agencies, the FRB, the OCC, and the FDIC, to encourage the institutions they regulate to help meet the credit needs of their local communities, including low- and moderate-income neighborhoods. Each agency has promulgated rules for evaluating and rating an institution’s CRA performance which, as the following summary indicates, vary according to an institution’s asset size. An institution’s CRA performance can also be adversely affected by evidence of discriminatory credit practices regardless of its asset size.
For an institution to receive CRA credit with respect to an investment in the Series A Preferred Units, the Partnership must hold CRA-qualifyingCRA qualifying investments that relate to the institution’s delineated CRA assessment area. The Partnership expects that an investment in its Series A Preferred Units will be considered a qualified investment under the CRA, but neither the Partnership nor the General Partner has received an interpretative letter from the Federal Financial Institutions Examination Council (“FFIEC”)FFIEC stating that an investment in the Partnership is considered eligible for regulatory credit under the CRA. Moreover, there is no guarantee that future changes to the CRA or future interpretations by the FFIEC will not affect the continuing eligibility of the Partnership’s investments. So that an investment in the Partnership itself may be considered a qualified investment, the Partnership will seek to invest only in investments that meet the prevailing community investing standards put forth by U.S. regulatory agencies.
In this regard, the Partnership expects that a majority of its investments will be considered eligible for regulatory credit under the CRA, but there is no guarantee that an investor will receive CRA credit for its investment in the Series A Preferred Units. For example, a state banking regulator may not consider the Partnership eligible for regulatory credit. If CRA credit is not given, there is a risk that an investor may not fulfill its CRA requirements.
The Partnership’s portfolio investment decisions may create CRA strategy risks.
Portfolio investment decisions take into account the Partnership’s goal of holding MRBs and other securities in designated geographic areas and will not be exclusively based on the investment characteristics of such assets, which may or may not have an adverse effect on the Partnership’s investment performance. CRA qualified assets in geographic areas sought by the Partnership may not provide as favorable return as CRA qualified assets in other geographic areas. The Partnership may sell assets for reasons relating to CRA qualification at times when such sales may not be desirable and may hold short-term investments that produce relatively low yields pending the selection of long-term investments believed to be CRA-qualified.
The Series A Preferred Units are subordinated to existing and future debt obligations, and the interests could be diluted by the issuance of additional units, including additional Series A Preferred Units, and by other transactions.
The Series A Preferred Units are subordinated to all existing and future indebtedness, including indebtedness outstanding under any senior bank credit facility. The Partnership may incur additional debt under its senior bank credit facility or future credit facilities. The payment of principal and interest on its debt reduces cash available for distribution to Unitholders, including the Preferred Units.
The Series A Preferred Units and Series A-1 Preferred Units are pari passu and senior to the Series B Preferred Units.
The issuance of additional units pari passu with or senior to the Series Aexisting series of Preferred Units would dilute the interests of the holders of the Series A Preferred Units, and any issuance of senior securities, parity securities, or additional indebtedness could affect the Partnership’s ability to pay distributions on or redeem the Series A Preferred Units.
Holders of the Series A Preferred Units may be required to bear the risks of an investment for an indefinite period of time.
Holders of the Series A Preferred Units may be required to bear the financial risks of an investment in the Series A Preferred Units for an indefinite period of time. In addition, the Series A Preferred Units will rank junior to all Partnership current and future indebtedness (including indebtedness outstanding under the Partnership’s senior bank credit facility) and other liabilities, and any other senior securities we may issue in the future with respect to assets available to satisfy claims against the Partnership.
Treatment of distributions on our Preferred Units is uncertain.
The tax treatment of distributions on our Preferred Units is uncertain. We will treat the holders of Preferred Units as partners for tax purposes and will treat distributions paid to holders of Preferred Units as being made to such holders in their capacity as partners. If the Preferred Units are not partnership interests, they likely would constitute indebtedness for U.S. federal income tax purposes and distributions to the holders of Preferred Units would constitute ordinary interest income to holders of Preferred Units. If Preferred Units
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are treated as partnership interests, but distributions to holders of Preferred Units are not treated as being made to such holders in their capacity as partners, then these distributions likely would be treated as guaranteed payments for the use of capital. Guaranteed payments generally would be taxable to the recipient as ordinary income, and a recipient could recognize taxable income from the accrual of such a guaranteed payment even in the absence of a contemporaneous distribution. Potential investors should consult their tax advisors with respect to the consequences of owning our Preferred Units.
There is no public market for the Series A Preferred Units, which may prevent an investor from liquidating its investment.
The Series A Preferred Units were offered in a private placement and the Partnership did not register the Series A Preferred Units with the SEC or any state securities commission. The Series A Preferred Units may not be resold unless the Partnership registers the securities with the SEC or an exemption from the registration requirement is available. It is not expected that any market for the Series A Preferred Units will develop or be sustained in the future. The lack of any public market for the Series A Preferred Units severely limits the ability to liquidate the investment, except for the right to put the Series A Preferred Units to the Partnership under certain circumstances.
Market interest rates may adversely affect the value of the Series A Preferred Units.
One of the factors that will influence the value of the Series A Preferred Units will be the distribution rate on the Series A Preferred Units (as a percentage of the price of the units) relative to market interest rates. An increase in market interest rates, which continue to remain at low levels relative to historical rates, may lower the value of the Series A Preferred Units and also would likely increase the Partnership’s borrowing costs.
Risks Related to Income Taxes
Not all the income received by us is exempt from taxation.
Income from our property loans, taxable MRBs, taxable GILs, MF Properties, investments in unconsolidated entities and taxable MRBs and related gains or losses on sale are subject to federal and state income taxes. Furthermore, income and gains generated by assets within our wholly owned subsidiary (the “Greens Hold Co”) and its subsidiaries are subject to federal, state and local income taxes as the Greens Hold Co is a “C” corporation for income tax purposes.
To the extent we generate taxable income, Unitholders will be subject to income taxes on this income, whether or not they receive cash distributions.
As a partnership, our Unitholders will beare individually liable for income tax on their proportionate share of any taxable income realized by us, whether or not we make cash distributions.
There are limits on the ability of our Unitholders to deduct Partnership losses and expenses allocated to them.
The ability of Unitholders to deduct their proportionate share of the losses and expenses generated by us will be limited in certain cases, and certain transactions may result in the triggering of the Alternative Minimum Tax for Unitholders who are individuals.
Unitholders may incur tax liability if any of the interest on our MRBs or GILs is determined to be taxable.
In each MRB and GIL transaction, the governmental issuer, as well as the underlying borrower, has covenanted and agreed to comply with all applicable legal and regulatory requirements necessary to establish and maintain the tax-exempt status of interest earned on
the MRBs and GILs. Failure to comply with such requirements may cause interest on the related investment to be includable in gross income for federal income tax purposes retroactive to the date of issuance, regardless of when such noncompliance occurs. Should the interest income on an MRB or GIL be deemed to be taxable, the governing documents include a variety of rights and remedies that we have concluded would help mitigate the economic impact of taxation of the interest income on the affected MRBs or GILs. Under such circumstances, we would enforce all such rights and remedies as set forth in the related governing documents as well as any other rights and remedies available under applicable law. In addition, in the event the tax-exemption of interest income on any MRB or GIL is challenged by the IRS, we would participate in the tax and legal proceedings to contest any such challenge and would, under appropriate circumstances, appeal any adverse final determinations. The loss of tax-exemption for any individual MRB or GIL would not, in and of itself, result in the loss of tax-exemption for any unrelated MRBs or GILs. However, the loss of such tax-exemption could result in the distribution to our Unitholders of taxable income relating to such MRBs and GILs.
In addition, we have, and may in the future, obtain debt financing through asset securitization programs in which we place MRBs and GILs into trusts and are entitled to a share of the interest received by the trust on these bonds after the payment of interest on senior securities and related expenses issued by the trust. It is possible that the characterization of our residual interest in such a securitization trust could be challenged and the income that we receive through these instruments could be treated as ordinary taxable income includable in our gross income for federal tax purposes.
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If we are determined to be an association taxable as a corporation, it will have adverse economic consequences for us and our Unitholders.
We have determined to be treated as a partnership for federal income tax purposes. The purpose of this determination is to eliminate federal and state income tax liability for us and allow us to pass through our interest income on our MRBs and GILs, which we expect and believe to be tax-exempt, to our Unitholders so that they are not subject to federal income tax on this income. If our treatment as a partnership for tax purposes is successfully challenged, we would be classified as an association taxable as a corporation. This would result in the Partnership being taxed on its taxable income, if any, and, in addition, would result in all cash distributions made by us to Unitholders being treated as taxable dividend income to the extent of our earnings and profits. The payment of these dividends would not be deductible by us. The listing of our BUCs for trading on the NASDAQ causes us to be treated as a “publicly traded partnership” under Section 7704 of the IRC. A publicly traded partnership is generally taxable as a corporation unless 90% or more of its gross income is “qualifying” income. Qualifying income includes interest, dividends, real property rents, gain from the sale or other disposition of real property, gain from the sale or other disposition of capital assets held to produce interest or dividends, and certain other items. We expect and believe that substantially all our gross income will continue to be tax-exempt interest income on our MRBs and GILs, but there can be no assurance that will be the case. While we believe that all interest income is qualifying income, it is possible that some or all our income could be determined not to be qualifying income. In such a case, if more than ten percent of our annual gross income in any year is not qualifying income, we will be taxable as a corporation rather than a partnership for federal income tax purposes. We have not received, and do not intend to seek, a ruling from the Internal Revenue Service regarding our status as a partnership for tax purposes.
Risks Related to Governmental and Regulatory Matters
We are not registered under the Investment Company Act.
We are not required to register as an investment company under the Investment Company Act of 1940, as amended (the “Investment Company Act”) because we operate under an exemption therefrom. As a result, none of the protections of the Investment Company Act (such as provisions relating to disinterested directors, custody requirements for securities, and regulation of the relationship between a fund and its advisor) will beare applicable to us.
Any downgrade, or anticipated downgrade, of U.S. sovereign credit ratings or the credit ratings of the U.S. Government-sponsored entities (“GSEs”) by the various credit rating agencies may materially adversely affect our business.
Our TEBS financing facilities are an integral part of our business strategy and those financings are dependent upon an investment grade rating of Freddie Mac. If Freddie Mac were to be downgraded to below investment grade, it would have a negative effect on our ability to finance our MRB portfolio on a longer-term basis and could negatively impact our cash flows from operations and our ability to continue distributions to our Unitholders at current levels.
The federal conservatorship of Freddie Mac and related efforts, along with any changes in laws and regulations affecting the relationship between Freddie Mac and the U.S. Government, may materially adversely affect our business.
The problems faced by Fannie Mae and Freddie Mac commencing in 2008 resulting in them being placed into federal conservatorship and receiving significant U.S. Government support have sparked serious debate among federal policy makers regarding the continued
role of the U.S. Government in providing liquidity and credit enhancement for mortgage loans, including single family and multifamily mortgages. As a result, the future roles of Fannie Mae and Freddie Mac may be reduced (perhaps significantly) and the nature of their guarantee obligations could be considerably limited relative to historical measurements. Alternatively, it is still possible that Fannie Mae and Freddie Mac could be dissolved entirely or privatized, and, as mentioned above, the U.S. Government could determine to stop providing liquidity support of any kind to the mortgage market. Any changes to the nature of the GSEs or their guarantee obligations could have broad adverse implications for the housing market and our business, operations, and financial condition. If Fannie Mae or Freddie Mac were to be eliminated, or their structures were to change radically (i.e., limitation or removal of the guarantee obligation)obligation, reduction in the size and scope of activities, etc.), our ability to utilize TEBS Financingsfinancings facilities would be materially and adversely impacted.
The Partnership faces legislative and regulatory risks in connection with its assets and operations, including under the CRA.
Many aspects of the Partnership’s investment objectives are directly affected by the national and local legal and regulatory environments. Changes in laws, regulations, or the interpretation of regulations could all pose risks to the successful realization of the Partnership’s investment objectives.
It is not known what changes, if any, may be made to the CRA in the future and what impact these changes could have on regulators or the various states that have their own versions of the CRA. Changes in the CRA might affect Partnership operations and might pose a risk to the successful realization of the Partnership’s investment objectives. Repeal of the CRA would significantly reduce
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the attractiveness of an investment in the Partnership’s Series A Preferred Units for regulated investors. There is no guarantee that an investor will receive CRA credit for its investment in the Series A Preferred Units.
The replacement of the London Interbank Bank Offering Rate (“LIBOR”) with an alternative reference rate may adversely affect our results of operations and financial condition.
The United Kingdom's Financial Conduct Authority (“FCA”) has announced that it will phase out certain LIBOR as a benchmarktenors by the end of 2021.2021 and certain US-based LIBOR tenors by the end of 2023. It is unclear whether new methods of calculating LIBOR will be established such that it continues to exist after 2021. Our investments with terms that referenceinterests indexed to LIBOR rates included one MRB,consisted of two MRBs, one taxable MRB and three property loans as of December 31, 2020.2021. The Partnership generally controls the determination of alternative reference rates for such investments. Regarding our liabilities, one of our two unsecuredsecured lines of credit, our Secured Notes, and total return swaps referencehave interest rates or terms indexed to LIBOR rates as of December 31, 2020.2021. In addition, three of our investments in unconsolidated entities have construction loan obligations that referencewith interest rates indexed to LIBOR rates as of December 31, 2020.2021. If LIBOR ceases to exist, we and unconsolidated entities in which we are invested will need to amend these agreements referencing LIBOR rates based on the terms of each agreement or protocols issued by the International Swaps and Derivatives Association.
The phasing out of LIBOR could impact short-term marketinterest rates in general which could potentially increase the cost of our debt financing arrangements. The transition to an alternative rate will require careful and deliberate consideration and implementation so as not to disrupt the stability of financial markets. There is no guarantee that a transition from LIBOR to an alternative index will not result in, among other things, financial market disruptions,disruptions.
General Risk Factors
We face possible risks associated with the effects of climate change and severe weather.
The physical effects of climate change could have a material adverse effect on our investments and operating results. To the extent climate change causes changes in weather patterns, our markets could experience increases in storm intensity and rising sea-levels. These conditions may negatively impact the pace and cost of properties under construction. Over time, these conditions could result in declining demand and operating results for properties related to investments. Climate change may also have indirect effects on our business by increasing the cost and/or availability of property insurance and increased repair and maintenance costs. There can be no assurance that climate change will not have a material adverse effect on our investments and operating results.
We are increasingly dependent on information technology, and potential disruption, cyber-attacks, security problems, and expanding social media vehicles present new risks.
We are increasingly dependent on information technology networks and systems, including the Internet, to process, transmit, and store electronic and financial information, to manage and support a variety of business processes and activities, and to comply with regulatory, legal, and tax requirements. Certain critical components of our information systems are hosted and supported by third-party service providers and affiliates of Greystone. If we and our service providers do not allocate and effectively manage the resources necessary to build and sustain the proper technology infrastructure and to maintain and protect the related automated and manual control processes, we could be subject to business disruptions or damage resulting from security breaches. If any of our information technology systems suffer severe damage, disruption, or shutdown, and our business continuity plans do not effectively resolve the issues in a timely manner, our revenues, financial condition, and results of operations may be materially and adversely affected. We could also experience delays in reporting our financial results. In addition, we may be negatively impacted by business interruption, litigation, and reputational damages from leakage of confidential information or from systems conversions when, and if, they occur in the normal course of business.
Our third-party service providers and Greystone affiliates are primarily responsible for the security of their own information technology environments and in certain instances, we rely significantly on third-party service providers to supply and store our sensitive data in a secure manner. All such third-party vendors face risks relating to cybersecurity similar to ours which could disrupt their businesses and therefore adversely impact us. While we provide guidance and specific requirements in some cases, we do not directly control any of such parties’ information technology security operations, or the amount of investment they place in guarding against cybersecurity threats. Accordingly, we are subject to any flaws in or breaches to their information technology systems or those which they operate for us.
Although no material incidents have occurred to date, we cannot be certain that our security efforts and measures will be effective or that our financial results will not be negatively impacted by such an incident should one occur.
The inappropriate use of certain media could cause brand damage or information leakage. Negative posts or comments about the Partnership on any social networking web site could seriously damage its reputation. In addition, the disclosure of non-public
30
information through external media channels could have a negative impact to the Partnership. Identifying new points of entry as social
media continues to expand presents new challenges. Any business interruptions or damage to our reputation could negatively impact our financial condition, results of operations, and the market price of our BUCs.
Item 1B. Unresolved Staff Comments.
None
Item 2. Properties.
The Partnership conducts its business operations from and maintains its corporate office at 14301 FNB Parkway, Suite 211, Omaha, Nebraska 68154. The Partnership believes that this office is adequate to meet its business needs for the foreseeable future.
Each of the Partnership’s MRBs and GILs are collateralized by multifamily residentialor senior housing properties or commercial property. The Partnership may have property loans that are also collateralizedsecured by these properties but does not hold title or any other interest in the properties. One of the Partnership’s property loans is secured by a skilled nursing facility.
As of December 31, 2020, theThe Partnership owned the Suites on Paseo and The 50/50 MF Properties and certain land held for development. The Partnership’s Real Estate Assetsdevelopment that are reported within the MF Properties segment as of December 31, 2021. The Partnership recorded one JV Equity Investment as a consolidated VIE and it is reported within the Market-Rate Joint Venture Investments segment as of December 31, 2021. The Partnership’s Real Estate Assets are summarized as follows:
Real Estate Assets as of December 31, 2021 |
| |||||||||||||||||
Property Name |
| Location |
| Number of |
|
| Land and Land |
|
| Buildings and |
|
| Carrying Value |
| ||||
Suites on Paseo |
| San Diego, CA |
|
| 384 |
|
| $ | 3,199,268 |
|
| $ | 39,302,507 |
|
| $ | 42,501,775 |
|
The 50/50 MF Property |
| Lincoln, NE |
|
| 475 |
|
|
| - |
|
|
| 33,013,039 |
|
|
| 33,013,039 |
|
Vantage at San Marcos |
| San Marcos, TX |
| (1) |
|
|
| 2,660,615 |
|
|
| 682,929 |
|
|
| 3,343,544 |
| |
Land held for development |
|
|
| (2) |
|
|
| 1,551,196 |
|
|
| - |
|
|
| 1,551,196 |
| |
|
|
|
|
|
|
|
|
|
|
|
|
| $ | 80,409,554 |
| |||
Less accumulated depreciation |
|
|
|
|
|
|
|
|
|
|
|
|
| (20,701,922 | ) | |||
Net real estate assets |
|
|
|
|
|
|
|
|
|
|
|
| $ | 59,707,632 |
|
Real Estate Assets as of December 31, 2020 |
| |||||||||||||||||
Property Name |
| Location |
| Number of Units |
|
| Land and Land Improvements |
|
| Buildings and Improvements |
|
| Carrying Value |
| ||||
Suites on Paseo |
| San Diego, CA |
|
| 384 |
|
| $ | 3,199,268 |
|
| $ | 39,375,298 |
|
| $ | 42,574,566 |
|
The 50/50 MF Property |
| Lincoln, NE |
|
| 475 |
|
|
| - |
|
|
| 32,940,854 |
|
|
| 32,940,854 |
|
Land held for development |
|
|
| (1) |
|
|
| 1,675,997 |
|
|
| - |
|
|
| 1,675,997 |
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| $ | 77,191,417 |
|
Less accumulated depreciation |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| (18,150,215 | ) |
Total real estate assets |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| $ | 59,041,202 |
|
|
|
Item 3. Legal Proceedings.
The Partnership is periodically involved in ordinary and routine litigation incidental to its business. In our judgment, there are no material pending legal proceedings to which the Partnership is a party or to which any of the properties which collateralize the Partnership’s MRBs, GILs orassociated with its investments in unconsolidated entities are subject, in which a resolution is expected to have a material adverse effect on the Partnership’s consolidated results of operations, cash flows, or financial condition.
Item 4. Mine Safety Disclosures.
Not Applicable.
31
PART II
Item 5. Market for the Registrant’s Common Equity, Related Security Holder Matters and Issuer Purchases of Equity Securities.
Market Information
The Partnership’s BUCs trade on the NASDAQ Global Select Market under the trading symbol “ATAX.”
BUC Holder Information
As of December 31, 2020,2021, we had 60,690,86266,049,908 BUCs outstanding held by a total of approximately 12,70015,600 holders of record. In addition, the Partnership had outstanding unvested restricted unit awards (“RUA” or “RUAs”) for 132,812232,566 BUCs held by 1214 individuals as of December 31, 2020.2021.
Distributions
Future distributions paid by the Partnership per BUC will be at the discretion of its General Partner and will be based upon financial, capital, and cash flow considerations. In addition, the holders of Series Aoutstanding Preferred Units are entitled to receive non-cumulative cash distributions, when, as, and if declared by the General Partner, out of funds legally available therefor, in accordance with the terms and in the amount set forth in the Partnership Agreement. Distributions to the BUCs rank junior to distributions to the Series A Preferred Units, and, therefore, such distributions may be limited under certain circumstances. See Note 20 to the Partnership’s consolidated financial statements for a further description of the Series A Preferred Units. The Partnership currently expects to continue to pay distributions on its Series A Preferred Units and BUCs in the future.
Equity Compensation Plan Information
The following table provides information with respect to compensation plans under which equity securities of the Partnership are currently authorized for issuance as of December 31, 2020:2021:
|
| Number of shares to be issued upon exercise of outstanding options, warrants, and rights |
|
| Weighted-average price of outstanding options, warrants, and rights |
|
| Number of shares remaining available for future issuance under equity compensation plans (excluding shares reflected in column (a)) |
|
|
| Number of shares to be issued |
| Weighted-average price of |
| Number of shares remaining |
|
| ||||||||
Plan Category |
| (a) |
|
| (b) |
|
| (c) |
|
|
| (a) |
|
| (b) |
|
| (c) |
|
| ||||||
Equity compensation plans approved by Unitholders |
|
| 132,812 |
|
| $ | - |
|
|
| 1,854,235 |
| (1) |
| 232,566 |
| $ | - |
| 1,635,476 |
| (1) | ||||
Equity compensation plan not approved by Unitholders |
|
| - |
|
|
| - |
|
|
| - |
|
|
|
| - |
|
|
| - |
|
|
| - |
|
|
Total |
|
| 132,812 |
|
| $ | - |
|
|
| 1,854,235 |
|
|
|
| 232,566 |
|
| $ | - |
|
|
| 1,635,476 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||
(1) Represents the BUCs which remain available for future issuance under the America First Multifamily Investors, L. P. 2015 Equity Incentive Plan | (1) Represents the BUCs which remain available for future issuance under the America First Multifamily Investors, L. P. 2015 Equity Incentive Plan | (1) Represents the BUCs which remain available for future issuance under the America First Multifamily Investors, L. P. 2015 Equity Incentive Plan |
Unregistered Sale of Equity Securities
The Partnership did not sell any BUCs in 20202021 or 20192020 that were not registered under the Securities Act of 1933, as amended. There were no sales of unregistered Series A Preferred Units in 20202021 or 2019.2020.
The Partnership did not repurchase any outstanding BUCs during the fourth quarter of 2020.2021.
32
Item 6. Selected Financial Data.
Set forth below is selected consolidated financial data for the Partnership, its subsidiaries, and its consolidated variable interest entities (“VIEs”) as of and for the years ended December 31, 2020 through 2016. Item 6 should be read in conjunction with Item 7, “Management’s Discussion and Analysis of Financial Condition and Results of Operations” of this Report and the Partnership’s consolidated financial statements and notes filed in Item 8 of this Report.
|
| For the Years Ended December 31, |
| |||||||||||||||||
|
| 2020 |
|
| 2019 |
|
| 2018 |
|
| 2017 |
|
| 2016 |
| |||||
Consolidated Balance Sheet Summary Information: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Mortgage revenue bonds, at fair value |
| $ | 25,963,841 |
|
| $ | 30,009,750 |
|
| $ | 86,894,562 |
|
| $ | 77,971,208 |
|
| $ | 90,016,872 |
|
Mortgage revenue bonds held in trust, at fair value |
| $ | 768,468,644 |
|
| $ | 743,587,715 |
|
| $ | 645,258,873 |
|
| $ | 710,867,447 |
|
| $ | 590,194,179 |
|
Governmental issuer loans held in trust |
| $ | 64,863,657 |
|
| $ | - |
|
| $ | - |
|
| $ | - |
|
| $ | - |
|
Public housing capital fund trusts, at fair value |
| $ | - |
|
| $ | 43,349,357 |
|
| $ | 48,672,086 |
|
| $ | 49,641,588 |
|
| $ | 57,158,068 |
|
Real estate assets, net |
| $ | 59,041,202 |
|
| $ | 61,559,963 |
|
| $ | 64,596,348 |
|
| $ | 76,692,192 |
|
| $ | 114,226,600 |
|
Investments in unconsolidated entities |
| $ | 106,878,570 |
|
| $ | 86,981,864 |
|
| $ | 76,534,306 |
|
| $ | 39,608,927 |
|
| $ | 19,470,006 |
|
Total assets |
| $ | 1,175,247,879 |
|
| $ | 1,029,168,508 |
|
| $ | 982,713,246 |
|
| $ | 1,069,767,999 |
|
| $ | 944,113,674 |
|
Total debt, net |
| $ | 707,417,512 |
|
| $ | 576,199,667 |
|
| $ | 568,777,140 |
|
| $ | 643,868,521 |
|
| $ | 606,579,212 |
|
Redeemable Series A Preferred Units, net |
| $ | 94,422,477 |
|
| $ | 94,386,427 |
|
| $ | 94,350,376 |
|
| $ | 94,314,326 |
|
| $ | 40,788,034 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Consolidated Statements of Operations Summary Information: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total revenues |
| $ | 55,528,568 |
|
| $ | 62,318,013 |
|
| $ | 81,355,576 |
|
| $ | 70,381,545 |
|
| $ | 58,978,750 |
|
Total expenses |
|
| (49,655,773 | ) |
|
| (47,921,672 | ) |
|
| (48,092,660 | ) |
|
| (51,452,851 | ) |
|
| (44,316,480 | ) |
Gains and losses on sales |
|
| 1,416,023 |
|
|
| 16,141,797 |
|
|
| 6,955,516 |
|
|
| 17,753,303 |
|
|
| 14,080,414 |
|
Income tax benefit (expense) |
|
| (79,990 | ) |
|
| (45,987 | ) |
|
| 921,097 |
|
|
| (6,019,146 | ) |
|
| (4,959,000 | ) |
Net income |
|
| 7,208,828 |
|
|
| 30,492,151 |
|
|
| 41,139,529 |
|
|
| 30,662,851 |
|
|
| 23,783,684 |
|
Less: net (loss) income attributable to noncontrolling interest |
|
| - |
|
|
| - |
|
|
| - |
|
|
| 71,653 |
|
|
| (823 | ) |
Partnership net income |
|
| 7,208,828 |
|
|
| 30,492,151 |
|
|
| 41,139,529 |
|
|
| 30,591,198 |
|
|
| 23,784,507 |
|
Redeemable Series A Preferred Unit distribution and accretion |
|
| (2,871,051 | ) |
|
| (2,871,051 | ) |
|
| (2,871,050 | ) |
|
| (1,982,538 | ) |
|
| (583,407 | ) |
Net income available to Partners |
|
| 4,337,777 |
|
|
| 27,621,100 |
|
|
| 38,268,479 |
|
|
| 28,608,660 |
|
|
| 23,201,100 |
|
Less: General Partnersʼ interest in net income |
|
| (32,666 | ) |
|
| 2,102,874 |
|
|
| 2,285,943 |
|
|
| 2,140,074 |
|
|
| 2,992,106 |
|
BUC holdersʼ interest in net income |
| $ | 4,370,443 |
|
| $ | 25,518,226 |
|
| $ | 35,982,536 |
|
| $ | 26,468,586 |
|
| $ | 20,208,994 |
|
BUC holdersʼ interest in net income per BUC, basic and diluted |
| $ | 0.07 |
|
| $ | 0.42 |
|
| $ | 0.60 |
|
| $ | 0.44 |
|
| $ | 0.34 |
|
Distributions declared, per BUC |
| $ | 0.31 |
|
| $ | 0.50 |
|
| $ | 0.50 |
|
| $ | 0.50 |
|
| $ | 0.50 |
|
Weighted average number of BUCs outstanding, basic |
|
| 60,606,989 |
|
|
| 60,551,775 |
|
|
| 60,028,120 |
|
|
| 59,895,229 |
|
|
| 60,182,264 |
|
Weighted average number of BUCs outstanding, diluted |
|
| 60,606,989 |
|
|
| 60,551,775 |
|
|
| 60,028,120 |
|
|
| 59,895,229 |
|
|
| 60,182,264 |
|
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations.
General
In this Management’s Discussion and Analysis, all references to “we,” “us,” and the “Partnership” refer to America First Multifamily Investors, L.P., its consolidated subsidiaries, and consolidated VIEs as of December 31, 20202021 and 2019.2020.
Executive Summary
The Partnership was formed in 1998 for the primary purpose of acquiring a portfolio of mortgage revenue bonds (“MRBs”) that are issued by state and local housing authorities to provide construction and/or permanent financing for affordable multifamily, seniors housing and commercial properties. We also invest in governmental issuer loans (“GILs”), which are similar to MRBs, to provide construction financing for affordable multifamily properties.We generally refer to affordable multifamily and residential properties associated with our MRBs and GILs as “Residential Properties.” We expect and believe the interest received on our MRBs and GILs is excludable from gross income for federal income tax purposes. We may also invest in other types of securities and investments that may or may not be secured by real estate to the extent allowed by the Partnership Agreement.
The Partnership includes the assets, liabilities, and results of operations of the Partnership, our wholly owned subsidiaries and consolidated VIEs. All significant transactions and accounts between usthe Partnership and the consolidated VIEs have been eliminated in consolidation. See Note 2 to the Partnership’s consolidated financial statements for additional details.
As of December 31, 2020,Historically, we haveoperated in four reportable segments: (1) Mortgage Revenue Bond Investments, (2) MF Properties, (3) Other Investments, and (4) Public Housing Capital Fund Trusts. However, effective as of December 1, 2021 we established a new reportable segment designated as Seniors and Skilled Nursing MRB Investments, which provides acquisition, construction and/or permanent financing for seniors housing and skilled nursing properties. Seniors housing consists of a combination of independent living, assisted living and memory care units. In addition, as of December 1, 2021, we renamed our Mortgage Revenue Bond Investments segment as “Affordable Multifamily MRB Investments”, and our Other Investments segment was renamed to “Market-Rate Joint Venture Investments”. Therefore, as of December 31, 2021, we had five reportable segments: (1) Affordable Multifamily MRB Investments, (2) Seniors and Skilled Nursing MRB Investments, (3) MF Properties, (4) Market-Rate Joint Venture Investments, and (5) Public Housing Capital Fund Trusts. All activity in the Public Housing Capital Fund Trusts (3) MF Properties, and (4) Other Investments.segment ceased with the sale of the PHC Certificates in January 2020, as described further below. The Partnership separately reports its consolidation and elimination information because it does not allocate certain items to the segments. All comparisons and discussion throughout this “Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations” are based on the new segment presentation implemented during the fourth quarter of 2021, as discussed above. See Notes 2 and 25 to the Partnership’s consolidated financial statements for additional details.
Corporate Responsibility
EffectsThe Partnership is committed to corporate responsibility and the importance of COVID-19developing environmental, social and governance (“ESG”) policies and practices consistent with that commitment. We believe the implementation and maintenance of such policies and practices benefit the employees that serve the Partnership, support long-term performance for our Unitholders, and have a positive impact on society and the environment.
Environmental Responsibility
Achieving environmental and sustainability goals in connection with our affordable housing investment activity is important to us. Opportunities for positive environmental investments are open to us because private activity bond volume cap and LIHTC allocations are key components of the capital structure for most new construction or acquisition/rehabilitation affordable housing properties financed by our MRB and GIL investments. These resources are allocated by individual states to our property sponsors through a competitive application process under a state-specific qualified allocation plan (“QAP”) as required under Section 42 of the IRC. Each state implements its public policy objectives through an application scoring or ranking system that rewards certain project features. Some of the common features rewarded under individual state QAPs are transit amenities (proximity to various forms of public transportation), proximity to public services (parks, libraries, full scale supermarkets, or a senior center), and energy efficiency/sustainability. Some state-specific QAPs have minimum energy efficiency standards that must be met, such as use of low water need landscaping, Energy Star appliances and hot water heaters, and GREENGUARD Gold certified insulation. Since we can only finance properties with successful applications, we work with our sponsor clients to maximize these environmental features such that their applications can earn the most points possible under the individual state’s QAP. During 2021, properties related to our MRB investments in Jackson Manor Apartments and Residency at the Mayer and all our six new GIL investments were awarded both private activity bond cap and LIHTC allocations through state-specific QAPs. Our MRB investment in Meadow Valley received only private activity bond cap allocation but was done in conjunction with commercial property assessed clean energy financing from another lender.
33
We continueare committed to monitorminimizing the overall environmental impact of our corporate operations. As only 13 employees of Greystone Manager are responsible for the Partnership’s operations, we have a relatively modest environmental impact and have adequate facilities to grow our employee base without acquiring additional physical space.
Social Responsibility
Our investment activity in MRBs and GILs directly supports the construction, rehabilitation, and stabilized operation of decent, safe, and sanitary affordable multifamily housing across the United States. Each of the properties securing our MRB and GIL investments is required to maintain a minimum percentage of units set-aside for low-income tenants in accordance with IRC guidelines, and the owners of the properties often agree to exceed the minimum IRC requirements. In addition, the rent charged to low-income tenants at MRB or GIL properties is often restricted to a certain percentage of the tenants’ income, making them more affordable. These properties provide valuable support to both low-income and market-rate tenants and create housing diversity in the geographic and social communities in which they are located.
Corporate Governance
Greystone Manager, as the general partner of the Partnership’s general partner, is committed to corporate governance that aligns with the interests of our Unitholders and stakeholders. The Board of Managers of Greystone Manager brings a diverse set of skills and experiences across industries in the public, private and not-for-profit sectors. The composition of the Greystone Manager Board of Managers is in compliance with the NASDAQ listing rules and SEC rules applicable to the Partnership. All the members of the Audit Committee of Greystone Manager are independent under the applicable SEC and NASDAQ independence requirements, two of whom qualify as “audit committee financial experts.” Of the seven Managers of Greystone Manager, one Manager is female.
Affordable Multifamily MRB Investments Segment
Effective December 2021, we renamed our Mortgage Revenue Bond Investments segment as "Affordable Multifamily MRB Investments". There was no change in the composition of investments within this segment upon the effective date of the name change. As of December 31, 2021, we owned 74 MRBs with aggregate outstanding principal of $697.6 million and nine GILs with aggregate outstanding principal of $184.8 million. Most of these MRBs and the GILs were issued by various state and local housing authorities to provide construction and/or permanent financing for 76 multifamily and seniors housing properties containing a total of 12,584 rental units located in 17 states in the United States.
As of December 31, 2020, we owned 77 MRBs with aggregate outstanding principal of $673.6 million and three GILs with aggregate outstanding principal of $64.9 million. Most of these MRBs and the GILs were issued by various state and local housing authorities to provide construction and/or permanent financing for 71 multifamily properties containing a total of 11,851 rental units located in 15 states in the United States.
Our MRBs, GILs and certain property loans are secured by a mortgage or deed of trust. One MRB is secured by ground, facility, and equipment of a commercial ancillary health care facility in Tennessee. Property loans related to multifamily properties are also included in this segment and may or may not be secured by a mortgage or deed of trust.
The following table compares operating results for the Affordable Multifamily MRB Investments segment for the periods indicated (dollar amounts in thousands):
|
| For the Years Ended December 31, |
| |||||||||||||
|
| 2021 |
|
| 2020 |
|
| $ Change |
|
| % Change |
| ||||
Affordable Multifamily MRB Investments |
|
|
|
|
|
|
|
|
|
|
|
| ||||
Total revenues |
| $ | 46,199 |
|
| $ | 41,877 |
|
| $ | 4,322 |
|
|
| 10.3 | % |
Interest expense |
|
| 20,382 |
|
|
| 19,822 |
|
|
| 560 |
|
|
| 2.8 | % |
Segment net income |
|
| 8,620 |
|
|
| 719 |
|
|
| 7,901 |
|
|
| 1098.9 | % |
Comparison of the years ended December 31, 2021 and 2020
Total revenues increased for 2021 as compared to the same period in 2020 due primarily to:
34
Total interest expense increased for 2021 as compared to the same period in 2020 due primarily to:
Segment net income for 2021 increased as compared to the pandemic on our businesssame period in 2020 due to:
Mortgage Revenue Bonds and Governmental Issuer Loans
Our MRBs and GILs are secured by affordable multifamily properties (referred to as Residential Properties) except for the Live 929 MRB, which is secured by a student housing property, and the Provision Center 2014-1 MRB whichand $3.5 million related to the Live 929 Apartments – Series A MRB;
35
The following tables summarize the segment’s net interest income, average balances, and related yields earned on interest-earning assets and incurred on interest-bearing liabilities, as well as other income included in total revenues for 2021 and 2020. The net of interest income from interest-earning assets and interest expense for interest-bearing liabilities is secured by a commercial property.the segment’s net interest income. The declineaverage balances are based primarily on monthly averages during the respective periods. All dollar amounts are in U.S. economic activity as a resultthousands.
|
| For the Years Ended December 31, | |||||||||||||||||||||||
|
| 2021 |
|
| 2020 |
|
| ||||||||||||||||||
|
| Average |
|
| Interest |
|
| Average |
|
| Average |
|
| Interest |
|
| Average |
|
| ||||||
Interest-earning assets: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
Mortgage revenue bonds |
| $ | 661,731 |
|
| $ | 38,272 |
|
|
| 5.8 | % |
| $ | 672,375 |
|
| $ | 39,859 |
|
|
| 5.9 | % |
|
Governmental issuer loans |
|
| 132,593 |
|
|
| 4,498 |
|
|
| 3.4 | % |
|
| 32,482 |
|
|
| 1,054 |
|
|
| 3.2 | % |
|
Property loans |
|
| 25,674 |
|
|
| 1,211 |
|
|
| 4.7 | % |
|
| 9,985 |
|
|
| 707 |
|
|
| 7.1 | % |
|
Other investments |
|
| 3,164 |
|
|
| 257 |
|
|
| 8.1 | % |
|
| 1,718 |
|
|
| 181 |
|
|
| 10.5 | % |
|
Total interest-earning assets |
| $ | 823,162 |
|
| $ | 44,238 |
|
|
| 5.4 | % |
| $ | 716,560 |
|
| $ | 41,801 |
|
|
| 5.8 | % |
|
Contingent interest income |
|
|
|
|
| 1,849 |
|
|
|
|
|
|
|
|
| - |
|
|
|
|
| ||||
Non-investment income |
|
|
|
|
| 112 |
|
|
|
|
|
|
|
|
| 76 |
|
|
|
|
| ||||
Total revenues |
|
|
|
| $ | 46,199 |
|
|
|
|
|
|
|
| $ | 41,877 |
|
|
|
|
| ||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
Interest-bearing liabilities: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
Lines of credit |
| $ | 8,360 |
|
| $ | 246 |
|
|
| 2.9 | % |
| $ | 13,139 |
|
| $ | 472 |
|
|
| 3.6 | % |
|
Fixed TEBS financing |
|
| 286,485 |
|
|
| 11,108 |
|
|
| 3.9 | % |
|
| 290,126 |
|
|
| 11,241 |
|
|
| 3.9 | % |
|
Variable TEBS financing |
|
| 77,647 |
|
|
| 1,100 |
|
|
| 1.4 | % |
|
| 78,915 |
|
|
| 1,601 |
|
|
| 2.0 | % |
|
Variable Secured Notes (1) |
|
| 103,260 |
|
|
| 2,357 |
|
|
| 2.3 | % |
|
| 28,067 |
|
|
| 635 |
|
|
| 2.3 | % |
|
Fixed Term A/B & TOB financing |
|
| 12,990 |
|
|
| 358 |
|
|
| 2.8 | % |
|
| 29,018 |
|
|
| 1,669 |
|
|
| 5.8 | % | (2) |
Variable TOB financing |
|
| 262,603 |
|
|
| 4,268 |
|
|
| 1.6 | % |
|
| 136,925 |
|
|
| 2,987 |
|
|
| 2.2 | % |
|
Amortization of deferred finance costs |
| N/A |
|
|
| 968 |
|
| N/A |
|
| N/A |
|
|
| 1,334 |
|
| N/A |
|
| ||||
Derivative fair value adjustments |
| N/A |
|
|
| (23 | ) |
| N/A |
|
| N/A |
|
|
| (117 | ) |
| N/A |
|
| ||||
Total interest-bearing liabilities |
| $ | 751,345 |
|
| $ | 20,382 |
|
|
| 2.7 | % |
| $ | 576,190 |
|
| $ | 19,822 |
|
|
| 3.4 | % |
|
Net interest income/spread (3) |
|
|
|
| $ | 23,856 |
|
|
| 2.9 | % |
|
|
|
| $ | 21,979 |
|
|
| 3.1 | % |
|
36
The following tables summarize the changes in interest income and interest expense between 2021 and 2020, and the extent to which these variances are attributable to 1) changes in the volume of interest-earning assets and interest-bearing liabilities, or 2) changes in the interest rates of the assets and liabilities. All dollar amounts are in thousands.
|
| For the Years Ended December 31, 2021 vs. 2020 |
|
| |||||||||
|
| Total |
|
| Average |
|
| Average |
|
| |||
Interest-earning assets: |
|
|
|
|
|
|
|
|
|
| |||
Mortgage revenue bonds |
| $ | (1,587 | ) |
| $ | (631 | ) |
| $ | (956 | ) |
|
Governmental issuer loans |
|
| 3,444 |
|
|
| 3,248 |
|
|
| 196 |
|
|
Property loans |
|
| 504 |
|
|
| 1,111 |
|
|
| (607 | ) |
|
Other investments |
|
| 76 |
|
|
| 152 |
|
|
| (76 | ) |
|
Total interest-earning assets |
| $ | 2,437 |
|
| $ | 3,880 |
|
| $ | (1,443 | ) |
|
|
|
|
|
|
|
|
|
|
|
| |||
Interest-bearing liabilities: |
|
|
|
|
|
|
|
|
|
| |||
Lines of credit |
| $ | (226 | ) |
| $ | (172 | ) |
| $ | (54 | ) |
|
Fixed TEBS financing |
|
| (133 | ) |
|
| (141 | ) |
|
| 8 |
|
|
Variable TEBS financing |
|
| (501 | ) |
|
| (26 | ) |
|
| (475 | ) |
|
Variable Secured Notes (1) |
|
| 1,722 |
|
|
| 1,722 |
|
|
| - |
|
|
Fixed Term A/B & TOB financing |
|
| (1,311 | ) |
|
| (922 | ) | (2) |
| (389 | ) |
|
Variable TOB financing |
|
| 1,281 |
|
|
| 2,742 |
| (2) |
| (1,461 | ) |
|
Amortization of deferred finance costs |
|
| (366 | ) | (3) | N/A |
|
|
| (366 | ) |
| |
Derivative fair value adjustments |
|
| 94 |
|
| N/A |
|
|
| 94 |
|
| |
Total interest-bearing liabilities |
| $ | 560 |
|
| $ | 3,203 |
|
| $ | (2,643 | ) |
|
Net interest income |
| $ | 1,877 |
|
| $ | 677 |
|
| $ | 1,200 |
|
|
Operational Matters
We regularly discuss operations and the impacts of COVID-19 pandemic continues to negatively impact employment and earnings for tenants of affordable housing properties nationwide, such as the Residential Properties securing our MRB investments.
Thewith property owners and property management service providers of multifamily properties securing our MRB Residential Properties provide regular updatesMRBs. We believe federal and state COVID-19 relief measures have helped certain tenants to stay current on operationstheir contractual rental payments. In addition, we have noted in conversations with certain property managers that rent payment relief programs are still being utilized by some of the tenant population. We have noted slight declines in occupancy and rental collections. These parties have reported average rental collections within 30 days of billing of 92% in November 2020, 91% in December 2020, and 91% in January 2021. Such collection rates,operating results at our multifamily properties securing MRBs due to COVID-19. However, operating results, plus the availability of reserves, have allowed all of the multifamily Residential Propertiesproperties to be current on contractual debt service payments on our MRBs and we have received no requests for forbearance of contractual debt service payments.
Federal and state governments have instituted various relief measures intended to provide economic assistance to businesses and individuals impacted by COVID-19, including the Coronavirus Aid, Relief, and Economic Security Act, also known as the CARES Act. We believe such relief measures have allowed many tenants to stay current on their contractual rental payments. The long-term ability of the multifamily Residential Properties to stay current on contractual debt service payments may be dependent on various future developments that are uncertain, such as additional shutdowns in local markets, changes in unemployment rates, and continuing governmental relief programs. If the Residential Properties experience a significant increase in delinquent rents in future months, our Residential Properties may be unable to make contractual principal and interest payments on our MRBs, negatively impacting our cash flows and leading to potential forbearance requests or MRB defaults. MRB defaults may cause defaults on our debt financing
arrangements, triggering either a termination and repayment of the related debt or a sale of the underlying MRB. Weproperty operating results significantly decline, we may choose to provide support to Residential Propertiesthe properties through supplemental property loans to prevent such MRB defaults. We are continually monitoring rent collectionsdefaults on the related MRBs.
During 2020 and financial resultsthe first half of the Residential Properties for signs of stress and will proactively work with Residential Properties that request forbearance on a case-by-case basis.
2021, COVID-19 has had a more significant impact on Live 929 Apartments, our sole student housing MRB Residential Property.property. As of December 31, 2021, Live 929 Apartments is 69%95% occupied, aswhich is higher than occupancy levels prior to the onset of December 31, 2020, due to limited on campus, in person classes atCOVID-19. The nearby educational institution, Johns Hopkins University. PriorUniversity, substantially resumed in-person, on-campus classes beginning with the Fall 2021 semester. The property continued to COVID-19, the Live 929 Apartments MRB was operatingoperate under a forbearance agreement related to certain debt covenants. Additional forbearance was granted in November 2020 which defers contractual MRB principal payments through December 2021. We are actively working withIn January 2022, the borrower on opportunitiescompleted a restructuring of all senior debt secured by the property. The restructuring transaction provided additional funds to improve operationsresolve certain payables, fund a debt service reserve, fund repairs and capital improvements, and improve cash flows available to paythe debt service thoughcoverage going forward. In the COVID-19 pandemic is making such improvements difficult. Due to these factors, we recorded an impairment of therestructuring transaction, our Live 929 Apartments – Series A and Series B MRBs were redeemed at par plus accrued interest and we purchased a new MRB with principal of $66.4 million and a relatedtaxable MRB of $3.6 million, both with fixed interest rates of 4.30%. We believe the restructured debt and estimated results of property loan inoperations will eliminate the third and fourth quarters of 2020. The outstanding principal of the Partnership’s MRB was $39.5 million as of December 31, 2020.need for further forbearance.
37
Additionally, COVID-19 has negatively impacted the performance of the commercial property associated with the Provision Center 2014-1 MRB in the form of lower patient volume and revenues. These results, in conjunction with declines in the general creditworthiness of proton therapy centers in the United States, have resulted in the reduction of the financial performance and support of the property. The contractual interest payment due on the Provision Center 2014-1 MRB was not made as scheduled on November 1, 2020 due to the majority senior bondholder’s direction to the bond trustee not to draw on the debt service reserve fund, as provided for under the bond indenture. Shortly thereafter, the borrower of Provision Center 2014-1 MRB filed for bankruptcy protection. The outstanding principal balanceprotection under Chapter 11 of Title 11 of the Partnership’s MRB was $10.0 million asUnited States Code in December 2020. In January 2022, the US Bankruptcy Court for the Middle District of December 31, 2020 and represents approximately 9%Tennessee approved a sale of the Knoxville facility to Covenant Health, a Tennessee non-profit corporation, for a purchase price of $45.3 million. The net sale proceeds and funds held by the trustee will be distributed to bondholders upon closing of the sale. The Partnership owns approximately 9.2% of the outstanding senior MRBs, issued by the borrower. We are assessing forbearance and restructuring options with other senior bondholders.we expect to receive approximately $4.6 million of net proceeds upon closing.
Residential Properties associated withsecuring our GILs and related property loans are currently under construction and have not yet commenced leasing operations. To date, these Residential Propertiesproperties have not experienced any material supply chain disruptions for either construction materials or labor or incurred material construction cost overruns due to COVID-19. If such disruptions or cost overruns were to occur, such GILs could default, causing
Seniors and Skilled Nursing MRB Investments Segment
Effective December 1, 2021, we established a default on our debtnew reportable segment designated as Seniors and Skilled Nursing MRB Investments, which provides acquisition, construction and permanent financing arrangements, triggering eitherfor seniors housing and skilled nursing properties. Seniors housing consists of a termination and repaymentcombination of the related debt orindependent living, assisted living and memory care units.
As of December 31, 2021, we owned one MRB with aggregate outstanding principal of $100,000, with an outstanding commitment to provide additional funding of $43.9 million on a saledraw-down basis during construction. This private placement MRB was issued to finance the construction and stabilization of the underlying GIL.
Investmentsa combined independent living, assisted living and memory care property in unconsolidated entities
Our investmentsTraverse City, MI, with 154 total units. Furthermore, in unconsolidated entities are related to the development2021 we funded a property loan with outstanding principal of market-rate multifamily properties. To date, projects under construction have not experienced any material supply chain disruptions for either construction materials or labor as a result of COVID-19, though such disruptions could occur in the future. In addition, we have noted no material construction cost overruns to date. Future increases in the spread of COVID-19 could require construction sites to close, causing potential construction delays. Leasing activity at properties with available units has faced challenges due to social distancing measures imposed as a result of COVID-19. However, properties with available units have generally experienced increasing occupancy though at a lower rate than before the COVID-19 pandemic. If such challenges persist, leasing could further decelerate, which will negatively impact our returns and cash flows from these investments and may cause impairment losses in future periods.
MF Properties
The MF Properties are adjacent to universities and serve primarily university students. The University of Nebraska-Lincoln, which is adjacent to The 50/50 MF Property, held on-campus, in person classes for the Fall 2020 semester and plans to do so for the Spring 2021 semester. The 50/50 MF Property was 89% occupied$13.4 million as of December 31, 2020, which is only slightly below prior periods, and there has been no significant increase in rental delinquencies. The 50/50 MF Property has generated sufficient operating cash flows to meet all mortgage payment and operational obligations through December 31, 2020. However, if the spread of COVID-19 causes a reduction or suspension of on-campus classes during either the Spring or Fall of 2021, we may experience declines in occupancy and collections.
San Diego State University, which is adjacent to the Suites on Paseo MF Property, has suspended on campus, in person classes for the Fall 2020 and Spring 2021 semesters due to COVID-19 concerns. Residence halls remain open but at a reduced capacity. As a result, occupancy at the Suites on Paseo was 68% as of December 31, 2020, which is significantly lower than prior periods. We have noted a slight increase in delinquencies at the Suites on Paseo compared to historical average delinquencies. There is currently no mortgage associated with the Suites on Paseo and the property’s operating cash flows have been sufficient to meet all operational obligations through December 31, 2020.
Continued spread of COVID-19 could put further stress on occupancy and delinquencies at our MF Properties. We continue to enforce the terms of our lease contracts with tenants, including co-signor guarantees, and will work with tenants experiencing financial difficulties on a case-by-case basis.
General Operations
Employees of Greystone Manager, the general partner of our General Partner, are responsible for our operations, including those individuals acting as executive officers of the Partnership. To protect the health and safety of our employees, we have implemented social distancing measures and certain employees continue to utilize work-at-home options. We also have implemented policies and procedures to address the COVID-19 pandemic, which have closely followed the recommendations and requirements of the CDC and the pronouncements of the state and local authorities of the states in which we operate.
Mortgage Revenue Bond Investments Segment
As of December 31, 2020, we owned 77 MRBs with an aggregate outstanding principal amount of $673.6 million and three GILs with an aggregate outstanding principal amount of $64.9 million. Most of these MRBs and the GILs were issued by various state and local housing authorities to provide construction and/or permanent financing for 71 Residential Properties containing a total of 11,851 rental units located in 15 states in the United States.
As of December 31, 2019, we owned 76 MRBs with an aggregate outstanding principal amount of $679.7 million. Most of these MRBs were issued by various state and local housing authorities in order to provide construction and/or permanent financing for 66 Residential Properties containing a total of 10,871 rental units located in 13 states in the United States.
Each MRB, GIL and property loan related to a Residential Property is secured by a mortgage or deed of trust. One MRB is secured by ground, facility, and equipment of a commercial ancillary health care128-bed skilled nursing facility in Tennessee. Property loans relatedHouston, TX, to Residential Properties are also included in this segment and may or may not be secured byposition ourselves for a mortgage or deed of trust.future MRB investment.
The following table compares operating results for the Mortgage Revenue BondSeniors and Skilled Nursing MRB Investments segment for the periods indicated (dollar amounts in thousands):
|
| For the Years Ended December 31, |
| |||||||||||||||||||||||||||
|
| 2020 |
|
| 2019 |
|
| $ Change |
|
| % Change |
|
| For the Years Ended December 31, | ||||||||||||||||
Mortgage Revenue Bond Investments |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||||||||
|
| 2021 |
|
| 2020 |
|
| $ Change |
|
| % Change | |||||||||||||||||||
Seniors and Skilled Nursing Investments |
|
|
|
|
|
|
|
| ||||||||||||||||||||||
Total revenues |
| $ | 41,877 |
|
| $ | 41,348 |
|
| $ | 529 |
|
|
| 1.3 | % |
| $ | 78 |
| $ | - |
|
| $ | 78 |
| N/A | ||
Interest expense |
|
| 19,822 |
|
|
| 21,862 |
|
|
| (2,040 | ) |
|
| -9.3 | % |
| - |
| - |
|
|
| - |
| N/A | ||||
Segment net income |
|
| 719 |
|
|
| 3,835 |
|
|
| (3,116 | ) |
|
| -81.3 | % |
| 72 |
| - |
|
|
| 72 |
| N/A |
Comparison
Operations in this segment began in December 2021.
Market-Rate Joint Venture Investments Segment
Effective December 1, 2021, our Other Investments segment was renamed to “Market-Rate Joint Venture Investments”. There was no change in the composition of investments within this segment upon the effective date of the years ended December 31, 2020 and 2019
Net interest income increased for the year ended December 31, 2020 as compared to the same period in 2019 due primarily to lower interest expense. Interest expenses decreased due to:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Segment net income for 2020 decreased as compared to the same period in 2019 due to:
|
|
|
|
|
|
|
|
The following tables summarize the segment’s net interest income, average balances, and related yields earned on interest-earning assets and incurred on interest-bearing liabilities, as well as other income included in total revenues for 2020 and 2019. The net of interest income from interest-earning assets and interest expense for interest-bearing liabilities is the segment’s net interest income. The average balances are based primarily on monthly averages during the respective periods. All dollar amounts are in thousands.
|
| For the Years Ended December 31, |
| |||||||||||||||||||||
|
| 2020 |
|
| 2019 |
| ||||||||||||||||||
|
| Average Balance |
|
| Interest Income/ Expense |
|
| Average Rates Earned/ Paid |
|
| Average Balance |
|
| Interest Income/ Expense |
|
| Average Rates Earned/ Paid |
| ||||||
Interest-earning assets: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Mortgage revenue bonds |
| $ | 672,375 |
|
| $ | 39,859 |
|
|
| 5.9 | % |
| $ | 673,867 |
|
| $ | 40,400 |
|
|
| 6.0 | % |
Governmental issuer loans |
|
| 32,482 |
|
|
| 1,054 |
|
|
| 3.2 | % |
|
| - |
|
|
| - |
|
| N/A |
| |
Property loans |
|
| 9,985 |
|
|
| 707 |
|
|
| 7.1 | % |
|
| 7,749 |
|
|
| 589 |
|
|
| 7.6 | % |
Other investments |
|
| 1,718 |
|
|
| 181 |
|
|
| 10.5 | % |
|
| 1,765 |
|
|
| 185 |
|
|
| 10.5 | % |
Total interest-earning assets |
| $ | 716,560 |
|
| $ | 41,801 |
|
|
| 5.8 | % |
| $ | 683,381 |
|
| $ | 41,174 |
|
|
| 6.0 | % |
MRB redemption income |
|
|
|
|
|
| - |
|
|
|
|
|
|
|
|
|
|
| 27 |
|
|
|
|
|
Non-investment income |
|
|
|
|
|
| 76 |
|
|
|
|
|
|
|
|
|
|
| 147 |
|
|
|
|
|
Total revenues |
|
|
|
|
| $ | 41,877 |
|
|
|
|
|
|
|
|
|
| $ | 41,348 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest-bearing liabilities: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Unsecured lines of credit |
| $ | 13,139 |
|
| $ | 472 |
|
|
| 3.6 | % |
| $ | 23,073 |
|
| $ | 1,174 |
|
|
| 5.1 | % |
Fixed TEBS financing |
|
| 290,126 |
|
|
| 11,241 |
|
|
| 3.9 | % |
|
| 253,842 |
|
|
| 10,106 |
|
|
| 4.0 | % |
Variable TEBS financing |
|
| 78,915 |
|
|
| 1,601 |
|
|
| 2.0 | % |
|
| 119,541 |
|
|
| 3,630 |
|
|
| 3.0 | % |
Variable Secured Notes (1) |
|
| 28,067 |
|
|
| 635 |
|
|
| 2.3 | % |
|
| - |
|
|
| - |
|
| N/A |
| |
Fixed Term A/B & TOB financing |
|
| 29,018 |
|
|
| 1,669 |
|
|
| 5.8 | % | (2) |
| 89,205 |
|
|
| 3,992 |
|
|
| 4.5 | % |
Variable TOB financing |
|
| 136,925 |
|
|
| 2,987 |
|
|
| 2.2 | % |
|
| 28,152 |
|
|
| 876 |
|
|
| 3.1 | % |
Amortization of deferred finance costs |
| N/A |
|
|
| 1,334 |
|
| N/A |
|
| N/A |
|
|
| 1,584 |
|
| N/A |
| ||||
Derivative fair value adjustments |
| N/A |
|
|
| (117 | ) |
| N/A |
|
| N/A |
|
|
| 500 |
|
| N/A |
| ||||
Total interest-bearing liabilities |
| $ | 576,190 |
|
| $ | 19,822 |
|
|
| 3.4 | % |
| $ | 513,813 |
|
| $ | 21,862 |
|
|
| 4.3 | % |
Net interest income/spread (3) |
|
|
|
|
| $ | 21,979 |
|
|
| 3.1 | % |
|
|
|
|
| $ | 19,312 |
|
|
| 2.8 | % |
|
|
|
|
|
|
The following tables summarize the changes in interest income and interest expense between 2020 and 2019, and the extent to which these variances are attributable to 1) changes in the volume of interest-earning assets and interest-bearing liabilities, or 2) changes in the interest rates of the assets and liabilities. All dollar amounts are in thousands.
|
| For the Years Ended December 31, 2020 vs. 2019 |
|
| |||||||||
|
| Total Change |
|
| Average Volume $ Change |
|
| Average Rate $ Change |
|
| |||
Interest-earning assets: |
|
|
|
|
|
|
|
|
|
|
|
|
|
Mortgage revenue bonds |
| $ | (541 | ) |
| $ | (89 | ) |
| $ | (452 | ) |
|
Governmental issuer loans |
|
| 1,054 |
|
|
| 1,054 |
|
|
| - |
|
|
Property loans |
|
| 118 |
|
|
| 170 |
|
|
| (52 | ) |
|
Other investments |
|
| (4 | ) |
|
| (5 | ) |
|
| 1 |
|
|
Total interest-earning assets |
| $ | 627 |
|
| $ | 1,130 |
|
| $ | (503 | ) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest-bearing liabilities: |
|
|
|
|
|
|
|
|
|
|
|
|
|
Unsecured & secured lines of credit |
| $ | (702 | ) |
| $ | (505 | ) |
| $ | (197 | ) |
|
Fixed TEBS financing |
|
| 1,135 |
|
|
| 1,445 |
| (1) |
| (310 | ) |
|
Variable TEBS financing |
|
| (2,029 | ) |
|
| (1,234 | ) | (1) |
| (795 | ) |
|
Variable Secured Notes (2) |
|
| 635 |
|
|
| 635 |
|
|
| - |
|
|
Fixed Term A/B & TOB financing |
|
| (2,323 | ) |
|
| (2,693 | ) | (3) |
| 370 |
| (4) |
Variable TOB financing |
|
| 2,111 |
|
|
| 3,385 |
| (3) |
| (1,274 | ) |
|
Amortization of deferred finance costs |
|
| (250 | ) |
| N/A |
|
|
| (250 | ) |
| |
Derivative fair value adjustments |
|
| (617 | ) |
| N/A |
|
|
| (617 | ) |
| |
Total interest-bearing liabilities |
| $ | (2,040 | ) |
| $ | 1,033 |
|
| $ | (3,073 | ) |
|
Net interest income |
| $ | 2,667 |
|
| $ | 97 |
|
| $ | 2,570 |
|
|
|
|
|
|
|
|
|
|
MF Properties Segment
As of December 31, 2020 and 2019, the Partnership owned the Suites on Paseo and The 50/50 MF Properties containing a total of 859 rental units.
The following table compares operating results for the MF Properties segment for the periods indicated (dollar amounts in thousands):
|
| For the Years Ended December 31, |
| |||||||||||||
|
| 2020 |
|
| 2019 |
|
| $ Change |
|
| % Change |
| ||||
MF Properties |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total revenues |
| $ | 6,986 |
|
| $ | 8,081 |
|
| $ | (1,095 | ) |
|
| -13.6 | % |
Interest expense |
|
| 1,196 |
|
|
| 1,445 |
|
|
| (249 | ) |
|
| -17.2 | % |
Segment net loss |
|
| (1,390 | ) |
|
| (964 | ) |
|
| (426 | ) |
|
| -44.2 | % |
Comparison of the years ended December 31, 2020 and 2019
The decrease in total revenues for the year ended December 31, 2020 as compared to the same period in 2019 is due primarily to lower occupancy at the Suites on Paseo. Lower occupancy is a result of the suspension of on-campus, in-person classes for the Fall 2020 semester at San Diego State University due to the COVID-19 pandemic.
The decrease in interest expense for the year ended December 31, 2020 as compared to the same period in 2019 was due to the refinancing of The 50/50 Mortgage and TIF loans to lower interest rates in February 2020.
The increase in segment net loss for the year ended December 31, 2020 as compared to the same period in 2019 was due to the changes in total revenues and interest expense described above. This was offset by a decrease in depreciation expense of approximately $266,000 at The 50/50 MF Property due to certain real estate assets that became fully depreciated in mid-2019.
Other Investments Segment
The OtherMarket-Rate Joint Venture Investments segment consists of the operations of ATAX Vantage Holdings, LLC, which holds noncontrolling equity investments in certain market-rate multifamily projects and property loans due from market-rate multifamily projects.
The following table compares operating results for the OtherMarket-Rate Joint Venture Investments segment for the periods indicated (dollar amounts in thousands):
|
| For the Years Ended December 31, |
| |||||||||||||||||||||||||||||
|
| 2020 |
|
| 2019 |
|
| $ Change |
|
| % Change |
|
| For the Years Ended December 31, |
| |||||||||||||||||
Other Investments |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||||||||||
|
| 2021 |
|
| 2020 |
|
| $ Change |
|
| % Change |
| ||||||||||||||||||||
Market-Rate Joint Venture Investments |
|
|
|
|
|
|
|
|
|
| ||||||||||||||||||||||
Total revenues |
| $ | 6,491 |
|
| $ | 10,520 |
|
| $ | (4,029 | ) |
|
| -38.3 | % |
| $ | 14,967 |
| $ | 6,491 |
|
| $ | 8,476 |
| 130.6 | % | |||
Interest expense |
| 428 |
| - |
|
|
| 428 |
| N/A |
| |||||||||||||||||||||
Gain on sale of investments in unconsolidated entities |
|
| - |
|
|
| 16,142 |
|
|
| (16,142 | ) |
|
| -100.0 | % |
| 15,521 |
| - |
|
|
| 15,521 |
| N/A |
| |||||
Segment net income |
|
| 6,488 |
|
|
| 26,664 |
|
|
| (20,176 | ) |
|
| -75.7 | % |
| 30,056 |
| 6,488 |
|
|
| 23,568 |
| 363.3 | % |
Comparison of the years ended December 31, 20202021 and 20192020
The decreaseincrease in total revenues betweenin 2021 as compared to 2020 and 2019 was due to the following factors:
38
• An increase of approximately $862,000 in investment income recognized upon the sale of Vantage at Germantown in March 2021, partially offset by a decrease of approximately $680,000 in recurring investment income due to having reached the maximum guaranteed preferred return for Vantage at Germantown during 2020; • An increase of approximately $2.4 million in investment income from amounts recognized upon the sale of Vantage at Powdersville in May 2021; • An increase of approximately $1.0 million in investment income primarily from amounts recognized upon the sale of Vantage at Bulverde in August 2021; • A net increase of approximately $4.3 million in investment income due to preferred return distributions from Vantage at Stone Creek and Vantage at Coventry in November 2021; • A net increase of approximately $2.2 million in investment income due to additional investments in unconsolidated entities in 2021 and 2020; and • Offset by approximately $1.5 million in investment income from amounts recognized upon the sale of Vantage at Waco in June 2020. Interest expense for 2021 is related to our secured line of credit with BankUnited, N.A. that is secured primarily by our investments in unconsolidated entities that was initiated in June 2021. |
|
|
|
|
|
|
The gain on sale of investments in unconsolidated entities for 2019 consists of approximately $10.5 million and $5.7 millionis related to the salessale of the Vantage at Germantown property in March 2021 for a gain of approximately $2.8 million, the sale of the Vantage at Powdersville property in May 2021 for a gain of approximately $5.5 million and the sale of the Vantage at Bulverde property in August 2021 for a gain of approximately $7.0 million. In addition, the we received cash of approximately $294,000 in November 2021 upon the resolution of gain contingencies related to the sale of Vantage at Panama City Beach in September 2019 and Vantage at Boerne in December 2019, respectively. There were no such gains on sale during 2020.2019.
The decreaseincrease in net income betweenin 2021 as compared to 2020 and 2019 was due to the decreasesincreases in total revenues, interest expense and gain on sale of investments in unconsolidated entities described above.
Operational Matters
Certain materials supply chains and labor needed to construct the properties underlying our investments in unconsolidated entities have been constrained in the current environment, but to date, projects under construction have not experienced any material supply chain disruptions. We have also noted volatile market prices for construction materials, particularly lumber and commodities, yet we have noted no material construction cost overruns to date. Despite leasing challenges from social distancing measures due to COVID-19, all properties that have completed construction are either stabilized or very near stabilization.
MF Properties Segment
As of December 31, 2021 and 2020, the Partnership owned the Suites on Paseo and The 50/50 MF Properties containing a total of 859 rental units.
The following table compares operating results for the MF Properties segment for the periods indicated (dollar amounts in thousands):
|
| For the Years Ended December 31, |
| |||||||||||||
|
| 2021 |
|
| 2020 |
|
| $ Change |
|
| % Change |
| ||||
MF Properties |
|
|
|
|
|
|
|
|
|
|
|
| ||||
Total revenues |
| $ | 7,209 |
|
| $ | 6,986 |
|
| $ | 223 |
|
|
| 3.2 | % |
Interest expense |
|
| 1,134 |
|
|
| 1,196 |
|
|
| (62 | ) |
|
| -5.2 | % |
Segment net loss |
|
| (648 | ) |
|
| (1,390 | ) |
|
| 742 |
|
|
| 53.4 | % |
Comparison of the years ended December 31, 2021 and 2020
The increase in total revenues for 2021 as compared to 2020 is due primarily to higher occupancy at the Suites on Paseo MF Property. Higher occupancy is a result of the resumption of on-campus, in-person classes for the Fall 2021 semester at San Diego State University after having suspended on-campus, in-person classes for the Fall 2020 and Spring 2021 semesters due to COVID-19 concerns.
The decrease in interest expense for 2021 as compared to 2020 was due to the refinancing of The 50/50 Mortgage and TIF loans to lower interest rates in February 2020 and slightly lower average outstanding principal balances.
39
The decrease in segment net loss for 2021 as compared to 2020 was due to the changes in total revenues and interest expense described above and approximately $483,000 of net savings from closure of food service operations at the Suites on Paseo MF Property in 2020.
Operational Matters
Both MF Properties are adjacent to universities and serve primarily university students. Certain universities in the United States have reverted to temporary remote learning in early 2022 due to the spread of COVID-19. Currently, the universities near our MF Properties are holding on-campus classes, though further spread could cause the universities to implement remote learning.
The University of Nebraska-Lincoln, which is adjacent to The 50/50 MF Property, is currently holding on-campus, in-person classes. The property is 88% occupied as of December 31, 2021, which remains below occupancy levels prior to the onset of COVID-19. However, the property has generated sufficient operating cash flows to meet all mortgage payment and operational obligations through December 31, 2021.
San Diego State University, which is adjacent to the Suites on Paseo MF Property, resumed on-campus, in-person classes for the Fall 2021 semester. The university temporarily reverted to remote learning in January 2022 due to community spread of the omicron variant of COVID-19 but resumed in-person classes on February 7th. Physical occupancy at the Suites on Paseo MF Property was 97% as of December 31, 2021, which is higher than occupancy levels prior to the onset of COVID-19. There is currently no direct debt associated with the Suites on Paseo MF Property and the property’s operating cash flows have been sufficient to meet all operational obligations through December 31, 2021.
Public Housing Capital Fund Trusts Segment
The PHC Certificates within this segment consisted of custodial receipts evidencing loans made to public housing authorities. Principal and interest on these loans were payable by the respective public housing authorities out of annual appropriations to be made to the public housing authorities by HUD under HUD’s Capital Fund Program. In January 2020, we sold all our PHC Certificates to an unrelated third party.
The following table compares operating results for the Public Housing Capital Fund Trusts segment for the periods indicated (dollar amounts in thousands):
|
| For the Years Ended December 31, |
|
| For the Years Ended December 31, |
| ||||||||||||||||||||||||||
|
| 2020 |
|
| 2019 |
|
| $ Change |
|
| % Change |
|
| 2021 |
|
| 2020 |
|
| $ Change |
|
| % Change |
| ||||||||
Public Housing Capital Fund Trusts |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
Total revenues |
| $ | 174 |
|
| $ | 2,369 |
|
| $ | (2,195 | ) |
|
| -92.7 | % |
| $ | - |
| $ | 174 |
|
| $ | (174 | ) |
| -100.0 | % | ||
Interest expense |
|
| 198 |
|
|
| 1,411 |
|
|
| (1,213 | ) |
|
| -86.0 | % |
| - |
| 198 |
|
|
| (198 | ) |
|
| -100.0 | % | |||
Segment net income |
|
| 1,391 |
|
|
| 958 |
|
|
| 433 |
|
|
| 45.2 | % |
| - |
| 1,391 |
|
|
| (1,391 | ) |
| -100.0 | % |
Comparison of the years ended December 31, 20202021 and 20192020
Total revenues and interest expense decreasedThere were no reported operations for the year ended December 31, 2020 as compared to the same period in 20192021 due to the sale of the PHC Certificates in January 2020 and the collapse and payment in full of all principal and interest due on the TOB Trust financings secured by the PHC Certificates.
Segment net income increased for the year ended December 31, 2020 as compared to the same period in 2019 due to a gain of approximately $1.4 million realized upon sale of the PHC Certificates, net of the decreases in total revenue and interest expense noted above.
Debt Financing
The following table summarizes the Partnership’s debt financing, net of deferred financing costs, as of December 31, 2020:
|
| Outstanding Debt Financings as of December 31, 2020, net |
|
| Restricted Cash |
|
| Year Acquired |
| Stated Maturities |
| Reset Frequency |
| Variable Rate Index |
| Index Based Rates |
|
| Spread/ Facility Fees |
|
| Period End Rates |
| |||||
TEBS Financings |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fixed - M24 |
| $ | 39,825,019 |
|
| $ | 238,760 |
|
| 2010 |
| May 2027 |
| N/A |
| N/A |
| N/A |
|
| N/A |
|
| 3.05% |
| |||
Variable - M31 (1) |
|
| 78,272,018 |
|
|
| 4,999 |
|
| 2014 |
| July 2024 |
| Weekly |
| SIFMA |
| 0.12% |
|
| 1.34% |
|
| 1.46% |
| |||
Fixed - M33 |
|
| 30,796,097 |
|
|
| 2,606 |
|
| 2015 |
| September 2030 |
| N/A |
| N/A |
| N/A |
|
| N/A |
|
| 3.24% |
| |||
Fixed - M45 (2) |
|
| 215,825,022 |
|
|
| 5,000 |
|
| 2018 |
| July 2034 |
| N/A |
| N/A |
| N/A |
|
| N/A |
|
| 3.82% |
| |||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Secured Notes |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Variable - Notes |
|
| 103,086,756 |
|
|
| 77,500,000 |
|
| 2020 |
| September 2025 |
| Monthly |
| 3-month LIBOR |
| 0.22% |
|
| 9.00% |
|
| 9.22% (3) |
| |||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
TOB & Term A/B Trusts Securitization |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fixed - Term TOB (4) |
|
| 13,001,530 |
|
|
| - |
|
| 2019 |
| May 2022 |
| N/A |
| N/A |
| N/A |
|
| N/A |
|
| 3.53% |
| |||
Variable - TOB (5) |
|
| 193,151,198 |
|
|
| - |
|
| 2019 - 2020 |
| July 2022 - December 2023 |
| Weekly |
| SIFMA/OBFR |
| 0.29% - 0.39% |
|
| 0.89% - 1.67% |
|
| 1.18% - 2.06% |
| |||
Total Debt Financings |
| $ | 673,957,640 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Outstanding Financing as of December 31, 2020, net |
|
| Financing Facility Provider |
| Year Acquired |
| Stated Maturity |
| Reset Frequency |
| Variable Rate Index |
| Index Based Rates |
|
| Facility Fees |
|
| Period End Rates |
| ||||
Variable - TOB Securitization |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Live 929 |
| $ | 31,553,785 |
|
| Mizuho |
| 2019 |
| July 2023 |
| Weekly |
| SIFMA |
| 0.29% |
|
| 1.66% |
|
|
| 1.95 | % | ||
Montecito at Williams Ranch - Series A |
|
| 6,915,682 |
|
| Mizuho |
| 2019 |
| July 2023 |
| Weekly |
| SIFMA |
| 0.29% |
|
| 1.17% |
|
|
| 1.46 | % | ||
Rosewood Townhomes - Series A |
|
| 7,691,507 |
|
| Mizuho |
| 2019 |
| July 2023 |
| Weekly |
| SIFMA |
| 0.39% |
|
| 1.17% |
|
|
| 1.56 | % | ||
South Pointe Apartments - Series A |
|
| 17,976,559 |
|
| Mizuho |
| 2019 |
| July 2023 |
| Weekly |
| SIFMA |
| 0.29% |
|
| 1.17% |
|
|
| 1.46 | % | ||
Vineyard Gardens - Series A |
|
| 3,587,685 |
|
| Mizuho |
| 2019 |
| July 2023 |
| Weekly |
| SIFMA |
| 0.29% |
|
| 1.17% |
|
|
| 1.46 | % | ||
Avistar at Copperfield - Series A |
|
| 11,729,379 |
|
| Mizuho |
| 2020 |
| July 2023 |
| Weekly |
| SIFMA |
| 0.39% |
|
| 1.67% |
|
|
| 2.06 | % | ||
Avistar at Wilcrest - Series A |
|
| 4,433,372 |
|
| Mizuho |
| 2020 |
| July 2023 |
| Weekly |
| SIFMA |
| 0.39% |
|
| 1.67% |
|
|
| 2.06 | % | ||
Avistar at Wood Hollow - Series A |
|
| 33,776,383 |
|
| Mizuho |
| 2020 |
| July 2023 |
| Weekly |
| SIFMA |
| 0.39% |
|
| 1.67% |
|
|
| 2.06 | % | ||
Gateway Village |
|
| 2,173,253 |
|
| Mizuho |
| 2020 |
| July 2023 |
| Weekly |
| SIFMA |
| 0.39% |
|
| 1.67% |
|
|
| 2.06 | % | ||
Lynnhaven |
|
| 2,887,257 |
|
| Mizuho |
| 2020 |
| July 2023 |
| Weekly |
| SIFMA |
| 0.39% |
|
| 1.67% |
|
|
| 2.06 | % | ||
Montevista - Series A |
|
| 5,668,324 |
|
| Mizuho |
| 2020 |
| December 2023 |
| Weekly |
| SIFMA |
| 0.29% |
|
| 1.27% |
|
|
| 1.56 | % | ||
Ocotillo Springs - Series A |
|
| 1,765,167 |
|
| Mizuho |
| 2020 |
| July 2022 |
| Weekly |
| SIFMA |
| 0.29% |
|
| 0.89% |
|
|
| 1.18 | % | ||
Trust 2020-XF2907 (1) |
|
| 58,353,917 |
|
| Mizuho |
| 2020 |
| September 2023 |
| Weekly |
| OBFR |
| 0.33% |
|
| 0.89% |
|
|
| 1.22 | % | ||
Trust 2020-XF2908 (2) |
|
| 4,638,928 |
|
| Mizuho |
| 2020 |
| September 2023 |
| Weekly |
| OBFR |
| 0.33% |
|
| 0.89% |
|
|
| 1.22 | % | ||
Total TOB Financing\ Weighted Average Period End Rate |
| $ | 193,151,198 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| 1.63 | % |
|
|
|
|
The following table summarizes the Partnership’s debt financing, net of deferred financing costs, as of December 31, 2019:
|
| Outstanding Debt Financings as of December 31, 2019, net |
|
| Restricted Cash |
|
| Year Acquired |
| Stated Maturities |
| Reset Frequency |
| SIFMA Based Rates |
|
| Facility Fees |
|
| Period End Rates |
| |||||
TEBS Financings |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fixed - M24 |
| $ | 40,495,442 |
|
| $ | 204,000 |
|
| 2010 |
| May 2027 |
| N/A |
| N/A |
|
| N/A |
|
| 3.05% |
| |||
Variable - M31 (1) |
|
| 79,505,180 |
|
|
| 4,999 |
|
| 2014 |
| July 2024 |
| Weekly |
| 1.64% |
|
| 1.54% |
|
| 3.18% |
| |||
Fixed - M33 |
|
| 31,367,147 |
|
|
| 2,606 |
|
| 2015 |
| September 2030 |
| N/A |
| N/A |
|
| N/A |
|
| 3.24% |
| |||
Fixed - M45 (2) |
|
| 217,603,233 |
|
|
| 5,000 |
|
| 2018 |
| July 2034 |
| N/A |
| N/A |
|
| N/A |
|
| 3.82% |
| |||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
TOB & Term A/B Trusts Securitization |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Variable - TOB (3) |
|
| 102,591,789 |
|
|
| - |
|
| 2019 |
| July 2020 - September 2020 |
| Weekly |
| 1.79% - 2.08% |
|
| 1.12% - 1.66% |
|
| 2.96% - 3.45% |
| |||
Fixed - Term TOB (3) |
|
| 21,073,418 |
|
|
| - |
|
| 2014 - 2019 |
| January 2020 - May 2022 |
| N/A |
| N/A |
|
| N/A |
|
| 3.53% - 4.01% |
| |||
Fixed - Term A/B (3) |
|
| 43,561,212 |
|
|
| - |
|
| 2017 - 2019 |
| February 2020 - February 2027 |
| N/A |
| N/A |
|
| N/A |
|
| 4.46% - 4.53% |
| |||
Total Debt Financings |
| $ | 536,197,421 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Outstanding Financing as of December 31, 2019, net |
|
| Financing Facility Provider |
| Year Acquired |
| Stated Maturity |
| Reset Frequency |
| SIFMA Based Rates |
|
| Facility Fees |
|
| Period End Rates |
| ||||
Variable - TOB Securitization |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Live 929 |
| $ | 31,733,007 |
|
| Mizuho |
| 2019 |
| August 2020 |
| Weekly |
| 1.79% |
|
| 1.66% |
|
|
| 3.45 | % | ||
Montecito at Williams Ranch - Series A |
|
| 6,899,653 |
|
| Mizuho |
| 2019 |
| August 2020 |
| Weekly |
| 1.79% |
|
| 1.17% |
|
|
| 2.96 | % | ||
PHC Certificate Trust 1 |
|
| 20,067,635 |
|
| Mizuho |
| 2019 |
| September 2020 |
| Weekly |
| 2.08% |
|
| 1.12% |
|
|
| 3.20 | % | ||
PHC Certificate Trust 2 |
|
| 3,786,197 |
|
| Mizuho |
| 2019 |
| September 2020 |
| Weekly |
| 2.08% |
|
| 1.12% |
|
|
| 3.20 | % | ||
PHC Certificate Trust 3 |
|
| 10,850,103 |
|
| Mizuho |
| 2019 |
| September 2020 |
| Weekly |
| 2.08% |
|
| 1.12% |
|
|
| 3.20 | % | ||
Rosewood Townhomes - Series A |
|
| 7,687,958 |
|
| Mizuho |
| 2019 |
| July 2020 |
| Weekly |
| 1.79% |
|
| 1.17% |
|
|
| 2.96 | % | ||
South Pointe Apartments - Series A |
|
| 17,992,112 |
|
| Mizuho |
| 2019 |
| July 2020 |
| Weekly |
| 1.79% |
|
| 1.17% |
|
|
| 2.96 | % | ||
Vineyard Gardens - Series A |
|
| 3,575,124 |
|
| Mizuho |
| 2019 |
| August 2020 |
| Weekly |
| 1.79% |
|
| 1.17% |
|
|
| 2.96 | % | ||
Total TOB Financing\ Weighted Average Period End Rate |
| $ | 102,591,789 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| 3.19 | % |
|
| Outstanding Financing as of December 31, 2019, net |
|
| Financing Facility Provider |
| Year Acquired |
| Stated Maturity |
| Fixed Interest Rate |
| ||
Fixed - Term TOB Securitization |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Provision Center 2014-1 |
| $ | 8,010,000 |
|
| Deutsche Bank |
| 2014 |
| January 2020 |
|
| 4.01 | % |
Village at Avalon |
|
| 13,063,418 |
|
| Morgan Stanley |
| 2019 |
| May 2022 |
|
| 3.53 | % |
Total Fixed Term TOB Financing\ Weighted Average Period End Rate |
| $ | 21,073,418 |
|
|
|
|
|
|
|
|
| 3.71 | % |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fixed - Term A/B Trusts Securitization |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Avistar at Copperfield - Series A |
| $ | 8,385,080 |
|
| Deutsche Bank |
| 2017 |
| February 2027 |
|
| 4.46 | % |
Avistar at Wilcrest - Series A |
|
| 3,142,267 |
|
| Deutsche Bank |
| 2017 |
| February 2027 |
|
| 4.46 | % |
Avistar at Wood Hollow - Series A |
|
| 26,773,109 |
|
| Deutsche Bank |
| 2017 |
| February 2027 |
|
| 4.46 | % |
Gateway Village |
|
| 2,260,628 |
|
| Deutsche Bank |
| 2019 |
| February 2020 |
|
| 4.53 | % |
Lynnhaven |
|
| 3,000,128 |
|
| Deutsche Bank |
| 2019 |
| February 2020 |
|
| 4.53 | % |
Total Fixed A/B Trust Financing\ Weighted Average Period End Rate |
| $ | 43,561,212 |
|
|
|
|
|
|
|
|
| 4.47 | % |
The Partnership is required to meet various covenants under the Master Trust Agreements related to the TOB Trusts Financings with Mizuho. The TOB Trusts with Mizuho require that the Partnership’s residual interest in the TOB Trusts maintain a certain value in relation to the total assets in each Trust. In addition, the Master Trust Agreement with Mizuho requires the Partnership’s partners’ capital, as defined, to maintain a certain threshold and that the Partnership remained listed on the NASDAQ. If the Partnership is not in compliance with any of these covenants, a termination event of the financing facility would be triggered, which would require the Partnership to purchase a portion or all of the senior interests issued by each TOB Trust. The Partnership was in compliance with these covenants as of December 31, 2020.
The Partnership is required to meet various covenants under the Term TOB financings with Morgan Stanley. The underlying property must maintain certain occupancy and debt service covenants. A termination event will occur if the Partnership’s net assets, as defined, decrease by 25% in one quarter or 35% over one year. If the underlying property or the Partnership, as applicable, is out of compliance with any of these covenants, a termination event of the financing facility would be triggered which would require the Partnership to purchase a portion or all of the Class A Certificates held by Morgan Stanley. The Partnership was in compliance with all covenants as of December 31, 2020.
See Item 7a, “Quantitative and Qualitative Disclosures about Market Risk” of this Report and Note 16 to the Partnership’s consolidated financial statements for additional details.
Discussion of Occupancy at Investment-Related Properties
The following tables outline information regarding the Residential Properties on which we hold MRBs asproperties securing our MRB and GIL investments. The tables also contain information about the MF Properties and properties associated with our investments in unconsolidated entities. The narrative discussion that follows provides a brief operating analysis of each category as of and for the years ended December 31, 20202021 and 2019.2020.
40
Non-Consolidated Properties - Stabilized
The owners of the following properties either do not meet the definition of a VIE and/or we have evaluated and determined we are not the primary beneficiary of eachthe VIE. As a result, we do not report the assets, liabilities and results of operations of these properties on a consolidated basis. For the years ended December 31, 2021 and 2020, and 2019, these Residential Propertiesproperties have met the stabilization criteria (see footnote 3 below the table). Debt service on our MRBs for the non-consolidated stabilized properties was current as of December 31, 2020.2021. The amounts presented below were obtained from records provided by the property owners and their related property management service providers.
|
|
|
| Number |
|
| Physical Occupancy (1) |
|
| Economic Occupancy (2) |
| |||||||||||
Property Name |
| State |
| 2021 |
|
| 2021 |
|
| 2020 |
|
| 2021 |
|
| 2020 |
| |||||
MRB Multifamily Properties-Stabilized (3) |
| |||||||||||||||||||||
Courtyard |
| CA |
|
| 109 |
|
|
| 100 | % |
|
| 99 | % |
|
| 92 | % |
|
| 93 | % |
Glenview Apartments |
| CA |
|
| 88 |
|
|
| 97 | % |
|
| 99 | % |
|
| 95 | % |
|
| 94 | % |
Harden Ranch |
| CA |
|
| 100 |
|
|
| 96 | % |
|
| 98 | % |
|
| 96 | % |
|
| 96 | % |
Harmony Court Bakersfield |
| CA |
|
| 96 |
|
|
| 96 | % |
|
| 97 | % |
|
| 91 | % |
|
| 90 | % |
Harmony Terrace |
| CA |
|
| 136 |
|
|
| 99 | % |
|
| 97 | % |
|
| 118 | % |
|
| 122 | % |
Las Palmas II |
| CA |
|
| 81 |
|
|
| 100 | % |
|
| 100 | % |
|
| 98 | % |
|
| 98 | % |
Lutheran Gardens (4) |
| CA |
|
| 76 |
|
|
| 96 | % |
| n/a |
|
|
| 98 | % |
| n/a |
| ||
Montclair Apartments |
| CA |
|
| 80 |
|
|
| 95 | % |
|
| 98 | % |
|
| 94 | % |
|
| 97 | % |
Montecito at Williams Ranch Apartments |
| CA |
|
| 132 |
|
|
| 98 | % |
|
| 95 | % |
|
| 106 | % |
|
| 105 | % |
Montevista |
| CA |
|
| 82 |
|
|
| 95 | % |
|
| 94 | % |
|
| 104 | % |
|
| 109 | % |
San Vicente |
| CA |
|
| 50 |
|
|
| 98 | % |
|
| 100 | % |
|
| 95 | % |
|
| 96 | % |
Santa Fe Apartments |
| CA |
|
| 89 |
|
|
| 98 | % |
|
| 97 | % |
|
| 95 | % |
|
| 96 | % |
Seasons at Simi Valley |
| CA |
|
| 69 |
|
|
| 100 | % |
|
| 100 | % |
|
| 109 | % |
|
| 114 | % |
Seasons Lakewood |
| CA |
|
| 85 |
|
|
| 99 | % |
|
| 99 | % |
|
| 97 | % |
|
| 102 | % |
Seasons San Juan Capistrano |
| CA |
|
| 112 |
|
|
| 95 | % |
|
| 92 | % |
|
| 96 | % |
|
| 97 | % |
Solano Vista |
| CA |
|
| 96 |
|
|
| 98 | % |
|
| 97 | % |
|
| 102 | % |
|
| 97 | % |
Summerhill |
| CA |
|
| 128 |
|
|
| 98 | % |
|
| 99 | % |
|
| 91 | % |
|
| 92 | % |
Sycamore Walk |
| CA |
|
| 112 |
|
|
| 100 | % |
|
| 100 | % |
|
| 90 | % |
|
| 92 | % |
The Village at Madera |
| CA |
|
| 75 |
|
|
| 99 | % |
|
| 99 | % |
|
| 102 | % |
|
| 96 | % |
Tyler Park Townhomes |
| CA |
|
| 88 |
|
|
| 99 | % |
|
| 100 | % |
|
| 97 | % |
|
| 97 | % |
Vineyard Gardens |
| CA |
|
| 62 |
|
|
| 100 | % |
|
| 100 | % |
|
| 97 | % |
|
| 99 | % |
Westside Village Market |
| CA |
|
| 81 |
|
|
| 96 | % |
|
| 95 | % |
|
| 93 | % |
|
| 97 | % |
Brookstone |
| IL |
|
| 168 |
|
|
| 97 | % |
|
| 96 | % |
|
| 95 | % |
|
| 102 | % |
Copper Gate Apartments |
| IN |
|
| 129 |
|
|
| 98 | % |
|
| 97 | % |
|
| 95 | % |
|
| 95 | % |
Renaissance |
| LA |
|
| 208 |
|
|
| 95 | % |
|
| 97 | % |
|
| 91 | % |
|
| 91 | % |
Live 929 Apartments |
| MD |
|
| 575 |
|
|
| 95 | % |
|
| 69 | % |
|
| 75 | % |
|
| 80 | % |
Gateway Village |
| NC |
|
| 64 |
|
|
| 83 | % |
|
| 97 | % |
|
| 92 | % |
|
| 95 | % |
Greens Property |
| NC |
|
| 168 |
|
|
| 99 | % |
|
| 96 | % |
|
| 93 | % |
|
| 91 | % |
Lynnhaven Apartments |
| NC |
|
| 75 |
|
|
| 85 | % |
|
| 91 | % |
|
| 83 | % |
|
| 89 | % |
Silver Moon |
| NM |
|
| 151 |
|
|
| 97 | % |
|
| 97 | % |
|
| 93 | % |
|
| 92 | % |
Village at Avalon |
| NM |
|
| 240 |
|
|
| 97 | % |
|
| 100 | % |
|
| 97 | % |
|
| 97 | % |
Ohio Properties (5) |
| OH |
|
| 362 |
|
|
| 98 | % |
|
| 96 | % |
|
| 92 | % |
|
| 93 | % |
Bridle Ridge |
| SC |
|
| 152 |
|
|
| 99 | % |
|
| 100 | % |
|
| 90 | % |
|
| 91 | % |
Columbia Gardens |
| SC |
|
| 188 |
|
|
| 91 | % |
|
| 95 | % |
|
| 99 | % |
|
| 91 | % |
Companion at Thornhill Apartments |
| SC |
|
| 179 |
|
|
| 100 | % |
|
| 100 | % |
|
| 88 | % |
|
| 86 | % |
Cross Creek |
| SC |
|
| 144 |
|
|
| 97 | % |
|
| 96 | % |
|
| 88 | % |
|
| 92 | % |
The Palms at Premier Park Apartments |
| SC |
|
| 240 |
|
|
| 100 | % |
|
| 97 | % |
|
| 92 | % |
|
| 92 | % |
Village at River's Edge |
| SC |
|
| 124 |
|
|
| 98 | % |
|
| 94 | % |
|
| 102 | % |
|
| 98 | % |
Willow Run |
| SC |
|
| 200 |
|
|
| 92 | % |
|
| 95 | % |
|
| 99 | % |
|
| 90 | % |
Arbors at Hickory Ridge (6) |
| TN |
|
| 348 |
|
| n/a |
|
| n/a |
|
| n/a |
|
| n/a |
| ||||
Avistar at Copperfield |
| TX |
|
| 192 |
|
|
| 94 | % |
|
| 96 | % |
|
| 84 | % |
|
| 87 | % |
Avistar at the Crest |
| TX |
|
| 200 |
|
|
| 99 | % |
|
| 95 | % |
|
| 77 | % |
|
| 82 | % |
Avistar at the Oaks |
| TX |
|
| 156 |
|
|
| 97 | % |
|
| 95 | % |
|
| 88 | % |
|
| 87 | % |
Avistar at the Parkway |
| TX |
|
| 236 |
|
|
| 95 | % |
|
| 96 | % |
|
| 85 | % |
|
| 82 | % |
Avistar at Wilcrest |
| TX |
|
| 88 |
|
|
| 89 | % |
|
| 94 | % |
|
| 72 | % |
|
| 81 | % |
Avistar at Wood Hollow |
| TX |
|
| 409 |
|
|
| 97 | % |
|
| 89 | % |
|
| 86 | % |
|
| 89 | % |
Avistar in 09 |
| TX |
|
| 133 |
|
|
| 100 | % |
|
| 100 | % |
|
| 90 | % |
|
| 92 | % |
Avistar on the Boulevard |
| TX |
|
| 344 |
|
|
| 97 | % |
|
| 93 | % |
|
| 82 | % |
|
| 79 | % |
Avistar on the Hills |
| TX |
|
| 129 |
|
|
| 98 | % |
|
| 95 | % |
|
| 87 | % |
|
| 85 | % |
Bruton Apartments |
| TX |
|
| 265 |
|
|
| 85 | % |
|
| 91 | % |
|
| 68 | % |
|
| 80 | % |
Concord at Gulfgate |
| TX |
|
| 288 |
|
|
| 97 | % |
|
| 90 | % |
|
| 83 | % |
|
| 85 | % |
Concord at Little York |
| TX |
|
| 276 |
|
|
| 94 | % |
|
| 92 | % |
|
| 83 | % |
|
| 85 | % |
Concord at Williamcrest |
| TX |
|
| 288 |
|
|
| 96 | % |
|
| 93 | % |
|
| 88 | % |
|
| 88 | % |
Crossing at 1415 |
| TX |
|
| 112 |
|
|
| 98 | % |
|
| 98 | % |
|
| 88 | % |
|
| 88 | % |
Decatur Angle |
| TX |
|
| 302 |
|
|
| 81 | % |
|
| 88 | % |
|
| 70 | % |
|
| 76 | % |
Esperanza at Palo Alto |
| TX |
|
| 322 |
|
|
| 93 | % |
|
| 95 | % |
|
| 87 | % |
|
| 85 | % |
Heights at 515 |
| TX |
|
| 96 |
|
|
| 97 | % |
|
| 99 | % |
|
| 88 | % |
|
| 89 | % |
Heritage Square |
| TX |
|
| 204 |
|
|
| 96 | % |
|
| 93 | % |
|
| 77 | % |
|
| 77 | % |
Oaks at Georgetown |
| TX |
|
| 192 |
|
|
| 96 | % |
|
| 93 | % |
|
| 94 | % |
|
| 92 | % |
Runnymede |
| TX |
|
| 252 |
|
|
| 99 | % |
|
| 100 | % |
|
| 95 | % |
|
| 92 | % |
Southpark |
| TX |
|
| 192 |
|
|
| 98 | % |
|
| 95 | % |
|
| 95 | % |
|
| 92 | % |
15 West Apartments |
| WA |
|
| 120 |
|
|
| 97 | % |
|
| 100 | % |
|
| 98 | % |
|
| 98 | % |
|
|
|
|
| 10,538 |
|
|
| 96 | % |
|
| 94 | % |
|
| 89 | % |
|
| 90 | % |
|
|
|
| Number of Units as of December 31, |
|
| Physical Occupancy (1) as of December 31, |
|
| Economic Occupancy (2) for the years ended December 31, |
| |||||||||||
Property Name |
| State |
| 2020 |
|
| 2020 |
|
| 2019 |
|
| 2020 |
|
| 2019 |
| |||||
Non-Consolidated Properties-Stabilized (3) |
| |||||||||||||||||||||
Courtyard |
| CA |
|
| 108 |
|
|
| 99 | % |
|
| 97 | % |
|
| 93 | % |
|
| 98 | % |
Glenview Apartments |
| CA |
|
| 88 |
|
|
| 99 | % |
|
| 98 | % |
|
| 94 | % |
|
| 96 | % |
Harden Ranch |
| CA |
|
| 100 |
|
|
| 98 | % |
|
| 99 | % |
|
| 96 | % |
|
| 96 | % |
Harmony Court Bakersfield |
| CA |
|
| 96 |
|
|
| 97 | % |
|
| 99 | % |
|
| 90 | % |
|
| 96 | % |
Harmony Terrace |
| CA |
|
| 136 |
|
|
| 97 | % |
|
| 100 | % |
|
| 122 | % |
|
| 128 | % |
Las Palmas II |
| CA |
|
| 81 |
|
|
| 100 | % |
|
| 100 | % |
|
| 98 | % |
|
| 99 | % |
Montclair Apartments |
| CA |
|
| 80 |
|
|
| 98 | % |
|
| 99 | % |
|
| 97 | % |
|
| 101 | % |
Montecito at Williams Ranch Apartments |
| CA |
|
| 132 |
|
|
| 95 | % |
|
| 96 | % |
|
| 105 | % |
|
| 108 | % |
Montevista |
| CA |
|
| 82 |
|
|
| 94 | % |
|
| 99 | % |
|
| 109 | % |
|
| 108 | % |
San Vicente |
| CA |
|
| 50 |
|
|
| 100 | % |
|
| 100 | % |
|
| 96 | % |
|
| 102 | % |
Santa Fe Apartments |
| CA |
|
| 89 |
|
|
| 97 | % |
|
| 98 | % |
|
| 96 | % |
|
| 96 | % |
Seasons at Simi Valley |
| CA |
|
| 69 |
|
|
| 100 | % |
|
| 100 | % |
|
| 114 | % |
|
| 120 | % |
Seasons Lakewood |
| CA |
|
| 85 |
|
|
| 99 | % |
|
| 99 | % |
|
| 102 | % |
|
| 99 | % |
Seasons San Juan Capistrano |
| CA |
|
| 112 |
|
|
| 92 | % |
|
| 96 | % |
|
| 97 | % |
|
| 100 | % |
Solano Vista |
| CA |
|
| 96 |
|
|
| 97 | % |
|
| 99 | % |
|
| 97 | % |
|
| 106 | % |
Summerhill |
| CA |
|
| 128 |
|
|
| 99 | % |
|
| 98 | % |
|
| 92 | % |
|
| 97 | % |
Sycamore Walk |
| CA |
|
| 112 |
|
|
| 100 | % |
|
| 98 | % |
|
| 92 | % |
|
| 91 | % |
The Village at Madera |
| CA |
|
| 75 |
|
|
| 99 | % |
|
| 100 | % |
|
| 96 | % |
|
| 97 | % |
Tyler Park Townhomes |
| CA |
|
| 88 |
|
|
| 100 | % |
|
| 97 | % |
|
| 97 | % |
|
| 97 | % |
Vineyard Gardens |
| CA |
|
| 62 |
|
|
| 100 | % |
|
| 100 | % |
|
| 99 | % |
|
| 101 | % |
Westside Village Market |
| CA |
|
| 81 |
|
|
| 95 | % |
|
| 99 | % |
|
| 97 | % |
|
| 99 | % |
Brookstone |
| IL |
|
| 168 |
|
|
| 96 | % |
|
| 95 | % |
|
| 102 | % |
|
| 100 | % |
Copper Gate Apartments |
| IN |
|
| 128 |
|
|
| 97 | % |
|
| 92 | % |
|
| 95 | % |
|
| 97 | % |
Renaissance |
| LA |
|
| 208 |
|
|
| 97 | % |
|
| 95 | % |
|
| 91 | % |
|
| 89 | % |
Live 929 Apartments |
| MD |
|
| 560 |
|
|
| 69 | % |
|
| 92 | % |
|
| 80 | % |
|
| 84 | % |
Woodlynn Village |
| MN |
|
| 59 |
|
|
| 98 | % |
|
| 97 | % |
|
| 99 | % |
|
| 97 | % |
Gateway Village |
| NC |
|
| 64 |
|
|
| 97 | % |
|
| 94 | % |
|
| 95 | % |
|
| 88 | % |
Greens Property |
| NC |
|
| 168 |
|
|
| 96 | % |
|
| 96 | % |
|
| 91 | % |
|
| 91 | % |
Lynnhaven Apartments |
| NC |
|
| 75 |
|
|
| 91 | % |
|
| 89 | % |
|
| 89 | % |
|
| 88 | % |
Silver Moon |
| NM |
|
| 151 |
|
|
| 97 | % |
|
| 95 | % |
|
| 92 | % |
|
| 88 | % |
Village at Avalon |
| NM |
|
| 240 |
|
|
| 100 | % |
|
| 99 | % |
|
| 97 | % |
|
| 95 | % |
Arby Road Apartments (5) |
| NV |
|
| 180 |
|
|
| 99 | % |
| n/a |
|
| n/a |
|
| n/a |
| |||
Ohio Properties (4) |
| OH |
|
| 362 |
|
|
| 96 | % |
|
| 97 | % |
|
| 93 | % |
|
| 95 | % |
Bridle Ridge |
| SC |
|
| 152 |
|
|
| 100 | % |
|
| 99 | % |
|
| 91 | % |
|
| 88 | % |
Columbia Gardens |
| SC |
|
| 188 |
|
|
| 95 | % |
|
| 94 | % |
|
| 91 | % |
|
| 94 | % |
Companion at Thornhill Apartments |
| SC |
|
| 179 |
|
|
| 100 | % |
|
| 100 | % |
|
| 86 | % |
|
| 92 | % |
Cross Creek |
| SC |
|
| 144 |
|
|
| 96 | % |
|
| 97 | % |
|
| 92 | % |
|
| 90 | % |
Rosewood Townhomes |
| SC |
|
| 100 |
|
|
| 96 | % |
|
| 98 | % |
|
| 92 | % |
|
| 86 | % |
South Pointe Apartments |
| SC |
|
| 256 |
|
|
| 94 | % |
|
| 98 | % |
|
| 93 | % |
|
| 81 | % |
The Palms at Premier Park Apartments |
| SC |
|
| 240 |
|
|
| 97 | % |
|
| 95 | % |
|
| 92 | % |
|
| 91 | % |
Village at River's Edge |
| SC |
|
| 124 |
|
|
| 94 | % |
|
| 100 | % |
|
| 98 | % |
|
| 99 | % |
Willow Run |
| SC |
|
| 200 |
|
|
| 95 | % |
|
| 87 | % |
|
| 90 | % |
|
| 91 | % |
Arbors at Hickory Ridge |
| TN |
|
| 348 |
|
|
| 92 | % |
|
| 90 | % |
|
| 84 | % |
|
| 76 | % |
Avistar at Copperfield |
| TX |
|
| 192 |
|
|
| 96 | % |
|
| 92 | % |
|
| 87 | % |
|
| 87 | % |
Avistar at the Crest |
| TX |
|
| 200 |
|
|
| 95 | % |
|
| 92 | % |
|
| 82 | % |
|
| 81 | % |
Avistar at the Oaks |
| TX |
|
| 156 |
|
|
| 95 | % |
|
| 97 | % |
|
| 87 | % |
|
| 86 | % |
Avistar at the Parkway |
| TX |
|
| 236 |
|
|
| 96 | % |
|
| 94 | % |
|
| 82 | % |
|
| 80 | % |
Avistar at Wilcrest |
| TX |
|
| 88 |
|
|
| 94 | % |
|
| 91 | % |
|
| 81 | % |
|
| 82 | % |
Avistar at Wood Hollow |
| TX |
|
| 409 |
|
|
| 89 | % |
|
| 97 | % |
|
| 89 | % |
|
| 92 | % |
Avistar in 09 |
| TX |
|
| 133 |
|
|
| 100 | % |
|
| 100 | % |
|
| 92 | % |
|
| 90 | % |
Avistar on the Boulevard |
| TX |
|
| 344 |
|
|
| 93 | % |
|
| 96 | % |
|
| 79 | % |
|
| 83 | % |
Avistar on the Hills |
| TX |
|
| 129 |
|
|
| 95 | % |
|
| 98 | % |
|
| 85 | % |
|
| 87 | % |
Bruton Apartments |
| TX |
|
| 264 |
|
|
| 91 | % |
|
| 89 | % |
|
| 80 | % |
|
| 83 | % |
Concord at Gulfgate |
| TX |
|
| 288 |
|
|
| 90 | % |
|
| 94 | % |
|
| 85 | % |
|
| 84 | % |
Concord at Little York |
| TX |
|
| 276 |
|
|
| 92 | % |
|
| 91 | % |
|
| 85 | % |
|
| 85 | % |
Concord at Williamcrest |
| TX |
|
| 288 |
|
|
| 93 | % |
|
| 97 | % |
|
| 88 | % |
|
| 90 | % |
Crossing at 1415 |
| TX |
|
| 112 |
|
|
| 98 | % |
|
| 97 | % |
|
| 88 | % |
|
| 87 | % |
Decatur Angle |
| TX |
|
| 302 |
|
|
| 88 | % |
|
| 89 | % |
|
| 76 | % |
|
| 82 | % |
Esperanza at Palo Alto |
| TX |
|
| 322 |
|
|
| 95 | % |
|
| 94 | % |
|
| 85 | % |
|
| 83 | % |
Heights at 515 |
| TX |
|
| 96 |
|
|
| 99 | % |
|
| 96 | % |
|
| 89 | % |
|
| 87 | % |
Heritage Square |
| TX |
|
| 204 |
|
|
| 93 | % |
|
| 96 | % |
|
| 77 | % |
|
| 72 | % |
Oaks at Georgetown |
| TX |
|
| 192 |
|
|
| 93 | % |
|
| 91 | % |
|
| 92 | % |
|
| 90 | % |
Runnymede |
| TX |
|
| 252 |
|
|
| 100 | % |
|
| 97 | % |
|
| 92 | % |
|
| 90 | % |
Southpark |
| TX |
|
| 192 |
|
|
| 95 | % |
|
| 96 | % |
|
| 92 | % |
|
| 92 | % |
15 West Apartments |
| WA |
|
| 120 |
|
|
| 100 | % |
|
| 98 | % |
|
| 98 | % |
|
| 96 | % |
|
|
|
|
| 11,039 |
|
|
| 94 | % |
|
| 95 | % |
|
| 90 | % |
|
| 90 | % |
41
|
|
|
|
|
|
|
|
|
|
|
Physical and economic occupancy as of December 31, 2020 were relatively consistent2021 was slightly higher compared with the same period in 2019.
Despite2020 due primarily to the economic impacts of the COVID-19 pandemic,large increase in physical occupancy at this time we have not seen significant impacts to physical and economicLive 929 Apartments. Economic occupancy for the MRB portfolio on average. We believe this is largelyyear ended December 31, 2021 wasslightly lower compared with the same period in 2020 due primarily to government relief programs that aid individuals, including affordable housing tenants, that have experienced economic hardship as a result of COVID-19. If COVID-19 continues to negatively impact the U.S. economy and such government relief programs are discontinued or curtailed, we anticipate there will be a negative impact onlower economic occupancy and physical occupancy in the future.at Live 929 Apartments has seenand certain properties located in Texas during the first half of 2021. The Decatur Angle and Bruton Apartments properties experienced significant decline in occupancy which isdeclines due to the property being primarilyhigher than historical bad debt reserve write-offs.
The Live 929 Apartments, a student housing which has beenproperty, was more significantly impacted by COVID-19 than affordable multifamily properties.
properties but has generally recovered from an occupancy standpoint for the Fall 2021 semester. The nearby educational institution, Johns Hopkins University, has resumed in-person, on-campus classes for the Fall 2021 semester. As of December 31, 2021, Live 929 Apartmentswas 95% occupied, which is higher than occupancy prior to the onset of COVID-19. Economic occupancy reported above remains low due to lower physical occupancy in Spring 2021, but we expect operations and economic occupancy to improve over the coming quarters as a result of increased occupancy.
Non-Consolidated Properties - Not Stabilized
The owners of the following properties do not meet the definition of a VIE and/or we have evaluated and determined we are not the primary beneficiary of each VIE. As a result, we do not report the assets, liabilities and results of operations of these properties on a consolidated basis. For the year ended December 31, 20202021 these Residential Properties hasproperties have not met the stabilization criteria (see footnote 3 below the table). As of December 31, 2020,2021, debt service on the Partnership’s MRB and GILs for the non-consolidated non-stabilized properties was current. The amounts presented below were obtained from records provided by the property owners and their related property management service providers.
|
|
|
| Number |
|
| Physical Occupancy (1) |
| Economic Occupancy (2) | |||||||||
Property Name |
| State |
| 2021 |
|
| 2021 |
|
| 2020 |
| 2021 |
|
| 2020 | |||
MRB Multifamily Properties-Non Stabilized (3) | ||||||||||||||||||
Ocotillo Springs (4) |
| CA |
|
| 75 |
|
| n/a |
|
| n/a |
| n/a |
|
| n/a | ||
Residency at the Mayer (4) |
| CA |
|
| 79 |
|
| n/a |
|
| n/a |
| n/a |
|
| n/a | ||
Jackson Manor Apartments (5) |
| MS |
|
| 60 |
|
|
| 97 | % |
| n/a |
|
| 86 | % |
| n/a |
|
|
|
|
| 214 |
|
|
|
|
|
|
|
|
|
|
| ||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||
GIL Multifamily Properties-Non Stabilized (3) | ||||||||||||||||||
Hope on Avalon (4) |
| CA |
|
| 88 |
|
| n/a |
|
| n/a |
| n/a |
|
| n/a | ||
Hope on Broadway (4) |
| CA |
|
| 49 |
|
| n/a |
|
| n/a |
| n/a |
|
| n/a | ||
Centennial Crossings (4) |
| CO |
|
| 209 |
|
| n/a |
|
| n/a |
| n/a |
|
| n/a | ||
Osprey Village (4) |
| FL |
|
| 383 |
|
| n/a |
|
| n/a |
| n/a |
|
| n/a | ||
Willow Place Apartments (4) |
| GA |
|
| 182 |
|
| n/a |
|
| n/a |
| n/a |
|
| n/a | ||
Oasis at Twin Lakes (4) |
| MN |
|
| 228 |
|
| n/a |
|
| n/a |
| n/a |
|
| n/a | ||
Legacy Commons at Signal Hills (4) |
| MN |
|
| 247 |
|
| n/a |
|
| n/a |
| n/a |
|
| n/a | ||
Hilltop at Signal Hills (4) |
| MN |
|
| 146 |
|
| n/a |
|
| n/a |
| n/a |
|
| n/a | ||
Scharbauer Flats Apartments (4) |
| TX |
|
| 300 |
|
| n/a |
|
| n/a |
| n/a |
|
| n/a | ||
|
|
|
|
| 1,832 |
|
|
|
|
|
|
|
|
|
|
| ||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||
MRB Seniors Housing and Skilled Nursing Properties-Non Stabilized (3) | ||||||||||||||||||
Meadow Valley (4) |
| MI |
|
| 154 |
|
| n/a |
|
| n/a |
| n/a |
|
| n/a | ||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||
Grand total |
|
|
|
| 2,200 |
|
|
| 97 | % |
| n/a |
|
| 86 | % |
| n/a |
|
|
|
| Number of Units as of December 31, |
|
| Physical Occupancy (1) as of December 31, |
| Economic Occupancy (2) for the years ended December 31, | |||||
Property Name |
| State |
| 2020 |
|
| 2020 |
| 2019 |
| 2020 |
| 2019 | |
Non-Consolidated Properties-Non Stabilized (3) | ||||||||||||||
Ocotillo Springs (4) |
| CA |
|
| 75 |
|
| n/a |
| n/a |
| n/a |
| n/a |
Scharbauer Flats Apartments (4) |
| TX |
|
| 300 |
|
| n/a |
| n/a |
| n/a |
| n/a |
Oasis at Twin Lakes (4) |
| MN |
|
| 228 |
|
| n/a |
| n/a |
| n/a |
| n/a |
Centennial Crossings (4) |
| CO |
|
| 209 |
|
| n/a |
| n/a |
| n/a |
| n/a |
|
|
|
|
| 812 |
|
| n/a |
| n/a |
| n/a |
| n/a |
|
|
|
|
|
|
| (4) Physical and economic occupancy information is not available for the years ended December 31, 2021 and 2020 as the property is under construction. (5) Physical and economic occupancy information is not available for the year ended |
The Partnership had four properties that had not stabilized as of December 31, 2020 as the related investment was acquired during 2021.
As of December 31, 2021, all non-stabilized properties except for Jackson Manor were still under construction.construction and have no operating metrics to report. Jackson Manor has commenced an in-place rehabilitation that is nearing completion.
42
MF Properties
As of December 31, 2020,2021, we owned two MF Properties. WeProperties that we report the assets, liabilities, and results of operations of these properties on a consolidated basis. The 50/50 MF properties areProperty is encumbered by mortgage loans with an aggregate principal balance of $26.0$25.1 million as of December 31, 2020.2021. Debt service on our mortgage payablesmortgages payable was current as of December 31, 2020.2021.
|
|
|
| Number |
|
| Physical Occupancy (1) |
|
| Economic Occupancy (2) |
| |||||||||||
Property Name |
| State |
| 2021 |
|
| 2021 |
|
| 2020 |
|
| 2021 |
|
| 2020 |
| |||||
MF Properties |
| |||||||||||||||||||||
Suites on Paseo |
| CA |
|
| 384 |
|
|
| 97 | % |
|
| 68 | % |
|
| 80 | % |
|
| 68 | % |
The 50/50 Property |
| NE |
|
| 475 |
|
|
| 88 | % |
|
| 89 | % |
|
| 83 | % |
|
| 85 | % |
|
|
|
|
| 859 |
|
|
| 92 | % |
|
| 80 | % |
|
| 82 | % |
|
| 76 | % |
|
|
|
| Number of Units as of December 31, |
|
| Physical Occupancy (1) as of December 31, |
|
| Economic Occupancy (2) for the years ended December 31, |
| |||||||||||
Property Name |
| State |
| 2020 |
|
| 2020 |
|
| 2019 |
|
| 2020 |
|
| 2019 |
| |||||
MF Properties |
| |||||||||||||||||||||
Suites on Paseo |
| CA |
|
| 384 |
|
|
| 68 | % |
|
| 89 | % |
|
| 68 | % |
|
| 87 | % |
The 50/50 Property |
| NE |
|
| 475 |
|
|
| 89 | % |
|
| 99 | % |
|
| 85 | % |
|
| 87 | % |
|
|
|
|
| 859 |
|
|
| 80 | % |
|
| 94 | % |
|
| 76 | % |
|
| 87 | % |
|
|
|
|
The physical occupancy and economic occupancy as of and for the year ended December 31, 2020 decreased2021 increased as compared to the same period in 20192020 due to a decreasean increase in overall occupancy at the Suites on Paseo primarily due to the effects of COVID-19.
The COVID-19 pandemic and the related impact to universities adjacent to our MF Properties may have a negative impact on economic occupancy and physical occupancy in the future.Property. The University of Nebraska-Lincoln, which is adjacent to the 50/50 MF Property, is currently holding on-campus, in-person learning forclasses but occupancy is below occupancy levels prior to the Spring 2021 term and residence halls are open. However,onset of COVID-19. San Diego State University, haswhich is adjacent to the Suites on Paseo MF Property, resumed on-campus, in-person classes in the Fall 2021 semester after having suspended on campus, in personon-campus, in-person classes for the Fall 2020 and Spring 2021 semestersemesters due to COVID-19 concerns. Residence halls remain open butCurrent occupancy at a reduced capacity. If the spreadSuites on Paseo MF Property is higher than occupancy levels prior to the onset of COVID-19 continues, we may experience further declines in occupancy and collections related to our MF Properties.COVID-19.
Investments in Unconsolidated Entities
We are the only limited equitymember investor in various unconsolidated entities formed for the purpose of constructing market-rate, multifamily real estate properties. The Partnership is the primary beneficiary of Vantage at San Marcos and reports this VIE on a consolidated basis as of December 31, 2021. For all other investments, the Partnership determined the unconsolidated entities are VIEs but that the Partnership is not the primary beneficiary. As a result, the Partnership does not report the assets, liabilities and results of operations of these properties on a consolidated basis. TheOur limited membership interests entitle the Partnershipus to shares of certain operating cash flows generated by the Vantage Properties from operationsunconsolidated entities and upon the occurrence of certain capital transactions, such as a refinancing or sale.The amounts presented below were obtained from records provided by the property management service providers.
|
|
|
| Number |
|
| Physical Occupancy (1) |
| ||||||
Property Name |
| State |
| 2021 |
|
| 2021 |
|
| 2020 |
| |||
Vantage at Powdersville (2) |
| SC |
| n/a |
|
| n/a |
|
|
| 95 | % | ||
Vantage at Bulverde (2) |
| TX |
| n/a |
|
| n/a |
|
|
| 88 | % | ||
Vantage at Germantown (2) |
| TN |
| n/a |
|
| n/a |
|
|
| 98 | % | ||
Vantage at Stone Creek |
| NE |
|
| 294 |
|
|
| 94 | % |
|
| 68 | % |
Vantage at Murfreesboro |
| TN |
|
| 288 |
|
|
| 97 | % |
|
| 75 | % |
Vantage at Coventry |
| NE |
|
| 294 |
|
|
| 94 | % |
|
| 40 | % |
Vantage at Conroe |
| TX |
|
| 288 |
|
|
| 89 | % |
|
| 15 | % |
Vantage at O'Connor |
| TX |
|
| 288 |
|
|
| 99 | % |
|
| 8 | % |
Vantage at Westover Hills |
| TX |
|
| 288 |
|
|
| 98 | % |
|
| 1 | % |
Vantage at Tomball (3) |
| TX |
|
| 288 |
|
| n/a |
|
| n/a |
| ||
Vantage at Hutto (3) |
| TX |
|
| 288 |
|
| n/a |
|
| n/a |
| ||
Vantage at San Marcos (3) (4) |
| TX |
|
| 288 |
|
| n/a |
|
| n/a |
| ||
Vantage at Loveland (3) |
| CO |
|
| 288 |
|
| n/a |
|
| n/a |
| ||
Vantage at Helotes (3) |
| TX |
|
| 288 |
|
| n/a |
|
| n/a |
| ||
Vantage at Fair Oaks (3) |
| TX |
|
| 288 |
|
| n/a |
|
| n/a |
| ||
Vantage at McKinney Falls (3) |
| TX |
|
| 288 |
|
| n/a |
|
| n/a |
| ||
|
|
|
|
| 3,756 |
|
|
|
|
|
|
|
|
|
|
| Number of Units as of December 31, |
|
| Physical Occupancy (1) as of December 31, |
| ||||||
Property Name |
| State |
| 2020 |
|
| 2020 |
|
| 2019 |
| |||
Vantage at Waco (2) |
| TX |
| n/a |
|
| n/a |
|
|
| 92 | % | ||
Vantage at Powdersville |
| SC |
|
| 288 |
|
|
| 95 | % |
|
| 31 | % |
Vantage at Stone Creek |
| NE |
|
| 294 |
|
|
| 68 | % |
|
| 36 | % |
Vantage at Bulverde |
| TX |
|
| 288 |
|
|
| 88 | % |
|
| 50 | % |
Vantage at Germantown |
| TN |
|
| 288 |
|
|
| 98 | % |
|
| 24 | % |
Vantage at Murfreesboro (3) |
| TN |
|
| 288 |
|
|
| 75 | % |
| n/a |
| |
Vantage at Coventry (3) |
| NE |
|
| 294 |
|
|
| 40 | % |
| n/a |
| |
Vantage at Conroe (3) |
| TX |
|
| 288 |
|
|
| 15 | % |
| n/a |
| |
Vantage at O'Connor (3) |
| TX |
|
| 288 |
|
|
| 8 | % |
| n/a |
| |
Vantage at Westover Hills (3) |
| TX |
|
| 288 |
|
|
| 1 | % |
| n/a |
| |
Vantage at Tomball (4) |
| TX |
|
| 288 |
|
| n/a |
|
| n/a |
| ||
Vantage at Hutto (4) |
| TX |
|
| 288 |
|
| n/a |
|
| n/a |
| ||
Vantage at San Marcos (4) |
| TX |
|
| 288 |
|
| n/a |
|
| n/a |
| ||
|
|
|
|
| 3,468 |
|
|
|
|
|
|
|
|
|
| (2) Physical occupancy |
|
|
|
(3) Physical occupancy information is not available as of December 31, 2021 and 2020 as the properties |
|
|
43 The Vantage properties at Tomball, Hutto, San Marcos Loveland, Helotes, Fair Oaks and McKinney Falls are currently under construction and have yet to commence leasing activities as of December 31, 2021. All other properties are currently Results of Operations The tables and following discussions of our changes in results of operations for the years ended December 31, The following table compares revenue and other income for the Partnership for the periods presented (dollar amounts in thousands): For the Years Ended December 31, For the Years Ended December 31, 2020 2019 $ Change % Change 2021 2020 $ Change % Change Revenues and Other Income: Investment income $ 47,554 $ 50,223 $ (2,669 ) -5.3 % $ 57,737 $ 47,554 $ 10,183 21.4 % Property revenues 6,986 8,081 (1,095 ) -13.6 % 7,209 6,986 223 3.2 % Contingent interest income 12 3,045 (3,033 ) -99.6 % 1,849 12 1,837 15308.3 % Other interest income 967 851 116 13.6 % 1,658 967 691 71.5 % Other income 10 118 (108 ) -91.5 % - 10 (10 ) -100.0 % Loss on sale of real estate asset (15 ) - (15 ) N/A Gain on sale of securities 1,416 - 1,416 N/A - 1,416 (1,416 ) -100.0 % Gain on sale of investments in unconsolidated entities - 16,142 (16,142 ) -100.0 % 15,521 - 15,521 N/A Total Revenues and Other Income $ 56,945 $ 78,460 $ (21,515 ) -27.4 % $ 83,959 $ 56,945 $ 27,014 47.4 % Discussion of the Total Revenues for the Year Ended December 31, Investment income. The Property revenuesThe Vantage Properties at Tomball, Hutto and San Marcos are currently under construction.in the lease-up phase. Leasing activities at properties with available units have faced challenges due to social distancing measures imposed because of the COVID-19 pandemic.either stabilized or are near stabilization.20202021 and 20192020 should be read in conjunction with the Partnership’s consolidated financial statements and notes thereto filed in Item 8 of this Report.20202021 Compared to the Year Ended December 31, 20192020net decreaseincrease in investment income betweenin 2021 as compared to 2020 and 2019 was due to the following factors:• •A decrease of $2.2 million in investment income related to the PHC Certificates that were sold in January 2020;•A net decrease of approximately $538,000 in investment interest income related to sales of investments in unconsolidated entities. We reported a decrease of approximately $1.2 million and $824,000 of additional investment income recognized upon the sale of Vantage at Boerne, LLC in December 2019 and Vantage at Panama City Beach, LLC in September 2019, respectively which was offset by an increase of $1.5 million of additional investment income recognized upon the sale of Vantage at Waco, LLC in June 2020; •A net decrease of approximately $437,000 recurring investment interest income due to having reached the maximum guaranteed preferred returns on certain investments in unconsolidated entities;•An increase approximately $1.1 million in investment income related to investments in GILs in 2020; and•A net decrease of approximately $542,000 in investment income related to MRB volume and interest rates. See discussion of volume and interest rate changes in the Mortgage Revenue Bond Investments segment previously included in Item 7.The net decreaseTotal revenues increased slightly in total revenue between2021 as compared to 2020 and 2019 was due primarily to lowerhigher occupancy at the Suites on Paseo. Lower occupancy is a resultPaseo MF Property as the property recovers from the impacts of the suspensionCOVID-19. The University of on-campus, in-person classes for the Fall 2020 semester atNebraska-Lincoln and San Diego State University dueare currently holding on-campus, in-person classes. The 50/50 MF Property occupancy is below and the Suites on Paseo MF Property occupancy is above levels prior to the COVID-19 pandemic.onset of COVID-19.
44
Contingent interest income. Contingent interest income recognized in 2021 was realized upon the redemption of the Rosewood Townhomes – Series A and South Pointe Apartments – Series A MRBs in July 2021. There was minimal contingent interest income recognized in 2020. In January 2019, we realized contingent interest income of approximately $3.0 million related to the redemption of the Vantage at Brooks, LLC property loan.
Other interest income.Other interest income is comprised mainlyprimarily of interest income on taxableour property loans held by us.loans. The increase in other interest income in 2021 as compared to 2020 is primarily due to interest on approximately $5.8$55.7 million of property loan advances made during 2020.2021.
Other income.Other income was minimal for 20202021 and 2019.2020.
Loss on sale of real estate asset. The loss on sale of real estate assets in 2021 related to the sale of land held for development in Gardner, KS in November 2021.
Gain on the sale of securities.securities. The gain on sale of securities forin 2020 related to the sale of the PHC Certificates in January 2020.2020. There was no gain on sale of securities reported for 2019.in 2021.
Gain on sale of investments in unconsolidated entities. The gain on sale of investments in unconsolidated entities is related to the sale of the Vantage at Germantown property in March 2021 for a gain of approximately $2.8 million, the sale of the Vantage at Powdersville property in May 2021 for a gain of approximately $5.5 million and the sale of the Vantage at Bulverde property in August 2021 for a gain of approximately $7.0 million. In addition, we received cash of approximately $294,000 in November 2021 upon the resolution of gain contingencies related to the sale of Vantage at Panama City Beach in September 2019. There was no gain on sale of investments in unconsolidated entities forin 2020. The gain on sale of investment in unconsolidated entities for 2019 consisted of approximately $10.5 million and $5.7 million related to the sales of Vantage at Panama City Beach in September 2019 and Vantage at Boerne in December 2019, respectively.
The following tabletable compares Partnership expenses for the periods presented (dollar amounts in thousands):
|
| For the Years Ended December 31, |
|
| For the Years Ended December 31, |
| ||||||||||||||||||||||||||
|
| 2020 |
|
| 2019 |
|
| $ Change |
|
| % Change |
|
| 2021 |
|
| 2020 |
|
| $ Change |
|
| % Change |
| ||||||||
Expenses: |
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|
|
|
|
|
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|
|
|
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|
|
|
|
|
|
|
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|
|
|
| |||||
Real estate operating (exclusive of items shown below) |
| $ | 4,347 |
|
| $ | 4,474 |
|
| $ | (127 | ) |
|
| -2.8 | % |
| $ | 3,992 |
| $ | 4,347 |
|
| $ | (355 | ) |
| -8.2 | % | ||
Provision for credit loss |
|
| 7,319 |
|
|
| - |
|
|
| 7,319 |
|
| N/A |
|
| 1,857 |
| 7,319 |
|
|
| (5,462 | ) |
| -74.6 | % | |||||
Provision for loan loss |
|
| 911 |
|
|
| - |
|
|
| 911 |
|
| N/A |
|
| 444 |
| 911 |
|
|
| (467 | ) |
| -51.3 | % | |||||
Impairment charge on real estate assets |
|
| 25 |
|
|
| 75 |
|
|
| (50 | ) |
|
| -66.7 | % |
| - |
| 25 |
|
|
| (25 | ) |
| -100.0 | % | ||||
Depreciation and amortization |
|
| 2,810 |
|
|
| 3,091 |
|
|
| (281 | ) |
|
| -9.1 | % |
| 2,733 |
| 2,810 |
|
|
| (77 | ) |
| -2.7 | % | ||||
Interest expense |
|
| 21,216 |
|
|
| 24,717 |
|
|
| (3,501 | ) |
|
| -14.2 | % |
| 21,944 |
| 21,216 |
|
|
| 728 |
| 3.4 | % | |||||
General and administrative |
|
| 13,028 |
|
|
| 15,565 |
|
|
| (2,537 | ) |
|
| -16.3 | % |
|
| 14,825 |
|
|
| 13,028 |
|
|
| 1,797 |
|
|
| 13.8 | % |
Total Expenses |
| $ | 49,656 |
|
| $ | 47,922 |
|
| $ | 1,734 |
|
|
| 3.6 | % |
| $ | 45,795 |
|
| $ | 49,656 |
|
| $ | (3,861 | ) |
|
| -7.8 | % |
Discussion of the Total Expenses for the Year Ended December 31, 20202021 Compared to the Year Ended December 31, 20192020
Real estate operating expenses. Real estate operating expenses associated with theare 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. A portion of realReal estate operating expenses is fixeddecreased in nature, thus a decrease in physical and economic occupancy would result in a reduction in operating margins. Conversely,2021 as physical and economic occupancy increase, the fixed nature of these expenses will increase operating margins as these real estate operating expenses would not increase at the same rate as rental revenues. The decrease in real estate operating expenses betweencompared to 2020 and 2019 wasprimarily due to the following factors:closure of food service operations at the Suites on Paseo MF Property in 2020.
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Provision for credit loss. The provision for credit loss in 2021 related to other-than-temporary impairments of approximately $1.9 million related to the Provision Center 2014-1. The provision for credit loss in 2020 consists of other-than-temporary impairments of approximately $3.5 million related to the Live 929 Apartments - Series A MRB and approximately $3.9 million related to the Provision Center 2014-1 MRB. There was no provision for credit loss recognized for 2019.
The provision for credit loss related to the Live 929 Apartments MRB was due to recent operational results, the borrower’s continued covenant forbearance, forbearance allowing for the deferral of principal payments granted in the fourth quarter of 2020 and declines in debt service coverage. The change in operating results at the Live 929 Apartments was primarily driven by the impact of the COVID-19 pandemic, which has had a significant impact on the student housing industry.
The provision for credit loss related to the Provision Center 2014-1 MRB was due to debt service shortfalls by the underlying commercial property, the borrower’s declaration of Chapter 11 bankruptcy protection and request for forbearance, and the general creditworthiness of proton therapy centers in the United States, including the impacts of the COVID-19 pandemic.
Provision for loan loss. The provisionprovisions for loan loss forlosses in 2021 and 2020 isare related to the loan loss allowanceallowances established for the Live 929 Apartments property loan of approximately $911,000. There was no provision for loan loss recognized for 2019. The provision for loan loss related to Live 929 was due to the same factors as discussed above related to the properties provision for credit loss.loan.
Impairment charge on real estate assets. assets. There was no impairment charge recognized in 2021. The impairment charge on real estate assets forin 2020 and 2019 related to the land held for development in Gardner, KS.
Depreciation and amortization expenseexpense.. Depreciation and amortization relate primarily to the MF Properties. The decrease in depreciation and amortization expenses betweenin 2021 as compared to 2020 and 2019 was duerelated to a decreasethe Suites of approximately $266,000 in depreciation expensePaseo MF Property due to real estate assets that became fully depreciated in mid-2019.2020.
45
Interest expense. The net decreaseincrease in interest expense betweenin 2021 as compared to 2020 and 2019 was due to the following factors:
• A decrease of approximately $2.6 million due to a decrease in effective interest rates of the debt financing portfolio as a result of refinancing activities and generally lower market interest rates; • An increase of approximately $3.2 million due to higher average principal outstanding of approximately $171.3 million; • A net increase of approximately $94,000 related to fair value adjustments to interest rate derivatives, net of cash paid; and • A decrease of approximately $229,000 in amortization of deferred financings costs.
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General and administrative expenses. The decreaseincrease in general and administrative expenses for 2020in 2021 as compared to 2019 was2020 is primarily due to a decreaseincreases of approximately $2.6 million in $461,000 related to administration fees paid to AFCA2 due to greater assets under management, approximately $241,000 related to salaries and benefits, approximately $260,000 related to restricted unit compensation expense. Upon the expense, approximately $225,000 related to referral fees paid to an affiliate of Greystone on closing of the acquisition by Greystone of AFCA 2 in September 2019, all outstanding restricted units vestednew investments during 2021, and all previously unrecognized compensation expense was recognized. approximately $496,000 related to professional and consulting fees from increased transactional activity during 2021.
Discussion of Income Tax Expense for the Year Ended December 31, 20202021 Compared to the Year Ended December 31, 20192020
A wholly owned subsidiary of the Partnership, the Greens Hold Co, is a corporation subject to federal and state income tax. The Greens Hold Co owns The 50/50 MF Property and certain property loans.
There was minimal taxable income for the Greens Hold Co in 20202021 and 2019. 2020.
Cash Available for Distribution
The increasePartnership believes that Cash Available for Distribution (“CAD”) provides relevant information about the Partnership’s operations and is necessary, along with net income, for understanding its operating results. To calculate CAD, the Partnership begins with net income as computed in accordance with GAAP and adjusts for non-cash expenses consisting of depreciation expense, amortization expense related to deferred financing costs, amortization of premiums and discounts, non-cash interest rate derivative expense or income, provisions for credit and loan losses, impairments on MRBs, GILs, PHC Certificates, real estate assets and property loans, deferred income tax expense (benefit) and restricted unit compensation expense. The Partnership also deducts Tier 2 income (see Note 3 to the Partnership’s consolidated financial statements) distributable to the General Partner as defined in the Partnership Agreement and distributions and accretion for the Preferred Units. Net income is primarilythe GAAP measure most comparable to CAD. There is no generally accepted methodology for computing CAD, and the Partnership’s computation of CAD may not be comparable to CAD reported by other companies. Although the Partnership considers CAD to be a useful measure of the Partnership’s operating performance, CAD is a non-GAAP measure that should not be considered as an alternative to net income calculated in accordance with GAAP, or any other measures of financial performance presented in accordance with GAAP.
46
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 years ended December 31, 2021 and 2020:
|
| For the Years Ended December 31, |
| |||||
|
| 2021 |
|
| 2020 |
| ||
Net income |
| $ | 38,099,488 |
|
| $ | 7,208,828 |
|
Change in fair value of derivatives |
|
| (23,214 | ) |
|
| (116,899 | ) |
Depreciation and amortization expense |
|
| 2,732,922 |
|
|
| 2,810,073 |
|
Provision for credit loss (1) |
|
| 1,856,893 |
|
|
| 7,318,590 |
|
Provision for loan loss (2) |
|
| 444,302 |
|
|
| 911,232 |
|
Reversal of impairment on securities (3) |
|
| - |
|
|
| (1,902,979 | ) |
Impairment charge on real estate assets |
|
| - |
|
|
| 25,200 |
|
Reversal of impairment charge on real estate assets (4) |
|
| (250,200 | ) |
|
| - |
|
Amortization of deferred financing costs |
|
| 1,209,837 |
|
|
| 1,450,398 |
|
Restricted unit compensation expense |
|
| 1,277,694 |
|
|
| 1,017,938 |
|
Deferred income taxes |
|
| (89,055 | ) |
|
| (105,920 | ) |
Redeemable Preferred Unit distributions and accretion |
|
| (2,871,051 | ) |
|
| (2,871,051 | ) |
Tier 2 (Income distributable) Loss allocable to the |
|
| (2,649,242 | ) |
|
| 80,501 |
|
Bond purchase premium (discount) amortization (accretion), net |
|
| (72,052 | ) |
|
| (59,691 | ) |
Total CAD |
| $ | 39,666,322 |
|
| $ | 15,766,220 |
|
|
|
|
|
|
|
| ||
Weighted average number of BUCs outstanding, basic |
|
| 61,971,556 |
|
|
| 60,606,989 |
|
Net income per BUC, basic |
| $ | 0.52 |
|
| $ | 0.07 |
|
Total CAD per BUC, basic |
| $ | 0.64 |
|
| $ | 0.26 |
|
Distributions declared, per BUC |
| $ | 0.50 |
|
| $ | 0.305 |
|
For the year ended December 31, 2021, Tier 2 income allocable to the general partner consisted of approximately $702,000 related to the gain on sale of Vantage at Germantown in March 2021, approximately $1.4 million related to the gain on sale of Vantage at Powdersville in May 2021, approximately $462,000 related to the redemption of Rosewood Townhomes – Series A and South Pointe Apartments – Series A MRBs in July 2021, and approximately $119,000 related to the gain on sale of Vantage at Bulverde in August 2021. This was offset by the loss on the sale of land held for development in Gardner, KS and reversal of prior impairments. For the year ended December 31, 2020, Tier 2 loss related to the sale of the PHC Certificates.
Liquidity and Capital Resources
We continually evaluate our potential sources and uses of liquidity, including current and potential future developments related to the COVID-19 pandemic.liquidity. The information below is based on the Partnership’s current expectations and projections about future events and financial trends, which could materially differ from actual results. See the discussion of Risk Factors in Item 1A of this Report for further information.
Our short-term liquidity requirements over the next 12 months will be primarily operational expenses, investment commitments, debt service (principal and interest payments) onrelated to our debt financings, the potential exercise of redemption rights by the holders of the Series A Preferred Units, and distribution payments. We expect to meet these liquidity requirements primarily using cash on hand, operating cash flows from our investments and MF Properties, and potentially additional debt financing.financing issued in the normal course of business. In addition, we will consider the issuance of additional BUCs, Series A-1 Preferred Units, Series B Preferred Units, or other series of limited partnership interests in the Partnership based on needs and opportunities for executing our strategy.
Our long-term liquidity requirements will be primarily for maturities of debt financings and mortgages payable, the potential exercise of redemption rights by the holders of the Series A Preferred Units and additional investments in MRBs, GILs, property loans
47
and unconsolidated entities. We expect to meet these liquidity requirements primarily through refinancing of maturing debt financings with the same or similar lenders, principal and interest proceeds from investments in MRBs and GILs, and proceeds from asset sales and redemptions. In addition, we will consider the issuance of additional Beneficial Unit Certificates (“BUCs”),BUCs, Series AA-1 Preferred Units, Series B Preferred Units, or other series of beneficiallimited partnership interests in the partnershipPartnership based on needs and opportunities for executing our strategy.
Sources of Liquidity
The Partnership’s principal sources of liquidity consist of:
• Unrestricted cash on hand; • Operating cash flows from investments in MRBs, GILs, property loans and investments in unconsolidated entities; • Net operating cash flows from MF Properties; • Secured lines of credit; • Proceeds from our total return swap transactions associated with our Secured Notes; • Proceeds from obtaining additional debt; • Issuances of BUCs, Series A-1 Preferred Units, Series B Preferred Units, or other series of limited partnership interests; and • Proceeds from the sale of assets.
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Unrestricted Cash on Hand
As of December 31, 2020,2021, the Partnership had unrestricted cash on hand of approximately $44.5$68.3 million. The Partnership is required to keep a minimum of $500,000$5.0 million of unrestricted cash on hand under the terms of its TEBS debt financing arrangements.certain guaranty obligations. There are no other contractual restrictions of the Partnership’s ability to use cash on hand.
Operating Cash Flows from Investments
Cash flows from operations are primarily comprised of regular interest payments received on our MRBs, GILs and GILsproperty loans that provide consistent cash receipts throughout the year. All MRBs, GILs and GILsproperty loans are current on contractual debt service payments as of January 31, 2021,2022, except for the Provision Center 2014-1 MRB as noted in the “Effects of Covid-19” section in this Item 7.MRB. Receipts, net of interest expense on related debt financings and lines of credit balances, are available for general use by the Partnership. The Partnership also receives distributions from investments in unconsolidated entities if, and when, cash is available for distribution at the unconsolidated entities.
Receipt of cash from our investments in MRBs and investments in unconsolidated entities is dependent upon the generation of net cash flows at multifamily properties that underlie our investments. These underlying properties are subject to risks usually associated with direct investments in multifamily real estate, which include (but are not limited to) reduced occupancy, tenant defaults, falling rental rates, and increasing operating expenses. Receipt of cash from GILs and property loans is dependent on the availability of construction funding and the execution of certain equity commitments by the owners of the underlyingsecured properties.
Net Operating Cash Flows from MF Properties
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. As noted in
Secured Lines of Credit
We maintain a secured line of credit (“General LOC”) with two financial institutions of up to $40.0 million, to purchase additional investments and to meet general working capital and liquidity requirements. The Partnership may borrow, prepay and reborrow amounts at any time through the “Effectsmaturity date, subject to the limitations of COVID-19” section in this Item 7,a borrowing base. The aggregate available commitment cannot exceed a borrowing base calculation, that is equal to 40% multiplied by the Suites on Paseo MF Property is experiencingaggregate value of a lower than historical occupancy. There is currently no mortgage associated withpool of eligible encumbered assets. Eligible encumbered assets consist of (i) the net book value of the Suites on Paseo MF Property, and (ii) 100% of the property’s operating cash flows have been sufficientPartnership’s capital contributions to meet all operational obligations through December 31, 2020. However, excess net cash flows from operations could be limitedunconsolidated entities, subject to certain restrictions. The General LOC is secured by first priority security interests in the future due to low occupancy.
Unsecured LinesPartnership’s investments in unconsolidated entities, a mortgage and assignment of Credit
We maintain two unsecured lines of credit (“LOC”) with a financial institution. Our unsecured operating LOC allows for the advance of up to $10.0 million to be used for general operations. We are required to make repaymentsleases and rents of the principalSuites on Paseo MF Property, and a security interest in a bank account at BankUnited, N.A., in which the Partnership must maintain a balance of not less than $5.0 million. The Partnership is subject to reducevarious affirmative and negative covenants that, among others, require the outstanding principal balance onPartnership
48
to maintain a minimum liquidity of not less than $5.0 million, maintain a minimum consolidated tangible net worth of $100.0 million, and to notify BankUnited, N.A. if the operating LOC to zero for fifteenPartnership’s consolidated net worth declines by (a) more than 20% from the immediately preceding quarter, or (b) more than 35% from the date at the end of two consecutive days during each calendar quarter. We fulfilled this requirement during the quarter ended December 31, 2020. In addition, we have fulfilled this requirement for the first quarter of 2021. We have $10.0 million available on the operating LOCquarters ending immediately thereafter. The Partnership was in compliance with all covenants as of December 31, 2020. 2021. The unsecured operatingbalance of the General LOC was $6.5 million with the ability to draw an additional $33.5 million as of December 31, 2021. The General LOC has a maturity date of June 2022.
Our unsecured non-operating LOC allows2023, with options to extend for the advance of up to $50.0two additional years.
We maintain a secured non-operating line of credit (“Acquisition LOC”) with a maximum commitment of $50 million and may be utilized for the purchaseto fund purchases of multifamily real estate, MRBs, taxable MRBs, or loans issued to finance the acquisition, rehabilitation, or construction of affordable housing or which are otherwise secured by real estate or mortgage-backed securities (i.e., GILs and taxable MRBs.property loans). Advances on the unsecured non-operatingAcquisition LOC are due on the 270th day following the advance date but may be extended for up to an additional 270 days by making certain payments. The unsecured non-operatingAcquisition LOC contains a covenant, among others, that the Partnership’s ratio of the lender’s senior debt will not exceed a specified percentage of the market value of the Partnership’s assets, as defined in the Credit Agreement. The Partnership was in compliance with all covenants as of December 31, 2020. We anticipate paying off2021. The balance of the balances on our unsecured non-operatingAcquisition LOC by entering into debt financing arrangements, to be securedwas $39.2 million with the previously acquired MRBs or multifamily real estate. We have approximately $42.5ability to draw an additional $10.8 million available on the unsecured non-operating LOC as of December 31, 2020.2021. The $7.5 million outstanding balances of the non-operating LOC as of December 31, 2020 are due in March 2021, though the Partnership can extend final repayment of the amounts due to December 2021 by making partial repayments. The unsecured non-operatingAcquisition LOC has a maturity date of June 2022.2023.
Proceeds from our Total Return Swap Transactions associated with our Secured Notes
In September 2020, we issued Secured Notes to Mizuho totaling $103.5 million. Concurrent with the issuance of the Secured Notes, the Partnershipwe entered into two total return swap transactions with Mizuho to reduce the net interest cost related to the Secured Notes. The combined notional amount of the total return swaps is $103.5$103.1 million, which is the same as the outstanding principal balance of the Secured Notes.
The first total return swap has a notional amount of approximately $40.0$39.6 million as of December 31, 2020.2021. The Partnership’s interest rate on the notional amount is equal to 3-month LIBOR plus 3.75%, with an interest rate floor of 4.25%. We are required to maintain minimum cash collateral with Mizuho equal to 35% of the notional amount, which was approximately $14.0 million as of December 31, 2020.2021. The remaining $26.0 million was received as cash proceeds by the Partnership during 2020.
The second total return swap has a notional amount of $63.5 million as of December 31, 2020.2021. The Partnership’s interest rate on the notional amount is equal to 3-month LIBOR plus 0.50%, with an interest rate floor of 1.00%. We are required to maintain cash collateral with Mizuho equal to 100% of the notional amount as of December 31, 2020.2021. Through March 2022, we have the option to reallocate notional amounts from the second total return swap to the first total return swap, in minimum increments of $10.0 million. Upon such a reallocation, cash equal to 35% of the notional amount reallocated will be posted as collateral for the first total return swap and 65% of the notional amount reallocated will be advanced as net proceeds to the Partnership for its general use. As of December 31, 2020,2021, we have the option to reallocate up to $63.5 million of notional amount, which if fully reallocated will generate additional net cash proceeds of approximately $41.3 million for the Partnership’sour general use.
Proceeds from Obtaining Additional Debt
We hold certain investments that are not associated with our debt financings, mortgages payable, or non-operating LOC.secured LOCs. The Partnership may obtain leverage for these investments by posting the investments as security. As of December 31, 2020,2021, the Partnership’s primary unleveraged assets were the Suites at Paseo MF Property, with a net carrying value of approximately $33.9 million, and certain MRBs with outstanding principal totaling approximately $20.9$19.3 million. As noted previously in this report, the Suites on Paseo MF Property is experiencing lower than historical occupancy and operating results due to the COVID-19 pandemic, which could limit the amount of debt that could be obtained related to this asset. Of thethese MRBs, approximately $10.0 million is principal outstanding on the Provision Center 2014-1 MRB, for which the borrower has declared Chapter 11 bankruptcy, and which could limit our ability to obtain leverage related to this MRB.
Issuances of BUCs, and Series AA-1 Preferred Units or Series B Preferred Units
We may, from time to time, issue additional BUCs in the public market. In December 2019, the Partnership’s Registration Statement on Form S-3 (“Registration Statement”) was declared effective by the SEC under which the Partnership may offer up to $225.0 million of BUCs for sale from time to time. The Registration Statement will expire in December 2022.
In September 2021, we completed an underwritten public offering of 5,462,500 BUCs. The offering resulted in net cash proceeds of approximately $31.2 million for the Partnership, after the payment of underwriting discounts, commissions and offering expenses.
49
In July 2021, the Partnership entered into a Capital on DemandTM Sales Agreement to offer and sell, from time to time at market prices on the date of sale, BUCs up to an aggregate offering price of $30 million via an “at the market offering.” As of December 31, 2021, the Partnership has not sold any BUCs under this program. We will continue to assess if and when to issue BUCs under this program going forward.
The Partnership is authorized to issue Series Avarious series of Preferred Units under the Partnership Agreement. AsIn September 2021, our registration statement on Form S-3 for the registered offering and issuance of December 31, 2020, we have issued 9,450,000up to 3,500,000 of Series AA-1 Preferred Units for gross proceeds of approximately $94.5 million to five financial institutions. The Series A Preferred Units were issued in a private placement that was terminated in October 2017. The Partnership may conduct additional private offerings of Series A Preferred Units indeclared effective by the future to supplement its cash flow needs if the General Partner deems such offerings to be necessary and otherwise consistent with the Partnership’s strategic initiatives. SEC. The Partnership is able to issue Series AA-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 AA-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. No Series A-1 Preferred Units had been sold as of December 31, 2021.
In September 2021, our registration statement on Form S-3 for the registered offering and issuance of up to 10,000,000 of a newly-created series of limited partnership interests designated as Series B Preferred Units was declared effective by the SEC. The Partnership is able to issue Series B Preferred Units so long as the aggregate market capitalization of the BUCs, based on the closing price on the trading day prior to issuance of the Series B Preferred Units, is no less than two times the aggregate book value of all Series A Preferred Units, Series A-1 Preferred Units and Series B Preferred Units, inclusive of the amount to be issued. No Series B Preferred Units had been sold as of December 31, 2021.
We may also designate and issue additional series of preferred units representing beneficial interestlimited partnership interests in the Partnership is so desired.in accordance with the terms of the Partnership Agreement.
Proceeds from the Sale of Assets
We may, from time to time, sell our investments in MRBs, GILs, property loans, investments in unconsolidated entities and MF Properties consistent with our strategic plans. Our MRB portfolio is marked at a significant premium to cost, adjusted for paydowns, primarily due to higher stated interest rates when compared to current market interest rates for similar investments. We may consider selling certain MRBs in exchange for cash at prices that approximate our currently reported fair value. However, we are contractually prevented from selling the MRBs included in our TEBS financings.
Our ability to dispose of investments on favorable terms is dependent upon several factors including, but not limited to, the availability of credit to potential buyers to purchase investments at prices we consider acceptable. In addition, potential adverse changes to general market and economic conditions may negatively impact our ability to sell our investments in the future.
In January 2020, we soldThree of our PHC Certificates to an unrelated party and we received net proceeds of approximately $8.7 million, after the payment of principal, interest and expenses related to the collapse of the related secured TOB financing. In June 2020, our investmentinvestments in Vantage at Waco wasunconsolidated entities were redeemed upon the salesales of the underlying property and weproperties during 2021. We received cash of approximately $10.8$16.1 million related tofrom the sale.sale of Vantage at Germantown in March 2021, approximately $20.1 million from the sale of Vantage at Powdersville in May 2021, and approximately $18.9 million from the sale of Vantage at Bulverde in August 2021.
Uses of Liquidity
Our principal uses of liquidity consist of:
• General and administrative expenses; • Investment funding commitments; • Debt service on secured lines of credit, debt financings, Secured Notes, and mortgages payable; • Distributions paid to holders of Preferred Units and BUCs; • Potential redemptions of Series A Preferred Units; and • Other contractual obligations. 50 |
|
|
|
|
|
|
|
|
|
|
General and Administrative Expenses
We use cash to pay general and administrative expenses of the Partnership’s operations.operations and real estate operating expenses of our MF Properties. For additional details, see Item 1A, “Risk Factors” in this report, and the section captioned “Cash flows from operating activities” in the Partnership’s consolidated statements of cash flows set forth in Item 8 of this Report. General and administrative expenses are typically paid from unrestricted cash on hand and operating cash flows.
Included in general and administrative expenses is operating lease expenses for our MF Properties, of which the most significant is a ground lease associated with The 50/50 MF Property. Such expenses are paid from operating cash flows. The following table summarizes our outstanding contractual lease obligations by year as of December 31, 2021:
2022 |
| $ | 141,119 |
|
2023 |
|
| 143,561 |
|
2024 |
|
| 144,706 |
|
2025 |
|
| 147,598 |
|
2026 |
|
| 150,548 |
|
Thereafter |
|
| 4,219,127 |
|
Total |
| $ | 4,946,659 |
|
51
Investments in Additional MRBs, GILs, Property Loans and Unconsolidated Entities
Our overall strategy is to continue to increase our investmentinvest in quality multifamily properties through either the acquisition of MRBs, GILs, property loans or equity investments in both existing and new markets. We evaluate investment opportunities based on, but not limited to, our market outlook, including general economic conditions, development opportunities and long-term growth potential. Our ability to make future investments is dependent upon identifying suitable acquisition and development opportunities, access to long-term financing sources, and the availability of investment capital. We may commit to fund additional investments on a draw-down or forward basis. The following table summarizes our outstanding investment commitments as of December 31, 2020:2021:
52
|
|
|
|
|
|
|
|
|
|
|
| Projected Funding by Year (1) |
|
|
|
|
| |||||||||||
Property Name |
| Commitment Date |
| Maturity Date |
| Total Initial Commitment |
|
| Remaining Commitment |
|
| 2022 |
|
| 2023 |
|
| 2024 |
|
| Interest Rate |
| Related Debt | |||||
Mortgage Revenue Bonds |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||
Jackson Manor Apartments |
| April 2021 |
| May 2038 |
| $ | 6,900,000 |
|
| $ | 2,000,000 |
|
| $ | 2,000,000 |
|
| $ | - |
|
| $ | - |
|
| 5.00% |
| Variable TOB |
Residency at the Mayer - Series A |
| October 2021 |
| April 2039 |
|
| 29,500,000 |
|
|
| 5,500,000 |
|
|
| 5,500,000 |
|
|
| - |
|
|
| - |
|
| SOFR + 3.60% (4) |
| Variable TOB |
Meadow Valley |
| December 2021 |
| December 2029 |
|
| 44,000,000 |
|
|
| 43,900,000 |
|
|
| 10,100,000 |
|
|
| 18,600,000 |
|
|
| 15,200,000 |
|
| 6.25% |
| (5) |
Subtotal |
|
|
|
|
|
| 80,400,000 |
|
|
| 51,400,000 |
|
|
| 17,600,000 |
|
|
| 18,600,000 |
|
|
| 15,200,000 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||
Taxable Mortgage Revenue Bonds |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||
Ocotillo Springs - Series A-T |
| July 2020 |
| August 2022 (3) |
| $ | 7,000,000 |
|
| $ | 6,000,000 |
|
| $ | 6,000,000 |
|
| $ | - |
|
| $ | - |
|
| LIBOR + 3.55% (4) |
| Variable TOB |
Residency at the Mayer Series A-T |
| October 2021 |
| April 2024 (3) |
|
| 12,500,000 |
|
|
| 11,500,000 |
|
|
| 11,500,000 |
|
|
| - |
|
|
| - |
|
| SOFR + 3.70% (4) |
| Variable TOB |
Subtotal |
|
|
|
|
|
| 19,500,000 |
|
|
| 17,500,000 |
|
|
| 17,500,000 |
|
|
| - |
|
|
| - |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||
Governmental Issuer Loans |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||
Hilltop at Signal Hills |
| January 2021 |
| August 2023 (3) |
| $ | 24,450,000 |
|
| $ | 2,899,416 |
|
| $ | 2,899,416 |
|
| $ | - |
|
| $ | - |
|
| SOFR + 3.07% (4) |
| Variable TOB |
Legacy Commons at Signal Hills |
| January 2021 |
| February 2024 (3) |
|
| 34,620,000 |
|
|
| 1,499,395 |
|
|
| 1,499,395 |
|
|
| - |
|
|
| - |
|
| SOFR + 3.07% (4) |
| Variable TOB |
Hope on Avalon |
| January 2021 |
| February 2023 (3) |
|
| 23,390,000 |
|
|
| 13,408,800 |
|
|
| 13,408,800 |
|
|
| - |
|
|
| - |
|
| SIFMA + 3.75% (4) |
| Variable TOB |
Hope on Broadway |
| January 2021 |
| February 2023 (3) |
|
| 12,105,623 |
|
|
| 8,414,378 |
|
|
| 8,414,378 |
|
|
| - |
|
|
| - |
|
| SIFMA + 3.75% (4) |
| Variable TOB |
Osprey Village |
| July 2021 |
| August 2024 (3) |
|
| 60,000,000 |
|
|
| 53,627,970 |
|
|
| 38,321,966 |
|
|
| 15,306,004 |
|
|
| - |
|
| SOFR + 3.07% (4) |
| Variable TOB |
Willow Place Apartments |
| September 2021 |
| October 2024 (3) |
|
| 25,000,000 |
|
|
| 22,028,214 |
|
|
| 19,520,341 |
|
|
| 2,507,873 |
|
|
| - |
|
| SOFR + 3.30% (4) |
| Variable TOB |
Subtotal |
|
|
|
|
|
| 179,565,623 |
|
|
| 101,878,173 |
|
|
| 84,064,296 |
|
|
| 17,813,877 |
|
|
| - |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||
Taxable Governmental Issuer Loans |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||
Hope on Avalon |
| January 2021 |
| February 2023 (3) |
| $ | 10,573,000 |
|
| $ | 9,573,000 |
|
| $ | 9,573,000 |
|
| $ | - |
|
| $ | - |
|
| SOFR + 3.55% (4) |
| Variable TOB |
Subtotal |
|
|
|
| 10,573,000 |
|
|
| 9,573,000 |
|
|
| 9,573,000 |
|
|
| - |
|
|
| - |
|
|
|
|
| ||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||
Property Loans |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||
Scharbauer Flats Apartments |
| June 2020 |
| January 2023 (3) |
| $ | 24,160,000 |
|
| $ | 14,451,402 |
|
| $ | 14,451,402 |
|
| $ | - |
|
| $ | - |
|
| LIBOR + 2.85% |
| Variable TOB |
Oasis at Twin Lakes |
| July 2020 |
| August 2023 (3) |
|
| 27,704,180 |
|
|
| 7,096,818 |
|
|
| 7,096,818 |
|
|
| - |
|
|
| - |
|
| LIBOR + 2.50% (4) |
| Variable TOB |
Centennial Crossings |
| August 2020 |
| September 2023 (3) |
|
| 24,250,000 |
|
|
| 12,895,614 |
|
|
| 12,895,614 |
|
|
| - |
|
|
| - |
|
| LIBOR + 2.50% (4) |
| Variable TOB |
Hilltop at Signal Hills |
| January 2021 |
| August 2023 (3) |
|
| 21,197,939 |
|
|
| 20,197,939 |
|
|
| 20,197,939 |
|
|
| - |
|
|
| - |
|
| SOFR + 3.07% (4) |
| Variable TOB |
Legacy Commons at Signal Hills |
| January 2021 |
| February 2024 (3) |
|
| 32,233,972 |
|
|
| 29,629,742 |
|
|
| 23,854,932 |
|
|
| 5,774,810 |
|
|
| - |
|
| SOFR + 3.07% (4) |
| Variable TOB |
Osprey Village |
| July 2021 |
| August 2024 (3) |
|
| 25,500,000 |
|
|
| 24,500,000 |
|
|
| - |
|
|
| 24,500,000 |
|
|
| - |
|
| SOFR + 3.07% (4) |
| Variable TOB |
Willow Place Apartments |
| September 2021 |
| October 2024 (3) |
|
| 21,351,328 |
|
|
| 20,351,328 |
|
|
| - |
|
|
| 20,351,328 |
|
|
| - |
|
| SOFR + 3.30% (4) |
| Variable TOB |
Magnolia Crossing (6) |
| December 2021 |
| December 2022 (3) |
|
| 14,500,000 |
|
|
| 1,075,421 |
|
|
| 1,075,421 |
|
|
| - |
|
|
| - |
|
| SOFR + 6.50% (4) |
| N/A |
Subtotal |
|
|
|
|
|
| 190,897,419 |
|
|
| 130,198,264 |
|
|
| 79,572,126 |
|
|
| 50,626,138 |
|
|
| - |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||
Equity Investments |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||
Vantage at Hutto (7) |
| November 2020 |
| N/A |
| $ | 11,233,000 |
|
| $ | 5,991,269 |
|
| $ | 5,991,269 |
|
| $ | - |
|
| $ | - |
|
| N/A |
| N/A |
Vantage at San Marcos (8) |
| November 2020 |
| N/A |
|
| 9,914,529 |
|
|
| 8,943,914 |
|
|
| 8,943,914 |
|
|
| - |
|
|
| - |
|
| N/A |
| N/A |
Vantage at Loveland |
| April 2021 |
| N/A |
|
| 16,329,000 |
|
|
| 5,883,811 |
|
|
| 5,883,811 |
|
|
| - |
|
|
| - |
|
| N/A |
| N/A |
Vantage at Helotes |
| May 2021 |
| N/A |
|
| 12,590,681 |
|
|
| 1,613,496 |
|
|
| 1,613,496 |
|
|
| - |
|
|
| - |
|
| N/A |
| N/A |
Vantage at Fair Oaks |
| June 2021 |
| N/A |
|
| 11,011,245 |
|
|
| 4,712,690 |
|
|
| 4,712,690 |
|
|
| - |
|
|
| - |
|
| N/A |
| N/A |
Vantage at McKinney Falls |
| December 2021 |
| N/A |
|
| 11,431,272 |
|
|
| 4,922,957 |
|
|
| 4,922,957 |
|
|
| - |
|
|
| - |
|
| N/A |
| N/A |
Subtotal |
|
|
|
|
|
| 72,509,727 |
|
|
| 32,068,137 |
|
|
| 32,068,137 |
|
|
| - |
|
|
| - |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||
Bond Purchase Commitments |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||
CCBA Senior Garden Apartments |
| July 2020 |
| Q1 2022 (9) |
| $ | 3,807,000 |
|
| $ | 3,807,000 |
|
| $ | 3,807,000 |
|
| $ | - |
|
| $ | - |
|
| 4.50% |
| N/A |
Anaheim & Walnut |
| September 2021 |
| Q3 2024 (9) |
|
| 3,900,000 |
|
|
| 3,900,000 |
|
|
| - |
|
|
| - |
|
|
| 3,900,000 |
|
| 4.85% |
| N/A |
Subtotal |
|
|
|
|
|
| 7,707,000 |
|
|
| 7,707,000 |
|
|
| 3,807,000 |
|
|
| - |
|
|
| 3,900,000 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||
Total Commitments |
|
|
|
|
| $ | 561,152,769 |
|
| $ | 350,324,574 |
|
| $ | 244,184,559 |
|
| $ | 87,040,015 |
|
| $ | 19,100,000 |
|
|
|
|
|
Investment |
| Remaining Funding Commitments |
|
| |
Mortgage revenue bond (1) |
| $ | 12,976,500 |
|
|
Taxable mortgage revenue bond |
|
| 7,000,000 |
|
|
Governmental issuer loans (1) |
|
| 42,216,343 |
|
|
Investments in unconsolidated entities |
|
| 17,729,428 |
|
|
Property loans (2) |
|
| 70,786,838 |
|
|
Bond purchase commitments (3) |
|
| 3,807,000 |
|
|
Total |
| $ | 154,516,109 |
|
|
53
|
|
|
|
|
|
Debt Service on Secured Lines of Credit, Debt Financings, Secured Notes and Mortgages Payable
As previously discussed, we maintain a General LOC and Acquisition LOC that provide flexibility in managing our liquidity. Debt service on our General LOC consists of monthly interest payments and principal repayment due upon maturity in June 2023, before consideration of extension options. Principal payments may be accelerated if the balance exceeds the borrowing base calculation. Debt service on our Acquisition LOC consists of monthly interest and principal repayments due on the 270th day following the advance date but may be extended for up to an additional 270 days by making certain payments.
Our debt financing arrangements consist of various secured financing transactions to leverage our portfolio of MRBs, taxable MRBs, GILs, a taxable GIL and certain property loans. The financing arrangements generally involve the securitization of MRBs, GILs and property loansthese investment assets into trusts whereby we retain beneficial interests in the trusts that provide us certain rights to the underlying investment assets. The senior beneficial interests are sold to unaffiliated parties in exchange for debt proceeds. The senior beneficial interests require periodic interest payments that may be fixed or variable, depending on the terms of the arrangement, and scheduled principal payments. The Partnership is required to fund any shortfall in principal and interest payable to the senior beneficial interests of the TEBS financings in the case of non-payment, forbearance or default of the borrowers’ contractual debt service payments of the related MRBs.MRBs, up to the value of our residual interests. In the
case of forbearance or default on an MRB, GIL or property loanunderlying investment asset in a Term TOB or TOB financing, we may be required to fund shortfalls in principal and interest payable to the senior beneficial interests, repurchase a portion of the outstanding senior beneficial interests, or repurchase the MRB, GIL or property loanunderlying investment asset and seek alternative financing. In addition, the Partnership may be required to post collateral if the value of MRBs, GILs and property loans securitized in TOB financings drops below a threshold in the aggregate. We anticipate that cash flows from the securitized investment assets will fund normal, recurring principal and interest payments to the senior beneficial interests and all trust-related fees.
Our Secured Notes are secured by the Partnership’s cash flows offrom the residual certificates associated withof our TEBS financings. Interest due on the Secured Notes, net of amounts due to the Partnershipus on the related total return swap transactions, will be paid from receipts related to the TEBS financing residual certificates. Future receipts of principal related to the TEBS financing residual certificates will be used to pay down the principal of the Secured Notes. The Partnership has guaranteed the payment and performance of the responsibilities under the Secured Notes and related documents.
We may be required to post collateral with Mizuho or Barclays if the value of investment assets securitized in TOB financings and Secured Notes drop below a threshold in the aggregate. We were not required to post collateral due to declines in the value of the securitized assets in 2021.
We actively manage both our fixed and variable rate debt financings and our exposure to changes in market interest rates. The following table summarizes our fixed and variable rate debt financings as of December 31, 20202021 and 2019:2020:
|
|
|
| December 31, 2021 |
|
| December 31, 2020 |
| ||||||||||
Securitized Assets - |
| Related Debt Financing - Fixed or Variable Interest Rates |
| Outstanding |
|
| % of Total |
|
| Outstanding |
|
| % of Total |
| ||||
Fixed |
| Fixed |
| $ | 293,999,683 |
|
|
| 35.8 | % |
| $ | 301,073,976 |
|
|
| 44.5 | % |
Fixed |
| Variable |
|
| 286,567,660 |
|
|
| 34.8 | % |
|
| 310,286,167 |
|
|
| 45.9 | % |
Variable (1) |
| Variable (1) |
|
| 242,204,000 |
|
|
| 29.4 | % |
|
| 64,972,998 |
|
|
| 9.6 | % |
Total |
|
|
| $ | 822,771,343 |
|
|
|
|
| $ | 676,333,141 |
|
|
|
|
|
|
|
| December 31, 2020 |
|
| December 31, 2019 |
| ||||||||||
Securitized Assets - Fixed or Variable Interest Rates |
| Related Debt Financing - Fixed or Variable Interest Rates |
| Outstanding Principal |
|
| % of Total Debt Financing |
|
| Outstanding Principal |
|
| % of Total Debt |
| ||||
Fixed |
| Fixed |
| $ | 301,073,976 |
|
|
| 44.5 | % |
| $ | 356,258,799 |
|
|
| 66.1 | % |
Fixed |
| Variable |
|
| 310,286,167 |
|
|
| 45.9 | % |
|
| 182,329,180 |
|
|
| 33.9 | % |
Variable (1) |
| Variable (1) |
|
| 64,972,998 |
|
|
| 9.6 | % |
|
| - |
|
|
| 0.0 | % |
Total |
|
|
| $ | 676,333,141 |
|
|
|
|
|
| $ | 538,587,979 |
|
|
|
|
|
| The securitized asset and related |
In April 2020, we terminated all outstanding arrangements with Deutsche Bank, consisting of the Term TOB Trust, Term A/B Trusts and Master Trust Agreement. The debt financing structures were collapsed and replaced withboth have variable interest rates, though the variable rate TOB Trust debt financings with Mizuho. The termination of the Master Trust Agreement with Deutsche Bank releasedindices may differ. As such, the Partnership from various financial covenants that limitedis at least partially hedged against rising interest rates.
54
In October 2021, we executed our first TOB financing with Barclays as the Partnership’s liquiditylender. The addition of Barclays provides an alternative financing source and that exposed the Partnership to riskdiversification of covenant violations due to changes in its market capitalization, which is outside of the Partnership’s control.our lender relationships.
In July 2020, we extended the maturity of all existing debt financings with Mizuho that were scheduled to mature within the next 12 months to July 2023. There were no additional changes to terms or fees associated with the amendment. We typically refinance arrangements with existing lenders, assuming the terms are acceptable to the Partnership. We may also explore other financing options with Freddie Mac, Fannie Mae, other investment banks or other lenders in the market.
Our mortgages payable financing arrangements are used to leverage The 50/50 MF Property. The mortgages are entered into with financial institutions and are secured by the MF Property. The mortgages bear interest at fixed rates and include scheduled principal payments. The mortgages mature in March 2025 and April 2027. We anticipate that cash flows from The 50/50 MF Property will be sufficient to pay all normal, recurring principal and interest payments.
In February 2020, the Partnership refinanced The 50/50 MF Property mortgage loanfollowing table summarizes contractual maturities by year for our secured lines of credit, debt financings, Secured Notes and mortgages payable as of December 31, 2021:
|
| Secured Lines of Credit |
|
| Debt Financing and Secured Notes |
|
| Mortgages Payable |
|
| Total |
| ||||
2022 |
| $ | 39,214,000 |
|
| $ | 23,169,689 |
|
| $ | 2,560,283 |
|
| $ | 64,943,972 |
|
2023 |
|
| 6,500,000 |
|
|
| 237,473,815 |
|
|
| 909,278 |
|
|
| 244,883,093 |
|
2024 |
|
| - |
|
|
| 199,878,152 |
|
|
| 947,301 |
|
|
| 200,825,453 |
|
2025 |
|
| - |
|
|
| 112,692,806 |
|
|
| 1,747,032 |
|
|
| 114,439,838 |
|
2026 |
|
| - |
|
|
| 4,227,863 |
|
|
| 641,415 |
|
|
| 4,869,278 |
|
Thereafter |
|
| - |
|
|
| 245,329,018 |
|
|
| 20,020,531 |
|
|
| 265,349,549 |
|
Total |
| $ | 45,714,000 |
|
| $ | 822,771,343 |
|
| $ | 26,825,840 |
|
| $ | 895,311,183 |
|
We expect to refinance maturing debts with its existing lender. The maturity datelenders or obtain new debt from other lenders under similar terms. Certain debt financings will be repaid either entirely or partially from redemption proceeds of the mortgage loan was extended seven yearssecured investment assets.
See Item 7a, “Quantitative and Qualitative Disclosures about Market Risk” of this Report and Notes 15 (secured lines of credit), 16 (debt financing and Secured Notes), and 17 (mortgages payable) to April 2027 and the interest rate was fixed at 4.35%. In February 2020, the Partnership also refinanced The 50/50 MF Property TIF loan with its existing lender. Partnership’s consolidated financial statements for additional details.The maturity date of the TIF loan was extended five years to March 2025 and the interest rate was lowered to 4.40%.
Distributions Paid to Holders of Series A Preferred Units and BUCs
Distributions to the holders of Series A Preferred Units, if declared by the General Partner, are paid quarterly at an annual fixed rate of 3.0%. If the Partnership were to issue Series A-1 Preferred Units or Series B Preferred Units, holders of such units will be paid quarterly distributions, if declared by the General Partner, at annual fixed rates of 3.0% and 3.4%, respectively. The Series A Preferred Units, Series A-1 Preferred Units and Series B Preferred Units are non-cumulative, non-voting and non-convertible.
On December 16, 2020,14, 2021, we announced that the Board of Managers of Greystone Manager, which is the general partner of the General Partner, declared a quarterly distribution of $0.06$0.11 per BUC and a special distribution of $0.08 per BUC to unitholders of record on December 31, 20202021 and was paid on January 29, 2021.31, 2022.
The Partnership and its General Partner continually assess the level of distributions for the Series A Preferred Units and BUCs based on cash available for distribution, financial performance and other factors considered relevant, including the effects of the COVID-19 pandemic.COVID-19.
Potential Redemptions of Series A Preferred Units
Upon the sixth anniversary of the closing of the sale of Series A Preferred Units to a subscriber, and upon each anniversary thereafter, each holder of Series A Preferred Units has the right to redeem, in whole or in part, the Series A Preferred Units held by such holder at a per unit redemption price equal to $10.00 per unit plus an amount equal to all declared and unpaid distributions through the date of the redemption. The next optional redemption dates for the currently outstanding Series A Preferred Units range from September 2022 through October 2023 and the holders must provide notice of the election to redeem no less than 180 days prior to such redemption dates. No Unitholders have given notice of their election to redeem Series A Preferred Units as of December 31, 2021. If the holders of the Series A Preferred Units elect to redeem, we will be required, subject to certain restrictions, to secure funds to redeem from unrestricted cash on hand, proceeds from our General LOC, additional borrowings or through additional capital raising options.
In July 2021, our registration statement on Form S-4 to register the offering and issuance of up to 9,450,000 of Series A-1 Preferred Units under a shelf registration process was declared effective by the SEC. Under this offering, the Partnership may issue up to 9,450,000 Series A-1 Preferred Units in exchange for the Partnership’s outstanding Series A Preferred Units. If unitholders elect to exchange Series A Preferred Units for Series A-1 Preferred Units, the new Series A-1 Preferred Units will not be eligible for redemption until the sixth anniversary of the date of the exchange, except in certain limited circumstances.
55
Other Contractual Obligations
We are subject to various guarantee obligations in the normal course of business, and, in most cases, do not anticipate these obligations to result in significant cash payments by the Partnership.
Cash Flows
In 2020,2021, we generated $79.8$28.9 million of cash, which was the net result of $15.8$33.9 million provided by operating activities, $38.1$187.5 million used in investing activities, and $102.1$182.5 million provided inby financing activities.
Cash provided by operating activities totaled $15.8$33.9 million in 20202021 compared to $18.0$15.8 million generated in 2019.2020. The change was due to the following factors:
• An increase of $30.9 million in net income, offset by the $15.5 million related to the gain on sale of unconsolidated entities that is cash from investing activities and $5.5 million decrease related to the provision for credit loss; and • An increase of $8.1 million related to changes in the preferred return receivable from unconsolidated entities.
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Cash used in investing activities totaled $187.5 million in 2021 compared to cash used of $38.1 million in 2020 compared to cash provided of $23.2 million in 2019.2020. The change was due to the following factors:
• A decrease of $43.3 million of cash proceeds from the sale of the PHC Certificates; • A decrease of $55.0 million and $49.9 million of cash due to continued advances on GIL and property loan investment commitments, respectively; • A decrease of $60.2 million of cash due to MRB acquisitions and draw-down funding; • A decrease of $13.5 million of cash due to continued contributions to unconsolidated entities; • An increase of $37.5 million of cash proceeds from the sale of investments in unconsolidated entities; and • An increase of $36.1 million in cash received for principal payments on MRBs, primarily due to MRB redemptions.
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Cash provided by financing activities totaled $182.5 million in 2021 compared to cash provided of $102.1 million in 2020 compared to cash used of $31.3 million in 2019.2020. The change was due to the following factors:
• An increase of $45.7 million in net cash proceeds from borrowing on the secured lines of credit; • An increase of $31.2 million in net cash proceeds from the sale of BUCs; • A net increase of $8.7 million in net cash proceeds from debt financing; • A decrease of $1.8 million of net cash payments on the unsecured lines of credit; and • A decrease of approximately $3.2 million in cash from an increase in distributions paid;
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We believe our cash balance and cash provided by the sources discussed herein will be sufficient to pay, or refinance, our debt obligations and to meet our liquidity needs over the next 12 months.
Leverage Ratio
We utilize leverage to enhance ratesset target constraints for each type of return to our Unitholders.financing utilized by us. Those constraints are dependent upon several factors, including the assets being leveraged, the tenor of the leverage program, whether the financing is subject to marketmargin collateral calls, and the liquidity and marketability of the financingfinanced collateral. We use target constraints for each type of financing utilized by us to manage to an overall maximum 75% leverage constraint,level (the “Leverage Ratio”), as established by the Board of Managers of Greystone Manager, which is the general partner of the Partnership’s General Partner.Manager. The Board of Managers of Greystone Manager retains the right to change the leverage constraintmaximum Leverage Ratio in the future based on the consideration of factors the Board of Managers considers relevant. We definecalculate our leverage ratioLeverage Ratio as total outstanding debt divided by total assets using cost adjusted for paydowns for MRBs, GILs, property loans, taxable MRBs and taxable MRBs,GILs, and initial cost for deferred financing costs and MF Properties.real estate assets. As of December 31, 2020,2021, our overall leverage ratioLeverage Ratio was approximately 67%69%.
Cash Available for Distribution
The Partnership believes that Cash Available for Distribution (“CAD”) provides relevant information about the Partnership’s operations and is necessary, along with net income, for understanding its operating results. To calculate CAD, the Partnership begins with net income as computed in accordance with GAAP and adjusts for non-cash expenses consisting of depreciation expense, amortization expense related to deferred financing costs, amortization of premiums and discounts, non-cash interest rate derivative expense or income, provision for credit and loan losses, impairments on MRBs, GILs, PHC Certificates, real estate assets and property loans, deferred income tax expense (benefit) and restricted unit compensation expense. The Partnership also deducts Tier 2 income (see Note 3 to the Partnership’s consolidated financial statements) distributable to the General Partner as defined in the Partnership Agreement and Series A Preferred Unit distributions and accretion. Net income is the GAAP measure most comparable to CAD. There is no generally accepted methodology for computing CAD, and the Partnership’s computation of CAD may not be comparable to CAD reported by other companies. Although the Partnership considers CAD to be a useful measure of the Partnership’s operating performance, CAD is a non-GAAP measure that should not be considered as an alternative to net income calculated in accordance with GAAP, or any other measures of financial performance presented in accordance with GAAP.56
Currently, cash distributions are made to the Partnership’s BUC holders at an annual rate of $0.305 per BUC. The amount of cash per BUC distributed may increase or decrease at the determination of the General Partner based on its assessment of the amount of cash available for this purpose. During the years ended December 31, 2020 and 2019, we generated CAD of $0.26 and $0.57 per BUC, respectively.
The following table shows the calculation of CAD (and a reconciliation of the Partnership’s net income (loss) as determined in accordance with GAAP to CAD) for the years ended December 31, 2020 and 2019:
|
| For the Years Ended December 31, |
| |||||
|
| 2020 |
|
| 2019 |
| ||
Net income |
| $ | 7,208,828 |
|
| $ | 30,492,151 |
|
Change in fair value of derivatives and interest rate derivative amortization |
|
| (116,899 | ) |
|
| 499,835 |
|
Depreciation and amortization expense |
|
| 2,810,073 |
|
|
| 3,091,417 |
|
Provision for credit loss (1) |
|
| 7,318,590 |
|
|
| - |
|
Provision for loan loss (2) |
|
| 911,232 |
|
|
| - |
|
Reversal of impairment on securities (3) |
|
| (1,902,979 | ) |
|
| - |
|
Impairment charge on real estate assets |
|
| 25,200 |
|
|
| 75,000 |
|
Amortization of deferred financing costs |
|
| 1,450,398 |
|
|
| 1,713,534 |
|
RUA compensation expense |
|
| 1,017,938 |
|
|
| 3,636,091 |
|
Deferred income taxes |
|
| (105,920 | ) |
|
| (149,874 | ) |
Redeemable Series A Preferred Unit distribution and accretion |
|
| (2,871,051 | ) |
|
| (2,871,051 | ) |
Tier 2 (Income distributable) Loss allocable to the General Partner (4) |
|
| 80,501 |
|
|
| (2,018,202 | ) |
Bond purchase premium (discount) amortization (accretion), net of cash received |
|
| (59,691 | ) |
|
| (80,524 | ) |
Total CAD |
| $ | 15,766,220 |
|
| $ | 34,388,377 |
|
|
|
|
|
|
|
|
|
|
Weighted average number of BUCs outstanding, basic |
|
| 60,606,989 |
|
|
| 60,551,775 |
|
Net income per BUC, basic |
| $ | 0.07 |
|
| $ | 0.42 |
|
Total CAD per BUC, basic |
| $ | 0.26 |
|
| $ | 0.57 |
|
Distributions declared, per BUC |
| $ | 0.305 |
|
| $ | 0.500 |
|
|
|
|
|
|
|
|
|
For 2020, Tier 2 loss allocable to the general partner related to the sale of the PHC Certificates. For 2019, Tier 2 income consisted of $3.0 million of contingent interest realized on redemption of the Vantage at Brooks, LLC property loan in January 2019 and a $10.5 million gain on sale related to the Partnership’s investment in Vantage at Panama City Beach in September 2019.
Off Balance Sheet Arrangements
As of December 31, 20202021 and 2019,2020, we held MRBs GILs and GILsproperty loans that are collateralizedsecured by Residential Propertiesaffordable multifamily and seniors housing properties and one commercial property. The affordable multifamily properties and commercial property, which are owned by entities that are not controlled by us. We have no equity interest in these entities and do not guarantee any obligations of these entities.
The Partnership has entered into various commitments and guarantees. For additional discussions related to commitments and guarantees, see Note 19 to the Partnership’s consolidated financial statements.
We do not engage in trading activities involving non-exchange traded contracts. As such, we are not materially exposed to any financing, liquidity, market, or credit risk that could arise if we had engaged in such relationships.
We do not have any relationships or transactions with persons or entities that derive benefits from their non-independent relationships with us or our related parties, other than what is disclosed in Note 23 to the Partnership’s consolidated financial statements.
Contractual ObligationsCritical Accounting Policies and Estimates
As discussedOur significant accounting policies are more fully described in Notes 15 through 17Note 2 and 24 to the Partnership’s consolidated financial statements, we have various debt service obligations related to our LOCs, debt financings and our MF Property mortgages payable. Our strategic objective is to leverage our new MRB and GIL investments utilizing long-term securitization financings either with Freddie Mac through its TEBS program or with other lenders with trust securitizations similar to the TOB Trust program with Mizuho and the Term TOB Trust program with Morgan Stanley. This strategy allows us to better match the duration of our assets and liabilities and to better manage the spread between our assets and liabilities.
See Note 20 to the Partnership’s consolidated financial statements for details regarding potential redemption dates for the Partnership’s Series A Preferred Units outstanding.
We have the following contractual obligations as of December 31, 2020:
|
| Payments due by period |
| |||||||||||||||||
|
| Total |
|
| Less than 1 year |
|
| 1-3 years |
|
| 3-5 years |
|
| More than 5 years |
| |||||
Debt Obligations |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Lines of credit - secured and unsecured |
| $ | 7,475,000 |
|
| $ | 7,475,000 |
|
| $ | - |
|
| $ | - |
|
| $ | - |
|
Debt financing |
|
| 676,333,141 |
|
|
| 5,894,456 |
|
|
| 216,953,505 |
|
|
| 99,202,936 |
|
|
| 354,282,244 |
|
Mortgages payable |
|
| 25,986,514 |
|
|
| 835,130 |
|
|
| 1,778,163 |
|
|
| 2,728,771 |
|
|
| 20,644,450 |
|
Lease Obligations |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating leases |
|
| 5,085,054 |
|
|
| 138,394 |
|
|
| 284,680 |
|
|
| 292,305 |
|
|
| 4,369,675 |
|
Total |
| $ | 714,879,709 |
|
| $ | 14,342,980 |
|
| $ | 219,016,348 |
|
| $ | 102,224,012 |
|
| $ | 379,296,369 |
|
Wewhich are also contractually obligated to pay interest on our long-term debt obligations. The weighted average interest of our lines of credit was 2.7% as of December 31, 2020. The weighted average interest of our debt financing was 3.7% as of December 31, 2020. The weighted average interest of our mortgages payable is 4.4% as of December 31, 2020.
We have various outstanding investment commitments for MRBs, GILs, property loans, investments in unconsolidated entities and for bond purchase commitments. See the “Liquidity and Capital Resources” section of this Item 7 for further information on our investment commitments and our liquidity sources to fund such commitments.
Inflation
Substantially all resident leases at the Residential Properties, which collateralize our MRBs, allow for adjustments in the rent payable at the time of renewal, subject to rent restrictions related to the MRBs. Additionally, the MF Properties may be able to seek rent increases. The majority of these leases are for one year or less. The short-term nature of these leases generally serves to reduce the risk to the properties of the adverse effects of inflation; however, market conditions may prevent the properties from increasing rental rates in amounts sufficient to offset higher operating expenses. Inflation did not have a significant impact on our financial results for the years presented in this Report.
Critical Accounting Policies
incorporated by reference. The preparation of financial statements in accordance with GAAP requires us to make judgments, assumptions, and estimates. The application of these judgments, assumptions, and estimates can affect the amounts of assets, liabilities, revenues, and expenses reported by us. Our significant accounting policies are described in Note 2 and 24 to the Partnership’s consolidated financial statements, which are incorporated by reference. We consider the following to be our critical accounting policies and estimates because they involve our judgments, assumptions and estimates that significantly affect the Partnership’s consolidated financial statements. If these estimates differ significantly from actual results, the impact on the Partnership’s consolidated financial statements may be material.
Variable Interest Entities
Under the accounting guidance for consolidation, the Partnership must evaluate entities in which it holds a variable interest to determine if the entities are VIEs and if the Partnership is the primary beneficiary. The entity that is deemed to have: (1) the power to direct the activities of a VIE that most significantly impact the entity’s economic performance; and (2) the obligation to absorb losses of the entity that could potentially be significant to the VIE or the right to receive benefits from the entity that could potentially be significant to the VIE, is considered the primary beneficiary. If the Partnership is deemed to be the primary beneficiary, then it must consolidate the VIEs in its consolidated financial statements. The Partnership has consolidated all VIEs in which it has determined it is the primary beneficiary. In the Partnership’s consolidated financial statements, all transactions and accounts between the Partnership and the consolidated VIEs have been eliminated in consolidation.
The Partnership re-evaluates VIEs at each reporting date based on events and circumstances at the VIEs. As a result, changes to the consolidated VIEs may occur in the future based on changes in circumstances. The accounting guidance on consolidations is complex and requires significant analysis and judgment.
The Partnership does not believe that the consolidation of VIEs for reporting under GAAP impacts its status as a partnership for federal income tax purposes or the status of Unitholders as partners of the Partnership. In addition, the consolidation of VIEs is not expected to impact the treatment of the MRBs, GILs and property loans owned by consolidated VIEs, the tax-exempt nature of the interest payments on secured debt financings, or the manner in which the Partnership’s income is reported to Unitholders on IRS Schedule K-1.
Fair Value of Financial Instruments
Current accounting guidance on fair value measurements establishes a framework for measuring fair value and provides for expanded disclosures about fair value measurements. The guidance:
• Defines fair value as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants at the measurement date; and • Establishes a three-level hierarchy for fair value measurements based upon the transparency of inputs to the valuation of an asset or liability on the measurement date.
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Inputs refer broadly to the assumptions that market participants would use in pricing the asset or liability, including assumptions about risk. To increase consistency and comparability in fair value measurements and related disclosures, the fair value hierarchy
57
prioritizes the inputs to valuation techniques used to measure fair value into three broad levels. The three levels of the hierarchy are defined as follows:
• Level 1 - inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities; • Level 2 - inputs are inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly, for substantially the full term of the financial instrument; and • Level 3 - inputs are unobservable inputs for asset or liabilities.
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The categorization within the valuation hierarchy is based upon the lowest level of input that is significant to the fair value measurement.
The following is a description of the valuation methodologies used for assets and liabilities measured at fair value.
Investments in MRBs, Taxable MRBs and Bond Purchase Commitments. Mortgage Revenue Bonds
The fair value of the Partnership’s investments in MRBs taxable MRBs, and bond purchase commitments as of December 31, 20202021 and 2019,2020, is based upon prices obtained from a third-party
pricing service, which are estimates of market prices. There is no active trading market for these securities, and price quotes for the securities are not available. The valuation methodology of the Partnership’s third-party pricing service incorporates commonly used market pricing methods. The valuation methodology considers the underlying characteristics of each security as well as other quantitative and qualitative characteristics including, but not limited to, market interest rates, illiquidity, legal structure of the borrower, collateral, seniority to other obligations, operating results of the underlying property, geographic location, and property quality. These characteristics are used to estimate an effective yield for each security. The security fair value is estimated using a discounted cash flow and yield to maturity or call analysis by applying the effective yield to contractual cash flows. Significant increases (decreases) in the effective yield would have resulted in a significantly lower (higher) fair value estimate. Changes in fair value due to an increase or decrease in the effective yield do not impact the Partnership’s cash flows.
See the Partnership's Mortgage Revenue Bonds Sensitivity Analysis in Item 7A for further analysis on the impact of hypothetical changes in effective yield on the fair value of our MRBs.
The Partnership evaluates pricing data received from the third-party pricing service by evaluating consistency with information from either the third-party pricing service or public sources. The fair value estimates of the MRBs taxable MRBs and bond purchase commitments are based largely on unobservable inputs believed to be used by market participants and requires the use of judgment on the part of the third-party pricing service and the Partnership. Due to the judgments involved, the fair value measurements of the Partnership’s investments in MRBs taxable MRBs and bond purchase commitments are categorized as Level 3 assets.
Mortgage Revenue Bonds and Taxable Mortgage Revenue BondsBond Impairment
The Partnership accounts for its investments in MRBs and taxable MRBs under the accounting guidance for certain investments in debt and equity securities. The Partnership’s investments in these instruments are classified as available-for-sale debt securities and are reported at their estimated fair value. The net unrealized gains or losses on these investments are reflected in the Partnership’s consolidated statements of comprehensive income. Unrealized gains and losses do not affect the cash flow of the bonds, distributions to Unitholders, or the characterization of the interest income of the financial obligation of the underlying collateral. See Note 24 for a description of the Partnership’s methodology for estimating the fair value of MRBs and taxable MRBs.
The Partnership periodically reviews its MRBs for impairment. The Partnership evaluates whether unrealized losses are considered other-than-temporary impairments based on various factors including, but not necessarily limited to, the following:
• The duration and severity of the decline in fair value; • The Partnership’s intent to hold and the likelihood of it being required to sell the security before its value recovers; • Adverse conditions specifically related to the security, its collateral, or both; • Volatility of the fair value of the security; • The likelihood of the borrower being able to make scheduled interest or principal payments; • Failure of the issuer to make scheduled interest or principal payments; and • Recoveries or additional declines in fair value after the balance sheet date. 58 |
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While the Partnership evaluates all available information, it focuses specifically on whether the security’s estimated fair value is below amortized cost. If a MRB’s estimated fair value is below amortized cost, and the Partnership has the intent to sell or may be required to sell the MRB prior to the time that its value recovers or until maturity, the Partnership will record an other-than-temporary impairment through earnings equal to the difference between the MRB’s carrying value and its fair value. If the Partnership does not expect to sell an other-than-temporarily impaired MRB, only the portion of the other-than-temporary impairment related to credit losses is recognized through earnings as a provision for credit loss, with the remainder recognized as a component of other comprehensive income (loss). In determining the provision for credit loss, the Partnership compares the present value of cash flows expected to be collected to the MRB’s amortized cost basis.
The recognition of other-than-temporary impairment, provision for credit loss, and the potential impairment analysis are subject to a considerable degree of judgment, the results of which, when applied under different conditions or assumptions, could have a material impact on the Partnership’s consolidated financial statements. If the Partnership experiences deterioration in the values of its MRB portfolio, the Partnership may incur other-than-temporary impairments or provision for credit losses that could negatively impact the Partnership’s financial condition, cash flows, and reported earnings.
Governmental Issuer Loan Impairment
The Partnership accounts for its investment in governmental issuer loans (“GILs”) under the accounting guidance for certain investments in debt and equity securities. The Partnership’s investment in these instruments are classified as held-to-maturity debt securities and are reported at amortized cost.
The Partnership periodically reviews its GILs for impairment. The Partnership evaluates whether unrealized losses are considered other-than-temporary impairments based on various factors including, but not necessarily limited to, the following:
• The duration and severity of the decline in fair value; • The Partnership’s intent to hold and the likelihood of it being required to sell the security before its value recovers; • Adverse conditions specifically related to the security, its collateral, or both; • Volatility of the fair value of the security; • The likelihood of the borrower being able to make scheduled interest or principal payments; • The failure of the borrower to make scheduled interest or principal payments; and • Recoveries or additional declines in fair value after the balance sheet date.
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While the Partnership evaluates all available information, it focuses specifically on whether the security’s estimated fair value is below amortized cost. If a GIL’s estimated fair value is below amortized cost, and the Partnership does not expect to recover its entire amortized cost, only the portion of the other-than-temporary impairment related to credit losses is recognized through earnings as a provision for credit loss, with the remainder recognized as a component of other comprehensive income (loss).
The recognition of other-than-temporary impairment, provision for credit loss, and the potential impairment analysis are subject to a considerable degree of judgment, the results of which, when applied under different conditions or assumptions, could have a material impact on the Partnership’s consolidated financial statements. If the Partnership experiences deterioration in the value of its GILs, the Partnership may incur other-than-temporary impairments or provision for credit losses that could negatively impact the Partnership’s financial condition, cash flows, and reported earnings.
Impairment of Investments in Unconsolidated Entities Impairment
The Partnership reviews its investments in unconsolidated affiliates for impairment whenever events or changes in business circumstances indicate that the carrying amount of the investments may not be fully recoverable. Factors considered include:
• The absence of an ability to recover the carrying amount of the investment; • The inability of the investee to sustain an earnings capacity that justifies the carrying amount of the investment; or • Estimated sales proceeds that are insufficient to recover the carrying amount of the investment. 59 |
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The Partnership’s assessment of whether a decline in value is other than temporary is based on the Partnership’s ability and intent to hold the investment and whether evidence indicating the carrying value of the investment is recoverable within a reasonable period of time outweighs evidence to the contrary. If the fair value of the investment is determined to be less than the carrying value and the decline in value is considered other than temporary, an impairment charge would be recorded equal to the excess of the carrying value over the estimated fair value of the investment.
Property Loans, Net of Loan Loss Allowance
The Partnership invests in taxable property loans made to the owners of certain multifamily, student housing and skilled nursing properties. Most of the property loans have been made to multifamily properties that secure MRBs and GILs owned by the Partnership. The Partnership recognizes interest income on the property loans as earned and the interest income is reported within “Other interest income” on the Partnership’s consolidated statements of operations. Interest income is not recognized for property loans that are deemed to be in nonaccrual status. The repayment of these property loans and accrued interest is dependent largely on the cash flows or proceeds upon sale or refinancing of the related property. The Partnership periodically evaluates these loans for potential impairment by estimating the fair value of the related property and comparing the fair value to the outstanding MRBs, GILs or other senior financing, plus the Partnership’s property loans. The Partnership utilizes a discounted cash flow model that considers varying assumptions. The discounted cash flow analysis may assume multiple revenue and expense scenarios, various capitalization rates, and multiple discount rates. The Partnership may also consider other information such as independent appraisals in estimating a property’s fair value.
If the estimated fair value of the related property, after deducting the amortized cost basis of the MRB, GIL or other senior financing, exceeds the principal balance of the taxable property loan then no potential loss is indicated and no allowance for loan loss is recorded. If a potential loss is indicated, an allowance for loan loss is recorded against the outstanding loan amount and a loss is realized.recognized. The determination of the need for an allowance for loan loss is subject to considerable judgment.
Real Estate Assets Impairment
The Partnership reviews real estate assets for impairment at least quarterlyperiodically and whenever events or changes in circumstances indicate that the carrying value of a property may not be recoverable. When indicators of potential impairment suggest that the carrying value of a real estate asset may not be recoverable, the Partnership compares the carrying amount of the real estate asset to the undiscounted net cash flows expected to be generated from the use of the asset. If the carrying value exceeds the undiscounted net cash flows, an impairment loss is recorded to the extent that the carrying value of the property exceeds its estimated fair value.
Recently Issued Accounting Pronouncements
For a discussion on recently issued accounting pronouncements, see Note 2 to the Partnership’s consolidated financial statements which is incorporated by reference.
60
Item 7A. Quantitative and Qualitative Disclosures About Market Risk.
OurThe primary components of our market risk exposuresat December 31, 2021 are related to interest rate risk and credit risk. Our exposure to market risks relates primarily to our investments in MRBs, GILs, property loans and our debt financing and mortgages payable.We seek to actively manage these and other risks and to acquire and hold assets that we believe justify bearing those risks, and to maintain capital levels consistent with those risks.
Interest Rate Risk
Interest rates are highly sensitive to many factors, including governmental, monetary and tax policies, domestic and international economic and political considerations, and other factors beyond our control. The nature of our MRBs, and GILs, property loans and the debt financing used to finance these investments, exposes us to financial risk due to fluctuations in market interest rates. The majority of our MRBs bear interest at fixed rates with the exception of the Ocotillo Springs MRB which has a variable rate subject to a floor (see Note 6).rates. The GILs and property loans predominantly bear interest at a variable rate,rates, noting all GILs are subject to a floorinterest rate floors with the exception of Scharbauer Flats Apartments GIL (see(Note 7).
We are subject to interest rate risk on the debt we’ve obtained to finance our investments. At December 31, 2021, our stated costs of borrowing by type of facility were as follows:
We have entered into total return swap agreements to lower the net interest cost of our Secured Notes. The following table sets forth certain information regarding the Partnership’s total return swap agreements as of December 31, 2021:
Purchase Date |
| Notional |
|
| Effective |
| Termination Date |
| Period End |
| Period End |
| Variable Rate |
| Counterparty |
| Fair Value as of |
| ||
Sept 2020 |
|
| 39,607,744 |
|
| Sept 2020 |
| Sept 2025 |
| 4.25% (1) |
| 9.20% (3) |
| 3-month LIBOR |
| Mizuho Capital Markets |
| $ | 77,061 |
|
Sept 2020 |
|
| 63,500,000 |
|
| Sept 2020 |
| Mar 2022 |
| 1.00% (2) |
| 9.20% (3) |
| 3-month LIBOR |
| Mizuho Capital Markets |
|
| 215,267 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| $ | 292,328 |
|
We enter into interest rate cap and other derivative agreements to mitigate our exposure to interest rate fluctuations on the variable rate financing facilities. The following table sets forth certain information regarding the Partnership’s interest rate cap agreement as of December 31, 2021:
Purchase |
| Notional Amount |
|
| Maturity |
| Effective |
|
| Index |
| Variable Debt |
| Counterparty |
| Fair Value as of |
| |||
Aug 2019 |
|
| 76,544,336 |
|
| Aug 2024 |
|
| 4.5 | % |
| SIFMA |
| M31 TEBS |
| Barclays Bank PLC |
| $ | 51,090 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| $ | 51,090 |
|
61
The following table sets forth information regarding the impact on the Partnership’s income assuming a change in interest rates as of December 31, 2021:
Description |
| - 25 basis points |
|
| + 50 basis points |
|
| + 100 basis points |
|
| + 150 basis points |
|
| + 200 basis points |
| |||||
TOB Debt Financings |
| $ | 1,251,939 |
|
| $ | (1,888,125 | ) |
| $ | (3,776,250 | ) |
| $ | (5,664,375 | ) |
| $ | (7,552,500 | ) |
TEBS Debt Financings |
|
| 127,977 |
|
|
| (255,954 | ) |
|
| (511,908 | ) |
|
| (767,862 | ) |
|
| (1,023,816 | ) |
Other Investment Financings |
|
| 182,239 |
|
|
| (646,034 | ) |
|
| (1,392,104 | ) |
|
| (2,138,174 | ) |
|
| (2,884,244 | ) |
Variable Rate Investments |
|
| (368,277 | ) |
|
| 1,266,501 |
|
|
| 2,931,936 |
|
|
| 4,705,901 |
|
|
| 6,491,927 |
|
Total |
| $ | 1,193,878 |
|
| $ | (1,523,612 | ) |
| $ | (2,748,326 | ) |
| $ | (3,864,510 | ) |
| $ | (4,968,633 | ) |
The interest rate sensitivity table above (the “Table”) represents the change in interest income from investments, net of interest on debt and settlement payments for interest rate derivatives over the next twelve months, assuming an immediate parallel shift in the LIBOR yield curve and the resulting implied forward rates are realized as a component of this shift in the curve. Assumptions include anticipated interest rates, relationships between interest rate indices and outstanding investments, liabilities and interest rate derivative positions.
No assurance can be made that the assumptions included in the Table presented herein will occur or that other events would not occur that would affect the outcomes of the analysis. Furthermore, the results included in the Table assume the Partnership does not act to change its sensitivity to the movement in interest rates.
As the above information incorporates only those material positions or exposures that existed as of December 31, 2021, it does not consider those exposures or positions that could arise after that date. The ultimate economic impact of these market risks will depend on the exposures that arise during the period, our risk mitigation strategies at that time and the overall business and economic environment.
Credit Risk
Our primary credit risk is the risk of default on our investment in MRBs, GILs and property loans collateralized by the Residential Properties.multifamily residential, seniors housing and skilled nursing properties. The MRBs and GILs are not direct obligations of the governmental authorities that issue the MRB or GIL and are not guaranteed by such authorities or any insurer or other party.insurer. In addition, the MRBs, GILs and the associated property loans are non-recourse obligations of the property owner. As a result, the soleprimary source of principal and interest payments on the MRBs, GILs and the property loans is the net operating cash flows generated by these properties or the net proceeds from a sale or refinance of these properties. Affiliates of the borrowers of our GILs and certain property loans have guaranteed payment of principal and accrued interest on the GILs and property loans of 100% at origination, decreasing to 50% upon receipt of the certificate of occupancy, and decreasing to 25% upon achievement of 90% occupancy for 30 consecutive days, so the Partnership may have additional recourse options for these investments.
If a property is unable to sustain net rental revenues at a level necessary to pay current debt service obligations on our MRB, GIL or property loans, a default may occur. A property’s ability to generate net operating cash flows is subject to a wide variety of factors, including rental and occupancy rates of the property and the level of its operating expenses. Occupancy rates and rents are directly affected by the supply of, and demand for, multifamily residential, seniors housing and skilled nursing properties in the market area where the property is located. This is affected by several factors such as local or national economic conditions, the amount of new apartment construction and the affordability of single-family homes. In addition, factors such as government regulation (e.g. zoning laws and permitting requirements), inflation, real estate and other taxes, labor problems, and natural disasters can affect the economic operations of a multifamily residential property.
Defaults on the MRBs, GILs or property loans may reduce the amount of future cash available for distribution to Unitholders. In addition, if a property’s net operating cash flows decline, it may affect the market value of the property. If the market value of a property deteriorates, the amount of net proceeds from the ultimate sale or refinancing of the property may be insufficient to repay the entire principal balance of the MRB, GIL or property loan. In the event of a default on an MRB, GIL or property loan, we will have the right to foreclose on the mortgage or deed of trust securing the property. If we take ownership of the property securing a defaulted MRB or GIL we will be entitled to all net operating cash flows generated by the property. If such an event occurs, these amounts will not provide tax-exempt income.
We actively manage the credit risks associated with our MRBs, GILs and property loans by performing a complete due diligence and underwriting process of the properties securing these investments prior to investing. In addition, we carefully monitor the on-going performance of the properties underlying these investments.
62
Credit risk is also present in the geographical concentration of the properties securing our MRBs. We have significant concentrations (geographic risk) in Texas, California, and South Carolina. The table below summarizes the geographic concentrations in these states as a percentage of the total MRB principal outstanding:
|
| December 31, 2021 |
|
| December 31, 2020 |
| ||
Texas |
|
| 41 | % |
|
| 43 | % |
California |
|
| 23 | % |
|
| 17 | % |
South Carolina |
|
| 11 | % |
|
| 17 | % |
Mortgage Revenue Bonds Sensitivity Analysis
A third-party pricing service is used to value our MRBs. The pricing service uses a discounted cash flow and yield to maturity or call analysis which encompasses judgment in its application. The key assumption in the yield to maturity or call analysis is the range of effective yields of the individual MRBs. The effective yield analysis for each MRB considers the current market yield on similar MRBs, specific terms of each MRB, and various characteristics of the properties collateralizing the MRBs such as debt service coverage ratio, loan to value, and other characteristics.
We completed a sensitivity analysis which is hypothetical and is as of a specific point in time. The results of the sensitivity analysis may not be indicative of actual changes in fair value and should be used with caution. The table below summarizes the sensitivity analysis metrics related to the investments in the MRBs as of December 31, 2020:2021:
Description |
| Estimated Fair Value (in 000's) |
|
| Range of Effective Yields used in Valuation |
| Range of Effective Yields if 10% Adverse Applied |
|
| Additional Unrealized Losses with 10% Adverse Change (in 000's) |
| ||||||
Mortgage Revenue Bonds |
| $ | 794,432 |
|
| 1.4% | -13.3% |
|
| 1.5 | % | -14.6% |
|
| $ | 16,384 |
|
Description |
| Estimated Fair |
|
| Range of Effective |
| Range of Effective |
| Additional |
| ||||||
Mortgage Revenue Bonds |
| $ | 793,510 |
|
| 0.9% | -19.1% |
|
| 1.0 | % | -21.0% |
| $ | 13,990 |
|
GeographicReinvestment Risk
The properties securingMRBs may have optional call dates that may be exercised by either the MRBsborrower or the Partnership that are geographically dispersed throughoutearlier than the United States with significant concentrations (geographic risk)contractual maturity at either par or premiums to par. In addition, our GILs and most property loans are prepayable at any time without penalty. Borrowers may choose to redeem our investments if prevailing market interest rates are lower than the interest rate on our investment asset or for other reasons. In order to maintain or grow our investment portfolio size and earnings, we must reinvest repayment proceeds in Texas, California,new assets. New MRB, GIL and South Carolina. The table below summarizesproperty loan opportunities may not generate the geographic concentrationssame returns as our current investments such that our reported operating results may decline over time.
Similarly, we are subject to reinvestment risk on the return of capital from sales of investments in these states as a percentageunconsolidated entities. Our strategy involves making equity investments in unconsolidated entities for the development, stabilization and sale of market-rate multifamily rental properties. Our initial equity contributions are returned upon sale of the total MRB principal outstanding:
|
| December 31, 2020 |
|
| December 31, 2019 |
| ||
Texas |
|
| 43 | % |
|
| 43 | % |
California |
|
| 17 | % |
|
| 18 | % |
South Carolina |
|
| 17 | % |
|
| 17 | % |
Summaryproperties underlying the unconsolidated entities, at which time we will reinvest the capital into new unconsolidated entities or other investments. New investment opportunities may not generate the same returns as our prior investments due to factors including, but not limited to, increasing competition in the development of Interest Rates on Borrowings and Interest Rate Cap Agreements
At December 31, 2020, the total costs of borrowing by investment type were as follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
We have entered into total return swap agreements to lower the net interest cost of our Secured Notes. The following table sets forth certain information regarding the Partnership’s total return swap agreements as of December 31, 2020:
Purchase Date |
| Notional Amount |
|
| Effective Date |
| Termination Date |
| Period End Variable Rate Paid |
| Period End Variable Rate Received |
| Variable Rate Index |
| Counterparty |
| Fair Value as of December 31, 2020 |
| ||
Sept 2020 |
|
| 39,970,485 |
|
| Sept 2020 |
| Sept 2025 |
| 4.25% (1) |
| 9.22% (3) |
| 3-month LIBOR |
| Mizuho Capital Markets |
| $ | 77,995 |
|
Sept 2020 |
|
| 63,500,000 |
|
| Sept 2020 |
| Mar 2022 |
| 1.00% (2) |
| 9.22% (3) |
| 3-month LIBOR |
| Mizuho Capital Markets |
|
| 215,631 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| $ | 293,626 |
|
|
|
|
|
|
|
We enter into interest rate cap agreements to mitigate our exposure to interest rate fluctuations on the variable rate financing facilities. The following table sets forth certain information regarding the Partnership’s interest rate cap agreement as of December 31, 2020:
Purchase Date |
| Notional Amount |
|
| Maturity Date |
| Effective Capped Rate (1) |
|
| Index |
| Variable Debt Financing Facility Hedged (1) |
| Counterparty |
| Fair Value as of December 31, 2020 |
| |||
Aug 2019 |
|
| 77,979,924 |
|
| Aug 2024 |
|
| 4.5 | % |
| SIFMA |
| M31 TEBS |
| Barclays Bank PLC |
| $ | 27,877 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| $ | 27,877 |
|
|
|
Interest Rate Risk – Change in Net Interest Income
The following table sets forth information regarding the impact on the Partnership’s income assuming a change inmarket-rate multifamily rental properties, rising interest rates as of December 31, 2020:and increasing construction costs. Lower returns on new investment opportunities will result in declining operating results over time.
Description |
| - 25 basis points |
|
| + 50 basis points |
|
| + 100 basis points |
|
| + 150 basis points |
|
| + 200 basis points |
| |||||
TOB Debt Financings |
| $ | 440,480 |
|
| $ | (882,415 | ) |
| $ | (1,764,830 | ) |
| $ | (2,647,245 | ) |
| $ | (3,529,660 | ) |
TEBS Debt Financings |
|
| 130,232 |
|
|
| (260,464 | ) |
|
| (520,927 | ) |
|
| (781,391 | ) |
|
| (1,041,855 | ) |
Other Investment Financings |
|
| 18,688 |
|
|
| (234,688 | ) |
|
| (789,563 | ) |
|
| (1,344,438 | ) |
|
| (1,899,313 | ) |
Variable Rate Investments |
|
| (84,457 | ) |
|
| 183,744 |
|
|
| 572,653 |
|
|
| 981,296 |
|
|
| 1,407,527 |
|
Total |
| $ | 504,943 |
|
| $ | (1,193,823 | ) |
| $ | (2,502,667 | ) |
| $ | (3,791,778 | ) |
| $ | (5,063,301 | ) |
The interest rate sensitivity table above (the “Table”) represents the change in interest income from investments, net of interest on debt and settlement payments for interest rate derivatives over the next twelve months, assuming an immediate parallel shift in the LIBOR yield curve and the resulting implied forward rates are realized as a component of this shift in the curve. Assumptions include anticipated interest rates, relationships between interest rate indices and outstanding investments, liabilities and interest rate derivative positions. 63
No assurance can be made that the assumptions included in the Table presented herein will occur or that other events would not occur that would affect the outcomes of the analysis. Furthermore, the results included in the Table assume the Partnership does not act to change its sensitivity to the movement in interest rates.
As the above information incorporates only those material positions or exposures that existed as of December 31, 2020, it does not consider those exposures or positions that could arise after that date. The ultimate economic impact of these market risks will depend on the exposures that arise during the period, our risk mitigation strategies at that time and the overall business and economic environment.
Item 8. Financial Statements and Supplementary Data.
Report of Independent Registered Public Accounting Firm
To the Board of Managers of Greystone AF Manager LLC and Partners of
America First Multifamily Investors, L.P.
Opinion on the Financial Statements
We have audited the accompanying consolidated balance sheets of America First Multifamily Investors, L.P. and its subsidiaries (the “Partnership”) as of December 31, 20202021 and 2019,2020, and the related consolidated statements of operations, of comprehensive income, of partners' capital and of cash flows for the years then ended, including the related notes (collectively referred to as the “consolidated financial statements”). In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Partnership as of December 31, 20202021 and 2019,2020, and the results of its operations and its cash flows for the years then ended in conformity with accounting principles generally accepted in the United States of America.
Basis for Opinion
These consolidated financial statements are the responsibility of the Partnership’s management. Our responsibility is to express an opinion on the Partnership’s consolidated financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Partnership in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audits of these consolidated financial statements in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud. The Partnership is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Partnership's internal control over financial reporting. Accordingly, we express no such opinion.
Our audits included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements. We believe that our audits provide a reasonable basis for our opinion.
Critical Audit Matters
The critical audit matter communicated below is a matter arising from the current period audit of the consolidated financial statements that was communicated or required to be communicated to the audit committee and that (i) relates to accounts or disclosures that are material to the consolidated financial statements and (ii) involved our especially challenging, subjective, or complex judgments. The communication of critical audit matters does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates.
Valuation of Level 3 Mortgage Revenue Bonds and Mortgage Revenue Bonds Held in Trust
As described in Note 24 to the consolidated financial statements, the estimated fair value of the Partnership’s investments in mortgage revenue bonds and mortgage revenue bonds held in trust (collectively referred to as “MRBs”) is $794.4$793.5 million or approximately 68%57% of the Partnership’s total assets as of December 31, 2020.2021. Management estimates the fair value of MRBs based upon prices obtained from a third-party pricing service, which are estimates of market prices. There is no active trading market for the MRBs, and price quotes for the MRBs are not available. The valuation methodology of the Partnership’s third-party pricing service incorporates commonly used market pricing methods. The valuation methodology considers the underlying characteristics of each MRB as well as other quantitative and qualitative characteristics including, but not limited to, market interest rates, illiquidity, legal structure of the borrower, collateral, seniority to other obligations, operating results of the underlying property, geographic location, and property quality. These characteristics are used to estimate an effective yield for each MRB. The MRB fair value is estimated using a discounted cash flow and yield to maturity or call analysis by applying the effective yield to contractual cash flows.
64
The principal considerations for our determination that performing procedures relating to the valuation of level 3 MRBs is a critical audit matter are the significant judgment by management to determine the fair value of these investments, which in turn led to a high degree of auditor judgment, subjectivity and effort in performing procedures and evaluating audit evidence relating to the effective yield based on the applicable underlying characteristics of each MRB, and the audit effort involved the use of professionals with specialized skill and knowledge.
Addressing the matter involved performing procedures and evaluating audit evidence in connection with forming our overall opinion on the consolidated financial statements. These procedures included, among others (i) testing the completeness and accuracy of data used in the valuation provided by management; (ii) evaluating the appropriateness of management’s valuation methodology; and (iii) the involvement of professionals with specialized skill and knowledge to assist in developing an independent range of fair value estimates and comparison of management’s estimate to the independently developed range. Developing the independent range involved developing a range of independent effective yields based on the applicable underlying characteristics of each MRB.
/s/ PricewaterhouseCoopers LLP
Chicago, Illinois
February 25, 202124, 2022
We have served as the Partnership’s auditor since 2016.
65
AMERICA FIRST MULTIFAMILY INVESTORS, L.P.
CONSOLIDATED BALANCE SHEETS
|
| December 31, 2020 |
|
| December 31, 2019 |
|
| December 31, 2021 |
|
| December 31, 2020 |
| ||||
Assets: |
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||
Cash and cash equivalents |
| $ | 44,495,538 |
|
| $ | 42,308,153 |
|
| $ | 68,285,501 |
|
| $ | 44,495,538 |
|
Restricted cash |
|
| 78,495,048 |
|
|
| 877,828 |
|
|
| 83,646,969 |
|
|
| 78,495,048 |
|
Interest receivable, net |
|
| 8,212,076 |
|
|
| 7,432,433 |
|
|
| 9,234,412 |
|
|
| 8,212,076 |
|
Mortgage revenue bonds held in trust, at fair value (Note 6) |
|
| 768,468,644 |
|
|
| 743,587,715 |
|
|
| 750,934,848 |
|
|
| 768,468,644 |
|
Mortgage revenue bonds, at fair value (Note 6) |
|
| 25,963,841 |
|
|
| 30,009,750 |
|
|
| 42,574,996 |
|
|
| 25,963,841 |
|
Governmental issuer loans held in trust (Note 7) |
|
| 64,863,657 |
|
|
| - |
| ||||||||
Public housing capital fund trust certificates, at fair value (Note 8) |
|
| - |
|
|
| 43,349,357 |
| ||||||||
Real estate assets: (Note 9) |
|
|
|
|
|
|
|
| ||||||||
Governmental issuer loans (Note 7) |
|
| 184,767,450 |
|
|
| 64,863,657 |
| ||||||||
Real estate assets: (Note 8) |
|
|
|
|
| |||||||||||
Land and improvements |
|
| 4,875,265 |
|
|
| 4,906,130 |
|
|
| 7,411,079 |
|
|
| 4,875,265 |
|
Buildings and improvements |
|
| 72,316,152 |
|
|
| 72,011,533 |
|
|
| 72,998,475 |
|
|
| 72,316,152 |
|
Real estate assets before accumulated depreciation |
|
| 77,191,417 |
|
|
| 76,917,663 |
|
|
| 80,409,554 |
|
|
| 77,191,417 |
|
Accumulated depreciation |
|
| (18,150,215 | ) |
|
| (15,357,700 | ) |
|
| (20,701,922 | ) |
|
| (18,150,215 | ) |
Net real estate assets |
|
| 59,041,202 |
|
|
| 61,559,963 |
|
|
| 59,707,632 |
|
|
| 59,041,202 |
|
Investments in unconsolidated entities (Note 10) |
|
| 106,878,570 |
|
|
| 86,981,864 |
| ||||||||
Property loans, net of loan loss allowance (Note 11) |
|
| 12,920,719 |
|
|
| 7,999,094 |
| ||||||||
Other assets (Note 13) |
|
| 5,908,584 |
|
|
| 5,062,351 |
| ||||||||
Investments in unconsolidated entities (Note 9) |
|
| 107,793,522 |
|
|
| 106,878,570 |
| ||||||||
Property loans, net of loan loss allowances (Note 10) |
|
| 68,101,268 |
|
|
| 12,920,719 |
| ||||||||
Other assets (Note 12) |
|
| 10,862,885 |
|
|
| 5,908,584 |
| ||||||||
Total Assets |
| $ | 1,175,247,879 |
|
| $ | 1,029,168,508 |
|
| $ | 1,385,909,483 |
|
| $ | 1,175,247,879 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||
Liabilities: |
|
|
|
|
|
|
|
|
|
|
|
|
| |||
Accounts payable, accrued expenses and other liabilities (Note 14) |
| $ | 9,949,565 |
|
| $ | 9,036,167 |
| ||||||||
Accounts payable, accrued expenses and other liabilities (Note 13) |
| $ | 13,664,212 |
|
| $ | 9,949,565 |
| ||||||||
Distribution payable |
|
| 3,686,283 |
|
|
| 7,607,984 |
|
|
| 12,757,459 |
|
|
| 3,686,283 |
|
Unsecured lines of credit (Note 15) |
|
| 7,475,000 |
|
|
| 13,200,000 |
| ||||||||
Unsecured lines of credit (Note 14) |
|
| - |
|
|
| 7,475,000 |
| ||||||||
Secured lines of credit (Note 15) |
|
| 45,714,000 |
|
|
| - |
| ||||||||
Debt financing, net (Note 16) |
|
| 673,957,640 |
|
|
| 536,197,421 |
|
|
| 820,078,714 |
|
|
| 673,957,640 |
|
Mortgages payable and other secured financing, net (Note 17) |
|
| 25,984,872 |
|
|
| 26,802,246 |
|
|
| 26,824,543 |
|
|
| 25,984,872 |
|
Total Liabilities |
|
| 721,053,360 |
|
|
| 592,843,818 |
|
|
| 919,038,928 |
|
|
| 721,053,360 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||
Commitments and Contingencies (Note 19) |
|
|
|
|
|
|
|
|
|
|
|
|
| |||
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||
Redeemable Series A Preferred Units, approximately $94.5 million redemption value, 9.5 million issued and outstanding, net (Note 20) |
|
| 94,422,477 |
|
|
| 94,386,427 |
| ||||||||
Redeemable Preferred Units, $94.5 million redemption value, 9.5 million |
|
| 94,458,528 |
|
|
| 94,422,477 |
| ||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||
Partnersʼ Capital: |
|
|
|
|
|
|
|
|
|
|
|
|
| |||
General Partner (Note 1) |
|
| 934,892 |
|
|
| 735,128 |
|
|
| 765,550 |
|
|
| 934,892 |
|
Beneficial Unit Certificates ("BUCs," Note 1) |
|
| 358,837,150 |
|
|
| 341,203,135 |
|
|
| 371,646,477 |
|
|
| 358,837,150 |
|
Total Partnersʼ Capital |
|
| 359,772,042 |
|
|
| 341,938,263 |
|
|
| 372,412,027 |
|
|
| 359,772,042 |
|
Total Liabilities and Partnersʼ Capital |
| $ | 1,175,247,879 |
|
| $ | 1,029,168,508 |
|
| $ | 1,385,909,483 |
|
| $ | 1,175,247,879 |
|
The accompanying notes are an integral part of the consolidated financial statements.
66
AMERICA FIRST MULTIFAMILY INVESTORS, L.P.
CONSOLIDATED STATEMENTS OF OPERATIONS
|
| For the Years Ended December 31, |
|
| For the Years Ended December 31, |
| ||||||||||
|
| 2020 |
|
| 2019 |
|
| 2021 |
|
| 2020 |
| ||||
Revenues: |
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||
Investment income |
| $ | 47,553,660 |
|
| $ | 50,222,435 |
|
| $ | 57,736,968 |
| $ | 47,553,660 |
| |
Property revenues |
|
| 6,986,009 |
|
|
| 8,081,029 |
|
| 7,208,661 |
| 6,986,009 |
| |||
Contingent interest income |
|
| 12,043 |
|
|
| 3,045,462 |
|
| 1,848,825 |
| 12,043 |
| |||
Other interest income |
|
| 967,338 |
|
|
| 851,123 |
|
| 1,657,840 |
| 967,338 |
| |||
Other income |
|
| 9,518 |
|
|
| 117,964 |
|
|
| - |
|
|
| 9,518 |
|
Total revenues |
|
| 55,528,568 |
|
|
| 62,318,013 |
|
|
| 68,452,294 |
|
|
| 55,528,568 |
|
Expenses: |
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||
Real estate operating (exclusive of items shown below) |
|
| 4,347,441 |
|
|
| 4,473,558 |
|
| 3,992,293 |
| 4,347,441 |
| |||
Provision for credit loss (Note 6) |
|
| 7,318,590 |
|
|
| - |
|
| 1,856,893 |
| 7,318,590 |
| |||
Provision for loan loss (Note 11) |
|
| 911,232 |
|
|
| - |
| ||||||||
Provision for loan loss (Note 10) |
| 444,302 |
| 911,232 |
| |||||||||||
Impairment charge on real estate assets |
|
| 25,200 |
|
|
| 75,000 |
|
| - |
| 25,200 |
| |||
Depreciation and amortization |
|
| 2,810,073 |
|
|
| 3,091,417 |
|
| 2,732,922 |
| 2,810,073 |
| |||
Interest expense |
|
| 21,215,888 |
|
|
| 24,717,294 |
|
| 21,943,885 |
| 21,215,888 |
| |||
General and administrative |
|
| 13,027,349 |
|
|
| 15,564,403 |
|
|
| 14,824,668 |
|
|
| 13,027,349 |
|
Total expenses |
|
| 49,655,773 |
|
|
| 47,921,672 |
|
|
| 45,794,963 |
|
|
| 49,655,773 |
|
Other Income: |
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||
Loss on sale of real estate asset |
| (14,800 | ) |
| - |
| ||||||||||
Gain on sale of securities |
|
| 1,416,023 |
|
|
| - |
|
| - |
| 1,416,023 |
| |||
Gain on sale of investments in unconsolidated entities |
|
| - |
|
|
| 16,141,797 |
|
|
| 15,520,749 |
|
|
| - |
|
Income before income taxes |
|
| 7,288,818 |
|
|
| 30,538,138 |
|
|
| 38,163,280 |
| 7,288,818 |
| ||
Income tax expense |
|
| 79,990 |
|
|
| 45,987 |
|
|
| 63,792 |
|
|
| 79,990 |
|
Net income |
|
| 7,208,828 |
|
|
| 30,492,151 |
|
|
| 38,099,488 |
| 7,208,828 |
| ||
Redeemable Series A Preferred Unit distributions and accretion |
|
| (2,871,051 | ) |
|
| (2,871,051 | ) | ||||||||
Redeemable Preferred Unit distributions and accretion |
|
| (2,871,051 | ) |
|
| (2,871,051 | ) | ||||||||
Net income available to Partners |
| $ | 4,337,777 |
|
| $ | 27,621,100 |
|
| $ | 35,228,437 |
|
| $ | 4,337,777 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||
Net income (loss) available to Partners allocated to: |
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||
General Partner |
| $ | (32,666 | ) |
| $ | 2,102,874 |
|
| $ | 2,830,481 |
| $ | (32,666 | ) | |
Limited Partners - BUCs |
|
| 4,304,208 |
|
|
| 25,423,398 |
|
| 32,258,667 |
| 4,304,208 |
| |||
Limited Partners - Restricted units |
|
| 66,235 |
|
|
| 94,828 |
|
| 139,289 |
| 66,235 |
| |||
|
| $ | 4,337,777 |
|
| $ | 27,621,100 |
|
| $ | 35,228,437 |
|
| $ | 4,337,777 |
|
BUC holders' interest in net income per BUC, basic and diluted |
| $ | 0.07 |
|
| $ | 0.42 |
|
| $ | 0.52 |
|
| $ | 0.07 |
|
Weighted average number of BUCs outstanding, basic |
|
| 60,606,989 |
|
|
| 60,551,775 |
|
|
| 61,971,556 |
|
|
| 60,606,989 |
|
Weighted average number of BUCs outstanding, diluted |
|
| 60,606,989 |
|
|
| 60,551,775 |
|
|
| 61,971,556 |
|
|
| 60,606,989 |
|
The accompanying notes are an integral part of the consolidated financial statements.
67
AMERICA FIRST MULTIFAMILY INVESTORS, L.P.
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
|
| For the Years Ended December 31, |
|
| For the Years Ended December 31, |
| ||||||||||
|
| 2020 |
|
| 2019 |
|
| 2021 |
|
| 2020 |
| ||||
Net income |
| $ | 7,208,828 |
|
| $ | 30,492,151 |
|
| $ | 38,099,488 |
|
| $ | 7,208,828 |
|
Reversal of net unrealized gains on sale of securities |
|
| (1,408,804 | ) |
|
| - |
|
| - |
|
|
| (1,408,804 | ) | |
Reversal of net unrealized loss on securities to provision for credit loss |
|
| 652,880 |
|
|
| - |
|
| - |
|
|
| 652,880 |
| |
Unrealized gain on securities |
|
| 33,609,375 |
|
|
| 40,330,635 |
| ||||||||
Unrealized gain (loss) on securities |
| (19,086,272 | ) |
|
| 33,609,375 |
| |||||||||
Unrealized gain on bond purchase commitments |
|
| 431,879 |
|
|
| - |
|
|
| 532,525 |
|
|
| 431,879 |
|
Comprehensive income |
| $ | 40,494,158 |
|
| $ | 70,822,786 |
|
| $ | 19,545,741 |
|
| $ | 40,494,158 |
|
The accompanying notes are an integral part of the consolidated financial statements.
68
AMERICA FIRST MULTIFAMILY INVESTORS, L.P.
CONSOLIDATED STATEMENTS OF PARTNERS’ CAPITAL
FOR THE YEARS ENDED DECEMBER 31, 20202021 AND 20192020
|
| General Partner |
|
| # of BUCs - Restricted and Unrestricted |
|
| BUCs - Restricted and Unrestricted |
|
| Total |
|
| Accumulated Other Comprehensive Income (Loss) |
| ||||||||||||||||||||||||||
Balance as of January 1, 2019 |
| $ | 344,590 |
|
|
| 60,691,467 |
|
| $ | 304,121,151 |
|
| $ | 304,465,741 |
|
| $ | 58,978,042 |
| |||||||||||||||||||||
Cumulative effect of accounting change (Note 2) |
|
| (2 | ) |
|
| - |
|
|
| (210 | ) |
|
| (212 | ) |
|
| - |
| |||||||||||||||||||||
Distributions paid or accrued ($0.50 per BUC): |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||
Regular distribution |
|
| (133,799 | ) |
|
| - |
|
|
| (13,245,970 | ) |
|
| (13,379,769 | ) |
|
| - |
| |||||||||||||||||||||
Distribution of Tier 2 income (Note 3) |
|
| (2,018,202 | ) |
|
| - |
|
|
| (6,054,607 | ) |
|
| (8,072,809 | ) |
|
| - |
| |||||||||||||||||||||
Distribution of Tier 3 income (Note 3) |
|
| - |
|
|
| - |
|
|
| (11,081,091 | ) |
|
| (11,081,091 | ) |
|
| - |
| |||||||||||||||||||||
Net income allocable to Partners |
|
| 2,102,874 |
|
|
| - |
|
|
| 25,518,226 |
|
|
| 27,621,100 |
|
|
| - |
| |||||||||||||||||||||
Restricted units awarded |
|
| - |
|
|
| 353,197 |
|
|
| - |
|
|
| - |
|
|
| - |
| |||||||||||||||||||||
Restricted unit compensation expense |
|
| 36,361 |
|
|
| - |
|
|
| 3,599,730 |
|
|
| 3,636,091 |
|
|
| - |
| |||||||||||||||||||||
BUCs surrendered to pay tax withholding on vested restricted units |
|
| - |
|
| �� | (209,460 | ) |
|
| (1,581,423 | ) |
|
| (1,581,423 | ) |
|
| - |
| |||||||||||||||||||||
Unrealized gain on securities |
|
| 403,306 |
|
|
| - |
|
|
| 39,927,329 |
|
|
| 40,330,635 |
|
|
| 40,330,635 |
| |||||||||||||||||||||
Balance as of December 31, 2019 |
| $ | 735,128 |
|
|
| 60,835,204 |
|
| $ | 341,203,135 |
|
| $ | 341,938,263 |
|
| $ | 99,308,677 |
| |||||||||||||||||||||
|
| General Partner |
|
| # of BUCs - |
|
| BUCs |
|
| Total |
|
| Accumulated Other |
| ||||||||||||||||||||||||||
Balance as of January 1, 2020 |
| $ | 735,128 |
|
|
| 60,835,204 |
|
| $ | 341,203,135 |
|
| $ | 341,938,263 |
|
| $ | 99,308,677 |
| |||||||||||||||||||||
Distributions paid or accrued ($0.305 per BUC): |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||||
Regular distribution |
|
| (191,104 | ) |
|
| - |
|
|
| (18,919,263 | ) |
|
| (19,110,367 | ) |
|
| - |
|
|
| (191,104 | ) |
|
| - |
|
|
| (18,919,263 | ) |
|
| (19,110,367 | ) |
|
| - |
| |
Distribution of Tier 2 loss (Note 3) |
|
| 80,501 |
|
|
| - |
|
|
| 365,218 |
|
|
| 445,719 |
|
|
| - |
|
|
| 80,501 |
|
|
| - |
|
|
| 365,218 |
|
|
| 445,719 |
|
|
| - |
| |
Net income (loss) allocable to Partners |
|
| (32,666 | ) |
|
| - |
|
|
| 4,370,443 |
|
|
| 4,337,777 |
|
|
| - |
|
|
| (32,666 | ) |
|
| - |
|
|
| 4,370,443 |
|
|
| 4,337,777 |
|
|
| - |
| |
Repurchase of BUCs |
|
| - |
|
|
| (290,000 | ) |
|
| (2,106,673 | ) |
|
| (2,106,673 | ) |
|
| - |
|
|
| - |
|
|
| (290,000 | ) |
|
| (2,106,673 | ) |
|
| (2,106,673 | ) |
|
| - |
| |
Restricted units awarded |
|
| - |
|
|
| 290,000 |
|
|
| - |
|
|
| - |
|
|
| - |
|
|
| - |
|
|
| 290,000 |
|
|
| - |
|
|
| - |
|
|
| - |
| |
Restricted unit compensation expense |
|
| 10,179 |
|
|
| - |
|
|
| 1,007,759 |
|
|
| 1,017,938 |
|
|
| - |
|
|
| 10,179 |
|
|
| - |
|
|
| 1,007,759 |
|
|
| 1,017,938 |
|
|
| - |
| |
Restricted units forfeited |
|
| - |
|
|
| (2,802 | ) |
|
| - |
|
|
| - |
|
|
| - |
|
|
| - |
|
|
| (2,802 | ) |
|
| - |
|
|
| - |
|
|
| - |
| |
BUCs surrendered to pay tax withholding on vested restricted units |
|
| - |
|
|
| (8,728 | ) |
|
| (35,945 | ) |
|
| (35,945 | ) |
|
| - |
|
|
| - |
|
|
| (8,728 | ) |
|
| (35,945 | ) |
|
| (35,945 | ) |
|
| - |
| |
Unrealized gain on securities |
|
| 336,094 |
|
|
| - |
|
|
| 33,273,281 |
|
|
| 33,609,375 |
|
|
| 33,609,375 |
|
|
| 336,094 |
|
|
| - |
|
|
| 33,273,281 |
|
|
| 33,609,375 |
|
|
| 33,609,375 |
| |
Unrealized gain on bond purchase commitments |
|
| 4,319 |
|
|
| - |
|
|
| 427,560 |
|
|
| 431,879 |
|
|
| 431,879 |
|
|
| 4,319 |
|
|
| - |
|
|
| 427,560 |
|
|
| 431,879 |
|
|
| 431,879 |
| |
Reversal of net unrealized gains on sale of securities |
|
| (14,088 | ) |
|
| - |
|
|
| (1,394,716 | ) |
|
| (1,408,804 | ) |
|
| (1,408,804 | ) |
|
| (14,088 | ) |
|
| - |
|
|
| (1,394,716 | ) |
|
| (1,408,804 | ) |
|
| (1,408,804 | ) | |
Reversal of net unrealized loss on securities to provision for credit loss |
|
| 6,529 |
|
|
| - |
|
|
| 646,351 |
|
|
| 652,880 |
|
|
| 652,880 |
|
|
| 6,529 |
|
|
| - |
|
|
| 646,351 |
|
|
| 652,880 |
|
|
| 652,880 |
| |
Balance as of December 31, 2020 |
| $ | 934,892 |
|
|
| 60,823,674 |
|
| $ | 358,837,150 |
|
| $ | 359,772,042 |
|
| $ | 132,594,007 |
|
| $ | 934,892 |
|
|
| 60,823,674 |
|
| $ | 358,837,150 |
|
| $ | 359,772,042 |
|
| $ | 132,594,007 |
| |
Distributions paid or accrued ($0.50 per BUC): |
|
|
|
|
|
|
|
|
|
|
| ||||||||||||||||||||||||||||||
Regular distribution |
|
| (177,820 | ) |
|
| - |
|
|
| (17,604,203 | ) |
|
| (17,782,023 | ) |
|
| - |
| |||||||||||||||||||||
Distribution of Tier 2 income (Note 3) |
|
| (2,649,242 | ) |
|
| - |
|
|
| (7,947,726 | ) |
|
| (10,596,968 | ) |
|
| - |
| |||||||||||||||||||||
Distribution of Tier 3 income (Note 3) |
|
| - |
|
|
|
|
| (6,507,605 | ) |
|
| (6,507,605 | ) |
|
| - |
| |||||||||||||||||||||||
Net income allocable to Partners |
|
| 2,830,481 |
|
|
| - |
|
|
| 32,397,956 |
|
|
| 35,228,437 |
|
|
| - |
| |||||||||||||||||||||
Sale of BUCs, net of issuance costs |
|
| - |
|
|
| 5,462,500 |
|
|
| 31,239,495 |
|
|
| 31,239,495 |
|
|
| - |
| |||||||||||||||||||||
Repurchase of BUCs |
|
| - |
|
|
| (222,459 | ) |
|
| (1,363,736 | ) |
|
| (1,363,736 | ) |
|
| - |
| |||||||||||||||||||||
Restricted units awarded |
|
| - |
|
|
| 266,324 |
|
|
| - |
|
|
| - |
|
|
| - |
| |||||||||||||||||||||
Restricted unit compensation expense |
|
| 12,777 |
|
|
| - |
|
|
| 1,264,917 |
|
|
| 1,277,694 |
|
|
| - |
| |||||||||||||||||||||
BUCs surrendered to pay tax withholding |
|
| - |
|
|
| (47,565 | ) |
|
| (301,562 | ) |
|
| (301,562 | ) |
|
| - |
| |||||||||||||||||||||
Unrealized loss on securities |
|
| (190,863 | ) |
|
| - |
|
|
| (18,895,409 | ) |
|
| (19,086,272 | ) |
|
| (19,086,272 | ) | |||||||||||||||||||||
Unrealized gain on bond purchase commitments |
|
| 5,325 |
|
|
| - |
|
|
| 527,200 |
|
|
| 532,525 |
|
|
| 532,525 |
| |||||||||||||||||||||
Balance as of December 31, 2021 |
| $ | 765,550 |
|
|
| 66,282,474 |
|
| $ | 371,646,477 |
|
| $ | 372,412,027 |
|
| $ | 114,040,260 |
|
The accompanying notes are an integral part of the consolidated financial statements.
69
AMERICA FIRST MULTIFAMILY INVESTORS, L.P.
CONSOLIDATED STATEMENTS OF CASH FLOWS
|
| For the Years Ended December 31, |
|
| For the Years Ended December 31, |
| ||||||||||
|
| 2020 |
|
| 2019 |
|
| 2021 |
|
| 2020 |
| ||||
Cash flows from operating activities: |
|
|
|
|
|
|
|
|
|
|
|
|
| |||
Net income |
| $ | 7,208,828 |
|
| $ | 30,492,151 |
|
| $ | 38,099,488 |
|
| $ | 7,208,828 |
|
Adjustments to reconcile net income to net cash provided by operating activities: |
|
|
|
|
|
|
|
|
|
|
|
|
| |||
Depreciation and amortization expense |
|
| 2,810,073 |
|
|
| 3,091,417 |
|
|
| 2,732,922 |
|
|
| 2,810,073 |
|
Amortization of deferred financing costs |
|
| 1,209,837 |
|
|
| 1,450,398 |
| ||||||||
Gain on sale of investments in unconsolidated entities |
|
| (15,520,749 | ) |
|
| - |
| ||||||||
Gain on sale of investment in securities |
|
| - |
|
|
| (1,416,023 | ) | ||||||||
Contingent interest realized on investing activities |
|
| (1,848,825 | ) |
|
| (12,043 | ) | ||||||||
Provision for credit loss |
|
| 1,856,893 |
|
|
| 7,318,590 |
| ||||||||
Provision for loan loss |
|
| 911,232 |
|
|
| - |
|
|
| 444,302 |
|
|
| 911,232 |
|
Gain on sale of investment in securities |
|
| (1,416,023 | ) |
|
| - |
| ||||||||
Provision for credit loss |
|
| 7,318,590 |
|
|
| - |
| ||||||||
Gain on sale of investment in an unconsolidated entity |
|
| - |
|
|
| (16,141,797 | ) | ||||||||
Contingent interest realized on investing activities |
|
| (12,043 | ) |
|
| (3,045,462 | ) | ||||||||
Loss on sale of real estate assets, net |
|
| 14,800 |
|
|
| - |
| ||||||||
Impairment charge on real estate assets |
|
| 25,200 |
|
|
| 75,000 |
|
|
| - |
|
|
| 25,200 |
|
(Gain) loss on derivatives, net of cash paid |
|
| (310,592 | ) |
|
| 615,722 |
| ||||||||
Gain on derivatives, net of cash paid |
|
| (21,915 | ) |
|
| (310,592 | ) | ||||||||
Restricted unit compensation expense |
|
| 1,017,938 |
|
|
| 3,636,091 |
|
|
| 1,277,694 |
|
|
| 1,017,938 |
|
Bond premium/discount amortization |
|
| (117,831 | ) |
|
| (135,648 | ) |
|
| (137,520 | ) |
|
| (117,831 | ) |
Debt premium amortization |
|
| (40,484 | ) |
|
| (18,513 | ) |
|
| (40,565 | ) |
|
| (40,484 | ) |
Amortization of deferred financing costs |
|
| 1,450,398 |
|
|
| 1,713,534 |
| ||||||||
Deferred income tax expense & income tax payable/receivable |
|
| 9,564 |
|
|
| (29,343 | ) | ||||||||
Deferred income tax expense (benefit) & income tax payable/receivable |
|
| (166,206 | ) |
|
| 9,564 |
| ||||||||
Change in preferred return receivable from unconsolidated entities, net |
|
| (3,399,130 | ) |
|
| (2,246,395 | ) |
|
| 4,657,928 |
|
|
| (3,399,130 | ) |
Changes in operating assets and liabilities |
|
|
|
|
|
|
|
|
|
|
|
|
| |||
Increase in interest receivable |
|
| (779,643 | ) |
|
| (420,594 | ) |
|
| (1,099,915 | ) |
|
| (779,643 | ) |
Decrease in other assets |
|
| 213,890 |
|
|
| 672,803 |
| ||||||||
Increase (decrease) in accounts payable and accrued expenses |
|
| 951,530 |
|
|
| (264,717 | ) | ||||||||
(Increase) decrease in other assets |
|
| (349,949 | ) |
|
| 213,890 |
| ||||||||
Increase in accounts payable and accrued expenses |
|
| 2,831,931 |
|
|
| 951,530 |
| ||||||||
Net cash provided by operating activities |
|
| 15,841,497 |
|
|
| 17,994,249 |
|
|
| 33,940,151 |
|
|
| 15,841,497 |
|
Cash flows from investing activities: |
|
|
|
|
|
|
|
|
|
|
|
|
| |||
Capital expenditures |
|
| (416,820 | ) |
|
| (126,732 | ) |
|
| (156,765 | ) |
|
| (416,820 | ) |
Acquisition of mortgage revenue bonds |
|
| (9,513,450 | ) |
|
| (19,250,000 | ) | ||||||||
Proceeds from sale of land held for development |
|
| 110,000 |
|
|
| - |
| ||||||||
Acquisition of and advances on mortgage revenue bonds |
|
| (69,672,500 | ) |
|
| (9,513,450 | ) | ||||||||
Acquisition of and advances on taxable mortgage revenue bonds |
|
| (2,000,000 | ) |
|
| - |
| ||||||||
Advances on governmental issuer loans |
|
| (64,863,657 | ) |
|
| - |
|
|
| (119,903,793 | ) |
|
| (64,863,657 | ) |
Advances on taxable governmental issuer loans |
|
| (1,000,000 | ) |
|
| - |
| ||||||||
Advances on property loans |
|
| (55,738,536 | ) |
|
| (5,832,857 | ) | ||||||||
Contributions to unconsolidated entities |
|
| (24,259,742 | ) |
|
| (25,274,899 | ) |
|
| (37,780,645 | ) |
|
| (24,259,742 | ) |
Advances on property loans |
|
| (5,832,857 | ) |
|
| (405,717 | ) | ||||||||
Principal payments received on mortgage revenue bonds |
|
| 15,611,098 |
|
|
| 17,268,512 |
| ||||||||
Proceeds from sale of PHC Certificates |
|
| 43,349,357 |
|
|
| - |
|
|
| - |
|
|
| 43,349,357 |
|
Principal payments received on PHC Certificates |
|
| - |
|
|
| 6,300,042 |
| ||||||||
Proceeds from sale of investment in an unconsolidated entity |
|
| 7,762,166 |
|
|
| 33,215,533 |
| ||||||||
Proceeds from sale of investments in unconsolidated entities |
|
| 45,281,550 |
|
|
| 7,762,166 |
| ||||||||
Return of investments in unconsolidated entities |
|
| 1,476,350 |
|
|
| - |
| ||||||||
Principal payments received on mortgage revenue bonds and contingent interest |
|
| 51,710,640 |
|
|
| 15,611,098 |
| ||||||||
Principal payments received on taxable mortgage revenue bonds |
|
| 8,846 |
|
|
| 53,086 |
|
|
| 9,675 |
|
|
| 8,846 |
|
Principal payments received on property loans and contingent interest |
|
| 12,043 |
|
|
| 11,413,098 |
|
|
| 191,264 |
|
|
| 12,043 |
|
Net cash provided by (used in) investing activities |
|
| (38,143,016 | ) |
|
| 23,192,923 |
| ||||||||
Net cash used in investing activities |
|
| (187,472,760 | ) |
|
| (38,143,016 | ) | ||||||||
Cash flows from financing activities: |
|
|
|
|
|
|
|
|
|
|
|
|
| |||
Distributions paid |
|
| (25,421,349 | ) |
|
| (35,336,852 | ) |
|
| (28,650,420 | ) |
|
| (25,421,349 | ) |
Repurchase of BUCs |
|
| (2,106,673 | ) |
|
| - |
|
|
| (1,363,736 | ) |
|
| (2,106,673 | ) |
Proceeds from the sale of BUCs |
|
| 33,321,250 |
|
|
| - |
| ||||||||
Payment of offering costs related to the sale of BUCs |
|
| (2,081,755 | ) |
|
| - |
| ||||||||
Payment of tax withholding related to restricted unit awards |
|
| (35,945 | ) |
|
| (1,581,423 | ) |
|
| (301,562 | ) |
|
| (35,945 | ) |
Proceeds from debt financing |
|
| 285,438,000 |
|
|
| 122,921,712 |
|
|
| 181,394,000 |
|
|
| 285,438,000 |
|
Principal payments on debt financing |
|
| (147,692,836 | ) |
|
| (92,811,848 | ) |
|
| (34,955,800 | ) |
|
| (147,692,836 | ) |
Principal payments on mortgages payable |
|
| (826,337 | ) |
|
| (739,897 | ) |
|
| (850,674 | ) |
|
| (826,337 | ) |
Principal borrowing on unsecured lines of credit |
|
| 10,492,728 |
|
|
| 23,200,000 |
|
|
| 15,172,445 |
|
|
| 10,492,728 |
|
Principal payments on unsecured lines of credit |
|
| (16,217,728 | ) |
|
| (45,659,200 | ) |
|
| (22,647,446 | ) |
|
| (16,217,728 | ) |
Decrease in security deposit liability related to restricted cash |
|
| (100,558 | ) |
|
| (22,199 | ) | ||||||||
Principal borrowing on secured lines of credit |
|
| 70,714,000 |
|
|
| - |
| ||||||||
Principal payments on secured lines of credit |
|
| (25,000,000 | ) |
|
| - |
| ||||||||
Increase (decrease) in security deposit liability related to restricted cash |
|
| 89,854 |
|
|
| (100,558 | ) | ||||||||
Debt financing and other deferred costs |
|
| (1,423,178 | ) |
|
| (1,240,095 | ) |
|
| (2,365,663 | ) |
|
| (1,423,178 | ) |
Net cash provided by (used in) financing activities |
|
| 102,106,124 |
|
|
| (31,269,802 | ) | ||||||||
Net cash provided by financing activities |
|
| 182,474,493 |
|
|
| 102,106,124 |
| ||||||||
Net increase in cash, cash equivalents and restricted cash |
|
| 79,804,605 |
|
|
| 9,917,370 |
|
|
| 28,941,884 |
|
|
| 79,804,605 |
|
Cash, cash equivalents and restricted cash at beginning of period |
|
| 43,185,981 |
|
|
| 33,268,611 |
|
|
| 122,990,586 |
|
|
| 43,185,981 |
|
Cash, cash equivalents and restricted cash at end of period |
| $ | 122,990,586 |
|
| $ | 43,185,981 |
|
| $ | 151,932,470 |
|
| $ | 122,990,586 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||
Supplemental disclosure of cash flow information: |
|
|
|
|
|
|
|
|
|
|
|
|
| |||
Cash paid during the period for interest |
| $ | 19,139,218 |
|
| $ | 22,084,197 |
|
| $ | 19,961,390 |
|
| $ | 19,139,218 |
|
Cash paid during the period for income taxes |
|
| 71,427 |
|
|
| 340,374 |
|
|
| 229,998 |
|
|
| 71,427 |
|
Supplemental disclosure of noncash investing and financing activities: |
|
|
|
|
|
|
|
|
|
|
|
|
| |||
Distributions declared but not paid for BUCs and General Partner |
| $ | 3,686,283 |
|
| $ | 7,607,984 |
|
| $ | 12,757,459 |
|
| $ | 3,686,283 |
|
Distributions declared but not paid for Series A Preferred Units |
|
| 708,750 |
|
|
| 708,750 |
|
|
| 708,750 |
|
|
| 708,750 |
|
Investment in previously unconsolidated entity consolidated as land |
|
| 970,615 |
|
|
| - |
| ||||||||
Debt from previously unconsolidated entity consolidated as mortgage payable |
|
| 1,690,000 |
|
|
| - |
| ||||||||
Capital expenditures financed through accounts payable |
|
| 686,287 |
|
|
| - |
| ||||||||
Deferred financing costs financed through accounts payable |
|
| 37,322 |
|
|
| 73,724 |
|
|
| 131,678 |
|
|
| 37,322 |
|
The following table provides a reconciliation of cash, cash equivalents and restricted cash reported within the consolidated balance sheets to the total of such amounts shown in the consolidated statements of cash flows:
|
| December 31, 2020 |
|
| December 31, 2019 |
|
| December 31, 2021 |
|
| December 31, 2020 |
| ||||
Cash and cash equivalents |
| $ | 44,495,538 |
|
| $ | 42,308,153 |
|
| $ | 68,285,501 |
|
| $ | 44,495,538 |
|
Restricted cash |
|
| 78,495,048 |
|
|
| 877,828 |
|
|
| 83,646,969 |
|
|
| 78,495,048 |
|
Total cash, cash equivalents and restricted cash |
| $ | 122,990,586 |
|
| $ | 43,185,981 |
|
| $ | 151,932,470 |
|
| $ | 122,990,586 |
|
The accompanying notes are an integral part of the consolidated financial statements.
70
AMERICA FIRST MULTIFAMILY INVESTORS, L.P.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEARS ENDED DECEMBER 31, 20202021 AND 20192020
1. Basis of Presentation
America First Multifamily Investors, L.P. (the “Partnership”) was formed on April 2, 1998, under the Delaware Revised Uniform Limited Partnership Act for the purpose of acquiring, holding, selling and otherwise dealing with a portfolio of mortgage revenue bonds (“MRBs”) that have been issued to provide construction and/or permanent financing for affordable multifamily and student housing residential properties (collectively “Residential Properties”) and commercial properties. The Partnership has also invested in governmental issuer loans (“GILs”), which are similar to MRBs, to provide construction financing for affordable multifamily properties. The Partnership expects and believes the interest earned on these MRBs and GILs is excludable from gross income for federal income tax purposes. The Partnership may also invest in other types of securities, that may or may not beincluding taxable MRBs and taxable GILs secured by real estate and may make property loans to multifamily residential properties which may or may not be financed by MRBs or GILs held by the Partnership.Partnership and may or may not be secured by real estate. The Partnership may acquire real estate securing its MRBs, GILs, or property loans through foreclosure in the event of a default or through the receipt of a fee simple deed in lieu of foreclosure. In addition, the Partnership may acquire interests in multifamily, student and senior citizen residential properties (“MF Properties”) in order to position itself for future investments in MRBs that finance these properties or to operate the MF Properties until their “highest and best use” can be determined by management. The Partnership is governed by the First Amended and Restated Agreement of Limited Partnership dated September 15, 2015, as further amended (the “Partnership Agreement”).
Mortgage investments, as defined in the Partnership Agreement, consistent of MRBs, taxable MRBs, GILs, taxable GILs and property loans. The Partnership Agreement authorizes the Partnership to make investments in tax-exempt securities other than in mortgage investments provided that the tax-exempt investments are rated in 1 of the 4 highest rating categories by a national securities rating agency. The Partnership Agreement also allows the Partnership to invest in other securities whose interest may be taxable for federal income tax purposes. Total tax-exempt and other investments cannot exceed 25% of the Partnership’s total assets at the time of acquisition as required under the Partnership Agreement. Tax-exempt and other investments primarily consist of real estate assets and investments in unconsolidated entities. In addition, the amount of other investments is limited based on the conditions to the exemption from registration under the Investment Company Act of 1940.
The Partnership’s sole general partner is America First Capital Associates Limited Partnership Two (“AFCA 2” or “General Partner”). The general partner of AFCA 2 is Greystone AF Manager LLC (“Greystone Manager”), an affiliate of Greystone & Co., Inc. II LLC (collectively with its affiliates, “Greystone”).
The Partnership has issued Beneficial Unit Certificates (“BUCs”) representing assigned limited partnerpartnership interests to investors (“BUC holders”). The Partnership has also issueddesignated 3 series of non-cumulative, non-voting, non-convertible Series A Preferred Units (“Series A Preferredpreferred units (collectively, the “Preferred Units”) that represent limited interests in the Partnership under the Partnership’s First Amended and Restated Agreement of Limited Partnership dated September 15, 2015, as further amended (the “Partnership Agreement”). The Series A Preferred Units are redeemable in the future and represent limited partnership interests in the Partnership consisting of the Series A Preferred Units, the Series A-1 Preferred Units, and the Series B Preferred Units. The Series A Preferred Units were previously issued pursuant to subscription agreements with five financial institutions (see Noteand are redeemable in the future (Note 20). The Partnership has not yet issued Series A-1 Preferred Units or Series B Preferred Units. The holders of the BUCs and Series A Preferred Units are referred to herein collectively as “Unitholders.”
All disclosures of the number of rental units for properties related to MRBs, taxable MRBs, GILs, property loans and MF Properties are unaudited.
2. Summary of Significant Accounting Policies
Consolidation
Consolidation
The “Partnership,” as used herein, includes America First Multifamily Investors, L.P., its consolidated subsidiaries and consolidated variable interest entities (Note 5). All intercompany transactions are eliminated. The consolidated subsidiaries of the Partnership for the periods presented consist of:
|
|
|
|
71
|
|
|
|
|
|
|
|
|
|
|
|
The Partnership also consolidates variable interest entities (“VIEs”) in which the Partnership is deemed to be the primary beneficiary.
Use of Estimates in Preparation of Consolidated Financial Statements
The preparation of the accompanying consolidated financial statements in conformity with accounting principles generally accepted in the United States of America (“GAAP”) requires the Partnership to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities as of the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. The most significant estimates and assumptions include those used in determining: (i) the fair value of MRBs and Public Housing Capital Fund Trusts Certificates (“PHC Certificates”);GILs; (ii) investment impairments; (iii) impairment of real estate assets; and (iv) allowances for loan losses.
Risks and Uncertainties
The business and economic uncertainty resulting from the COVID-19 pandemic has made estimates and assumptions more difficult to calculate.calculate. The extent of the impact of COVID-19 on the Partnership’s future operational and financial performance will depend on certain developments, including the duration, variation and spread of the outbreak, the impact on the underlying borrowers of MRBs and GILs, tenants at the MF Properties and operations of the Partnership’s investments in unconsolidated entities. In addition, market volatility may cause fluctuations in the valuation of the Partnership’s MRBs, taxable MRBs, GILs, taxable GILs, property loans, MF Properties and investments in unconsolidated entities. The extent to which COVID-19 will impact the Partnership’s financial condition or results of operations in the future is uncertain and actual results and outcomes could differ from current estimates.
As of December 31, 2020, theThe Partnership has yet to observenoted slight, but not significant, declines in occupancy and operating results at multifamily properties securing its MRBs since the outbreak of COVID-19. The Partnership has observed a significant decline in occupancy or operating results at propertiesthe property securing its MRBs due to the COVID-19 pandemic, with the exception of the Provision Center 2014-1 andMRB, a commercial property. The property securing the Live 929 Apartments MRBs, which area student housing property, experienced significant declines during the first half of 2021 but has since recovered (see Note 6 for further discussed in Note 6. Furthermore, thediscussion). The Partnership has observed no material negative trends that potentially indicate impairmentevaluated the impacts of The 50/50COVID-19 on its investments in MF Property orProperties, properties related to its GILs, and investments in unconsolidated entities. The Partnership performed anentities and noted no indications of impairment analysis for the Suites at Paseo MF Property during 2020 due to a significant decline in occupancy as a result of COVID-19. The Partnership’s estimates of future undiscounted net cash flows expected to be generated from the use of the asset significantly exceeded the carrying value such that the property was not deemed impaired.investments.
Variable Interest Entities
Under the accounting guidance for consolidation, the Partnership must evaluate entities in which it holds a variable interest to determine if the entities are VIEs and if the Partnership is the primary beneficiary. The entity that is deemed to have: (1) the power to direct the activities of a VIE that most significantly impact the entity’s economic performance; and (2) the obligation to absorb losses of the entity that could potentially be significant to the VIE or the right to receive benefits from the entity that could potentially be significant to the VIE, is considered the primary beneficiary. If the Partnership is deemed to be the primary beneficiary, then it must consolidate the VIEs in its consolidated financial statements. The Partnership has consolidated all VIEs in which it has determined it is the primary beneficiary. In the Partnership’s consolidated financial statements, all transactions and accounts between the Partnership and the consolidated VIEs have been eliminated in consolidation.
The Partnership re-evaluates VIEs at each reporting date based on events and circumstances at the VIEs. As a result, changes to the consolidated VIEs may occur in the future based on changes in circumstances. The accounting guidance on consolidations is complex and requires significant analysis and judgment.
72
The Partnership does not believe that the consolidation of VIEs for reporting under GAAP impacts its status as a partnership for federal income tax purposes or the status of Unitholders as partners of the Partnership. In addition, the consolidation of VIEs is not expected to impact the treatment of the MRBs, GILs and property loans owned by consolidated VIEs, the tax-exempt nature of the interest payments on secured debt financings, or the manner in which the Partnership’s income is reported to Unitholders on IRS Schedule K-1.
Cash and Cash Equivalents
Cash and cash equivalents include highly liquid securities and investments in federally tax-exempt securities with maturities of three months or less when purchased.
Concentration of Credit Risk
The Partnership maintains the majority of its unrestricted cash balances at three financial institutions. The balances insured by the Federal Deposit Insurance Corporation are equal to $250,000 at each institution. At various times the cash balances have exceeded the $250,000 limit. The Partnership may from time to time invest in short-term investment grade securities. The Partnership is also exposed to risk on its short-term investments in the event of non-performance by counterparties. Thecounterparties, though such risk is minimal and the Partnership does not anticipate any non-performance. This risk is minimized significantly by the Partnership’s short-term investment portfolio being restricted to investment grade securities.
Restricted Cash
Restricted cash is legally restricted as to its use. The Partnership is required to maintain restricted cash collateral related to itsone secured line of credit (Note 15) and two total return swap transactions (see Note(Note 18). In addition, the Partnership is required to maintain restricted cash balances related to the TEBS Financing facilities (Note 16), resident security deposits, required maintenance reserves, escrowed funds, and property rehabilitation. Restricted cash is presented with cash and cash equivalents onin the Partnership’s consolidated statementstatements of cash flows.
Investments in Mortgage Revenue Bonds and Taxable Mortgage Revenue Bonds
The Partnership accounts for its investments in MRBs and taxable MRBs under the accounting guidance for certain investments in debt and equity securities. The Partnership’s investments in these instruments are classified as available-for-sale debt securities and are reported at their estimated fair value. The net unrealized gains or losses on these investments are reflected inon the Partnership’s consolidated statements of comprehensive income. Unrealized gains and losses do not affect the cash flow of the bonds, distributions to Unitholders, or the characterization of the interest income of the financial obligation of the underlying collateral. See Note 24 for a description of the Partnership’s methodology for estimating the fair value of MRBs and taxable MRBs.
The Partnership periodically reviews its MRBs and taxable MRBs for impairment. The Partnership evaluates whether unrealized losses are considered other-than-temporary impairments based on various factors including, but not necessarily limited to, the following:
• The duration and severity of the decline in fair value; • The Partnership’s intent to hold and the likelihood of it being required to sell the security before its value recovers; • Adverse conditions specifically related to the security, its collateral, or both; • Volatility of the fair value of the security; • The likelihood of the borrower being able to make scheduled interest and principal payments; • Failure of the issuer to make scheduled interest or principal payments; and • Recoveries or additional declines in fair value after the balance sheet date.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
While the Partnership evaluates all available information, it focuses specifically on whether the security’s estimated fair value is below amortized cost. If a MRB’s estimated fair value is below amortized cost, and the Partnership has the intent to sell or may be required to sell the MRB prior to the time that its value recovers or until maturity, the Partnership will record an other-than-temporary impairment through earnings equal to the difference between the MRB’s carrying value and its fair value. If the Partnership does not expect to sell an other-than-temporarily impaired MRB, only the portion of the other-than-temporary impairment related to credit losses is recognized through earnings as a provision for credit loss, with the remainder recognized as a component of other comprehensive income (loss).income. In determining the provision for credit loss, the Partnership compares the present value of cash flows expected to be collected to the MRB’s amortized cost basis.
73
The recognition of other-than-temporary impairment, provision for credit loss, and the potential impairment analysis are subject to a considerable degree of judgment, the results of which, when applied under different conditions or assumptions, could have a material impact onto the Partnership’s consolidated financial statements. If the Partnership experiences deterioration in the values of its MRB portfolio, the Partnership may incur other-than-temporary impairments or provision for credit losses that could negatively impact the Partnership’s financial condition, cash flows, and reported earnings.
Investment in Governmental Issuer Loans and Taxable Governmental Issuer Loans
The Partnership accounts for its investment in governmental issuer loans (“GILs”) and taxable GILs under the accounting guidance for certain investments in debt and equity securities. The Partnership’s investment in these instruments are classified as held-to-maturity debt securities and are reported at amortized cost.
The Partnership periodically reviews its GILs and taxable GILs for impairment. The Partnership evaluates whether unrealized losses are considered other-than-temporary impairments based on various factors including, but not necessarily limited to, the following:
• The duration and severity of the decline in fair value; • The Partnership’s intent to hold and the likelihood of it being required to sell the security before its value recovers; • Adverse conditions specifically related to the security, its collateral, or both; • Volatility of the fair value of the security; • The likelihood of the borrower being able to make scheduled interest and principal payments; • The failure of the borrower to make scheduled interest or principal payments; and • Recoveries or additional declines in fair value after the balance sheet date.
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While the Partnership evaluates all available information, it focuses specifically on whether the security’s estimated fair value is below amortized cost. If a GIL’sthe estimated fair value of a GIL or taxable GIL is below amortized cost, and the Partnership does not expect to recover its entire amortized cost, only the portion of the other-than-temporary impairment related to credit losses is recognized through earnings as a provision for credit loss, with the remainder recognized as a component of other comprehensive income (loss). income.
The recognition of other-than-temporary impairment, provision for credit loss, and the potential impairment analysis are subject to a considerable degree of judgment, the results of which, when applied under different conditions or assumptions, could have a material impact onto the Partnership’s consolidated financial statements. If the Partnership experiences deterioration in the value of its GILs or taxable GILs, the Partnership may incur other-than-temporary impairments or provision for credit losses that could negatively impact the Partnership’s financial condition, cash flows, and reported earnings.
Investment in Public Housing Capital Fund Trust Certificates
The Partnership accounted for its investments in PHC Certificates under the accounting guidance for certain investments in debt and equity securities. The Partnership’s investments in these instruments are classified as available-for-sale debt securities and are reported at their estimated fair value. The net unrealized gains or losses on these investments are reflected in the Partnership’s consolidated statements of comprehensive income. Unrealized gains and losses do not affect the cash flow of the certificates, distributions to Unitholders, or the characterization of the interest income of the financial obligation of the underlying collateral. See Note 24 for a description of the Partnership’s methodology for estimating the fair value of the PHC Certificates.
Real Estate Assets
The Partnership’s investments in real estate are carried at cost less accumulated depreciation. Depreciation of real estate is based on the estimated useful life of the related asset, generally 19-4019-40 years on multifamily and student housing residential apartment buildings, and five to 15 years on capital improvements. Depreciation expense is calculated using the straight-line method. Maintenance and repairs are charged to expense as incurred, while improvements, renovations, and replacements are capitalized. The Partnership also holds land held for investment and development which is reported at cost. The Partnership recognizes gains and losses equal to the difference between proceeds on sale and the net carrying value of the assets at the date of disposition.
The Partnership reviews real estate assets for impairment at least quarterlyperiodically and whenever events or changes in circumstances indicate that the carrying value of a property may not be recoverable. When indicators of potential impairment suggest that the carrying value of a real estate asset may not be recoverable, the Partnership compares the carrying amount of the real estate asset to the undiscounted net cash flows expected to be generated from the use of the asset. If the carrying value exceeds the undiscounted net cash flows, an impairment loss is recorded to the extent that the carrying value of the property exceeds its estimated fair value.
See Note 98 for information on recognized impairments of the real estate assets.
Investments in Unconsolidated Entities
ThePartnership, through ATAX Vantage Holdings, LLC, makes initial investments in and is committed to make further investments in certain limited liability companies (“Vantage Properties”). companies. ATAX Vantage Holdings, LLC holds limited membership interests in the Vantage Properties.limited liability companies. The investments are used to construct market-rate multifamily properties. The Partnership does not have a
74
controlling interest in the Vantage Propertieslimited liability companies and accounts for its limited membership interests using the equity method of accounting.
The Partnership reviews its investments in unconsolidated affiliates for impairment whenever events or changes in business circumstances indicate that the carrying amount of the investments may not be fully recoverable. Factors considered include:
• The absence of an ability to recover the carrying amount of the investment; • The inability of the investee to sustain an earnings capacity that justifies the carrying amount of the investment; or • Estimated sales proceeds that are insufficient to recover the carrying amount of the investment.
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The Partnership’s assessment of whether a decline in value is other than temporary is based on the Partnership’s ability and intent to hold the investment and whether evidence indicating the carrying value of the investment is recoverable within a reasonable period of time outweighs evidence to the contrary. If the fair value of the investment is determined to be less than the carrying value and the decline in value is considered other than temporary, an impairment charge would be recorded equal to the excess of the carrying value over the estimated fair value of the investment.
The Partnership earns a return on its investments in unconsolidated entities that is guaranteed by an unrelated third party, which is also an affiliate of the unconsolidated entities. The term of the third-party guarantee is from the initial investment through a date approximately two to threefive years after construction completion.commencement of construction. The Partnership recognizes a return based upon the guarantee provided by the unrelated third-party, the guarantor’s financial ability to perform under the guarantee and the cash flows expected to be received from each property. These returns are reported within “Investment income” on the Partnership’s consolidated statements of operations.
Property Loans, Net of Loan Loss Allowance
The Partnership invests in taxable property loans made to the owners of certain multifamily student housing and skilled nursing properties. Most of the property loans have been made to multifamily properties that secure MRBs and GILs owned by the Partnership. The Partnership recognizes interest income on the property loans as earned and the interest income is reported within “Other interest income” on the Partnership’s consolidated statements of operations. Interest income is not recognized for property loans that are deemed to be in nonaccrual status. Interest income is recognized upon the repayment of these property loans and accrued interest which is dependent largely on the cash flows or proceeds upon sale or refinancing of the related property. The Partnership periodically evaluates theseproperty loans for potential impairment by estimating the fair value of the related property and comparing the fair value to the outstanding MRBs, GILs or other senior financing, plus the Partnership’s property loans. The Partnership also considers financing commitments, borrower equity commitments, guaranties by borrower affiliates, and construction progress when assessing property loans associated with GIL investments. The Partnership utilizes a discounted cash flow model that considers varying assumptions. The discounted cash flow analysis may assume multiple revenue and expense scenarios, various capitalization rates, and multiple discount rates. The Partnership may also consider other information such as independent appraisals in estimating a property’s fair value.
If the estimated fair value of the related property, after deducting the amortized cost basis of the MRB, GIL or other senior financing, exceeds the principal balance of the taxable property loan then 0 potential loss is indicated and 0 allowance for loan loss is recorded. If a potential loss is indicated, an allowance for loan loss is recorded against the outstanding loan amount and a loss is realized.recognized. The determination of the need for an allowance for loan loss is subject to considerable judgment.
See Note 1110 for additional information on the Partnership’s property loan loss allowances.
Accounting for TOB, Term TOB, Term A/B and TEBS Financing Arrangements
The Partnership has evaluated the accounting guidance related to its TOB (“Tender Option Bond”), Term TOB, Term A/B and TEBS Financingsfinancings and has determined that the securitization transactions do not meet the accounting criteria for a sale or transfer of financial assets and therefore are accounted for as secured financing transactions. More specifically, the guidance on transfers and servicing sets forth the conditions that must be met to de-recognize a transferred financial asset. This guidance provides, in part, that the transferor has surrendered control over transferred assets if and only if the transferor does not maintain effective control over the transferred assets. The financing agreements contain certain provisions that allow the Partnership to unilaterally cause the holder to return the securitized assets, other than through a cleanup call. Based on these terms, the Partnership has concluded that the Partnership has not transferred effective control over the transferred assets and, as such, the transactions do not meet the conditions to de-recognize the transferred assets.
In addition, the Partnership has evaluated the securitization trusts associated with the TOB, Term TOB, Term A/B and TEBS Financingsfinancings in accordance with guidance on consolidation of VIEs. See Note 5 for the consolidation analysis related to these secured financing
75
arrangements. The Partnership is deemed to be the primary beneficiary of these securitization trusts and consolidates the assets, liabilities, income and expenses of the securitization trusts in the Partnership’s consolidated financial statements.
The Partnership recognizes interest expense for fixed-rate TEBS Financingsfinancings with escalating stated interest rates using the effective interest method over the estimated term of the arrangement.
Deferred Financing Costs
Debt financing costs are capitalized and amortized using the effective interest method through either the stated maturity date or the optional redemption date of the related debt financing agreement. Debt financing costs associated with revolving line of credit (“LOC”) arrangements are reported within “Other assets” on the Partnership’s consolidated balance sheets. Deferred financing costs associated with debt financing and mortgages payable arrangements are reported as reductions to the carrying value of the related debt financing arrangementsliability on the Partnership’s consolidated balance sheets.
Income Taxes
No provision has been made for income taxes of the Partnership because the Unitholders are required to report their share of the Partnership’s taxable income for federal and state income tax purposes, except for certain entities described below. The Partnership pays franchise margin taxes on revenues in certain jurisdictions relating to property loans and investments in unconsolidated entities.
The Greens Hold Co is subject to federal and state income taxes. The Partnership recognizes income tax expense or benefit for the federal and state income taxes incurred by this entity in its consolidated financial statements.
The Partnership evaluates the tax positions it takes in its consolidated financial statements under the accounting guidance for uncertain tax positions. As such, the Partnership may recognize a tax benefit from an uncertain tax position only if the Partnership believes it is more likely than not that the tax position will be sustained on examination by taxing authorities. The Partnership accrues interest and penalties, if any, and reports them within “Income tax expense” on the Partnership’s consolidated statements of operations.
Deferred income tax expense or benefit, is generally a function of the period’s temporary differences (items that are treated differently for tax purposes than for financial reporting purposes), such as depreciation, amortization of financing costs, etc. and the utilization of tax net operating losses (“NOLs”). The Partnership values its deferred tax assets and liabilities using enacted tax rates in effect for the year in which the differences are expected to reverse. The Partnership records a valuation allowance for deferred income tax assets if it believes all, or some portion, of the deferred income tax asset may not be realized. Any increase or decrease in the valuation allowance that results from a change in circumstances that causes a change in the estimated ability to realize the related deferred income tax asset is included in deferred income tax expense.
Investment Income from Investments in Mortgage Revenue Bonds and Governmental Issuer Loans
The interest income received by the Partnership from its MRBs and GILs is dependent upon the net cash flow of the underlying properties. Interest income on fully performing MRBs and GILs is recognized as it is earned. Current and past due interest income on MRBs and GILs not fully performing is recognized as it is received. The Partnership reinstates the accrual of interest once the MRB’s or GIL’s ability to perform is adequately demonstrated. Interest income related to MRBs and GILs is reported within “Investment Income” and interest income related to taxable MRBs and taxable GILs is reported within “Other interest income” on the Partnership’s consolidated statements of operations. As of December 31, 20202021 and 2019,2020, the Partnership’s MRBs and GILs were fully performing and current on all interest payments, with the exception of the Provision Center 2014-1 MRB and forbearance granted to the borrower of the Live 929 Apartments MRB,MRBs, both of which are further discussed in Note 6.
Premiums on callable MRB investments are amortized as a yield adjustment to the earliest call date. Discounts on MRB investments are amortized as a yield adjustment to the stated maturity date. Amortization of premiums and discounts is reported within “Investment income” on the Partnership’s consolidated statements of operations.
Bond issuance costs are capitalized and amortized utilizing the effective interest method over the period to the stated maturity of the related MRBs. Bond issuance costs are reported as an adjustment to the carrying cost of the related MRB on the Partnership’s consolidated balance sheets.
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Investment Income from PHC Certificates
Interest income on the PHC Certificates iswas recognized as it iswas earned. The PHC Certificate Trust I was purchased at a premium and PHC Certificate Trusts II and III were purchased at discounts to par value. The premiums and discounts arewere amortized using the effective yield method over the term of the related PHC Certificate and amortization iswas reported within “Investment income” on the Partnership’s consolidated statements of operations.
Derivative Instruments and Hedging Activities
The Partnership reports all interest rate derivatives inon its consolidated balance sheets at fair value. The Partnership’s derivative financial instruments are not designated as hedging instruments and changes in fair value are reported within “Interest expense” on the Partnership’s consolidated statements of operations. The Partnership is exposed to loss should a counterparty to its interest rate derivative agreements default. The Partnership does not anticipate non-performance by any counterparty.
Redeemable Preferred Units
RedeemableThe Partnership has designated three series of Preferred Units consisting of the Series A Preferred Units,
the Series A-1 Preferred Units, and the Series B Preferred Units. The Partnership has issued Series A Preferred Units representing limited partnership interests in the Partnership to various financial institutions. The Series A Preferred Units are recorded as mezzanine equity due to the holders’ redemption option which, if and when the units become subject to redemption, is outside the Partnership’s control. The costs of issuing the Series A Preferred Units arehave been netted against the carrying value of the Series A Preferred Units and are being amortized to the first redemption date. The Partnership will account for the Series A-1 Preferred Units and Series B Preferred Units in a manner consistent with the Series A Preferred Units if and when issued.
Beneficial Unit Certificates (“BUCs”)
The Partnership has issued BUCs representing assigned limited partnership interests to investors. Costs related to the issuance of BUCs are recorded as a reduction to partners’ capital when issued.
Restricted Unit Awards (“RUA” or “RUAs”)
The Partnership’s 2015 Equity Incentive Plan (the “Plan”), as approved by the BUC holders in September 2015, permits the grant of RUAs and other awards to the employees of Greystone Manager, or any affiliate, who performs services for Greystone Manager, the Partnership or an affiliate, and members of Greystone Manager’s Board of Managers for up to 3.0 million BUCs. RUAs have historically been granted with vesting conditions ranging from three months to up to three years.years. RUAs typically provide for the payment of distributions during the restriction period. The RUAs provide for accelerated vesting if there is a change in control, or upon death or disability of the participant. The Partnership accounts for forfeitures as they occur.
The fair value of each RUA is estimated on the grant date based on the Partnership’s exchange-listed closing price of the BUCs. The Partnership recognizes compensation expense for the RUAs on a straight-line basis over the requisite vesting period. The Partnership accounts for modifications to RUAs as they occur, if the fair value of the RUAs change, there are changes to vesting conditions or the awards no longer qualify for equity classification.
Net Income per BUC
The Partnership uses the two-class method to allocate net income available to the BUCs, and to the unvested RUAs as the RUAs are participating securities. Unvested RUAs are included with BUCs for the calculation of diluted net income per BUC using the treasury stock method, if the treasury stock method is more dilutive than the two-class method.
Lease Accounting
On January 1, 2019, the Partnership adopted the lease guidance in Accounting Standards Codification (“ASC”) 842. The Partnership adopted ASC 842 at the required adoption date of January 1, 2019, using the transition method that allowed the Partnership to initially apply ASC 842 as of January 1, 2019 and recognize a cumulative-effect adjustment to the opening balance of partners’ capital in the period of adoption.
Lessee Operating Leases. Leases
The Partnership’s only material lessee lease is a ground lease at The 50/50 MF Property. Upon adoption of ASC 842, theThe Partnership has elected the package of practical expedients in ASU 2016-11, elected not to apply ASC 842 to short-term leases and elected to combine lease and non-lease components when accounting for operating lease arrangements. On
The Partnership’s lessee ROU assets are reported within “Other assets” on the date of adoption of ASC 842, the Partnership recognized operating lease right-of-use (“ROU”) assets of approximately $1.7 million,Partnership’s consolidated balance sheet (Note 12). The Partnership’s lessee operating lease liabilities of approximately $2.2 million,are reported within “Accounts payable, accrued expenses and an immaterial cumulative adjustment to partners’ capital.other liabilities” on the Partnership’s consolidated balance sheet (Note 13). See Note 13 for additional information on the Partnership’s ground lease. The Partnership used a discount rate of 6.6% to calculate the ROU asset and lease liability related to the ground lease. The discount rate is based on the Partnership’s estimated incremental borrowing rate to borrow, on a fully collateralized basis, over a similar term for the
77
amount of contractual lease payments. The incremental borrowing rate was estimated using market transactions adjusted for differences in the term and security.
The Partnership’s lessee ROU assets are reported within “Other assets” on the Partnership’s consolidated balance sheet (see Note 13). The Partnership’s lessee operating lease liabilities are reported within “Accounts payable, accrued expenses and other liabilities” on the Partnership’s consolidated balance sheet (see Note 14). See Note 14 for additional information on the Partnership’s ground lease.
Lessor Operating Leases. Leases
The Partnership’s lessor leases consist of tenant leases related to real estate assets, specifically at the MF Properties. Tenant leases also contain terms for non-lease revenues related to operations at the MF Properties, such as parking and food service revenues. The Partnership has elected to combine the lease and non-lease components when accounting for lessor leases. The unit lease component of the tenant lease is considered the predominant component, so all components of the tenant lease are accounted for under ASC 842. Tenant leases are typically for terms of 12 months or less and do not include extension options. Lease revenue is recognized monthly and is reported within “Property revenues” on the Partnership’s consolidated statements of operations. ASC 842 did not have a material impact on the Partnership’s accounting for its lessor arrangements with tenants at the MF Properties.
Recently Issued Accounting Pronouncements
In June 2016, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2016-13, “Financial Instruments – Credit Losses (Topic 326).” ASU 2016-13 enhances the methodology of measuring expected credit losses for financial assets to include the use of reasonable and supportable forward-looking information to better estimate credit losses. ASU 2016-13 also includes changes to the impairment model for available-for-sale debt securities such as the Partnership’s MRBs and taxable MRBs. In November 2019, the FASB issued ASU 2019-10 which amended the mandatory effective dates of certain ASUs, including ASU 2016-13, based on an entity’s filing status. As a smaller reporting company, the Partnership’s mandatory effective date for ASU 2016-13 is noweffective for the Partnership on January 1, 2023, and2023. The Partnership regularly assesses its assets that are within the Partnership has elected to defer adoption until that date. The delay in implementingscope of ASU 2016-13 will allow the Partnership to take advantage of any additional guidance that may come out from the FASB on implementing ASU 2016-13. The effective date may be sooner if the Partnership becomes an accelerated filer in the future. Prior to the issuance of ASU 2019-10, the Partnership completed an initial assessment and has determined that its property loans, the interest receivable onGILs, taxable GIL, property loans, receivables reported within other assets, financial guarantees, financial commitments, and commitments are within the scope of ASU 2016-13. The Partnership has also determined that the GILs and theany interest receivable on GILsrelated to such assets, are within the scope of ASU 2016-13. Furthermore, the Partnership has begun developing data collection processes, assessment procedures and internal controls required to implement ASU 2016-13. The Partnership will continue to develop data collection processes, assessment procedures and internal controls that will be required when it does implement ASU 2016-13, and to evaluate the impact onto the Partnership’s consolidated financial statements.
In March 2020, the FASB issued ASU 2020-04, Reference Rate Reform—Facilitation of the Effects of Reference Rate Reform on Financial Reporting (“ASU 2020-04”), which provides optional guidance for a limited period meant to ease the potential burden in accounting for, or recognizing the effects of, reform to LIBOR and certain other reference rates. The standard is effective for all entities from March 12, 2020 through December 31, 2022. However, ASU 2020-04 is only applicable to contracts, hedging relationships, and other transactions that reference LIBOR or another reference rate expected to be discontinued because of reference rate reform, and that were entered into or evaluated prior to January 1, 2023. The Partnership has evaluated its population of instruments indexed, either directly or indirectly, to LIBOR and is currently evaluating the impact that the adoption of ASU 2020-04 will have on itsto the consolidated financial statements.
3. Partnership Income, Expenses and Cash Distributions
The Partnership Agreement contains provisions for the distribution of Net Interest Income, Net Residual Proceeds and Liquidation Proceeds, for the allocation of income or loss from operations, and for the allocation of income and loss arising from a repayment, sale, or liquidation of investments. Income and losses will be allocated to each Unitholder on a periodic basis, as determined by the General Partner, based on the number of Series A Preferred Units and BUCs held by each Unitholder as of the last day of the period for which such allocation is to be made. Distributions of Net Interest Income and Net Residual Proceeds will be made to each Unitholder of record on the last day of each distribution period based on the number of Series A Preferred Units and BUCs held by each Unitholder on that date. Cash distributions are currently made on a quarterly basis.
For purposes of the Partnership Agreement, income and cash received by the Partnership from its investments in MF Properties, investments in unconsolidated entities, and property loans will be included in the Partnership’s Net Interest Income, and cash distributions received by the Partnership from the sale or redemption of such investments will be included in the Partnership’s Net Residual Proceeds.
The holders of the Series A Preferred Units are entitled to distributions at a fixed rate of 3.0% per annum prior to payment of distributions to other Unitholders.
Net Interest Income (Tier 1) is allocated 99% to the limited partners and BUC holders as a class and 1% to the General Partner. Net Interest Income (Tier 2) and Net Residual Proceeds (Tier 2) are allocated 75% to the limited partners and BUC holders as a class and 25% to the General Partner. Net Interest Income (Tier 2) and Net Residual Proceeds (Tier 2) in excess of the maximum allowable amount as set forth in the Partnership Agreement are considered Net Interest Income (Tier 3) and Net Residual Proceeds (Tier 3) and are allocated 100% to the limited partners and BUC holders as a class.
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The distributions paid or accrued per BUC during the fiscal years ended December 31, 20202021 and 20192020 were as follows:
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| For the Years Ended December 31, |
| |||||
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| 2021 |
|
| 2020 |
| ||
Cash distributions |
| $ | 0.5000 |
|
| $ | 0.3050 |
|
|
| For the Years Ended December 31, |
| |||||
|
| 2020 |
|
| 2019 |
| ||
Cash distributions |
| $ | 0.3050 |
|
| $ | 0.5000 |
|
4. Net income per BUC
The Partnership has disclosed basic and diluted net income per BUC on the Partnership’s consolidated statements of operations. The unvested RUAs issued under the Partnership’s 2015 Equity Incentive Plan (the “2015 Plan”) are considered participating securities. There were 0 dilutive BUCs for the years ended December 31, 20202021 and 2019.2020.
5. Variable Interest Entities
Consolidated VIEs
The Partnership has determined the TOB, Term TOB, Term A/B and TEBS Financingsfinancings are VIEs and the Partnership is the primary beneficiary (see Note 16).beneficiary. In determining the primary beneficiary of each VIE, the Partnership considered which party has the power to control the activities of the VIE which most significantly impact its financial performance, the risks that the entity was designed to create, and how each risk affects the VIE. The executed agreements related to the TOB, Term TOB, Term A/B and TEBS Financingsfinancings stipulate the Partnership has the sole right to cause the trusts to sell the underlying assets. If the underlying assets were sold, the extent to which the VIEs will be exposed to gains or losses would result from decisions made by the Partnership.
As the primary beneficiary, the Partnership reports the TOB, Term TOB, Term A/B and TEBS Financingsfinancings on a consolidated basis. The Partnership reports the senior Floater Certificates related to the TOB Financings,financings, and the Class A Certificates related to the Term TOB Term A/B and TEBS Financingsfinancings as secured debt financings on the Partnership’s consolidated balance sheets (see Note(Note 16). The MRBs, taxable MRBs, GILs, taxable GIL and property loans secured by the TOB, Term TOB, Term A/B and TEBS Financings, and the PHCs secured by the TOB Financings,financings are reported as assets on the Partnership’s consolidated balance sheets (see Notes(Notes 6, 7, 810 and 11)12). In April 2020, the Partnership collapsed all Term A/B Trust financings with Deutsche Bank. The Term A/B Trusts were also consolidated VIEs similar to the TOB financings.
The Partnership has determined its investment in Vantage at San Marcos is a VIE and the Partnership is the primary beneficiary. The Partnership may currently require the managing member of the VIE to purchase the Partnership’s equity investment in the VIE at a price equal to the Partnership’s carrying value. If the Partnership were to redeem its investment, the underlying assets of the project would likely need to be sold. If the underlying assets were sold, the extent to which the VIE will be exposed to gains or losses would result from decisions made by the Partnership. The Partnership’s option to redeem its investment in Vantage at San Marcos was not effective until the fourth quarter of 2021. As the primary beneficiary, the Partnership reports Vantage at San Marcos on a consolidated basis, which consist of a real estate asset investment (Note 8), mortgage payable (Note 17), and current liabilities associated with the construction costs of a market-rate multifamily property (Note 13). If certain events occur in the future, the Partnership’s option to redeem the investment will terminate and the investment may be deconsolidated.
During 2021, the Partnership consolidated Vantage at Hutto and Vantage at Fair Oaks because it could require the managing member of the VIEs to purchase the Partnership’s equity investments in the VIEs at a price equal to the Partnership’s carrying value. The Partnership’s right to require the managing members of the VIEs to purchase the Partnership’s equity investments at a price equal to the Partnership’s carrying values was terminated during 2021. As such, the Partnership is no longer the primary beneficiary of the VIEs and they are not reported on a consolidated basis as of December 31, 2021.
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Non-Consolidated VIEs
The Partnership has variable interests in various entities in the form of MRBs, taxable MRBs, GILs, a taxable GIL, property loans and investments in unconsolidated entities. These variable interests do not allow the Partnership to direct the activities that most significantly impact the economic performance of such VIEs. As a result, the Partnership is not considered the primary beneficiary and does not consolidate the financial statements of these VIEs in the Partnership’s consolidated financial statements.
The Partnership held variable interests in 2130 and 1721 non-consolidated VIEs as of December 31, 2021 and 2020, and 2019, respectively. The following table summarizes the Partnership’s variable interests in these entities and maximum exposure to loss associated with its variable interests as of December 31, 20202021 and 2019:
2020:
|
| Maximum Exposure to Loss |
| |||||
|
| December 31, 2020 |
|
| December 31, 2019 |
| ||
Mortgage revenue bonds |
| $ | 20,763,500 |
|
| $ | 30,455,000 |
|
Governmental issuer loans |
|
| 64,863,657 |
|
|
| - |
|
Property loans |
|
| 5,327,342 |
|
|
| - |
|
Investment in unconsolidated entities |
|
| 106,878,570 |
|
|
| 86,981,864 |
|
|
| $ | 197,833,069 |
|
| $ | 117,436,864 |
|
|
| Maximum Exposure to Loss |
| |||||
|
| December 31, 2021 |
|
| December 31, 2020 |
| ||
Mortgage revenue bonds |
| $ | 51,045,000 |
|
| $ | 20,763,500 |
|
Taxable mortgage revenue bonds |
|
| 2,000,000 |
|
|
| - |
|
Governmental issuer loans |
|
| 184,767,450 |
|
|
| 64,863,657 |
|
Taxable governmental issuer loan |
|
| 1,000,000 |
|
|
| - |
|
Property loans |
|
| 47,274,576 |
|
|
| 5,327,342 |
|
Investments in unconsolidated entities |
|
| 107,793,522 |
|
|
| 106,878,570 |
|
|
| $ | 393,880,548 |
|
| $ | 197,833,069 |
|
The maximum exposure to loss for the MRBs and taxable MRB is equal to the cost adjusted for paydowns. The difference between aan MRB’s carrying value onin the Partnership’s consolidated balance sheets and the maximum exposure to loss is a function of the unrealized gains or losses on the MRB.
The maximum exposure to loss for the GILs, taxable GIL, property loans and investments in unconsolidated entities is equal to the Partnership’s carrying value.
6. Mortgage Revenue Bonds
The Partnership owns MRBs that were issued by state and local governments, their agencies and authorities to finance the construction or rehabilitation of income-producing real estatemultifamily rental properties. The Partnership expects and believes the interest earned on the MRBs is excludable from gross income for federal income tax purposes. The MRBs do not constitute an obligation of any state or local government, agency or authority and no state or local government, agency or authority is liable on them, nor is the taxing power of any state or local government pledged to the payment of principal or interest on the MRBs. The MRBs are non-recourse obligations of the respective ownersproperty owners. Each MRB is secured by a mortgage on all real and personal property of the properties.secured property. The sole source of the funds to pay principal and interest on the MRBsof an MRB is the net cash flow or the sale or refinancing proceeds from the properties. Each MRB is collateralized by a mortgage on all real and personal property included in the relatedsecured property.
The MRBs bear interest at a fixed rate, with the exception of Ocotillo Springs – Series A, MRB.Residency at the Mayer - Series A, and Live 929 Apartment – Series B MRBs.
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The following tables present information regarding the MRBs owned by the Partnership as of December 31, 20202021 and 2019:2020:
|
| December 31, 2020 |
| |||||||||||||||
Description of Mortgage Revenue Bonds Held in Trust |
| State |
| Cost Adjusted for Paydowns and Allowances |
|
| Cumulative Unrealized Gain |
|
| Cumulative Unrealized Loss |
|
| Estimated Fair Value |
| ||||
Courtyard - Series A (4) |
| CA |
| $ | 10,061,161 |
|
| $ | 2,487,317 |
|
| $ | - |
|
| $ | 12,548,478 |
|
Glenview Apartments - Series A (3) |
| CA |
|
| 4,483,154 |
|
|
| 1,010,425 |
|
|
| - |
|
|
| 5,493,579 |
|
Harmony Court Bakersfield - Series A (4) |
| CA |
|
| 3,668,439 |
|
|
| 889,216 |
|
|
| - |
|
|
| 4,557,655 |
|
Harmony Terrace - Series A (4) |
| CA |
|
| 6,791,096 |
|
|
| 1,724,350 |
|
|
| - |
|
|
| 8,515,446 |
|
Harden Ranch - Series A (2) |
| CA |
|
| 6,621,823 |
|
|
| 1,606,690 |
|
|
| - |
|
|
| 8,228,513 |
|
Las Palmas II - Series A (4) |
| CA |
|
| 1,664,566 |
|
|
| 400,431 |
|
|
| - |
|
|
| 2,064,997 |
|
Montclair Apartments - Series A (3) |
| CA |
|
| 2,428,775 |
|
|
| 572,671 |
|
|
| - |
|
|
| 3,001,446 |
|
Montecito at Williams Ranch Apartments - Series A (6) |
| CA |
|
| 7,626,287 |
|
|
| 2,350,276 |
|
|
| - |
|
|
| 9,976,563 |
|
Montevista - Series A (6) |
| CA |
|
| 6,720,000 |
|
|
| 2,404,771 |
|
|
| - |
|
|
| 9,124,771 |
|
Ocotillo Springs - Series A (6) |
| CA |
|
| 2,023,500 |
|
|
| 215,633 |
|
|
| - |
|
|
| 2,239,133 |
|
San Vicente - Series A (4) |
| CA |
|
| 3,432,246 |
|
|
| 809,327 |
|
|
| - |
|
|
| 4,241,573 |
|
Santa Fe Apartments - Series A (3) |
| CA |
|
| 2,942,370 |
|
|
| 724,678 |
|
|
| - |
|
|
| 3,667,048 |
|
Seasons at Simi Valley - Series A (4) |
| CA |
|
| 4,236,876 |
|
|
| 1,180,122 |
|
|
| - |
|
|
| 5,416,998 |
|
Seasons Lakewood - Series A (4) |
| CA |
|
| 7,233,993 |
|
|
| 1,836,808 |
|
|
| - |
|
|
| 9,070,801 |
|
Seasons San Juan Capistrano - Series A (4) |
| CA |
|
| 12,179,682 |
|
|
| 2,973,846 |
|
|
| - |
|
|
| 15,153,528 |
|
Summerhill - Series A (4) |
| CA |
|
| 6,316,993 |
|
|
| 1,470,689 |
|
|
| - |
|
|
| 7,787,682 |
|
Sycamore Walk - Series A (4) |
| CA |
|
| 3,517,919 |
|
|
| 888,485 |
|
|
| - |
|
|
| 4,406,404 |
|
The Village at Madera - Series A (4) |
| CA |
|
| 3,034,084 |
|
|
| 735,450 |
|
|
| - |
|
|
| 3,769,534 |
|
Tyler Park Townhomes - Series A (2) |
| CA |
|
| 5,767,938 |
|
|
| 939,214 |
|
|
| - |
|
|
| 6,707,152 |
|
Vineyard Gardens - Series A (6) |
| CA |
|
| 3,969,173 |
|
|
| 1,226,058 |
|
|
| - |
|
|
| 5,195,231 |
|
Westside Village Market - Series A (2) |
| CA |
|
| 3,769,337 |
|
|
| 859,860 |
|
|
| - |
|
|
| 4,629,197 |
|
Brookstone (1) |
| IL |
|
| 7,374,252 |
|
|
| 2,201,663 |
|
|
| - |
|
|
| 9,575,915 |
|
Copper Gate Apartments (2) |
| IN |
|
| 4,955,000 |
|
|
| 641,581 |
|
|
| - |
|
|
| 5,596,581 |
|
Renaissance - Series A (3) |
| LA |
|
| 10,870,681 |
|
|
| 4,293,328 |
|
|
| - |
|
|
| 15,164,009 |
|
Live 929 Apartments (6) |
| MD |
|
| 36,234,756 |
|
|
| - |
|
|
| - |
|
|
| 36,234,756 |
|
Woodlynn Village (1) |
| MN |
|
| 4,120,000 |
|
|
| 56,458 |
|
|
| - |
|
|
| 4,176,458 |
|
Gateway Village (6) |
| NC |
|
| 2,600,000 |
|
|
| 136,612 |
|
|
| - |
|
|
| 2,736,612 |
|
Greens Property - Series A (2) |
| NC |
|
| 7,829,000 |
|
|
| 663,781 |
|
|
| - |
|
|
| 8,492,781 |
|
Lynnhaven Apartments (6) |
| NC |
|
| 3,450,000 |
|
|
| 178,960 |
|
|
| - |
|
|
| 3,628,960 |
|
Silver Moon - Series A (3) |
| NM |
|
| 7,697,891 |
|
|
| 1,995,694 |
|
|
| - |
|
|
| 9,693,585 |
|
Village at Avalon - Series A (5) |
| NM |
|
| 16,189,074 |
|
|
| 4,879,623 |
|
|
| - |
|
|
| 21,068,697 |
|
Ohio Properties - Series A (1) |
| OH |
|
| 13,724,000 |
|
|
| 61,243 |
|
|
| - |
|
|
| 13,785,243 |
|
Bridle Ridge (1) |
| SC |
|
| 7,235,000 |
|
|
| 153,657 |
|
|
| - |
|
|
| 7,388,657 |
|
Columbia Gardens (4) |
| SC |
|
| 12,898,904 |
|
|
| 2,689,886 |
|
|
| - |
|
|
| 15,588,790 |
|
Companion at Thornhill Apartments (4) |
| SC |
|
| 11,055,254 |
|
|
| 2,208,446 |
|
|
| - |
|
|
| 13,263,700 |
|
Cross Creek (1) |
| SC |
|
| 6,136,261 |
|
|
| 2,277,289 |
|
|
| - |
|
|
| 8,413,550 |
|
Rosewood Townhomes - Series A (6) |
| SC |
|
| 9,259,206 |
|
|
| 578,247 |
|
|
| - |
|
|
| 9,837,453 |
|
South Pointe Apartments - Series A (6) |
| SC |
|
| 21,551,600 |
|
|
| 1,345,919 |
|
|
| - |
|
|
| 22,897,519 |
|
The Palms at Premier Park Apartments (2) |
| SC |
|
| 18,619,081 |
|
|
| 2,906,879 |
|
|
| - |
|
|
| 21,525,960 |
|
Village at River's Edge (4) |
| SC |
|
| 9,802,479 |
|
|
| 1,353,745 |
|
|
| - |
|
|
| 11,156,224 |
|
Willow Run (4) |
| SC |
|
| 12,720,560 |
|
|
| 2,650,995 |
|
|
| - |
|
|
| 15,371,555 |
|
Arbors at Hickory Ridge (2) |
| TN |
|
| 10,910,733 |
|
|
| 2,704,295 |
|
|
| - |
|
|
| 13,615,028 |
|
Avistar at Copperfield - Series A (6) |
| TX |
|
| 13,815,817 |
|
|
| 3,189,896 |
|
|
| - |
|
|
| 17,005,713 |
|
Avistar at the Crest - Series A (2) |
| TX |
|
| 9,140,656 |
|
|
| 2,376,580 |
|
|
| - |
|
|
| 11,517,236 |
|
Avistar at the Oaks - Series A (2) |
| TX |
|
| 7,388,262 |
|
|
| 1,854,785 |
|
|
| - |
|
|
| 9,243,047 |
|
Avistar at the Parkway - Series A (3) |
| TX |
|
| 12,721,014 |
|
|
| 2,790,208 |
|
|
| - |
|
|
| 15,511,222 |
|
Avistar at Wilcrest - Series A (6) |
| TX |
|
| 5,235,915 |
|
|
| 1,084,347 |
|
|
| - |
|
|
| 6,320,262 |
|
Avistar at Wood Hollow - Series A (6) |
| TX |
|
| 39,756,184 |
|
|
| 8,703,609 |
|
|
| - |
|
|
| 48,459,793 |
|
Avistar in 09 - Series A (2) |
| TX |
|
| 6,379,479 |
|
|
| 1,601,535 |
|
|
| - |
|
|
| 7,981,014 |
|
Avistar on the Boulevard - Series A (2) |
| TX |
|
| 15,572,093 |
|
|
| 3,779,139 |
|
|
| - |
|
|
| 19,351,232 |
|
Avistar on the Hills - Series A (2) |
| TX |
|
| 5,058,171 |
|
|
| 1,292,513 |
|
|
| - |
|
|
| 6,350,684 |
|
Bruton Apartments (4) |
| TX |
|
| 17,674,167 |
|
|
| 3,792,253 |
|
|
| - |
|
|
| 21,466,420 |
|
Concord at Gulfgate - Series A (4) |
| TX |
|
| 18,796,773 |
|
|
| 4,888,537 |
|
|
| - |
|
|
| 23,685,310 |
|
Concord at Little York - Series A (4) |
| TX |
|
| 13,168,029 |
|
|
| 3,543,909 |
|
|
| - |
|
|
| 16,711,938 |
|
Concord at Williamcrest - Series A (4) |
| TX |
|
| 20,398,687 |
|
|
| 5,397,326 |
|
|
| - |
|
|
| 25,796,013 |
|
Crossing at 1415 - Series A (4) |
| TX |
|
| 7,331,821 |
|
|
| 1,810,458 |
|
|
| - |
|
|
| 9,142,279 |
|
Decatur Angle (4) |
| TX |
|
| 22,270,729 |
|
|
| 5,600,721 |
|
|
| - |
|
|
| 27,871,450 |
|
Esperanza at Palo Alto (4) |
| TX |
|
| 19,218,417 |
|
|
| 5,955,488 |
|
|
| - |
|
|
| 25,173,905 |
|
Heights at 515 - Series A (4) |
| TX |
|
| 6,712,409 |
|
|
| 1,600,836 |
|
|
| - |
|
|
| 8,313,245 |
|
Heritage Square - Series A (3) |
| TX |
|
| 10,579,057 |
|
|
| 2,095,871 |
|
|
| - |
|
|
| 12,674,928 |
|
Oaks at Georgetown - Series A (4) |
| TX |
|
| 12,135,392 |
|
|
| 2,597,201 |
|
|
| - |
|
|
| 14,732,593 |
|
Runnymede (1) |
| TX |
|
| 9,805,000 |
|
|
| 105,634 |
|
|
| - |
|
|
| 9,910,634 |
|
Southpark (1) |
| TX |
|
| 11,462,172 |
|
|
| 1,917,286 |
|
|
| - |
|
|
| 13,379,458 |
|
15 West Apartments (4) |
| WA |
|
| 9,604,680 |
|
|
| 3,257,826 |
|
|
| - |
|
|
| 12,862,506 |
|
Mortgage revenue bonds held in trust |
|
|
| $ | 637,948,068 |
|
| $ | 130,520,576 |
|
| $ | - |
|
| $ | 768,468,644 |
|
(1)
|
| December 31, 2021 |
| |||||||||||||||
Description of Mortgage Revenue Bonds Held in Trust |
| State |
| Cost Adjusted for |
|
| Cumulative |
|
| Cumulative |
|
| Estimated Fair Value |
| ||||
Courtyard - Series A (4) |
| CA |
| $ | 9,970,209 |
|
| $ | 2,060,480 |
|
| $ | - |
|
| $ | 12,030,689 |
|
Glenview Apartments - Series A (3) |
| CA |
|
| 4,429,350 |
|
|
| 863,955 |
|
|
| - |
|
|
| 5,293,305 |
|
Harmony Court Bakersfield - Series A (4) |
| CA |
|
| 3,635,277 |
|
|
| 720,308 |
|
|
| - |
|
|
| 4,355,585 |
|
Harmony Terrace - Series A (4) |
| CA |
|
| 6,730,004 |
|
|
| 1,425,757 |
|
|
| - |
|
|
| 8,155,761 |
|
Harden Ranch - Series A (2) |
| CA |
|
| 6,538,111 |
|
|
| 1,285,747 |
|
|
| - |
|
|
| 7,823,858 |
|
Las Palmas II - Series A (4) |
| CA |
|
| 1,649,370 |
|
|
| 332,704 |
|
|
| - |
|
|
| 1,982,074 |
|
Montclair Apartments - Series A (3) |
| CA |
|
| 2,399,626 |
|
|
| 446,912 |
|
|
| - |
|
|
| 2,846,538 |
|
Montecito at Williams Ranch Apartments - Series A (6) |
| CA |
|
| 7,568,334 |
|
|
| 1,983,454 |
|
|
| - |
|
|
| 9,551,788 |
|
Montevista - Series A (6) |
| CA |
|
| 6,701,776 |
|
|
| 2,114,978 |
|
|
| - |
|
|
| 8,816,754 |
|
Ocotillo Springs - Series A (6) |
| CA |
|
| 15,000,000 |
|
|
| 271,172 |
|
|
| - |
|
|
| 15,271,172 |
|
Residency at the Mayer - Series A (6) |
| CA |
|
| 24,000,000 |
|
|
| - |
|
|
| - |
|
|
| 24,000,000 |
|
San Vicente - Series A (4) |
| CA |
|
| 3,400,913 |
|
|
| 671,681 |
|
|
| - |
| �� |
| 4,072,594 |
|
Santa Fe Apartments - Series A (3) |
| CA |
|
| 2,907,057 |
|
|
| 567,028 |
|
|
| - |
|
|
| 3,474,085 |
|
Seasons at Simi Valley - Series A (4) |
| CA |
|
| 4,188,582 |
|
|
| 1,011,623 |
|
|
| - |
|
|
| 5,200,205 |
|
Seasons Lakewood - Series A (4) |
| CA |
|
| 7,168,917 |
|
|
| 1,518,742 |
|
|
| - |
|
|
| 8,687,659 |
|
Seasons San Juan Capistrano - Series A (4) |
| CA |
|
| 12,070,116 |
|
|
| 2,557,065 |
|
|
| - |
|
|
| 14,627,181 |
|
Summerhill - Series A (4) |
| CA |
|
| 6,259,888 |
|
|
| 1,187,464 |
|
|
| - |
|
|
| 7,447,352 |
|
Sycamore Walk - Series A (4) |
| CA |
|
| 3,474,617 |
|
|
| 696,090 |
|
|
| - |
|
|
| 4,170,707 |
|
The Village at Madera - Series A (4) |
| CA |
|
| 3,006,656 |
|
|
| 621,367 |
|
|
| - |
|
|
| 3,628,023 |
|
Tyler Park Townhomes - Series A (2) |
| CA |
|
| 5,694,168 |
|
|
| 691,137 |
|
|
| - |
|
|
| 6,385,305 |
|
Vineyard Gardens - Series A (6) |
| CA |
|
| 3,939,476 |
|
|
| 987,782 |
|
|
| - |
|
|
| 4,927,258 |
|
Westside Village Market - Series A (2) |
| CA |
|
| 3,721,129 |
|
|
| 701,915 |
|
|
| - |
|
|
| 4,423,044 |
|
Brookstone (1) |
| IL |
|
| 7,334,161 |
|
|
| 1,903,086 |
|
|
| - |
|
|
| 9,237,247 |
|
Copper Gate Apartments (2) |
| IN |
|
| 4,900,000 |
|
|
| 433,436 |
|
|
| - |
|
|
| 5,333,436 |
|
Renaissance - Series A (3) |
| LA |
|
| 10,732,295 |
|
|
| 4,172,381 |
|
|
| - |
|
|
| 14,904,676 |
|
Live 929 Apartments - Series A (6) |
| MD |
|
| 36,169,147 |
|
|
| 573,155 |
|
|
| - |
|
|
| 36,742,302 |
|
Jackson Manor Apartments (6) |
| MS |
|
| 4,900,000 |
|
|
| - |
|
|
| - |
|
|
| 4,900,000 |
|
Gateway Village (6) |
| NC |
|
| 2,600,000 |
|
|
| 90,861 |
|
|
| - |
|
|
| 2,690,861 |
|
Greens Property - Series A (2) |
| NC |
|
| 7,719,000 |
|
|
| 281,953 |
|
|
| - |
|
|
| 8,000,953 |
|
Lynnhaven Apartments (6) |
| NC |
|
| 3,450,000 |
|
|
| 115,328 |
|
|
| - |
|
|
| 3,565,328 |
|
Silver Moon - Series A (3) |
| NM |
|
| 7,629,704 |
|
|
| 1,868,323 |
|
|
| - |
|
|
| 9,498,027 |
|
Village at Avalon (5) |
| NM |
|
| 16,069,382 |
|
|
| 4,124,498 |
|
|
| - |
|
|
| 20,193,880 |
|
Ohio Properties - Series A (1) |
| OH |
|
| 13,580,000 |
|
|
| - |
|
|
| - |
|
|
| 13,580,000 |
|
Bridle Ridge (1) |
| SC |
|
| 7,145,000 |
|
|
| - |
|
|
| - |
|
|
| 7,145,000 |
|
Columbia Gardens (4) |
| SC |
|
| 12,725,440 |
|
|
| 2,003,599 |
|
|
| - |
|
|
| 14,729,039 |
|
Companion at Thornhill Apartments (4) |
| SC |
|
| 10,924,609 |
|
|
| 1,793,226 |
|
|
| - |
|
|
| 12,717,835 |
|
Cross Creek (1) |
| SC |
|
| 6,120,285 |
|
|
| 1,845,064 |
|
|
| - |
|
|
| 7,965,349 |
|
The Palms at Premier Park Apartments (2) |
| SC |
|
| 18,385,572 |
|
|
| 2,181,632 |
|
|
| - |
|
|
| 20,567,204 |
|
Village at River's Edge (4) |
| SC |
|
| 9,728,355 |
|
|
| 2,370,569 |
|
|
| - |
|
|
| 12,098,924 |
|
Willow Run (4) |
| SC |
|
| 12,549,146 |
|
|
| 1,974,479 |
|
|
| - |
|
|
| 14,523,625 |
|
Arbors at Hickory Ridge (2) |
| TN |
|
| 10,755,889 |
|
|
| 3,598,292 |
|
|
| - |
|
|
| 14,354,181 |
|
Avistar at Copperfield - Series A (6) |
| TX |
|
| 13,678,286 |
|
|
| 2,549,711 |
|
|
| - |
|
|
| 16,227,997 |
|
Avistar at the Crest - Series A (2) |
| TX |
|
| 9,022,172 |
|
|
| 1,926,825 |
|
|
| - |
|
|
| 10,948,997 |
|
Avistar at the Oaks - Series A (2) |
| TX |
|
| 7,295,334 |
|
|
| 1,578,333 |
|
|
| - |
|
|
| 8,873,667 |
|
Avistar at the Parkway - Series A (3) |
| TX |
|
| 12,579,783 |
|
|
| 2,353,247 |
|
|
| - |
|
|
| 14,933,030 |
|
Avistar at Wilcrest - Series A (6) |
| TX |
|
| 5,183,794 |
|
|
| 772,242 |
|
|
| - |
|
|
| 5,956,036 |
|
Avistar at Wood Hollow - Series A (6) |
| TX |
|
| 39,360,426 |
|
|
| 7,200,790 |
|
|
| - |
|
|
| 46,561,216 |
|
Avistar in 09 - Series A (2) |
| TX |
|
| 6,299,237 |
|
|
| 1,288,060 |
|
|
| - |
|
|
| 7,587,297 |
|
Avistar on the Boulevard - Series A (2) |
| TX |
|
| 15,370,243 |
|
|
| 3,165,575 |
|
|
| - |
|
|
| 18,535,818 |
|
Avistar on the Hills - Series A (2) |
| TX |
|
| 4,994,549 |
|
|
| 1,100,478 |
|
|
| - |
|
|
| 6,095,027 |
|
Bruton Apartments (4) |
| TX |
|
| 17,532,185 |
|
|
| 4,452,765 |
|
|
| - |
|
|
| 21,984,950 |
|
Concord at Gulfgate - Series A (4) |
| TX |
|
| 18,606,719 |
|
|
| 4,211,979 |
|
|
| - |
|
|
| 22,818,698 |
|
Concord at Little York - Series A (4) |
| TX |
|
| 13,034,887 |
|
|
| 3,055,517 |
|
|
| - |
|
|
| 16,090,404 |
|
Concord at Williamcrest - Series A (4) |
| TX |
|
| 20,192,436 |
|
|
| 4,651,973 |
|
|
| - |
|
|
| 24,844,409 |
|
Crossing at 1415 - Series A (4) |
| TX |
|
| 7,253,698 |
|
|
| 1,549,224 |
|
|
| - |
|
|
| 8,802,922 |
|
Decatur Angle (4) |
| TX |
|
| 22,074,594 |
|
|
| 4,731,759 |
|
|
| - |
|
|
| 26,806,353 |
|
Esperanza at Palo Alto (4) |
| TX |
|
| 19,071,622 |
|
|
| 5,317,911 |
|
|
| - |
|
|
| 24,389,533 |
|
Heights at 515 - Series A (4) |
| TX |
|
| 6,640,885 |
|
|
| 1,418,341 |
|
|
| - |
|
|
| 8,059,226 |
|
Heritage Square - Series A (3) |
| TX |
|
| 10,455,924 |
|
|
| 1,823,426 |
|
|
| - |
|
|
| 12,279,350 |
|
Oaks at Georgetown - Series A (4) |
| TX |
|
| 12,026,225 |
|
|
| 2,181,690 |
|
|
| - |
|
|
| 14,207,915 |
|
Runnymede (1) |
| TX |
|
| 9,675,000 |
|
|
| 99,489 |
|
|
| - |
|
|
| 9,774,489 |
|
Southpark (1) |
| TX |
|
| 11,365,100 |
|
|
| 1,542,509 |
|
|
| - |
|
|
| 12,907,609 |
|
15 West Apartments (4) |
| WA |
|
| 9,531,842 |
|
|
| 2,799,259 |
|
|
| - |
|
|
| 12,331,101 |
|
Mortgage revenue bonds held in trust |
|
|
| $ | 639,116,502 |
|
| $ | 111,818,346 |
|
| $ | - |
|
| $ | 750,934,848 |
|
|
| December 31, 2020 |
| |||||||||||||||
Description of Mortgage Revenue Bonds held by the Partnership |
| State |
| Cost Adjusted for Paydowns |
|
| Cumulative Unrealized Gain |
|
| Cumulative Unrealized Loss |
|
| Estimated Fair Value |
| ||||
Solano Vista - Series A |
| CA |
| $ | 2,665,000 |
|
| $ | 891,612 |
|
| $ | - |
|
| $ | 3,556,612 |
|
Greens Property - Series B |
| NC |
|
| 925,607 |
|
|
| 107,347 |
|
|
| - |
|
|
| 1,032,954 |
|
Arby Road Apartments - Series A |
| NV |
|
| 7,385,000 |
|
|
| 15,059 |
|
|
| - |
|
|
| 7,400,059 |
|
Ohio Properties - Series B |
| OH |
|
| 3,485,690 |
|
|
| 13,578 |
|
|
| - |
|
|
| 3,499,268 |
|
Rosewood Townhomes - Series B |
| SC |
|
| 469,781 |
|
|
| 2,549 |
|
|
| - |
|
|
| 472,330 |
|
South Pointe Apartments - Series B |
| SC |
|
| 1,099,487 |
|
|
| 5,967 |
|
|
| - |
|
|
| 1,105,454 |
|
Provision Center 2014-1 |
| TN |
|
| 6,161,954 |
|
|
| - |
|
|
| - |
|
|
| 6,161,954 |
|
Avistar at the Crest - Series B |
| TX |
|
| 735,974 |
|
|
| 144,746 |
|
|
| - |
|
|
| 880,720 |
|
Avistar at the Oaks - Series B |
| TX |
|
| 538,723 |
|
|
| 100,668 |
|
|
| - |
|
|
| 639,391 |
|
Avistar at the Parkway - Series B |
| TX |
|
| 123,973 |
|
|
| 43,650 |
|
|
| - |
|
|
| 167,623 |
|
Avistar in 09 - Series B |
| TX |
|
| 444,398 |
|
|
| 83,042 |
|
|
| - |
|
|
| 527,440 |
|
Avistar on the Boulevard - Series B |
| TX |
|
| 437,318 |
|
|
| 82,718 |
|
|
| - |
|
|
| 520,036 |
|
Mortgage revenue bonds held by the Partnership |
|
|
| $ | 24,472,905 |
|
| $ | 1,490,936 |
|
| $ | - |
|
| $ | 25,963,841 |
|
|
| December 31, 2019 |
| |||||||||||||||
Description of Mortgage Revenue Bonds Held in Trust |
| State |
| Cost Adjusted for Paydowns |
|
| Cumulative Unrealized Gain |
|
| Cumulative Unrealized Loss |
|
| Estimated Fair Value |
| ||||
Courtyard - Series A (5) |
| CA |
| $ | 10,147,686 |
|
| $ | 1,602,534 |
|
| $ | - |
|
| $ | 11,750,220 |
|
Glenview Apartments - Series A (4) |
| CA |
|
| 4,533,958 |
|
|
| 757,900 |
|
|
| - |
|
|
| 5,291,858 |
|
Harmony Court Bakersfield - Series A (5) |
| CA |
|
| 3,699,987 |
|
|
| 549,211 |
|
|
| - |
|
|
| 4,249,198 |
|
Harmony Terrace - Series A (5) |
| CA |
|
| 6,849,214 |
|
|
| 1,121,262 |
|
|
| - |
|
|
| 7,970,476 |
|
Harden Ranch - Series A (3) |
| CA |
|
| 6,700,868 |
|
|
| 1,281,980 |
|
|
| - |
|
|
| 7,982,848 |
|
Las Palmas II - Series A (5) |
| CA |
|
| 1,679,022 |
|
|
| 263,441 |
|
|
| - |
|
|
| 1,942,463 |
|
Montclair Apartments - Series A (4) |
| CA |
|
| 2,456,298 |
|
|
| 446,558 |
|
|
| - |
|
|
| 2,902,856 |
|
Montecito at Williams Ranch Apartments - Series A (7) |
| CA |
|
| 7,681,146 |
|
|
| 1,580,303 |
|
|
| - |
|
|
| 9,261,449 |
|
San Vicente - Series A (5) |
| CA |
|
| 3,462,053 |
|
|
| 510,593 |
|
|
| - |
|
|
| 3,972,646 |
|
Santa Fe Apartments - Series A (4) |
| CA |
|
| 2,975,713 |
|
|
| 540,988 |
|
|
| - |
|
|
| 3,516,701 |
|
Seasons at Simi Valley - Series A (5) |
| CA |
|
| 4,282,477 |
|
|
| 860,856 |
|
|
| - |
|
|
| 5,143,333 |
|
Seasons Lakewood - Series A (5) |
| CA |
|
| 7,295,901 |
|
|
| 1,124,372 |
|
|
| - |
|
|
| 8,420,273 |
|
Seasons San Juan Capistrano - Series A (5) |
| CA |
|
| 12,283,916 |
|
|
| 1,893,075 |
|
|
| - |
|
|
| 14,176,991 |
|
Summerhill - Series A (5) |
| CA |
|
| 6,371,318 |
|
|
| 797,228 |
|
|
| - |
|
|
| 7,168,546 |
|
Sycamore Walk - Series A (5) |
| CA |
|
| 3,559,011 |
|
|
| 567,713 |
|
|
| - |
|
|
| 4,126,724 |
|
The Village at Madera - Series A (5) |
| CA |
|
| 3,060,177 |
|
|
| 454,240 |
|
|
| - |
|
|
| 3,514,417 |
|
Tyler Park Townhomes - Series A (3) |
| CA |
|
| 5,837,595 |
|
|
| 864,894 |
|
|
| - |
|
|
| 6,702,489 |
|
Vineyard Gardens - Series A (7) |
| CA |
|
| 3,995,000 |
|
|
| 815,213 |
|
|
| - |
|
|
| 4,810,213 |
|
Westside Village Market - Series A (3) |
| CA |
|
| 3,814,857 |
|
|
| 594,361 |
|
|
| - |
|
|
| 4,409,218 |
|
Brookstone (1) |
| IL |
|
| 7,406,755 |
|
|
| 2,194,994 |
|
|
| - |
|
|
| 9,601,749 |
|
Copper Gate Apartments (3) |
| IN |
|
| 5,005,000 |
|
|
| 682,497 |
|
|
| - |
|
|
| 5,687,497 |
|
Renaissance - Series A (4) |
| LA |
|
| 11,001,027 |
|
|
| 1,775,086 |
|
|
| - |
|
|
| 12,776,113 |
|
Live 929 Apartments (7), (8) |
| MD |
|
| 39,984,026 |
|
|
| - |
|
|
| (280,711 | ) |
|
| 39,703,315 |
|
Woodlynn Village (1) |
| MN |
|
| 4,172,000 |
|
|
| 44,510 |
|
|
| - |
|
|
| 4,216,510 |
|
Gateway Village (2) |
| NC |
|
| 2,600,000 |
|
|
| 509,901 |
|
|
| - |
|
|
| 3,109,901 |
|
Greens Property - Series A (3) |
| NC |
|
| 7,936,000 |
|
|
| 845,678 |
|
|
| - |
|
|
| 8,781,678 |
|
Lynnhaven Apartments (2) |
| NC |
|
| 3,450,000 |
|
|
| 393,686 |
|
|
| - |
|
|
| 3,843,686 |
|
Silver Moon - Series A (4) |
| NM |
|
| 7,762,116 |
|
|
| 1,166,748 |
|
|
| - |
|
|
| 8,928,864 |
|
Village at Avalon - Series A (6) |
| NM |
|
| 16,302,038 |
|
|
| 3,131,843 |
|
|
| - |
|
|
| 19,433,881 |
|
Ohio Properties - Series A (1) |
| OH |
|
| 13,857,000 |
|
|
| 48,813 |
|
|
| - |
|
|
| 13,905,813 |
|
Bridle Ridge (1) |
| SC |
|
| 7,315,000 |
|
|
| 113,469 |
|
|
| - |
|
|
| 7,428,469 |
|
Columbia Gardens (5) |
| SC |
|
| 13,064,589 |
|
|
| 2,179,744 |
|
|
| - |
|
|
| 15,244,333 |
|
Companion at Thornhill Apartments (5) |
| SC |
|
| 11,178,557 |
|
|
| 1,709,040 |
|
|
| - |
|
|
| 12,887,597 |
|
Cross Creek (1) |
| SC |
|
| 6,143,976 |
|
|
| 2,507,072 |
|
|
| - |
|
|
| 8,651,048 |
|
Rosewood Townhomes - Series A (7) |
| SC |
|
| 9,280,000 |
|
|
| 316,916 |
|
|
| - |
|
|
| 9,596,916 |
|
South Pointe Apartments - Series A (7) |
| SC |
|
| 21,600,000 |
|
|
| 835,005 |
|
|
| - |
|
|
| 22,435,005 |
|
The Palms at Premier Park Apartments (3) |
| SC |
|
| 18,838,478 |
|
|
| 2,799,411 |
|
|
| - |
|
|
| 21,637,889 |
|
Village at River's Edge (5) |
| SC |
|
| 9,872,297 |
|
|
| 2,236,259 |
|
|
| - |
|
|
| 12,108,556 |
|
Willow Run (5) |
| SC |
|
| 12,884,191 |
|
|
| 2,100,598 |
|
|
| - |
|
|
| 14,984,789 |
|
Arbors at Hickory Ridge (3) |
| TN |
|
| 11,056,825 |
|
|
| 1,934,146 |
|
|
| - |
|
|
| 12,990,971 |
|
Provision Center 2014-1 (2), (8) |
| TN |
|
| 10,022,352 |
|
|
| - |
|
|
| (372,169 | ) |
|
| 9,650,183 |
|
Avistar at Copperfield - Series A (2) |
| TX |
|
| 13,945,681 |
|
|
| 2,356,231 |
|
|
| - |
|
|
| 16,301,912 |
|
Avistar at the Crest - Series A (3) |
| TX |
|
| 9,252,257 |
|
|
| 1,715,456 |
|
|
| - |
|
|
| 10,967,713 |
|
Avistar at the Oaks - Series A (3) |
| TX |
|
| 7,475,794 |
|
|
| 1,336,580 |
|
|
| - |
|
|
| 8,812,374 |
|
Avistar at the Parkway - Series A (4) |
| TX |
|
| 12,854,039 |
|
|
| 2,065,468 |
|
|
| - |
|
|
| 14,919,507 |
|
Avistar at Wilcrest - Series A (2) |
| TX |
|
| 5,285,131 |
|
|
| 806,523 |
|
|
| - |
|
|
| 6,091,654 |
|
Avistar at Wood Hollow - Series A (2) |
| TX |
|
| 40,129,878 |
|
|
| 6,450,704 |
|
|
| - |
|
|
| 46,580,582 |
|
Avistar in 09 - Series A (3) |
| TX |
|
| 6,455,058 |
|
|
| 1,125,239 |
|
|
| - |
|
|
| 7,580,297 |
|
Avistar on the Boulevard - Series A (3) |
| TX |
|
| 15,762,217 |
|
|
| 2,648,781 |
|
|
| - |
|
|
| 18,410,998 |
|
Avistar on the Hills - Series A (3) |
| TX |
|
| 5,118,097 |
|
|
| 938,032 |
|
|
| - |
|
|
| 6,056,129 |
|
Bruton Apartments (5) |
| TX |
|
| 17,807,768 |
|
|
| 3,534,702 |
|
|
| - |
|
|
| 21,342,470 |
|
Concord at Gulfgate - Series A (5) |
| TX |
|
| 18,975,786 |
|
|
| 3,572,995 |
|
|
| - |
|
|
| 22,548,781 |
|
Concord at Little York - Series A (5) |
| TX |
|
| 13,293,436 |
|
|
| 2,624,054 |
|
|
| - |
|
|
| 15,917,490 |
|
Concord at Williamcrest - Series A (5) |
| TX |
|
| 20,592,957 |
|
|
| 3,971,001 |
|
|
| - |
|
|
| 24,563,958 |
|
Crossing at 1415 - Series A (5) |
| TX |
|
| 7,405,406 |
|
|
| 1,229,438 |
|
|
| - |
|
|
| 8,634,844 |
|
Decatur Angle (5) |
| TX |
|
| 22,455,747 |
|
|
| 4,198,200 |
|
|
| - |
|
|
| 26,653,947 |
|
Esperanza at Palo Alto (5) |
| TX |
|
| 19,356,959 |
|
|
| 4,111,518 |
|
|
| - |
|
|
| 23,468,477 |
|
Heights at 515 - Series A (5) |
| TX |
|
| 6,779,777 |
|
|
| 1,154,387 |
|
|
| - |
|
|
| 7,934,164 |
|
Heritage Square - Series A (4) |
| TX |
|
| 10,695,037 |
|
|
| 1,455,672 |
|
|
| - |
|
|
| 12,150,709 |
|
Oaks at Georgetown - Series A (5) |
| TX |
|
| 12,239,247 |
|
|
| 1,645,817 |
|
|
| - |
|
|
| 13,885,064 |
|
Runnymede (1) |
| TX |
|
| 9,925,000 |
|
|
| 80,343 |
|
|
| - |
|
|
| 10,005,343 |
|
Southpark (1) |
| TX |
|
| 11,548,337 |
|
|
| 2,334,262 |
|
|
| - |
|
|
| 13,882,599 |
|
15 West Apartments (5) |
| WA |
|
| 9,673,117 |
|
|
| 2,287,904 |
|
|
| - |
|
|
| 11,961,021 |
|
Mortgage revenue bonds held in trust |
|
|
| $ | 648,445,150 |
|
| $ | 95,795,445 |
|
| $ | (652,880 | ) |
| $ | 743,587,715 |
|
(1)
81
|
| December 31, 2021 |
| |||||||||||||||
Description of Mortgage Revenue Bonds held by the Partnership |
| State |
| Cost Adjusted for |
|
| Cumulative |
|
| Cumulative |
|
| Estimated Fair Value |
| ||||
Lutheran Gardens |
| CA |
| $ | 10,352,000 |
|
| $ | - |
|
| $ | - |
|
| $ | 10,352,000 |
|
Solano Vista - Series A |
| CA |
|
| 2,649,291 |
|
|
| 744,617 |
|
|
| - |
|
|
| 3,393,908 |
|
Live 929 Apartments - Series B |
| MD |
|
| 17,344,000 |
|
|
| - |
|
|
| - |
|
|
| 17,344,000 |
|
Meadow Valley |
| MI |
|
| 100,000 |
|
|
| - |
|
|
| - |
|
|
| 100,000 |
|
Greens Property - Series B |
| NC |
|
| 920,637 |
|
|
| 46,672 |
|
|
| - |
|
|
| 967,309 |
|
Ohio Properties - Series B |
| OH |
|
| 3,465,270 |
|
|
| - |
|
|
| - |
|
|
| 3,465,270 |
|
Provision Center 2014-1 |
| TN |
|
| 4,300,000 |
|
|
| - |
|
|
| - |
|
|
| 4,300,000 |
|
Avistar at the Crest - Series B |
| TX |
|
| 730,612 |
|
|
| 122,646 |
|
|
| - |
|
|
| 853,258 |
|
Avistar at the Oaks - Series B |
| TX |
|
| 534,953 |
|
|
| 86,437 |
|
|
| - |
|
|
| 621,390 |
|
Avistar at the Parkway - Series B |
| TX |
|
| 123,598 |
|
|
| 37,590 |
|
|
| - |
|
|
| 161,188 |
|
Avistar in 09 - Series B |
| TX |
|
| 441,288 |
|
|
| 71,303 |
|
|
| - |
|
|
| 512,591 |
|
Avistar on the Boulevard - Series B |
| TX |
|
| 434,132 |
|
|
| 69,950 |
|
|
| - |
|
|
| 504,082 |
|
Mortgage revenue bonds held by the Partnership |
|
|
| $ | 41,395,781 |
|
| $ | 1,179,215 |
|
| $ | - |
|
| $ | 42,574,996 |
|
82
|
| December 31, 2020 |
| |||||||||||||||
Description of Mortgage Revenue Bonds Held in Trust |
| State |
| Cost Adjusted for |
|
| Cumulative |
|
| Cumulative |
|
| Estimated Fair Value |
| ||||
Courtyard - Series A (4) |
| CA |
| $ | 10,061,161 |
|
| $ | 2,487,317 |
|
| $ | - |
|
| $ | 12,548,478 |
|
Glenview Apartments - Series A (3) |
| CA |
|
| 4,483,154 |
|
|
| 1,010,425 |
|
|
| - |
|
|
| 5,493,579 |
|
Harmony Court Bakersfield - Series A (4) |
| CA |
|
| 3,668,439 |
|
|
| 889,216 |
|
|
| - |
|
|
| 4,557,655 |
|
Harmony Terrace - Series A (4) |
| CA |
|
| 6,791,096 |
|
|
| 1,724,350 |
|
|
| - |
|
|
| 8,515,446 |
|
Harden Ranch - Series A (2) |
| CA |
|
| 6,621,823 |
|
|
| 1,606,690 |
|
|
| - |
|
|
| 8,228,513 |
|
Las Palmas II - Series A (4) |
| CA |
|
| 1,664,566 |
|
|
| 400,431 |
|
|
| - |
|
|
| 2,064,997 |
|
Montclair Apartments - Series A (3) |
| CA |
|
| 2,428,775 |
|
|
| 572,671 |
|
|
| - |
|
|
| 3,001,446 |
|
Montecito at Williams Ranch Apartments - Series A (6) |
| CA |
|
| 7,626,287 |
|
|
| 2,350,276 |
|
|
| - |
|
|
| 9,976,563 |
|
Montevista - Series A (6) |
| CA |
|
| 6,720,000 |
|
|
| 2,404,771 |
|
|
| - |
|
|
| 9,124,771 |
|
Ocotillo Springs - Series A (6) |
| CA |
|
| 2,023,500 |
|
|
| 215,633 |
|
|
| - |
|
|
| 2,239,133 |
|
San Vicente - Series A (4) |
| CA |
|
| 3,432,246 |
|
|
| 809,327 |
|
|
| - |
|
|
| 4,241,573 |
|
Santa Fe Apartments - Series A (3) |
| CA |
|
| 2,942,370 |
|
|
| 724,678 |
|
|
| - |
|
|
| 3,667,048 |
|
Seasons at Simi Valley - Series A (4) |
| CA |
|
| 4,236,876 |
|
|
| 1,180,122 |
|
|
| - |
|
|
| 5,416,998 |
|
Seasons Lakewood - Series A (4) |
| CA |
|
| 7,233,993 |
|
|
| 1,836,808 |
|
|
| - |
|
|
| 9,070,801 |
|
Seasons San Juan Capistrano - Series A (4) |
| CA |
|
| 12,179,682 |
|
|
| 2,973,846 |
|
|
| - |
|
|
| 15,153,528 |
|
Summerhill - Series A (4) |
| CA |
|
| 6,316,993 |
|
|
| 1,470,689 |
|
|
| - |
|
|
| 7,787,682 |
|
Sycamore Walk - Series A (4) |
| CA |
|
| 3,517,919 |
|
|
| 888,485 |
|
|
| - |
|
|
| 4,406,404 |
|
The Village at Madera - Series A (4) |
| CA |
|
| 3,034,084 |
|
|
| 735,450 |
|
|
| - |
|
|
| 3,769,534 |
|
Tyler Park Townhomes - Series A (2) |
| CA |
|
| 5,767,938 |
|
|
| 939,214 |
|
|
| - |
|
|
| 6,707,152 |
|
Vineyard Gardens - Series A (6) |
| CA |
|
| 3,969,173 |
|
|
| 1,226,058 |
|
|
| - |
|
|
| 5,195,231 |
|
Westside Village Market - Series A (2) |
| CA |
|
| 3,769,337 |
|
|
| 859,860 |
|
|
| - |
|
|
| 4,629,197 |
|
Brookstone (1) |
| IL |
|
| 7,374,252 |
|
|
| 2,201,663 |
|
|
| - |
|
|
| 9,575,915 |
|
Copper Gate Apartments (2) |
| IN |
|
| 4,955,000 |
|
|
| 641,581 |
|
|
| - |
|
|
| 5,596,581 |
|
Renaissance - Series A (3) |
| LA |
|
| 10,870,681 |
|
|
| 4,293,328 |
|
|
| - |
|
|
| 15,164,009 |
|
Live 929 Apartments - Series A (6) |
| MD |
|
| 36,234,756 |
|
|
| - |
|
|
| - |
|
|
| 36,234,756 |
|
Woodlynn Village (1) |
| MN |
|
| 4,120,000 |
|
|
| 56,458 |
|
|
| - |
|
|
| 4,176,458 |
|
Gateway Village (6) |
| NC |
|
| 2,600,000 |
|
|
| 136,612 |
|
|
| - |
|
|
| 2,736,612 |
|
Greens Property - Series A (2) |
| NC |
|
| 7,829,000 |
|
|
| 663,781 |
|
|
| - |
|
|
| 8,492,781 |
|
Lynnhaven Apartments (6) |
| NC |
|
| 3,450,000 |
|
|
| 178,960 |
|
|
| - |
|
|
| 3,628,960 |
|
Silver Moon - Series A (3) |
| NM |
|
| 7,697,891 |
|
|
| 1,995,694 |
|
|
| - |
|
|
| 9,693,585 |
|
Village at Avalon (5) |
| NM |
|
| 16,189,074 |
|
|
| 4,879,623 |
|
|
| - |
|
|
| 21,068,697 |
|
Ohio Properties - Series A (1) |
| OH |
|
| 13,724,000 |
|
|
| 61,243 |
|
|
| - |
|
|
| 13,785,243 |
|
Bridle Ridge (1) |
| SC |
|
| 7,235,000 |
|
|
| 153,657 |
|
|
| - |
|
|
| 7,388,657 |
|
Columbia Gardens (4) |
| SC |
|
| 12,898,904 |
|
|
| 2,689,886 |
|
|
| - |
|
|
| 15,588,790 |
|
Companion at Thornhill Apartments (4) |
| SC |
|
| 11,055,254 |
|
|
| 2,208,446 |
|
|
| - |
|
|
| 13,263,700 |
|
Cross Creek (1) |
| SC |
|
| 6,136,261 |
|
|
| 2,277,289 |
|
|
| - |
|
|
| 8,413,550 |
|
Rosewood Townhomes - Series A (6) |
| SC |
|
| 9,259,206 |
|
|
| 578,247 |
|
|
| - |
|
|
| 9,837,453 |
|
South Pointe Apartments - Series A (6) |
| SC |
|
| 21,551,600 |
|
|
| 1,345,919 |
|
|
| - |
|
|
| 22,897,519 |
|
The Palms at Premier Park Apartments (2) |
| SC |
|
| 18,619,081 |
|
|
| 2,906,879 |
|
|
| - |
|
|
| 21,525,960 |
|
Village at River's Edge (4) |
| SC |
|
| 9,802,479 |
|
|
| 1,353,745 |
|
|
| - |
|
|
| 11,156,224 |
|
Willow Run (4) |
| SC |
|
| 12,720,560 |
|
|
| 2,650,995 |
|
|
| - |
|
|
| 15,371,555 |
|
Arbors at Hickory Ridge (2) |
| TN |
|
| 10,910,733 |
|
|
| 2,704,295 |
|
|
| - |
|
|
| 13,615,028 |
|
Avistar at Copperfield - Series A (6) |
| TX |
|
| 13,815,817 |
|
|
| 3,189,896 |
|
|
| - |
|
|
| 17,005,713 |
|
Avistar at the Crest - Series A (2) |
| TX |
|
| 9,140,656 |
|
|
| 2,376,580 |
|
|
| - |
|
|
| 11,517,236 |
|
Avistar at the Oaks - Series A (2) |
| TX |
|
| 7,388,262 |
|
|
| 1,854,785 |
|
|
| - |
|
|
| 9,243,047 |
|
Avistar at the Parkway - Series A (3) |
| TX |
|
| 12,721,014 |
|
|
| 2,790,208 |
|
|
| - |
|
|
| 15,511,222 |
|
Avistar at Wilcrest - Series A (6) |
| TX |
|
| 5,235,915 |
|
|
| 1,084,347 |
|
|
| - |
|
|
| 6,320,262 |
|
Avistar at Wood Hollow - Series A (6) |
| TX |
|
| 39,756,184 |
|
|
| 8,703,609 |
|
|
| - |
|
|
| 48,459,793 |
|
Avistar in 09 - Series A (2) |
| TX |
|
| 6,379,479 |
|
|
| 1,601,535 |
|
|
| - |
|
|
| 7,981,014 |
|
Avistar on the Boulevard - Series A (2) |
| TX |
|
| 15,572,093 |
|
|
| 3,779,139 |
|
|
| - |
|
|
| 19,351,232 |
|
Avistar on the Hills - Series A (2) |
| TX |
|
| 5,058,171 |
|
|
| 1,292,513 |
|
|
| - |
|
|
| 6,350,684 |
|
Bruton Apartments (4) |
| TX |
|
| 17,674,167 |
|
|
| 3,792,253 |
|
|
| - |
|
|
| 21,466,420 |
|
Concord at Gulfgate - Series A (4) |
| TX |
|
| 18,796,773 |
|
|
| 4,888,537 |
|
|
| - |
|
|
| 23,685,310 |
|
Concord at Little York - Series A (4) |
| TX |
|
| 13,168,029 |
|
|
| 3,543,909 |
|
|
| - |
|
|
| 16,711,938 |
|
Concord at Williamcrest - Series A (4) |
| TX |
|
| 20,398,687 |
|
|
| 5,397,326 |
|
|
| - |
|
|
| 25,796,013 |
|
Crossing at 1415 - Series A (4) |
| TX |
|
| 7,331,821 |
|
|
| 1,810,458 |
|
|
| - |
|
|
| 9,142,279 |
|
Decatur Angle (4) |
| TX |
|
| 22,270,729 |
|
|
| 5,600,721 |
|
|
| - |
|
|
| 27,871,450 |
|
Esperanza at Palo Alto (4) |
| TX |
|
| 19,218,417 |
|
|
| 5,955,488 |
|
|
| - |
|
|
| 25,173,905 |
|
Heights at 515 - Series A (4) |
| TX |
|
| 6,712,409 |
|
|
| 1,600,836 |
|
|
| - |
|
|
| 8,313,245 |
|
Heritage Square - Series A (3) |
| TX |
|
| 10,579,057 |
|
|
| 2,095,871 |
|
|
| - |
|
|
| 12,674,928 |
|
Oaks at Georgetown - Series A (4) |
| TX |
|
| 12,135,392 |
|
|
| 2,597,201 |
|
|
| - |
|
|
| 14,732,593 |
|
Runnymede (1) |
| TX |
|
| 9,805,000 |
|
|
| 105,634 |
|
|
| - |
|
|
| 9,910,634 |
|
Southpark (1) |
| TX |
|
| 11,462,172 |
|
|
| 1,917,286 |
|
|
| - |
|
|
| 13,379,458 |
|
15 West Apartments (4) |
| WA |
|
| 9,604,680 |
|
|
| 3,257,826 |
|
|
| - |
|
|
| 12,862,506 |
|
Mortgage revenue bonds held in trust |
|
|
| $ | 637,948,068 |
|
| $ | 130,520,576 |
|
| $ | - |
|
| $ | 768,468,644 |
|
(3)
(4)
(5) (4)see Note 16
83
|
|
|
|
| December 31, 2019 |
| |||||||||||||||
Description of Mortgage Revenue Bonds held by the Partnership |
| State |
| Cost Adjusted for Paydowns |
|
| Cumulative Unrealized Gain |
|
| Cumulative Unrealized Loss |
|
| Estimated Fair Value |
| ||||
Montevista - Series A & B |
| CA |
| $ | 13,200,000 |
|
| $ | 1,654,870 |
|
| $ | - |
|
| $ | 14,854,870 |
|
Solano Vista - Series A & B |
| CA |
|
| 5,768,000 |
|
|
| 625,235 |
|
|
| - |
|
|
| 6,393,235 |
|
Greens Property - Series B |
| NC |
|
| 930,016 |
|
|
| 142,265 |
|
|
| - |
|
|
| 1,072,281 |
|
Ohio Properties - Series B |
| OH |
|
| 3,504,171 |
|
|
| 10,363 |
|
|
| - |
|
|
| 3,514,534 |
|
Rosewood Townhomes - Series B |
| SC |
|
| 470,000 |
|
|
| 1,685 |
|
|
| - |
|
|
| 471,685 |
|
South Pointe Apartments - Series B |
| SC |
|
| 1,100,000 |
|
|
| 2,952 |
|
|
| - |
|
|
| 1,102,952 |
|
Avistar at the Crest - Series B |
| TX |
|
| 740,876 |
|
|
| 94,819 |
|
|
| - |
|
|
| 835,695 |
|
Avistar at the Oaks - Series B |
| TX |
|
| 542,170 |
|
|
| 65,455 |
|
|
| - |
|
|
| 607,625 |
|
Avistar at the Parkway - Series B |
| TX |
|
| 124,305 |
|
|
| 38,045 |
|
|
| - |
|
|
| 162,350 |
|
Avistar in 09 - Series B |
| TX |
|
| 447,241 |
|
|
| 53,995 |
|
|
| - |
|
|
| 501,236 |
|
Avistar on the Boulevard - Series B |
| TX |
|
| 440,231 |
|
|
| 53,056 |
|
|
| - |
|
|
| 493,287 |
|
Mortgage revenue bonds held by the Partnership |
|
|
| $ | 27,267,010 |
|
| $ | 2,742,740 |
|
| $ | - |
|
| $ | 30,009,750 |
|
See Note 24 for a description of the methodology and significant assumptions used in determining the fair value of the MRBs. Unrealized gains or losses on the MRBs are recorded inon the Partnership’s consolidated statements of comprehensive income (loss) to reflect changes in their estimated fair values resulting from market conditions and fluctuations in the present value of the expected cash flows from the MRBs.
During the year ended December 31, 2021, the Partnership recognized a provision for credit loss of $1.9 million related to the Provision Center 2014-1 MRB on the consolidated statements of operations. The borrower of the Provision Center 2014-1 MRB filed for Chapter 11 bankruptcy in December 2020 and has ceased making contractual principal and interest payments. The credit loss was driven primarily by operational and collateral information obtained during the bankruptcy process.
During the year ended December 31, 2020, the Partnership recognized total provisions for credit loss of approximately $7.3 million, of which approximately $3.5 million related to the Live 929 Apartments - Series A MRB and approximately $3.9 million related to the Provision Center 2014-1 MRB in itson the consolidated statements of operations. The Live 929 Apartments MRB provision for credit loss was incurred during the third quarter of 2020. The Provision Center 2014-1 MRB incurred provisions for credit losses of $1.4 million, $465,000 and $2.0 million during the first, second and fourth quarters of 2020, respectively. See Note 2 for information considered in the Partnership’s evaluation of other-than-temporary impairment and provision for credit loss of the MRBs.
The provision for credit loss related to the Live 929 Apartments – Series A MRB was due to recent operational results, the borrower’s continued covenant forbearance forbearance allowing for the deferral of principal payments granted in the fourth quarter of 2020 and declines in debt service coverage. The change in operating results at the Live 929 Apartments was primarily driven by the impact of the COVID-19, pandemic, which has had a significant impact on the underlying student housing industry.property.
The provision for credit loss related to the Provision Center 2014-1 MRB was due toprimarily driven by debt service shortfalls by the underlying commercial property, the borrower’s declaration of Chapter 11 bankruptcy protection and request for forbearance (prior to filing for bankruptcy protection), and the general creditworthiness of proton therapy centers in the United States, including the impacts on them from COVID-19.
The Partnership has remaining commitments to provide additional funding of certain MRBs during construction or rehabilitation as of December 31, 2021. See Note 19 for further details regarding these remaining funding commitments.
84
Activity in 2021:
Acquisitions:
The following MRBs were acquired at prices that approximated the principal outstanding plus accrued interest during the year ended December 31, 2021:
Property Name |
| Month |
| Property Location |
| Units |
|
| Maturity Date |
| Interest Rate |
|
| Initial Principal Acquired |
| |||
Jackson Manor Apartments (1) |
| April |
| Jackson, MS |
|
| 60 |
|
| 5/1/2038 |
|
| 5.00 | % |
| $ | 4,150,000 |
|
Residency at the Mayer - Series A(2) |
| October |
| Hollywood, CA |
|
| 79 |
|
| 4/1/2039 |
| SOFR + 3.60% |
| (3) |
| 24,000,000 |
| |
Meadow Valley (4) |
| December |
| Garfield Charter Township, MI |
|
| 154 |
|
| 12/1/2029 |
|
| 6.25 | % |
|
| 100,000 |
|
Lutheran Gardens |
| December |
| Compton, CA |
|
| 76 |
|
| 2/1/2025 |
|
| 4.90 | % |
|
| 10,352,000 |
|
Live 929 Apartments - Series B (5) |
| December |
| Baltimore, MD |
|
| 575 |
|
| 7/1/2039 |
|
| 1.60 | % | (6) |
| 21,680,000 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| $ | 60,282,000 |
|
MRB Redemptions:
The following MRBs were redeemed at prices that approximated the Partnership's carrying value plus accrued interest during the year ended December 31, 2021:
Property Name |
| Month |
| Property Location |
| Units |
|
| Original |
| Interest Rate |
|
| Principal |
| |||
Arby Road Apartments - Series A (1) |
| March |
| Las Vegas, NV |
|
| 180 |
|
| 10/1/2027 |
|
| 5.35 | % |
| $ | 1,600,000 |
|
Arby Road Apartments - Series A (1) |
| March |
| Las Vegas, NV |
|
| 180 |
|
| 4/1/2041 |
|
| 5.50 | % |
|
| 5,785,000 |
|
Rosewood Townhomes - Series A |
| July |
| Goose Creek, SC |
|
| 100 |
|
| 7/1/2055 |
|
| 5.75 | % |
|
| 9,259,206 |
|
Rosewood Townhomes - Series B |
| July |
| Goose Creek, SC |
|
| 100 |
|
| 8/1/2055 |
|
| 12.00 | % |
|
| 469,781 |
|
South Pointe Apartments - Series A |
| July |
| Hanahan, SC |
|
| 256 |
|
| 7/1/2055 |
|
| 5.75 | % |
|
| 21,551,600 |
|
South Pointe Apartments - Series B |
| July |
| Hanahan, SC |
|
| 256 |
|
| 8/1/2055 |
|
| 12.00 | % |
|
| 1,099,487 |
|
Woodlynn Village |
| November |
| Maplewood, MN |
|
| 59 |
|
| 11/1/2042 |
|
| 6.00 | % |
|
| 4,065,000 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| $ | 43,830,074 |
|
The Rosewood Townhomes – Series A and South Pointe Apartments – Series A MRBs were redeemed at 106% of par value plus accrued interest in July 2021. The redemption premium of approximately $1.8 million is reported as “Contingent interest income” on
85
the Partnership’s consolidated statements of operations. All other MRBs were redeemed at a price that approximated the Partnership’s carrying value plus accrued interest.
Activity in 2020:
Acquisitions:
The following MRBs were acquired at prices that approximated the principal outstanding plus accrued interest during the year ended December 31, 2020:
Property Name |
| Month |
| Property Location |
| Units |
|
| Maturity Date |
| Interest Rate |
|
| Initial Principal Acquired |
| |||
Arby Road Apartments - Series A (1) |
| June |
| Las Vegas, NV |
|
| 180 |
|
| 10/1/2027 |
|
| 5.35 | % |
| $ | 1,690,000 |
|
Arby Road Apartments - Series A (1) |
| June |
| Las Vegas, NV |
|
| 180 |
|
| 4/1/2041 |
|
| 5.50 | % |
|
| 5,785,000 |
|
Ocotillo Springs - Series A (2) |
| July |
| Brawley, CA |
|
| 75 |
|
| 8/1/2037 |
|
| 4.55 | % | (3) |
| 2,023,500 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| $ | 9,498,500 |
|
Property Name |
| Month Acquired |
| Property Location |
| Units |
| Maturity Date |
| Interest Rate |
|
| Principal Acquired |
| ||
Arby Road Apartments - Series A (1) |
| June |
| Las Vegas, NV |
| 180 |
| 10/1/2027 |
|
| 5.35 | % |
| $ | 1,690,000 |
|
Arby Road Apartments - Series A (1) |
| June |
| Las Vegas, NV |
| 180 |
| 4/1/2041 |
|
| 5.50 | % |
|
| 5,785,000 |
|
Ocotillo Springs - Series A (2) |
| July |
| Brawley, CA |
| 75 |
| 8/1/2037 |
|
| 4.55 | % | (3) |
| 2,023,500 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| $ | 9,498,500 |
|
|
|
|
|
| (3) The MRB has a variable interest rate equal to 1-month LIBOR plus 3.25%, subject to a floor of 4.55%, during construction of the project until stabilization. Upon stabilization, the MRB will convert to a fixed interest rate of 4.35%. |
Redemptions:
The following MRBs were redeemed at prices that approximated the Partnership’s carrying value plus accrued interest during the year ended December 31, 2020:
Property Name |
| Month Redeemed |
| Property Location |
| Units |
|
| Original Maturity Date |
| Interest Rate |
|
| Principal Outstanding at Date of Redemption |
| |||
Solano Vista - Series B |
| January |
| Vallejo, CA |
|
| 96 |
|
| 1/1/2021 |
|
| 5.85 | % |
| $ | 3,103,000 |
|
Montevista - Series B |
| August |
| San Pablo, CA |
|
| 82 |
|
| 7/1/2021 |
|
| 8.00 | % |
|
| 6,480,000 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| $ | 9,583,000 |
|
MRB Activity in 2019:
Acquisitions:
Property Name |
| Month |
| Property Location |
| Units |
|
| Original Maturity Date |
| Interest Rate |
|
| Principal |
| |||
Solano Vista - Series B |
| January |
| Vallejo, CA |
|
| 96 |
|
| 1/1/2021 |
|
| 5.85 | % |
| $ | 3,103,000 |
|
Montevista - Series B |
| August |
| San Pablo, CA |
|
| 82 |
|
| 7/1/2021 |
|
| 8.00 | % |
| $ | 6,480,000 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| $ | 9,583,000 |
|
The following MRBs were acquired at prices that approximatedtable summarizes the principal outstanding duringchanges in the yearPartnership’s allowance for credit losses for the years ended December 31, 2019:
Property Name |
| Month Acquired |
| Property Location |
| Units |
|
| Maturity Date |
| Interest Rate |
|
| Principal Outstanding at Date of Acquisition |
| |||
Gateway Village |
| February |
| Durham, NC |
|
| 64 |
|
| 4/1/2032 |
|
| 6.10 | % |
| $ | 2,600,000 |
|
Lynnhaven Apartments |
| February |
| Durham, NC |
|
| 75 |
|
| 4/1/2032 |
|
| 6.10 | % |
|
| 3,450,000 |
|
Montevista - Series A |
| June |
| San Pablo, CA |
|
| 82 |
|
| 7/1/2036 |
|
| 5.75 | % |
|
| 6,720,000 |
|
Montevista - Series B |
| June |
| San Pablo, CA |
|
| 82 |
|
| 7/1/2021 |
|
| 5.75 | % |
|
| 6,480,000 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| $ | 19,250,000 |
|
2021 and 2020:
Redemptions:
|
| For the Years Ended December 31, |
| |||||
|
| 2021 |
|
| 2020 |
| ||
Balance, beginning of period |
|
| 7,319,000 |
|
|
| 0 |
|
Provision for credit loss |
|
| 1,857,000 |
|
|
| 7,319,000 |
|
Balance, end of period (1) |
| $ | 9,176,000 |
|
| $ | 7,319,000 |
|
Property Name |
| Month Redeemed |
| Property Location |
| Units |
|
| Original Maturity Date |
| Interest Rate |
|
| Principal Outstanding at Date of Redemption |
| |||
Seasons San Juan Capistrano - Series B |
| January |
| San Juan Capistrano, CA |
|
| 112 |
|
| 1/1/2019 |
|
| 8.00 | % |
| $ | 5,574,000 |
|
Courtyard - Series B |
| April |
| Fullerton, CA |
|
| 108 |
|
| 6/1/2019 |
|
| 8.00 | % |
|
| 6,228,000 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| $ | 11,802,000 |
|
Restructurings:
The following MRBs were restructured during2021 and 2020 is related to the year ended December 31, 2019. The principal outstanding onProvision Center 2014-1 MRB and the Series B MRBs were collapsed into the principal outstanding on the associatedLive 929 Apartments - Series A MRBs and the Series B MRBs were eliminated. No cash was paid or received on restructuring. The terms of the Series B MRBs that were eliminated are as follows:
Property Name |
| Month Restructured |
| Property Location |
| Units |
|
| Maturity Date |
| Interest Rate |
|
| Principal Outstanding at Date of Restructuring |
| |||
Avistar at Copperfield - Series B |
| May |
| Houston, TX |
|
| 192 |
|
| 6/1/2054 |
|
| 12.00 | % |
| $ | 4,000,000 |
|
Avistar at Wilcrest - Series B |
| May |
| Houston, TX |
|
| 88 |
|
| 6/1/2054 |
|
| 12.00 | % |
|
| 1,550,000 |
|
Avistar at Wood Hollow - Series B |
| May |
| Austin, TX |
|
| 409 |
|
| 6/1/2054 |
|
| 12.00 | % |
|
| 8,410,000 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| $ | 13,960,000 |
|
Geographic Concentrations
The properties securing the Partnership’s MRBs are geographically dispersed throughout the United States with significant concentrations in Texas, California and South Carolina. The table below summarizes the geographic concentrations in these states as a percentage of the total MRB principal outstanding:
|
| December 31, 2021 |
|
| December 31, 2020 |
| ||
Texas |
|
| 41 | % |
|
| 43 | % |
California |
|
| 23 | % |
|
| 17 | % |
South Carolina |
|
| 11 | % |
|
| 17 | % |
86
|
| December 31, 2020 |
|
| December 31, 2019 |
| ||
Texas |
|
| 43 | % |
|
| 43 | % |
California |
|
| 17 | % |
|
| 18 | % |
South Carolina |
|
| 17 | % |
|
| 17 | % |
The following tables represent a description of certain terms of the Partnership’s MRBs as of December 31, 2020,2021, and 2019:2020:
Property Name |
| Year Acquired |
|
| Location |
| Maturity Date |
| Base Interest Rate |
|
| Principal Outstanding as of December 31, 2021 |
| |||
15 West Apartments - Series A (4) |
|
| 2016 |
|
| Vancouver, WA |
| 7/1/2054 |
|
| 6.25 | % |
| $ | 9,531,842 |
|
Arbors at Hickory Ridge (2) |
|
| 2012 |
|
| Memphis, TN |
| 1/1/2049 |
|
| 6.25 | % |
|
| 10,701,537 |
|
Avistar at Copperfield - Series A (6) |
|
| 2017 |
|
| Houston, TX |
| 5/1/2054 |
|
| 5.75 | % |
|
| 13,678,286 |
|
Avistar on the Boulevard - Series A (2) |
|
| 2013 |
|
| San Antonio, TX |
| 3/1/2050 |
|
| 6.00 | % |
|
| 15,370,243 |
|
Avistar at the Crest - Series A (2) |
|
| 2013 |
|
| San Antonio, TX |
| 3/1/2050 |
|
| 6.00 | % |
|
| 9,022,172 |
|
Avistar (February 2013 Acquisition) - Series B (2 Bonds) |
|
| 2013 |
|
| San Antonio, TX |
| 4/1/2050 |
|
| 9.00 | % |
|
| 1,164,744 |
|
Avistar at the Oaks - Series A (2) |
|
| 2013 |
|
| San Antonio, TX |
| 8/1/2050 |
|
| 6.00 | % |
|
| 7,295,334 |
|
Avistar in 09 - Series A (2) |
|
| 2013 |
|
| San Antonio, TX |
| 8/1/2050 |
|
| 6.00 | % |
|
| 6,299,237 |
|
Avistar on the Hills - Series A (2) |
|
| 2013 |
|
| San Antonio, TX |
| 8/1/2050 |
|
| 6.00 | % |
|
| 4,994,549 |
|
Avistar (June 2013 Acquisition) - Series B (2 Bonds) |
|
| 2013 |
|
| San Antonio, TX |
| 9/1/2050 |
|
| 9.00 | % |
|
| 976,241 |
|
Avistar at the Parkway - Series A (3) |
|
| 2015 |
|
| San Antonio, TX |
| 5/1/2052 |
|
| 6.00 | % |
|
| 12,579,783 |
|
Avistar at the Parkway - Series B |
|
| 2015 |
|
| San Antonio, TX |
| 6/1/2052 |
|
| 12.00 | % |
|
| 123,598 |
|
Avistar at Wilcrest - Series A (6) |
|
| 2017 |
|
| Houston, TX |
| 5/1/2054 |
|
| 5.75 | % |
|
| 5,183,794 |
|
Avistar at Wood Hollow - Series A (6) |
|
| 2017 |
|
| Austin, TX |
| 5/1/2054 |
|
| 5.75 | % |
|
| 39,360,427 |
|
Bridle Ridge (1) |
|
| 2008 |
|
| Greer, SC |
| 1/1/2043 |
|
| 6.00 | % |
|
| 7,145,000 |
|
Brookstone (1) |
|
| 2009 |
|
| Waukegan, IL |
| 5/1/2040 |
|
| 5.45 | % |
|
| 8,531,517 |
|
Bruton Apartments (4) |
|
| 2014 |
|
| Dallas, TX |
| 8/1/2054 |
|
| 6.00 | % |
|
| 17,532,185 |
|
Columbia Gardens (4) |
|
| 2015 |
|
| Columbia, SC |
| 12/1/2050 |
|
| 5.50 | % |
|
| 12,620,000 |
|
Companion at Thornhill Apartments (4) |
|
| 2016 |
|
| Lexington, SC |
| 1/1/2052 |
|
| 5.80 | % |
|
| 10,924,609 |
|
Concord at Gulfgate - Series A (4) |
|
| 2015 |
|
| Houston, TX |
| 2/1/2032 |
|
| 6.00 | % |
|
| 18,606,719 |
|
Concord at Little York - Series A (4) |
|
| 2015 |
|
| Houston, TX |
| 2/1/2032 |
|
| 6.00 | % |
|
| 13,034,887 |
|
Concord at Williamcrest - Series A (4) |
|
| 2015 |
|
| Houston, TX |
| 2/1/2032 |
|
| 6.00 | % |
|
| 20,192,436 |
|
Copper Gate Apartments (2) |
|
| 2013 |
|
| Lafayette, IN |
| 12/1/2029 |
|
| 6.25 | % |
|
| 4,900,000 |
|
Courtyard - Series A (4) |
|
| 2016 |
|
| Fullerton, CA |
| 12/1/2033 |
|
| 5.00 | % |
|
| 9,970,209 |
|
Cross Creek (1) |
|
| 2009 |
|
| Beaufort, SC |
| 3/1/2049 |
|
| 6.15 | % |
|
| 7,747,521 |
|
Crossing at 1415 - Series A (4) |
|
| 2015 |
|
| San Antonio, TX |
| 12/1/2052 |
|
| 6.00 | % |
|
| 7,253,698 |
|
Decatur Angle (4) |
|
| 2014 |
|
| Fort Worth, TX |
| 1/1/2054 |
|
| 5.75 | % |
|
| 22,074,594 |
|
Esperanza at Palo Alto (4) |
|
| 2018 |
|
| San Antonio, TX |
| 7/1/2058 |
|
| 5.80 | % |
|
| 19,071,622 |
|
Gateway Village (6) |
|
| 2019 |
|
| Durham, NC |
| 4/1/2032 |
|
| 6.10 | % |
|
| 2,600,000 |
|
Glenview Apartments - Series A (3) |
|
| 2014 |
|
| Cameron Park, CA |
| 12/1/2031 |
|
| 5.75 | % |
|
| 4,429,350 |
|
Greens Property - Series A (2) |
|
| 2012 |
|
| Durham, NC |
| 10/1/2047 |
|
| 6.50 | % |
|
| 7,719,000 |
|
Greens Property - Series B |
|
| 2012 |
|
| Durham, NC |
| 10/1/2047 |
|
| 12.00 | % |
|
| 920,637 |
|
Harden Ranch - Series A (2) |
|
| 2014 |
|
| Salinas, CA |
| 3/1/2030 |
|
| 5.75 | % |
|
| 6,538,111 |
|
Harmony Court Bakersfield - Series A (4) |
|
| 2016 |
|
| Bakersfield, CA |
| 12/1/2033 |
|
| 5.00 | % |
|
| 3,635,277 |
|
Harmony Terrace - Series A (4) |
|
| 2016 |
|
| Simi Valley, CA |
| 1/1/2034 |
|
| 5.00 | % |
|
| 6,730,004 |
|
Heights at 515 - Series A (4) |
|
| 2015 |
|
| San Antonio, TX |
| 12/1/2052 |
|
| 6.00 | % |
|
| 6,640,885 |
|
Heritage Square - Series A (3) |
|
| 2014 |
|
| Edinburg, TX |
| 9/1/2051 |
|
| 6.00 | % |
|
| 10,455,924 |
|
Jackson Manor Apartments (6) |
|
| 2021 |
|
| Jackson, MS |
| 5/1/2038 |
|
| 5.00 | % |
|
| 4,900,000 |
|
Las Palmas II - Series A (4) |
|
| 2016 |
|
| Coachella, CA |
| 11/1/2033 |
|
| 5.00 | % |
|
| 1,649,370 |
|
Live 929 Apartments - Series A (6) |
|
| 2014 |
|
| Baltimore, MD |
| 7/1/2049 |
|
| 5.78 | % |
|
| 39,465,000 |
|
Live 929 Apartments - Series B |
|
| 2021 |
|
| Baltimore, MD |
| 7/1/2039 |
|
| 1.60 | % |
|
| 21,680,000 |
|
Lutheran Gardens |
|
| 2021 |
|
| Compton, CA |
| 2/1/2025 |
|
| 4.90 | % |
|
| 10,352,000 |
|
Lynnhaven Apartments (6) |
|
| 2019 |
|
| Durham, NC |
| 4/1/2032 |
|
| 6.10 | % |
|
| 3,450,000 |
|
Meadow Valley |
|
| 2021 |
|
| Garfield Charter Township, MI |
| 12/1/2029 |
|
| 6.25 | % |
|
| 100,000 |
|
Montclair Apartments - Series A (3) |
|
| 2014 |
|
| Lemoore, CA |
| 12/1/2031 |
|
| 5.75 | % |
|
| 2,399,626 |
|
Montecito at Williams Ranch Apartments - Series A (6) |
|
| 2017 |
|
| Salinas, CA |
| 10/1/2034 |
|
| 5.50 | % |
|
| 7,568,334 |
|
Montevista - Series A (6) |
|
| 2019 |
|
| San Pablo, CA |
| 7/1/2036 |
|
| 5.75 | % |
|
| 6,701,776 |
|
Oaks at Georgetown - Series A (4) |
|
| 2016 |
|
| Georgetown, TX |
| 1/1/2034 |
|
| 5.00 | % |
|
| 12,026,225 |
|
Ocotillo Springs - Series A (6) |
|
| 2020 |
|
| Brawley, CA |
| 8/1/2037 |
|
| 4.55 | % |
|
| 15,000,000 |
|
Ohio Properties - Series A (1) |
|
| 2010 |
|
| Ohio |
| 6/1/2050 |
|
| 7.00 | % |
|
| 13,580,000 |
|
Ohio Properties - Series B |
|
| 2010 |
|
| Ohio |
| 6/1/2050 |
|
| 10.00 | % |
|
| 3,465,270 |
|
Provision Center 2014-1 |
|
| 2014 |
|
| Knoxville, TN |
| 5/1/2034 |
|
| 6.00 | % |
|
| 10,000,000 |
|
Renaissance - Series A (3) |
|
| 2015 |
|
| Baton Rouge, LA |
| 6/1/2050 |
|
| 6.00 | % |
|
| 10,732,295 |
|
Residency at the Mayer - Series A (6) |
|
| 2021 |
|
| Hollywood, CA |
| 4/1/2039 |
|
| 3.85 | % |
|
| 24,000,000 |
|
Runnymede (1) |
|
| 2007 |
|
| Austin, TX |
| 10/1/2042 |
|
| 6.00 | % |
|
| 9,675,000 |
|
San Vicente - Series A (4) |
|
| 2016 |
|
| Soledad, CA |
| 11/1/2033 |
|
| 5.00 | % |
|
| 3,400,913 |
|
Santa Fe Apartments - Series A (3) |
|
| 2014 |
|
| Hesperia, CA |
| 12/1/2031 |
|
| 5.75 | % |
|
| 2,907,057 |
|
Seasons at Simi Valley - Series A (4) |
|
| 2015 |
|
| Simi Valley, CA |
| 9/1/2032 |
|
| 5.75 | % |
|
| 4,188,582 |
|
Seasons Lakewood - Series A (4) |
|
| 2016 |
|
| Lakewood, CA |
| 1/1/2034 |
|
| 5.00 | % |
|
| 7,168,917 |
|
Seasons San Juan Capistrano - Series A (4) |
|
| 2016 |
|
| San Juan Capistrano, CA |
| 1/1/2034 |
|
| 5.00 | % |
|
| 12,070,116 |
|
Silver Moon - Series A (3) |
|
| 2015 |
|
| Albuquerque, NM |
| 8/1/2055 |
|
| 6.00 | % |
|
| 7,629,704 |
|
Solano Vista - Series A |
|
| 2018 |
|
| Vallejo, CA |
| 1/1/2036 |
|
| 5.85 | % |
|
| 2,649,291 |
|
Southpark (1) |
|
| 2009 |
|
| Austin, TX |
| 12/1/2049 |
|
| 6.13 | % |
|
| 12,675,000 |
|
Summerhill - Series A (4) |
|
| 2016 |
|
| Bakersfield, CA |
| 12/1/2033 |
|
| 5.00 | % |
|
| 6,259,888 |
|
Sycamore Walk - Series A (4) |
|
| 2015 |
|
| Bakersfield, CA |
| 1/1/2033 |
|
| 5.25 | % |
|
| 3,474,617 |
|
The Palms at Premier Park Apartments (2) |
|
| 2013 |
|
| Columbia, SC |
| 1/1/2050 |
|
| 6.25 | % |
|
| 18,385,572 |
|
Tyler Park Townhomes (2) |
|
| 2013 |
|
| Greenfield, CA |
| 1/1/2030 |
|
| 5.75 | % |
|
| 5,694,168 |
|
The Village at Madera - Series A (4) |
|
| 2016 |
|
| Madera, CA |
| 12/1/2033 |
|
| 5.00 | % |
|
| 3,006,656 |
|
Village at Avalon (5) |
|
| 2018 |
|
| Albuquerque, NM |
| 1/1/2059 |
|
| 5.80 | % |
|
| 16,069,382 |
|
Village at River's Edge (4) |
|
| 2017 |
|
| Columbia, SC |
| 6/1/2033 |
|
| 6.00 | % |
|
| 9,728,355 |
|
Vineyard Gardens - Series A (6) |
|
| 2017 |
|
| Oxnard, CA |
| 1/1/2035 |
|
| 5.50 | % |
|
| 3,939,476 |
|
Westside Village Market (2) |
|
| 2013 |
|
| Shafter, CA |
| 1/1/2030 |
|
| 5.75 | % |
|
| 3,721,129 |
|
Willow Run (4) |
|
| 2015 |
|
| Columbia, SC |
| 12/1/2050 |
|
| 5.50 | % |
|
| 12,444,000 |
|
|
|
|
|
|
|
|
|
|
|
|
| $ | 697,713,691 |
|
Property Name |
| Year Acquired |
| Location |
| Maturity Date |
| Base Interest Rate |
|
| Principal Outstanding as of December 31, 2020 |
| ||
15 West Apartments - Series A (4) |
| 2016 |
| Vancouver, WA |
| 7/1/2054 |
|
| 6.25 | % |
| $ | 9,604,680 |
|
Arbors at Hickory Ridge (2) |
| 2012 |
| Memphis, TN |
| 1/1/2049 |
|
| 6.25 | % |
|
| 10,848,178 |
|
Arby Road Apartments - Series A (7) |
| 2020 |
| Las Vegas, NV |
| 10/1/2027 |
|
| 5.35 | % |
|
| 1,600,000 |
|
Arby Road Apartments - Series A (7) |
| 2020 |
| Las Vegas, NV |
| 4/1/2041 |
|
| 5.50 | % |
|
| 5,785,000 |
|
Avistar at Copperfield - Series A (6) |
| 2017 |
| Houston, TX |
| 5/1/2054 |
|
| 5.75 | % |
|
| 13,815,817 |
|
Avistar on the Boulevard - Series A (2) |
| 2013 |
| San Antonio, TX |
| 3/1/2050 |
|
| 6.00 | % |
|
| 15,572,093 |
|
Avistar at the Crest - Series A (2) |
| 2013 |
| San Antonio, TX |
| 3/1/2050 |
|
| 6.00 | % |
|
| 9,140,656 |
|
Avistar (February 2013 Acquisition) - Series B (2 Bonds) |
| 2013 |
| San Antonio, TX |
| 4/1/2050 |
|
| 9.00 | % |
|
| 1,173,292 |
|
Avistar at the Oaks - Series A (2) |
| 2013 |
| San Antonio, TX |
| 8/1/2050 |
|
| 6.00 | % |
|
| 7,388,262 |
|
Avistar in 09 - Series A (2) |
| 2013 |
| San Antonio, TX |
| 8/1/2050 |
|
| 6.00 | % |
|
| 6,379,479 |
|
Avistar on the Hills - Series A (2) |
| 2013 |
| San Antonio, TX |
| 8/1/2050 |
|
| 6.00 | % |
|
| 5,058,171 |
|
Avistar (June 2013 Acquisition) - Series B (2 Bonds) |
| 2013 |
| San Antonio, TX |
| 9/1/2050 |
|
| 9.00 | % |
|
| 983,121 |
|
Avistar at the Parkway - Series A (3) |
| 2015 |
| San Antonio, TX |
| 5/1/2052 |
|
| 6.00 | % |
|
| 12,721,014 |
|
Avistar at the Parkway - Series B |
| 2015 |
| San Antonio, TX |
| 6/1/2052 |
|
| 12.00 | % |
|
| 123,973 |
|
Avistar at Wilcrest - Series A (6) |
| 2017 |
| Houston, TX |
| 5/1/2054 |
|
| 5.75 | % |
|
| 5,235,915 |
|
Avistar at Wood Hollow - Series A (6) |
| 2017 |
| Austin, TX |
| 5/1/2054 |
|
| 5.75 | % |
|
| 39,756,184 |
|
Bridle Ridge (1) |
| 2008 |
| Greer, SC |
| 1/1/2043 |
|
| 6.00 | % |
|
| 7,235,000 |
|
Brookstone (1) |
| 2009 |
| Waukegan, IL |
| 5/1/2040 |
|
| 5.45 | % |
|
| 8,652,804 |
|
Bruton Apartments (4) |
| 2014 |
| Dallas, TX |
| 8/1/2054 |
|
| 6.00 | % |
|
| 17,674,167 |
|
Columbia Gardens (4) |
| 2015 |
| Columbia, SC |
| 12/1/2050 |
|
| 5.50 | % |
|
| 12,775,000 |
|
Companion at Thornhill Apartments (4) |
| 2016 |
| Lexington, SC |
| 1/1/2052 |
|
| 5.80 | % |
|
| 11,055,254 |
|
Concord at Gulfgate - Series A (4) |
| 2015 |
| Houston, TX |
| 2/1/2032 |
|
| 6.00 | % |
|
| 18,796,773 |
|
Concord at Little York - Series A (4) |
| 2015 |
| Houston, TX |
| 2/1/2032 |
|
| 6.00 | % |
|
| 13,168,029 |
|
Concord at Williamcrest - Series A (4) |
| 2015 |
| Houston, TX |
| 2/1/2032 |
|
| 6.00 | % |
|
| 20,398,687 |
|
Copper Gate Apartments (2) |
| 2013 |
| Lafayette, IN |
| 12/1/2029 |
|
| 6.25 | % |
|
| 4,955,000 |
|
Courtyard - Series A (4) |
| 2016 |
| Fullerton, CA |
| 12/1/2033 |
|
| 5.00 | % |
|
| 10,061,161 |
|
Cross Creek (1) |
| 2009 |
| Beaufort, SC |
| 3/1/2049 |
|
| 6.15 | % |
|
| 7,862,645 |
|
Crossing at 1415 - Series A (4) |
| 2015 |
| San Antonio, TX |
| 12/1/2052 |
|
| 6.00 | % |
|
| 7,331,821 |
|
Decatur Angle (4) |
| 2014 |
| Fort Worth, TX |
| 1/1/2054 |
|
| 5.75 | % |
|
| 22,270,729 |
|
Esperanza at Palo Alto (4) |
| 2018 |
| San Antonio, TX |
| 7/1/2058 |
|
| 5.80 | % |
|
| 19,218,417 |
|
Gateway Village (6) |
| 2019 |
| Durham, NC |
| 4/1/2032 |
|
| 6.10 | % |
|
| 2,600,000 |
|
Glenview Apartments - Series A (3) |
| 2014 |
| Cameron Park, CA |
| 12/1/2031 |
|
| 5.75 | % |
|
| 4,483,154 |
|
Greens Property - Series A (2) |
| 2012 |
| Durham, NC |
| 10/1/2047 |
|
| 6.50 | % |
|
| 7,829,000 |
|
Greens Property - Series B |
| 2012 |
| Durham, NC |
| 10/1/2047 |
|
| 12.00 | % |
|
| 925,607 |
|
Harden Ranch - Series A (2) |
| 2014 |
| Salinas, CA |
| 3/1/2030 |
|
| 5.75 | % |
|
| 6,621,823 |
|
Harmony Court Bakersfield - Series A (4) |
| 2016 |
| Bakersfield, CA |
| 12/1/2033 |
|
| 5.00 | % |
|
| 3,668,439 |
|
Harmony Terrace - Series A (4) |
| 2016 |
| Simi Valley, CA |
| 1/1/2034 |
|
| 5.00 | % |
|
| 6,791,096 |
|
Heights at 515 - Series A (4) |
| 2015 |
| San Antonio, TX |
| 12/1/2052 |
|
| 6.00 | % |
|
| 6,712,409 |
|
Heritage Square - Series A (3) |
| 2014 |
| Edinburg, TX |
| 9/1/2051 |
|
| 6.00 | % |
|
| 10,579,057 |
|
Las Palmas II - Series A (4) |
| 2016 |
| Coachella, CA |
| 11/1/2033 |
|
| 5.00 | % |
|
| 1,664,566 |
|
Live 929 Apartments (6) |
| 2014 |
| Baltimore, MD |
| 7/1/2049 |
|
| 5.78 | % |
|
| 39,465,000 |
|
Lynnhaven Apartments (6) |
| 2019 |
| Durham, NC |
| 4/1/2032 |
|
| 6.10 | % |
|
| 3,450,000 |
|
Montclair Apartments - Series A (3) |
| 2014 |
| Lemoore, CA |
| 12/1/2031 |
|
| 5.75 | % |
|
| 2,428,775 |
|
Montecito at Williams Ranch Apartments - Series A (6) |
| 2017 |
| Salinas, CA |
| 10/1/2034 |
|
| 5.50 | % |
|
| 7,626,287 |
|
Montevista - Series A (6) |
| 2019 |
| San Pablo, CA |
| 7/1/2036 |
|
| 5.75 | % |
|
| 6,720,000 |
|
Oaks at Georgetown - Series A (4) |
| 2016 |
| Georgetown, TX |
| 1/1/2034 |
|
| 5.00 | % |
|
| 12,135,392 |
|
Ocotillo Springs - Series A (6) |
| 2020 |
| Brawley, CA |
| 8/1/2037 |
|
| 4.55 | % |
|
| 2,023,500 |
|
Ohio Properties - Series A (1) |
| 2010 |
| Ohio |
| 6/1/2050 |
|
| 7.00 | % |
|
| 13,724,000 |
|
Ohio Properties - Series B |
| 2010 |
| Ohio |
| 6/1/2050 |
|
| 10.00 | % |
|
| 3,485,690 |
|
Provision Center 2014-1 |
| 2014 |
| Knoxville, TN |
| 5/1/2034 |
|
| 6.00 | % |
|
| 10,000,000 |
|
Renaissance - Series A (3) |
| 2015 |
| Baton Rouge, LA |
| 6/1/2050 |
|
| 6.00 | % |
|
| 10,870,681 |
|
Rosewood Townhomes - Series A (6) |
| 2017 |
| Goose Creek, SC |
| 7/1/2055 |
|
| 5.75 | % |
|
| 9,259,206 |
|
Rosewood Townhomes - Series B |
| 2017 |
| Goose Creek, SC |
| 8/1/2055 |
|
| 12.00 | % |
|
| 469,781 |
|
Runnymede (1) |
| 2007 |
| Austin, TX |
| 10/1/2042 |
|
| 6.00 | % |
|
| 9,805,000 |
|
San Vicente - Series A (4) |
| 2016 |
| Soledad, CA |
| 11/1/2033 |
|
| 5.00 | % |
|
| 3,432,246 |
|
Santa Fe Apartments - Series A (3) |
| 2014 |
| Hesperia, CA |
| 12/1/2031 |
|
| 5.75 | % |
|
| 2,942,370 |
|
Seasons at Simi Valley - Series A (4) |
| 2015 |
| Simi Valley, CA |
| 9/1/2032 |
|
| 5.75 | % |
|
| 4,236,876 |
|
Seasons Lakewood - Series A (4) |
| 2016 |
| Lakewood, CA |
| 1/1/2034 |
|
| 5.00 | % |
|
| 7,233,993 |
|
Seasons San Juan Capistrano - Series A (4) |
| 2016 |
| San Juan Capistrano, CA |
| 1/1/2034 |
|
| 5.00 | % |
|
| 12,179,682 |
|
Silver Moon - Series A (3) |
| 2015 |
| Albuquerque, NM |
| 8/1/2055 |
|
| 6.00 | % |
|
| 7,697,891 |
|
Solano Vista - Series A |
| 2018 |
| Vallejo, CA |
| 1/1/2036 |
|
| 5.85 | % |
|
| 2,665,000 |
|
South Pointe Apartments - Series A (6) |
| 2017 |
| Hanahan, SC |
| 7/1/2055 |
|
| 5.75 | % |
|
| 21,551,600 |
|
South Pointe Apartments - Series B |
| 2017 |
| Hanahan, SC |
| 8/1/2055 |
|
| 12.00 | % |
|
| 1,099,487 |
|
Southpark (1) |
| 2009 |
| Austin, TX |
| 12/1/2049 |
|
| 6.13 | % |
|
| 12,845,000 |
|
Summerhill - Series A (4) |
| 2016 |
| Bakersfield, CA |
| 12/1/2033 |
|
| 5.00 | % |
|
| 6,316,993 |
|
Sycamore Walk - Series A (4) |
| 2015 |
| Bakersfield, CA |
| 1/1/2033 |
|
| 5.25 | % |
|
| 3,517,919 |
|
The Palms at Premier Park Apartments (2) |
| 2013 |
| Columbia, SC |
| 1/1/2050 |
|
| 6.25 | % |
|
| 18,619,081 |
|
Tyler Park Townhomes (2) |
| 2013 |
| Greenfield, CA |
| 1/1/2030 |
|
| 5.75 | % |
|
| 5,767,938 |
|
The Village at Madera - Series A (4) |
| 2016 |
| Madera, CA |
| 12/1/2033 |
|
| 5.00 | % |
|
| 3,034,084 |
|
Village at Avalon (5) |
| 2018 |
| Albuquerque, NM |
| 1/1/2059 |
|
| 5.80 | % |
|
| 16,189,074 |
|
Village at River's Edge (4) |
| 2017 |
| Columbia, SC |
| 6/1/2033 |
|
| 6.00 | % |
|
| 9,802,479 |
|
Vineyard Gardens - Series A (6) |
| 2017 |
| Oxnard, CA |
| 1/1/2035 |
|
| 5.50 | % |
|
| 3,969,173 |
|
Westside Village Market (2) |
| 2013 |
| Shafter, CA |
| 1/1/2030 |
|
| 5.75 | % |
|
| 3,769,337 |
|
Willow Run (4) |
| 2015 |
| Columbia, SC |
| 12/1/2050 |
|
| 5.50 | % |
|
| 12,597,000 |
|
Woodlynn Village (1) |
| 2008 |
| Maplewood, MN |
| 11/1/2042 |
|
| 6.00 | % |
|
| 4,120,000 |
|
|
|
|
|
|
|
|
|
|
|
|
| $ | 673,567,008 |
|
|
|
|
|
|
|
|
|
(5)
87
Property Name |
| Year Acquired |
|
| Location |
| Maturity Date |
| Base Interest Rate |
|
| Principal Outstanding as of December 31, 2020 |
| |||
15 West Apartments - Series A (4) |
|
| 2016 |
|
| Vancouver, WA |
| 7/1/2054 |
|
| 6.25 | % |
| $ | 9,604,680 |
|
Arbors at Hickory Ridge (2) |
|
| 2012 |
|
| Memphis, TN |
| 1/1/2049 |
|
| 6.25 | % |
|
| 10,848,178 |
|
Arby Road Apartments - Series A (7) |
|
| 2020 |
|
| Las Vegas, NV |
| 10/1/2027 |
|
| 5.35 | % |
|
| 1,600,000 |
|
Arby Road Apartments - Series A (7) |
|
| 2020 |
|
| Las Vegas, NV |
| 4/1/2041 |
|
| 5.50 | % |
|
| 5,785,000 |
|
Avistar at Copperfield - Series A (6) |
|
| 2017 |
|
| Houston, TX |
| 5/1/2054 |
|
| 5.75 | % |
|
| 13,815,817 |
|
Avistar on the Boulevard - Series A (2) |
|
| 2013 |
|
| San Antonio, TX |
| 3/1/2050 |
|
| 6.00 | % |
|
| 15,572,093 |
|
Avistar at the Crest - Series A (2) |
|
| 2013 |
|
| San Antonio, TX |
| 3/1/2050 |
|
| 6.00 | % |
|
| 9,140,656 |
|
Avistar (February 2013 Acquisition) - Series B (2 Bonds) |
|
| 2013 |
|
| San Antonio, TX |
| 4/1/2050 |
|
| 9.00 | % |
|
| 1,173,292 |
|
Avistar at the Oaks - Series A (2) |
|
| 2013 |
|
| San Antonio, TX |
| 8/1/2050 |
|
| 6.00 | % |
|
| 7,388,262 |
|
Avistar in 09 - Series A (2) |
|
| 2013 |
|
| San Antonio, TX |
| 8/1/2050 |
|
| 6.00 | % |
|
| 6,379,479 |
|
Avistar on the Hills - Series A (2) |
|
| 2013 |
|
| San Antonio, TX |
| 8/1/2050 |
|
| 6.00 | % |
|
| 5,058,171 |
|
Avistar (June 2013 Acquisition) - Series B (2 Bonds) |
|
| 2013 |
|
| San Antonio, TX |
| 9/1/2050 |
|
| 9.00 | % |
|
| 983,121 |
|
Avistar at the Parkway - Series A (3) |
|
| 2015 |
|
| San Antonio, TX |
| 5/1/2052 |
|
| 6.00 | % |
|
| 12,721,014 |
|
Avistar at the Parkway - Series B |
|
| 2015 |
|
| San Antonio, TX |
| 6/1/2052 |
|
| 12.00 | % |
|
| 123,973 |
|
Avistar at Wilcrest - Series A (6) |
|
| 2017 |
|
| Houston, TX |
| 5/1/2054 |
|
| 5.75 | % |
|
| 5,235,915 |
|
Avistar at Wood Hollow - Series A (6) |
|
| 2017 |
|
| Austin, TX |
| 5/1/2054 |
|
| 5.75 | % |
|
| 39,756,184 |
|
Bridle Ridge (1) |
|
| 2008 |
|
| Greer, SC |
| 1/1/2043 |
|
| 6.00 | % |
|
| 7,235,000 |
|
Brookstone (1) |
|
| 2009 |
|
| Waukegan, IL |
| 5/1/2040 |
|
| 5.45 | % |
|
| 8,652,804 |
|
Bruton Apartments (4) |
|
| 2014 |
|
| Dallas, TX |
| 8/1/2054 |
|
| 6.00 | % |
|
| 17,674,167 |
|
Columbia Gardens (4) |
|
| 2015 |
|
| Columbia, SC |
| 12/1/2050 |
|
| 5.50 | % |
|
| 12,775,000 |
|
Companion at Thornhill Apartments (4) |
|
| 2016 |
|
| Lexington, SC |
| 1/1/2052 |
|
| 5.80 | % |
|
| 11,055,254 |
|
Concord at Gulfgate - Series A (4) |
|
| 2015 |
|
| Houston, TX |
| 2/1/2032 |
|
| 6.00 | % |
|
| 18,796,773 |
|
Concord at Little York - Series A (4) |
|
| 2015 |
|
| Houston, TX |
| 2/1/2032 |
|
| 6.00 | % |
|
| 13,168,029 |
|
Concord at Williamcrest - Series A (4) |
|
| 2015 |
|
| Houston, TX |
| 2/1/2032 |
|
| 6.00 | % |
|
| 20,398,687 |
|
Copper Gate Apartments (2) |
|
| 2013 |
|
| Lafayette, IN |
| 12/1/2029 |
|
| 6.25 | % |
|
| 4,955,000 |
|
Courtyard - Series A (4) |
|
| 2016 |
|
| Fullerton, CA |
| 12/1/2033 |
|
| 5.00 | % |
|
| 10,061,161 |
|
Cross Creek (1) |
|
| 2009 |
|
| Beaufort, SC |
| 3/1/2049 |
|
| 6.15 | % |
|
| 7,862,645 |
|
Crossing at 1415 - Series A (4) |
|
| 2015 |
|
| San Antonio, TX |
| 12/1/2052 |
|
| 6.00 | % |
|
| 7,331,821 |
|
Decatur Angle (4) |
|
| 2014 |
|
| Fort Worth, TX |
| 1/1/2054 |
|
| 5.75 | % |
|
| 22,270,729 |
|
Esperanza at Palo Alto (4) |
|
| 2018 |
|
| San Antonio, TX |
| 7/1/2058 |
|
| 5.80 | % |
|
| 19,218,417 |
|
Gateway Village (6) |
|
| 2019 |
|
| Durham, NC |
| 4/1/2032 |
|
| 6.10 | % |
|
| 2,600,000 |
|
Glenview Apartments - Series A (3) |
|
| 2014 |
|
| Cameron Park, CA |
| 12/1/2031 |
|
| 5.75 | % |
|
| 4,483,154 |
|
Greens Property - Series A (2) |
|
| 2012 |
|
| Durham, NC |
| 10/1/2047 |
|
| 6.50 | % |
|
| 7,829,000 |
|
Greens Property - Series B |
|
| 2012 |
|
| Durham, NC |
| 10/1/2047 |
|
| 12.00 | % |
|
| 925,607 |
|
Harden Ranch - Series A (2) |
|
| 2014 |
|
| Salinas, CA |
| 3/1/2030 |
|
| 5.75 | % |
|
| 6,621,823 |
|
Harmony Court Bakersfield - Series A (4) |
|
| 2016 |
|
| Bakersfield, CA |
| 12/1/2033 |
|
| 5.00 | % |
|
| 3,668,439 |
|
Harmony Terrace - Series A (4) |
|
| 2016 |
|
| Simi Valley, CA |
| 1/1/2034 |
|
| 5.00 | % |
|
| 6,791,096 |
|
Heights at 515 - Series A (4) |
|
| 2015 |
|
| San Antonio, TX |
| 12/1/2052 |
|
| 6.00 | % |
|
| 6,712,409 |
|
Heritage Square - Series A (3) |
|
| 2014 |
|
| Edinburg, TX |
| 9/1/2051 |
|
| 6.00 | % |
|
| 10,579,057 |
|
Las Palmas II - Series A (4) |
|
| 2016 |
|
| Coachella, CA |
| 11/1/2033 |
|
| 5.00 | % |
|
| 1,664,566 |
|
Live 929 Apartments - Series A (6) |
|
| 2014 |
|
| Baltimore, MD |
| 7/1/2049 |
|
| 5.78 | % |
|
| 39,465,000 |
|
Lynnhaven Apartments (6) |
|
| 2019 |
|
| Durham, NC |
| 4/1/2032 |
|
| 6.10 | % |
|
| 3,450,000 |
|
Montclair Apartments - Series A (3) |
|
| 2014 |
|
| Lemoore, CA |
| 12/1/2031 |
|
| 5.75 | % |
|
| 2,428,775 |
|
Montecito at Williams Ranch Apartments - Series A (6) |
|
| 2017 |
|
| Salinas, CA |
| 10/1/2034 |
|
| 5.50 | % |
|
| 7,626,287 |
|
Montevista - Series A (6) |
|
| 2019 |
|
| San Pablo, CA |
| 7/1/2036 |
|
| 5.75 | % |
|
| 6,720,000 |
|
Oaks at Georgetown - Series A (4) |
|
| 2016 |
|
| Georgetown, TX |
| 1/1/2034 |
|
| 5.00 | % |
|
| 12,135,392 |
|
Ocotillo Springs - Series A (6) |
|
| 2020 |
|
| Brawley, CA |
| 8/1/2037 |
|
| 4.55 | % |
|
| 2,023,500 |
|
Ohio Properties - Series A (1) |
|
| 2010 |
|
| Ohio |
| 6/1/2050 |
|
| 7.00 | % |
|
| 13,724,000 |
|
Ohio Properties - Series B |
|
| 2010 |
|
| Ohio |
| 6/1/2050 |
|
| 10.00 | % |
|
| 3,485,690 |
|
Provision Center 2014-1 |
|
| 2014 |
|
| Knoxville, TN |
| 5/1/2034 |
|
| 6.00 | % |
|
| 10,000,000 |
|
Renaissance - Series A (3) |
|
| 2015 |
|
| Baton Rouge, LA |
| 6/1/2050 |
|
| 6.00 | % |
|
| 10,870,681 |
|
Rosewood Townhomes - Series A (6) |
|
| 2017 |
|
| Goose Creek, SC |
| 7/1/2055 |
|
| 5.75 | % |
|
| 9,259,206 |
|
Rosewood Townhomes - Series B |
|
| 2017 |
|
| Goose Creek, SC |
| 8/1/2055 |
|
| 12.00 | % |
|
| 469,781 |
|
Runnymede (1) |
|
| 2007 |
|
| Austin, TX |
| 10/1/2042 |
|
| 6.00 | % |
|
| 9,805,000 |
|
San Vicente - Series A (4) |
|
| 2016 |
|
| Soledad, CA |
| 11/1/2033 |
|
| 5.00 | % |
|
| 3,432,246 |
|
Santa Fe Apartments - Series A (3) |
|
| 2014 |
|
| Hesperia, CA |
| 12/1/2031 |
|
| 5.75 | % |
|
| 2,942,370 |
|
Seasons at Simi Valley - Series A (4) |
|
| 2015 |
|
| Simi Valley, CA |
| 9/1/2032 |
|
| 5.75 | % |
|
| 4,236,876 |
|
Seasons Lakewood - Series A (4) |
|
| 2016 |
|
| Lakewood, CA |
| 1/1/2034 |
|
| 5.00 | % |
|
| 7,233,993 |
|
Seasons San Juan Capistrano - Series A (4) |
|
| 2016 |
|
| San Juan Capistrano, CA |
| 1/1/2034 |
|
| 5.00 | % |
|
| 12,179,682 |
|
Silver Moon - Series A (3) |
|
| 2015 |
|
| Albuquerque, NM |
| 8/1/2055 |
|
| 6.00 | % |
|
| 7,697,891 |
|
Solano Vista - Series A |
|
| 2018 |
|
| Vallejo, CA |
| 1/1/2036 |
|
| 5.85 | % |
|
| 2,665,000 |
|
South Pointe Apartments - Series A (6) |
|
| 2017 |
|
| Hanahan, SC |
| 7/1/2055 |
|
| 5.75 | % |
|
| 21,551,600 |
|
South Pointe Apartments - Series B |
|
| 2017 |
|
| Hanahan, SC |
| 8/1/2055 |
|
| 12.00 | % |
|
| 1,099,487 |
|
Southpark (1) |
|
| 2009 |
|
| Austin, TX |
| 12/1/2049 |
|
| 6.13 | % |
|
| 12,845,000 |
|
Summerhill - Series A (4) |
|
| 2016 |
|
| Bakersfield, CA |
| 12/1/2033 |
|
| 5.00 | % |
|
| 6,316,993 |
|
Sycamore Walk - Series A (4) |
|
| 2015 |
|
| Bakersfield, CA |
| 1/1/2033 |
|
| 5.25 | % |
|
| 3,517,919 |
|
The Palms at Premier Park Apartments (2) |
|
| 2013 |
|
| Columbia, SC |
| 1/1/2050 |
|
| 6.25 | % |
|
| 18,619,081 |
|
Tyler Park Townhomes (2) |
|
| 2013 |
|
| Greenfield, CA |
| 1/1/2030 |
|
| 5.75 | % |
|
| 5,767,938 |
|
The Village at Madera - Series A (4) |
|
| 2016 |
|
| Madera, CA |
| 12/1/2033 |
|
| 5.00 | % |
|
| 3,034,084 |
|
Village at Avalon (5) |
|
| 2018 |
|
| Albuquerque, NM |
| 1/1/2059 |
|
| 5.80 | % |
|
| 16,189,074 |
|
Village at River's Edge (4) |
|
| 2017 |
|
| Columbia, SC |
| 6/1/2033 |
|
| 6.00 | % |
|
| 9,802,479 |
|
Vineyard Gardens - Series A (6) |
|
| 2017 |
|
| Oxnard, CA |
| 1/1/2035 |
|
| 5.50 | % |
|
| 3,969,173 |
|
Westside Village Market (2) |
|
| 2013 |
|
| Shafter, CA |
| 1/1/2030 |
|
| 5.75 | % |
|
| 3,769,337 |
|
Willow Run (4) |
|
| 2015 |
|
| Columbia, SC |
| 12/1/2050 |
|
| 5.50 | % |
|
| 12,597,000 |
|
Woodlynn Village (1) |
|
| 2008 |
|
| Maplewood, MN |
| 11/1/2042 |
|
| 6.00 | % |
|
| 4,120,000 |
|
|
|
|
|
|
|
|
|
|
|
|
| $ | 673,567,008 |
|
Property Name |
| Year Acquired |
| Location |
| Maturity Date |
| Base Interest Rate |
|
| Principal Outstanding as of December 31, 2019 |
| ||
15 West Apartments - Series A (5) |
| 2016 |
| Vancouver, WA |
| 7/1/2054 |
|
| 6.25 | % |
| $ | 9,673,117 |
|
Arbors at Hickory Ridge (3) |
| 2012 |
| Memphis, TN |
| 1/1/2049 |
|
| 6.25 | % |
|
| 10,985,959 |
|
Avistar at Copperfield - Series A (2) |
| 2017 |
| Houston, TX |
| 5/1/2054 |
|
| 5.75 | % |
|
| 13,945,681 |
|
Avistar on the Boulevard - Series A (3) |
| 2013 |
| San Antonio, TX |
| 3/1/2050 |
|
| 6.00 | % |
|
| 15,762,217 |
|
Avistar at the Crest - Series A (3) |
| 2013 |
| San Antonio, TX |
| 3/1/2050 |
|
| 6.00 | % |
|
| 9,252,257 |
|
Avistar (February 2013 Acquisition) - Series B (2 Bonds) |
| 2013 |
| San Antonio, TX |
| 4/1/2050 |
|
| 9.00 | % |
|
| 1,181,107 |
|
Avistar at the Oaks - Series A (3) |
| 2013 |
| San Antonio, TX |
| 8/1/2050 |
|
| 6.00 | % |
|
| 7,475,794 |
|
Avistar in 09 - Series A (3) |
| 2013 |
| San Antonio, TX |
| 8/1/2050 |
|
| 6.00 | % |
|
| 6,455,058 |
|
Avistar on the Hills - Series A (3) |
| 2013 |
| San Antonio, TX |
| 8/1/2050 |
|
| 6.00 | % |
|
| 5,118,097 |
|
Avistar (June 2013 Acquisition) - Series B (2 Bonds) |
| 2013 |
| San Antonio, TX |
| 9/1/2050 |
|
| 9.00 | % |
|
| 989,411 |
|
Avistar at the Parkway - Series A (4) |
| 2015 |
| San Antonio, TX |
| 5/1/2052 |
|
| 6.00 | % |
|
| 12,854,039 |
|
Avistar at the Parkway - Series B |
| 2015 |
| San Antonio, TX |
| 6/1/2052 |
|
| 12.00 | % |
|
| 124,305 |
|
Avistar at Wilcrest - Series A (2) |
| 2017 |
| Houston, TX |
| 5/1/2054 |
|
| 5.75 | % |
|
| 5,285,131 |
|
Avistar at Wood Hollow - Series A (2) |
| 2017 |
| Austin, TX |
| 5/1/2054 |
|
| 5.75 | % |
|
| 40,129,878 |
|
Bridle Ridge (1) |
| 2008 |
| Greer, SC |
| 1/1/2043 |
|
| 6.00 | % |
|
| 7,315,000 |
|
Brookstone (1) |
| 2009 |
| Waukegan, IL |
| 5/1/2040 |
|
| 5.45 | % |
|
| 8,767,616 |
|
Bruton Apartments (5) |
| 2014 |
| Dallas, TX |
| 8/1/2054 |
|
| 6.00 | % |
|
| 17,807,768 |
|
Columbia Gardens (5) |
| 2015 |
| Columbia, SC |
| 12/1/2050 |
|
| 5.50 | % |
|
| 12,922,000 |
|
Companion at Thornhill Apartments (5) |
| 2016 |
| Lexington, SC |
| 1/1/2052 |
|
| 5.80 | % |
|
| 11,178,557 |
|
Concord at Gulfgate - Series A (5) |
| 2015 |
| Houston, TX |
| 2/1/2032 |
|
| 6.00 | % |
|
| 18,975,786 |
|
Concord at Little York - Series A (5) |
| 2015 |
| Houston, TX |
| 2/1/2032 |
|
| 6.00 | % |
|
| 13,293,436 |
|
Concord at Williamcrest - Series A (5) |
| 2015 |
| Houston, TX |
| 2/1/2032 |
|
| 6.00 | % |
|
| 20,592,957 |
|
Copper Gate Apartments (3) |
| 2013 |
| Lafayette, IN |
| 12/1/2029 |
|
| 6.25 | % |
|
| 5,005,000 |
|
Courtyard - Series A (5) |
| 2016 |
| Fullerton, CA |
| 12/1/2033 |
|
| 5.00 | % |
|
| 10,147,686 |
|
Cross Creek (1) |
| 2009 |
| Beaufort, SC |
| 3/1/2049 |
|
| 6.15 | % |
|
| 7,970,921 |
|
Crossing at 1415 - Series A (5) |
| 2015 |
| San Antonio, TX |
| 12/1/2052 |
|
| 6.00 | % |
|
| 7,405,406 |
|
Decatur Angle (5) |
| 2014 |
| Fort Worth, TX |
| 1/1/2054 |
|
| 5.75 | % |
|
| 22,455,747 |
|
Esperanza at Palo Alto (5) |
| 2018 |
| San Antonio, TX |
| 7/1/2058 |
|
| 5.80 | % |
|
| 19,356,959 |
|
Gateway Village (2) |
| 2019 |
| Durham, NC |
| 4/1/2032 |
|
| 6.10 | % |
|
| 2,600,000 |
|
Glenview Apartments - Series A (4) |
| 2014 |
| Cameron Park, CA |
| 12/1/2031 |
|
| 5.75 | % |
|
| 4,533,958 |
|
Greens Property - Series A (3) |
| 2012 |
| Durham, NC |
| 10/1/2047 |
|
| 6.50 | % |
|
| 7,936,000 |
|
Greens Property - Series B |
| 2012 |
| Durham, NC |
| 10/1/2047 |
|
| 12.00 | % |
|
| 930,016 |
|
Harden Ranch - Series A (3) |
| 2014 |
| Salinas, CA |
| 3/1/2030 |
|
| 5.75 | % |
|
| 6,700,868 |
|
Harmony Court Bakersfield - Series A (5) |
| 2016 |
| Bakersfield, CA |
| 12/1/2033 |
|
| 5.00 | % |
|
| 3,699,987 |
|
Harmony Terrace - Series A (5) |
| 2016 |
| Simi Valley, CA |
| 1/1/2034 |
|
| 5.00 | % |
|
| 6,849,214 |
|
Heights at 515 - Series A (5) |
| 2015 |
| San Antonio, TX |
| 12/1/2052 |
|
| 6.00 | % |
|
| 6,779,777 |
|
Heritage Square - Series A (4) |
| 2014 |
| Edinburg, TX |
| 9/1/2051 |
|
| 6.00 | % |
|
| 10,695,037 |
|
Las Palmas II - Series A (5) |
| 2016 |
| Coachella, CA |
| 11/1/2033 |
|
| 5.00 | % |
|
| 1,679,022 |
|
Live 929 Apartments (7) |
| 2014 |
| Baltimore, MD |
| 7/1/2049 |
|
| 5.78 | % |
|
| 39,685,000 |
|
Lynnhaven Apartments (2) |
| 2019 |
| Durham, NC |
| 4/1/2032 |
|
| 6.10 | % |
|
| 3,450,000 |
|
Montclair Apartments - Series A (4) |
| 2014 |
| Lemoore, CA |
| 12/1/2031 |
|
| 5.75 | % |
|
| 2,456,298 |
|
Montecito at Williams Ranch Apartments - Series A (7) |
| 2017 |
| Salinas, CA |
| 10/1/2034 |
|
| 5.50 | % |
|
| 7,681,146 |
|
Montevista - Series A |
| 2019 |
| San Pablo, CA |
| 7/1/2036 |
|
| 5.75 | % |
|
| 6,720,000 |
|
Montevista - Series B |
| 2019 |
| San Pablo, CA |
| 7/1/2021 |
|
| 5.75 | % |
|
| 6,480,000 |
|
Oaks at Georgetown - Series A (5) |
| 2016 |
| Georgetown, TX |
| 1/1/2034 |
|
| 5.00 | % |
|
| 12,239,247 |
|
Ohio Properties - Series A (1) |
| 2010 |
| Ohio |
| 6/1/2050 |
|
| 7.00 | % |
|
| 13,857,000 |
|
Ohio Properties - Series B |
| 2010 |
| Ohio |
| 6/1/2050 |
|
| 10.00 | % |
|
| 3,504,170 |
|
Provision Center 2014-1 (2) |
| 2014 |
| Knoxville, TN |
| 5/1/2034 |
|
| 6.00 | % |
|
| 10,000,000 |
|
Renaissance - Series A (4) |
| 2015 |
| Baton Rouge, LA |
| 6/1/2050 |
|
| 6.00 | % |
|
| 11,001,027 |
|
Rosewood Townhomes - Series A (7) |
| 2017 |
| Goose Creek, SC |
| 7/1/2055 |
|
| 5.75 | % |
|
| 9,280,000 |
|
Rosewood Townhomes - Series B |
| 2017 |
| Goose Creek, SC |
| 8/1/2055 |
|
| 12.00 | % |
|
| 470,000 |
|
Runnymede (1) |
| 2007 |
| Austin, TX |
| 10/1/2042 |
|
| 6.00 | % |
|
| 9,925,000 |
|
San Vicente - Series A (5) |
| 2016 |
| Soledad, CA |
| 11/1/2033 |
|
| 5.00 | % |
|
| 3,462,053 |
|
Santa Fe Apartments - Series A (4) |
| 2014 |
| Hesperia, CA |
| 12/1/2031 |
|
| 5.75 | % |
|
| 2,975,713 |
|
Seasons at Simi Valley - Series A (5) |
| 2015 |
| Simi Valley, CA |
| 9/1/2032 |
|
| 5.75 | % |
|
| 4,282,477 |
|
Seasons Lakewood - Series A (5) |
| 2016 |
| Lakewood, CA |
| 1/1/2034 |
|
| 5.00 | % |
|
| 7,295,901 |
|
Seasons San Juan Capistrano - Series A (5) |
| 2016 |
| San Juan Capistrano, CA |
| 1/1/2034 |
|
| 5.00 | % |
|
| 12,283,916 |
|
Silver Moon - Series A (4) |
| 2015 |
| Albuquerque, NM |
| 8/1/2055 |
|
| 6.00 | % |
|
| 7,762,116 |
|
Solano Vista - Series A |
| 2018 |
| Vallejo, CA |
| 1/1/2036 |
|
| 5.85 | % |
|
| 2,665,000 |
|
Solano Vista - Series B |
| 2018 |
| Vallejo, CA |
| 1/1/2021 |
|
| 5.85 | % |
|
| 3,103,000 |
|
South Pointe Apartments - Series A (7) |
| 2017 |
| Hanahan, SC |
| 7/1/2055 |
|
| 5.75 | % |
|
| 21,600,000 |
|
South Pointe Apartments - Series B |
| 2017 |
| Hanahan, SC |
| 8/1/2055 |
|
| 12.00 | % |
|
| 1,100,000 |
|
Southpark (1) |
| 2009 |
| Austin, TX |
| 12/1/2049 |
|
| 6.13 | % |
|
| 13,005,000 |
|
Summerhill - Series A (5) |
| 2016 |
| Bakersfield, CA |
| 12/1/2033 |
|
| 5.00 | % |
|
| 6,371,318 |
|
Sycamore Walk - Series A (5) |
| 2015 |
| Bakersfield, CA |
| 1/1/2033 |
|
| 5.25 | % |
|
| 3,559,011 |
|
The Palms at Premier Park Apartments (3) |
| 2013 |
| Columbia, SC |
| 1/1/2050 |
|
| 6.25 | % |
|
| 18,838,478 |
|
Tyler Park Townhomes (3) |
| 2013 |
| Greenfield, CA |
| 1/1/2030 |
|
| 5.75 | % |
|
| 5,837,595 |
|
The Village at Madera - Series A (5) |
| 2016 |
| Madera, CA |
| 12/1/2033 |
|
| 5.00 | % |
|
| 3,060,177 |
|
Village at Avalon (6) |
| 2018 |
| Albuquerque, NM |
| 1/1/2059 |
|
| 5.80 | % |
|
| 16,302,038 |
|
Village at River's Edge (5) |
| 2017 |
| Columbia, SC |
| 6/1/2033 |
|
| 6.00 | % |
|
| 9,872,297 |
|
Vineyard Gardens - Series A (7) |
| 2017 |
| Oxnard, CA |
| 1/1/2035 |
|
| 5.50 | % |
|
| 3,995,000 |
|
Westside Village Market (3) |
| 2013 |
| Shafter, CA |
| 1/1/2030 |
|
| 5.75 | % |
|
| 3,814,857 |
|
Willow Run (5) |
| 2015 |
| Columbia, SC |
| 12/1/2050 |
|
| 5.50 | % |
|
| 12,742,000 |
|
Woodlynn Village (1) |
| 2008 |
| Maplewood, MN |
| 11/1/2042 |
|
| 6.00 | % |
|
| 4,172,000 |
|
|
|
|
|
|
|
|
|
|
|
|
| $ | 679,679,604 |
|
(1) MRB owned by ATAX TEBS I, LLC (M24 TEBS), see Note 16
(2) MRB owned by Deutsche Bank in a debt financing transaction, see Note 16
(3) MRB owned by ATAX TEBS II, LLC (M31 TEBS), see Note 16
(4) MRB owned by ATAX TEBS III, LLC (M33 TEBS), see Note 16
(5) MRB owned by ATAX TEBS IV, LLC (M45 TEBS), see Note 16
(6) MRB held by Morgan Stanley in a debt financing transaction, see Note 1688
(7) MRB held by Mizuho Capital Markets, LLC in a debt financing transaction, see Note 16
7. Governmental Issuer Loans
Governmental issuer loans (“GILs”) owned by theThe Partnership owns GILs that are issued by state or local governmental authorities to providefinance the construction financing forof affordable multifamily properties. The Partnership expects and believes the interest earned on the GILs is excludable from gross income for federal income tax purposes. The GILs do not constitute an obligation of any state government, agency or authority and no state government, agency or authority is liable for them, nor is the taxing power of any state government pledged to the payment of principal or interest on the GILs. The GILs areEach GIL is secured by the borrower’s non-recourse obligation evidenced by a mortgage on all real and personal property associatedof the Residential Property. The GILs share first mortgage lien positions with property loans and/or taxable GILs also owned by the underlying property. The sole sourcePartnership (Notes 10 and 12). Sources of the funds to pay principal and interest on the GILs isa GIL consist of the net cash flow or the sale or refinancing proceeds from the underlying property. The GILs share a first mortgage lien position withsecured property and limited-to-full payment guaranties provided by affiliates of the associated property loans also owned by the Partnership (see Note 11). The GILs are held in trust in connection with TOB Trust financings (see Note 16).borrower. The Partnership has committed to provide total funding for certain GILs on a draw-down basis during construction. The Partnership had the following investments and remaining funding commitments related to itsAll GILs were held in trust in connection with TOB Trust financings as of December 31, 2020:2021 and 2020 (Note 16).
|
|
|
|
|
|
|
|
|
|
|
| As of December 31, 2020 |
| |||||||||
Property Name |
| Date Acquired |
| Property Location |
| Units |
| Maturity Date |
| Variable Interest Rate |
| Current Interest Rate |
|
| Amortized Cost |
|
| Maximum Remaining Commitment |
| |||
Scharbauer Flats Apartments |
| June 2020 |
| Midland, TX |
| 300 |
| 1/1/2023 (1) |
| SIFMA + 3.10% |
| 3.19% |
|
| $ | 40,000,000 |
|
| $ | - |
| |
Oasis at Twin Lakes |
| July 2020 |
| Roseville, MN |
| 228 |
| 8/1/2023 (2) |
| SIFMA + 3.25% | (3),(4) | 3.75% |
|
|
| 14,403,000 |
|
|
| 19,597,000 |
| |
Centennial Crossings |
| August 2020 |
| Centennial, CO |
| 209 |
| 9/1/2023 (2) |
| SIFMA + 2.75% | (4) | 3.25% |
|
|
| 10,460,657 |
|
|
| 22,619,343 |
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| $ | 64,863,657 |
|
| $ | 42,216,343 |
|
|
|
|
|
|
|
|
|
An affiliateAt the closing of the Partnershipeach GIL, Freddie Mac, through a servicer, has forward committed to purchase the GILsGIL at maturity if the property has reached stabilization and other conditions are met (see Note 23). Affiliates of the borrower have guaranteed payment of principal and accrued interest on the GILs of 100% at origination, decreasing to 50% upon receipt of the certificate of occupancy, and decreasing to 25% upon achievement of 90% occupancy for 30 consecutive days.met.
8. Public Housing Capital Fund Trust Certificates
The Partnership’s PHC Certificates represented beneficial interests in 3 PHC Trusts that consisted of custodial receipts evidencing loans made to numerous local public housing authorities. Principal and interest on these loans were payable by the respective public housing authorities out of annual appropriations to be made to the public housing authorities under the Department of Housing and Urban Development’s (“HUD”) Capital Fund Program established under the Quality Housing and Work Responsibility Act of 1998 (the “Capital Fund Program”).
On January 30, 2020, the Partnership sold its PHC Certificates to an unrelated party for approximately $43.3 million, plus accrued interest, recognizing a gain on sale of securities of approximately $1.4 million. The PHC Certificates were held in trust at Mizuho in secured TOB Trust financing transactions, which upon sale, were collapsed and all principal and interest were paid off in full (see Note 16).
The Partnership had the following GIL investments in the PHC Certificates as of December 31, 2019:2021 and 2020:
|
|
|
|
|
|
|
|
|
|
|
| As of December 31, 2021 |
| |||
Property Name |
| Month |
| Property |
| Units |
| Maturity |
| Variable Interest |
| Current Interest |
| Amortized |
| |
Scharbauer Flats Apartments (1) |
| June 2020 |
| Midland, TX |
| 300 |
| 1/1/2023 |
| SIFMA + 3.10% |
| 3.20% |
| $ | 40,000,000 |
|
Oasis at Twin Lakes (1) |
| July 2020 |
| Roseville, MN |
| 228 |
| 8/1/2023 |
| SIFMA + 3.25% | (3),(4) | 3.75% |
|
| 34,000,000 |
|
Centennial Crossings (1) |
| August 2020 |
| Centennial, CO |
| 209 |
| 9/1/2023 |
| SIFMA + 2.75% | (4) | 3.25% |
|
| 33,080,000 |
|
Legacy Commons at Signal Hills (1) |
| January 2021 |
| St. Paul, MN |
| 247 |
| 2/1/2024 |
| SOFR + 3.07% | (4) | 3.57% |
|
| 33,120,605 |
|
Hilltop at Signal Hills (1) |
| January 2021 |
| St. Paul, MN |
| 146 |
| 8/1/2023 |
| SOFR + 3.07% | (4) | 3.57% |
|
| 21,550,584 |
|
Hope on Avalon |
| January 2021 |
| Los Angeles, CA |
| 88 |
| 2/1/2023 |
| SIFMA + 3.75% | (4) | 4.60% |
|
| 9,981,200 |
|
Hope on Broadway |
| January 2021 |
| Los Angeles, CA |
| 49 |
| 2/1/2023 |
| SIFMA + 3.75% | (4) | 4.60% |
|
| 3,691,245 |
|
Osprey Village (1) |
| July 2021 |
| Kissimmee, FL |
| 383 |
| 8/1/2024 |
| SOFR + 3.07% | (4) | 3.57% |
|
| 6,372,030 |
|
Willow Place Apartments (1) |
| September 2021 |
| McDonough, GA |
| 182 |
| 10/1/2024 |
| SOFR + 3.30% | (4) | 3.55% |
|
| 2,971,786 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| $ | 184,767,450 |
|
|
| December 31, 2019 |
| |||||||||||||||||||||
Description of PHC Certificates |
| Weighted Average Lives (Years) |
| Investment Rating |
| Weighted Average Interest Rate Over Life |
|
| Cost Adjusted for Paydowns and Impairment |
|
| Cumulative Unrealized Gain |
|
| Cumulative Unrealized Loss |
|
| Estimated Fair Value |
| |||||
PHC Certificate Trust I |
| 5.47 |
| AA- |
| 5.33% |
|
| $ | 24,477,478 |
|
| $ | 435,659 |
|
| $ | - |
|
| $ | 24,913,137 |
| |
PHC Certificate Trust II |
| 4.58 |
| AA- |
| 4.41% |
|
|
| 4,375,296 |
|
|
| 386,433 |
|
|
| - |
|
|
| 4,761,729 |
| |
PHC Certificate Trust III |
| 5.43 |
| BBB |
| 5.12% |
|
|
| 13,087,779 |
|
|
| 586,712 |
|
|
| - |
|
|
| 13,674,491 |
| |
|
|
|
|
|
|
|
|
|
| $ | 41,940,553 |
|
| $ | 1,408,804 |
|
| $ | - |
|
| $ | 43,349,357 |
|
89
|
|
|
|
|
|
|
|
|
|
|
| As of December 31, 2020 |
| |||
Property Name |
| Month |
| Property Location |
| Units |
| Maturity |
| Variable Interest Rate |
| Current Interest Rate |
| Amortized |
| |
Scharbauer Flats Apartments (1) |
| June 2020 |
| Midland, TX |
| 300 |
| 1/1/2023 |
| SIFMA + 3.10% |
| 3.19% |
| $ | 40,000,000 |
|
Oasis at Twin Lakes (1) |
| July 2020 |
| Roseville, MN |
| 228 |
| 8/1/2023 |
| SIFMA + 3.25% | (3),(4) | 3.75% |
|
| 14,403,000 |
|
Centennial Crossings (1) |
| August 2020 |
| Centennial, CO |
| 209 |
| 9/1/2023 |
| SIFMA + 2.75% | (4) | 3.25% |
|
| 10,460,657 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| $ | 64,863,657 |
|
The Partnership has remaining commitments to provide additional funding of certain GILs during construction of the secured properties as of December 31, 2021. See Note 2419 for a description of the methodology and significant assumptions for determining the fair value of the PHC Certificates. Unrealized gains or losses on the PHC Certificates were reported on the Partnership’s consolidated statements of comprehensive income to reflect changes in their estimated fair values resulting from market conditions and fluctuations in the present value of the expected cash flows from the PHC Certificates.further details regarding these remaining funding commitments.
Activity in 2021
9.Acquisitions:
During 2021, the Partnership entered into multiple GIL commitments to provide construction financing for the underlying properties on a draw-down basis as summarized below. See the above tables and Note 19 for additional information associated with the GIL commitments.
Activity in 2020
Acquisitions:
During 2020, the Partnership entered into multiple GIL commitments to provide construction financing for the underlying properties on a draw-down basis as summarized below. See the above tables and Note 19 for additional information associated with the GIL commitments.
8. Real Estate Assets
The Partnership owns real estate assets, including MF Properties, either directly, or through a wholly owned subsidiary or through a consolidated VIE, as described in Note 2. The financial statements of the MF propertiesProperties are consolidated with those of the Partnership. The Partnership also invests in land with plans to develop into rental properties or for future sale. These investments are reported as “Land held for development” below.
90
The following tables summarize information regarding the Partnership’s real estate assets as of December 31, 20202021 and 2019:2020:
Real Estate Assets as of December 31, 2021 |
| |||||||||||||||||
Property Name |
| Location |
| Number of |
|
| Land and Land |
|
| Buildings and |
|
| Carrying Value |
| ||||
Suites on Paseo |
| San Diego, CA |
|
| 384 |
|
| $ | 3,199,268 |
|
| $ | 39,302,507 |
|
| $ | 42,501,775 |
|
The 50/50 MF Property |
| Lincoln, NE |
|
| 475 |
|
|
| - |
|
|
| 33,013,039 |
|
|
| 33,013,039 |
|
Vantage at San Marcos |
| San Marcos, TX |
| (1) |
|
|
| 2,660,615 |
|
|
| 682,929 |
|
|
| 3,343,544 |
| |
Land held for development |
|
|
| (2) |
|
|
| 1,551,196 |
|
|
| - |
|
|
| 1,551,196 |
| |
|
|
|
|
|
|
|
|
|
|
|
|
| $ | 80,409,554 |
| |||
Less accumulated depreciation |
|
|
|
|
|
|
|
|
|
|
|
|
| (20,701,922 | ) | |||
Net real estate assets |
|
|
|
|
|
|
|
|
|
|
|
| $ | 59,707,632 |
|
Real Estate Assets as of December 31, 2020 |
| |||||||||||||||||
Property Name |
| Location |
| Number of Units |
|
| Land and Land Improvements |
|
| Buildings and Improvements |
|
| Carrying Value |
| ||||
Suites on Paseo |
| San Diego, CA |
|
| 384 |
|
| $ | 3,199,268 |
|
| $ | 39,375,298 |
|
| $ | 42,574,566 |
|
The 50/50 MF Property |
| Lincoln, NE |
|
| 475 |
|
|
| - |
|
|
| 32,940,854 |
|
|
| 32,940,854 |
|
Land held for development |
|
|
| (1) |
|
|
| 1,675,997 |
|
|
| - |
|
|
| 1,675,997 |
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| $ | 77,191,417 |
|
Less accumulated depreciation |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| (18,150,215 | ) |
Net real estate assets |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| $ | 59,041,202 |
|
Real Estate Assets as of December 31, 2020 |
| |||||||||||||||||
Property Name |
| Location |
| Number of |
|
| Land and Land |
|
| Buildings and |
|
| Carrying Value |
| ||||
Suites on Paseo |
| San Diego, CA |
|
| 384 |
|
| $ | 3,199,268 |
|
| $ | 39,375,298 |
|
| $ | 42,574,566 |
|
The 50/50 MF Property |
| Lincoln, NE |
|
| 475 |
|
|
| - |
|
|
| 32,940,854 |
|
|
| 32,940,854 |
|
Land held for development |
|
|
| (1) |
|
|
| 1,675,997 |
|
|
| - |
|
|
| 1,675,997 |
| |
|
|
|
|
|
|
|
|
|
|
|
|
| $ | 77,191,417 |
| |||
Less accumulated depreciation |
|
|
|
|
|
|
|
|
|
|
|
|
| (18,150,215 | ) | |||
Net real estate assets |
|
|
|
|
|
|
|
|
|
|
|
| $ | 59,041,202 |
|
|
|
In November 2021, the Partnership sold the land held for development in Gardner, KS and recognized a loss on the sale of $14,800.
Real Estate Assets as of December 31, 2019 |
| |||||||||||||||||
Property Name |
| Location |
| Number of Units |
|
| Land and Land Improvements |
|
| Buildings and Improvements |
|
| Carrying Value |
| ||||
Suites on Paseo |
| San Diego, CA |
|
| 384 |
|
| $ | 3,199,268 |
|
| $ | 39,073,728 |
|
| $ | 42,272,996 |
|
The 50/50 MF Property |
| Lincoln, NE |
|
| 475 |
|
|
| - |
|
|
| 32,937,805 |
|
|
| 32,937,805 |
|
Land held for development |
|
|
| (1) |
|
|
| 1,706,862 |
|
|
| - |
|
|
| 1,706,862 |
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| $ | 76,917,663 |
|
Less accumulated depreciation |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| (15,357,700 | ) |
Net real estate assets |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| $ | 61,559,963 |
|
|
|
Activity in 2020
In June 2020, the Partnership determined that the land held for development in Gardner, KansasKS was impaired and recorded an impairment charge of $25,200, which represents the difference between the Partnership’s carrying value and the estimated fair value of the land as of the assessment date.
Activity in 2019
In September 2019, the Partnership determined that the land held for development in Gardner, KS was impaired. The Partnership recorded impairment charges of $75,000 in the third quarter of 2019. The impairment charge represented the difference between the Partnership’s carrying value and the estimated fair value of the land as of the assessment date.land.
10.9. Investments in Unconsolidated Entities
ATAX Vantage Holdings, LLC, a wholly owned subsidiary of the Partnership, has equity investment commitments and has made equity investments in unconsolidated entities. The carrying value of the equity investments represents the Partnership’s maximum exposure to loss. ATAX Vantage Holdings, LLC is the only limited equity investor in the unconsolidated entities. An affiliate of the unconsolidated entities guarantees ATAX Vantage Holdings, LLC’s return on its investments through a date approximately
two to threefive years after construction completion.commencement of construction. The return on these investments earned by the Partnership is reported as “Investment income” on the Partnership’s consolidated statements of operations.
91
The following table provides the details of the investments in unconsolidated entities as of December 31, 20202021 and 2019 and remaining equity commitment amounts2020:
Property Name |
| Location |
| Units |
|
| Construction Commencement Date |
| Construction Completion Date |
| Carrying Value as of December 31, 2021 |
|
| Carrying Value as of December 31, 2020 |
| |||
Vantage at Powdersville |
| Powdersville, SC |
|
| 288 |
|
| November 2017 |
| February 2020 |
|
| - |
|
| $ | 12,295,801 |
|
Vantage at Stone Creek |
| Omaha, NE |
|
| 294 |
|
| March 2018 |
| April 2020 |
| $ | 6,143,099 |
|
|
| 7,840,500 |
|
Vantage at Bulverde |
| Bulverde, TX |
|
| 288 |
|
| March 2018 |
| August 2019 |
|
| - |
|
|
| 10,570,000 |
|
Vantage at Germantown |
| Germantown, TN |
|
| 288 |
|
| June 2018 |
| March 2020 |
|
| - |
|
|
| 12,425,000 |
|
Vantage at Murfreesboro |
| Murfreesboro, TN |
|
| 288 |
|
| September 2018 |
| October 2020 |
|
| 12,240,000 |
|
|
| 14,640,000 |
|
Vantage at Coventry |
| Omaha, NE |
|
| 294 |
|
| September 2018 |
| February 2021 |
|
| 7,611,614 |
|
|
| 9,007,435 |
|
Vantage at Conroe |
| Conroe, TX |
|
| 288 |
|
| April 2019 |
| January 2021 |
|
| 11,164,625 |
|
|
| 10,406,895 |
|
Vantage at O'Connor |
| San Antonio, TX |
|
| 288 |
|
| October 2019 |
| June 2021 |
|
| 9,109,343 |
|
|
| 8,245,890 |
|
Vantage at Westover Hills |
| San Antonio, TX |
|
| 288 |
|
| January 2020 |
| July 2021 |
|
| 8,861,504 |
|
|
| 8,021,544 |
|
Vantage at Tomball |
| Tomball, TX |
|
| 288 |
|
| August 2020 |
| N/A |
|
| 11,814,774 |
|
|
| 9,280,134 |
|
Vantage at Hutto |
| Hutto, TX |
|
| 288 |
|
| December 2021 |
| N/A |
|
| 5,629,651 |
|
|
| 3,163,676 |
|
Vantage at San Marcos (1) |
| San Marcos, TX |
|
| 288 |
|
| N/A |
| N/A |
|
| - |
|
|
| 981,695 |
|
Vantage at Loveland |
| Loveland, CO |
|
| 288 |
|
| April 2021 |
| N/A |
|
| 10,913,911 |
|
|
| - |
|
Vantage at Helotes |
| Helotes, TX |
|
| 288 |
|
| May 2021 |
| N/A |
|
| 11,350,686 |
|
|
| - |
|
Vantage at Fair Oaks |
| Boerne, TX |
|
| 288 |
|
| September 2021 |
| N/A |
|
| 6,424,306 |
|
|
| - |
|
Vantage at McKinney Falls |
| McKinney Falls, TX |
|
| 288 |
|
| December 2021 |
| N/A |
|
| 6,530,009 |
|
|
| - |
|
|
|
|
|
|
|
|
|
|
|
| $ | 107,793,522 |
|
| $ | 106,878,570 |
|
Property Name |
| Location |
| Units |
|
| Month Commitment Executed |
| Construction Completion Date |
| Carrying Value as of December 31, 2020 |
|
| Carrying Value as of December 31, 2019 |
|
| Maximum Remaining Equity Commitment as of December 31, 2020 |
| ||||
Vantage at Waco |
| Waco, TX |
|
| 288 |
|
| August 2016 |
| May 2018 |
| $ | - |
|
| $ | 9,337,166 |
|
| $ | - |
|
Vantage at Powdersville |
| Powdersville, SC |
|
| 288 |
|
| November 2017 |
| February 2020 |
|
| 12,295,801 |
|
|
| 12,295,801 |
|
|
| - |
|
Vantage at Stone Creek |
| Omaha, NE |
|
| 294 |
|
| March 2018 |
| April 2020 |
|
| 7,840,500 |
|
|
| 7,840,500 |
|
|
| - |
|
Vantage at Bulverde |
| Bulverde, TX |
|
| 288 |
|
| March 2018 |
| August 2019 |
|
| 10,570,000 |
|
|
| 10,144,052 |
|
|
| - |
|
Vantage at Germantown |
| Germantown, TN |
|
| 288 |
|
| June 2018 |
| March 2020 |
|
| 12,425,000 |
|
|
| 11,745,155 |
|
|
| - |
|
Vantage at Murfreesboro |
| Murfreesboro, TN |
|
| 288 |
|
| September 2018 |
| October 2020 |
|
| 14,640,000 |
|
|
| 13,516,425 |
|
|
| - |
|
Vantage at Coventry |
| Omaha, NE |
|
| 294 |
|
| September 2018 |
| N/A |
|
| 9,007,435 |
|
|
| 9,007,435 |
|
|
| - |
|
Vantage at Conroe |
| Conroe, TX |
|
| 288 |
|
| April 2019 |
| N/A |
|
| 10,406,895 |
|
|
| 8,078,519 |
|
|
| - |
|
Vantage at O'Connor |
| San Antonio, TX |
|
| 288 |
|
| October 2019 |
| N/A |
|
| 8,245,890 |
|
|
| 5,016,811 |
|
|
| - |
|
Vantage at Westover Hills |
| San Antonio, TX |
|
| 288 |
|
| January 2020 |
| N/A |
|
| 8,021,544 |
|
|
| - |
|
|
| - |
|
Vantage at Tomball |
| Tomball, TX |
|
| 288 |
|
| August 2020 |
| N/A |
|
| 9,280,134 |
|
|
| - |
|
|
| 1,425,562 |
|
Vantage at Hutto |
| Hutto, TX |
|
| 288 |
|
| November 2020 |
| N/A |
|
| 3,163,676 |
|
|
| - |
|
|
| 7,359,952 |
|
Vantage at San Marcos |
| San Marcos, TX |
|
| 288 |
|
| November 2020 |
| N/A |
|
| 981,695 |
|
|
| - |
|
|
| 8,943,914 |
|
|
|
|
|
| 3,756 |
|
|
|
|
|
| $ | 106,878,570 |
|
| $ | 86,981,864 |
|
| $ | 17,729,428 |
|
The Partnership has remaining commitments to provide additional equity funding for certain unconsolidated entities as of December 31, 2021. See Note 19 for further details regarding these remaining funding commitments.
Activity in 20202021
Sales Activity:
The following table summarizes sales information of the Partnership’s investments in unconsolidated entities during 2021:
Property Name |
| Location |
| Units |
|
| Month Sold |
| Gross Proceeds |
|
| Investment Income |
|
| Gain on Sale |
| ||||
Vantage at Germantown |
| Germantown, TN |
|
| 288 |
|
| March 2021 |
| $ | 16,096,560 |
|
| $ | 862,454 |
|
| $ | 2,809,106 |
|
Vantage at Powdersville |
| Powdersville, SC |
|
| 288 |
|
| May 2021 |
|
| 20,118,680 |
|
|
| 2,359,394 |
|
|
| 5,463,484 |
|
Vantage at Bulverde |
| Bulverde, TX |
|
| 288 |
|
| August 2021 |
|
| 18,916,961 |
|
|
| 1,392,312 |
|
|
| 6,954,649 |
|
Vantage at Panama City Beach |
| Panama City Beach, FL |
|
| 288 |
|
| (1) |
|
| 293,510 |
|
|
| - |
|
|
| 293,510 |
|
|
|
|
|
|
|
|
|
| $ | 55,425,711 |
|
| $ | 4,614,160 |
|
| $ | 15,520,749 |
|
New and Amended Equity Commitments:
In April 2021, the Partnership executed a $7.3$16.3 million equity commitment to fund the construction of the Vantage at Westover HillsLoveland multifamily property. The Partnership may increase its equity commitment to $18.2 million based upon the occurrence of certain events.
In May 2021, the Partnership executed a $12.6 million equity commitment to fund the construction of the Vantage at Helotes multifamily property.
In June 2021, the Partnership executed a $1.1 million equity commitment to fund the purchase of land for future development of the Vantage at Fair Oaks multifamily property. In September 2021, the Partnership amended its equity commitment to $11.0 million to fund construction of the property.
In December 2021, the Partnership executed a $11.4 million equity commitment to fund the construction of the Vantage at McKinney Falls multifamily property.
92
In December 2021, the Partnership increased its total equity commitment related to the Vantage at Hutto multifamily property to $11.2 million.
Activity in 2020
Sales Activity:
In June 2020, Vantage at Waco sold substantially all assets to an unrelated third party and ceased operations. The Partnership has received cash of approximately $10.8 million as a result of the sale. The Partnership recognized approximately $1.5 million of “Investment Income”income” on the Partnership’s consolidated statements of operations associated with the sale.
New Equity Commitments:
In January 2020, the Partnership executed a $7.3million equity commitment to fund construction of the Vantage at Westover Hills multifamily property.
In August 2020, the Partnership executed a $10.4 million equity commitment to fund construction of the Vantage at Tomball multifamily property.
In November 2020, the Partnership executed a $10.5 million equity commitment to fund construction of the Vantage at Hutto multifamily property and a $9.9 million equity commitment to fund construction of the Vantage at San Marcos.
Activity in 2019
In April 2019, the Partnership executed a $9.0 million equity commitment to fund construction of the Vantage at Conroe multifamily property.
In September 2019, the membership interests of Vantage at Panama City Beach were sold to an unrelated third party. The Partnership received cash of approximately $22.7 million upon sale. The Partnership recognized approximately $547,000 of “Investment income” and approximately $10.5 million of “Gain on sale of investments in unconsolidated entities” associated with the sale. The Partnership may also be entitled to receive up to $325,000 of additional proceeds in future periods if certain gain contingencies are satisfied.
In December 2019, Vantage at Boerne sold substantially all its assets to an unrelated third party and ceased operations. The Partnership received cash of approximately $15.2 million upon sale. The Partnership recognized approximately $1.2 million of “Investment income” and approximately $5.7 million as “Gain on sale of investments in unconsolidated entities” associated with the sale.
The following table provides summary combined financial information related to the Partnership’s investments in unconsolidated entities for the years ended December 31, 20202021 and 2019:2020:
|
| For the Years Ended December 31, |
| |||||
|
| 2021 |
|
| 2020 |
| ||
Property Revenues |
| $ | 24,501,799 |
|
| $ | 14,553,331 |
|
Gain on sale of property |
| $ | 42,792,935 |
|
| $ | 6,106,279 |
|
Net income (loss) |
| $ | 37,836,191 |
|
| $ | (1,674,527 | ) |
93
|
| For the Years Ended December 31, |
| |||||
|
| 2020 |
|
| 2019 |
| ||
Property Revenues |
| $ | 14,553,331 |
|
| $ | 12,541,852 |
|
Gain on sale of property |
| $ | 6,106,279 |
|
| $ | 35,871,041 |
|
Net income (loss) |
| $ | (1,674,527 | ) |
| $ | 32,662,003 |
|
11.10. Property Loans, Net of Loan Loss Allowances
The following tabletables summarize the Partnership’s property loans, net of loan loss allowances, as of December 31, 20202021 and 2019:2020:
|
| December 31, 2021 |
|
|
|
|
|
| |||||||||
|
| Outstanding |
|
| Loan Loss |
|
| Property Loan Principal, |
|
| Maturity Date |
| Interest Rate |
| |||
Avistar (February 2013 portfolio) |
| $ | 201,972 |
|
| $ | - |
|
| $ | 201,972 |
|
| 6/26/2024 |
| 12.00% |
|
Avistar (June 2013 portfolio) |
|
| 251,622 |
|
|
| - |
|
|
| 251,622 |
|
| 6/26/2024 |
| 12.00% |
|
Centennial Crossings (1) (2) |
|
| 11,354,386 |
|
|
| - |
|
|
| 11,354,386 |
|
| 9/1/2023 | (3) | LIBOR + 2.50% | (4) |
Cross Creek |
|
| 11,101,887 |
|
|
| (7,393,814 | ) |
|
| 3,708,073 |
|
| 12/1/2025 |
| 6.15% |
|
Greens Property |
|
| 850,000 |
|
|
| - |
|
|
| 850,000 |
|
| 9/1/2046 |
| 10.00% |
|
Hilltop at Signal Hills (1) (2) |
|
| 1,000,000 |
|
|
| - |
|
|
| 1,000,000 |
|
| 8/1/2023 | (3) | SOFR + 3.07% | (4) |
Legacy Commons at Signal Hills (1) (2) |
|
| 2,604,230 |
|
|
| - |
|
|
| 2,604,230 |
|
| 2/1/2024 | (3) | SOFR + 3.07% | (4) |
Live 929 Apartments |
|
| 1,355,534 |
|
|
| (1,355,534 | ) |
|
| - |
|
| 7/31/2049 |
| 8.00% |
|
Magnolia Crossing |
|
| 13,424,579 |
|
|
| - |
|
|
| 13,424,579 |
|
| 12/1/2022 |
| SOFR + 6.50% | (5) |
Oasis at Twin Lakes (1) (2) |
|
| 20,607,362 |
|
|
| - |
|
|
| 20,607,362 |
|
| 8/1/2023 | (3) | LIBOR + 2.50% | (4) |
Ohio Properties |
|
| 2,390,446 |
|
|
| - |
|
|
| 2,390,446 |
|
| 12/1/2026 - 6/1/2050 |
| 10.00% |
|
Osprey Village (1)(2) |
|
| 1,000,000 |
|
|
| - |
|
|
| 1,000,000 |
|
| 8/1/2024 | (3) | SOFR + 3.07% | (4) |
Scharbauer Flats Apartments (1) (2) |
|
| 9,708,598 |
|
|
| - |
|
|
| 9,708,598 |
|
| 1/1/2023 | (3) | LIBOR + 2.85% |
|
Willow Place Apartments (1)(2) |
|
| 1,000,000 |
|
|
| - |
|
|
| 1,000,000 |
|
| 10/1/2024 | (3) | SOFR + 3.30% | (5) |
Total |
| $ | 76,850,616 |
|
| $ | (8,749,348 | ) |
| $ | 68,101,268 |
|
|
|
|
|
|
|
| December 31, 2020 |
| |||||||||
|
| Outstanding Balance |
|
| Loan Loss Allowance |
|
| Property Loan Principal, net of allowance |
| |||
Arbors at Hickory Ridge |
| $ | 191,264 |
|
| $ | - |
|
| $ | 191,264 |
|
Avistar (February 2013 portfolio) |
|
| 201,972 |
|
|
| - |
|
|
| 201,972 |
|
Avistar (June 2013 portfolio) |
|
| 251,622 |
|
|
| - |
|
|
| 251,622 |
|
Centennial Crossings (1) |
|
| 3,017,729 |
|
|
| - |
|
|
| 3,017,729 |
|
Cross Creek |
|
| 11,101,887 |
|
|
| (7,393,814 | ) |
|
| 3,708,073 |
|
Greens Property |
|
| 850,000 |
|
|
| - |
|
|
| 850,000 |
|
Live 929 Apartments |
|
| 911,232 |
|
|
| (911,232 | ) |
|
| - |
|
Ohio Properties |
|
| 2,390,446 |
|
|
| - |
|
|
| 2,390,446 |
|
Scharbauer Flats Apartments (1) |
|
| 2,309,613 |
|
|
| - |
|
|
| 2,309,613 |
|
Total |
| $ | 21,225,765 |
|
| $ | (8,305,046 | ) |
| $ | 12,920,719 |
|
(2) The property loan and associated GIL are on parity and share a first mortgage lien position on all real and personal property associated with the underlying property. Affiliates of the borrower have guaranteed limited-to-full payment of principal and accrued interest on the property loan. (3) The borrower may elect to extend the maturity date for a period ranging between six and twelve months upon meeting certain conditions, including payment of a non-refundable extension fee. (4) The index is subject to a floor of 0.50%. (5) The index is subject to a floor of 0.25%.
(1) The property loan is held in trust in connection with a TOB financings (Note 16). (2) The property loan and associated GIL are on parity and share a first mortgage lien position on all real and personal property associated with the underlying property. Affiliates of the borrower have guaranteed limited-to-full payment of principal and accrued interest on the property loan. (3) The borrower may elect to extend the maturity date for a period ranging between six and twelve months upon meeting certain conditions, including payment of a non-refundable extension fee. (4) The index is subject to a floor of 0.50%.
|
|
|
| December 31, 2019 |
| |||||||||
|
| Outstanding Balance |
|
| Loan Loss Allowance |
|
| Property Loan Principal, net of allowance |
| |||
Arbors at Hickory Ridge |
| $ | 191,264 |
|
| $ | - |
|
| $ | 191,264 |
|
Avistar (February 2013 portfolio) |
|
| 201,972 |
|
|
| - |
|
|
| 201,972 |
|
Avistar (June 2013 portfolio) |
|
| 251,622 |
|
|
| - |
|
|
| 251,622 |
|
Cross Creek |
|
| 11,101,887 |
|
|
| (7,393,814 | ) |
|
| 3,708,073 |
|
Greens Property |
|
| 850,000 |
|
|
| - |
|
|
| 850,000 |
|
Live 929 Apartments |
|
| 405,717 |
|
|
| - |
|
|
| 405,717 |
|
Ohio Properties |
|
| 2,390,446 |
|
|
| - |
|
|
| 2,390,446 |
|
Total |
| $ | 15,392,908 |
|
| $ | (7,393,814 | ) |
| $ | 7,999,094 |
|
During the yearyears ended December 31, 2021 and 2020, the Partnership recognized a provision for loan loss and associated loan loss allowance of approximately $444,000 and $911,000, respectively, related to the Live 929 Apartments property loan as the Partnership determined it was probable the outstanding balance will not be collectible.
The interest to be earned on the Live 929 Apartments and Cross Creek property loans was onin nonaccrual status for the years ended December 31, 20202021 and 2019.2020. The discounted cash flow method used by management to establish the net realizable value of these
94
property loans determined the collection of the interest earned since inceptionaccrued was not probable. In addition, interest to be earned on approximately $983,000 of property loan principal for the Ohio Properties was in nonaccrual status for the years ended December 31, 20202021 and 20192020 as, in management’s opinion, the interest was not considered collectible.
Activity in 2020
Concurrent with the acquisition of its GILs (see Note 7), the Partnership has committed to provide property loans for the construction of the underlying properties on a draw-down basis. The property loans and associated GILs are on parity and share a first mortgage lien position on all real and personal property associated with the underlying property. Affiliates of the borrower have guaranteed payment of principal and accrued interest on the GILs of 100% at origination, decreasing to 50% upon receipt of the certificate of occupancy, and decreasing to 25% upon achievement of 90% occupancy for 30 consecutive days. The following is a summary of property loans, and the remaining funding commitments, that were entered into during 2020:
|
|
|
|
|
| As of December 31, 2020 |
| |||||
Property Name |
| Date Committed |
| Maturity Date |
| Outstanding Balance |
|
| Maximum Remaining Commitment |
| ||
Scharbauer Flats Apartments |
| June 2020 |
| 1/1/2023 (1) |
| $ | 2,309,613 |
|
| $ | 21,850,387 |
|
Oasis at Twin Lakes |
| July 2020 |
| 8/1/2023 (2) |
|
| - |
|
|
| 27,704,180 |
|
Centennial Crossings |
| August 2020 |
| 9/1/2023 (2) |
|
| 3,017,729 |
|
|
| 21,232,271 |
|
|
|
|
|
|
| $ | 5,327,342 |
|
| $ | 70,786,838 |
|
|
|
|
|
During the year end December 31, 2020, the Partnership advanced Live 929 Apartments approximately $505,000 under the secured property loan entered into in August 2019. A loan loss allowance was established for these advances during the year ended December 31, 2020.
Activity in 2019
In January 2019, the Vantage at Brooks property was sold by its owner. Upon sale, the Partnership received all outstanding principal and accrued interest on the Vantage at Brooks, LLC property loan. The Partnership received additional proceeds of approximately $3.0 million, which is reported as “Contingent interest” on the Partnership’s consolidated statements of operations. The contingent interest recognized is considered Tier 2 income for purposes of distributions to the General Partner and BUC holders (see Note 3).
In August 2019, the Partnership entered into a secured property loan with Live 929 Apartments. The property may request additional advances for the sole purpose of funding monthly operating shortfalls up to a total loan amount of $1.0 million. The property loan is subordinate to the MRBs associated with the property and has a stated maturity date of July 31, 2049.
The following table summarizes the changes in the Partnership’s loan loss allowance for the years ended December 31, 20202021 and 2019:2020:
|
| For the Years Ended December 31, |
| |||||
|
| 2021 |
|
| 2020 |
| ||
Balance, beginning of period |
| $ | 8,305,046 |
|
| $ | 7,393,814 |
|
Provision for loan loss |
|
| 444,302 |
|
|
| 911,232 |
|
Balance, end of period |
| $ | 8,749,348 |
|
| $ | 8,305,046 |
|
The Partnership has remaining commitments to provide additional funding of certain property loans during construction of the secured property as of December 31, 2021. See Note 19 for further regarding these remaining funding commitments.
Activity in 2021
Concurrent with the acquisition of GILs (Note 7), the Partnership committed to provide property loans for the construction of the underlying properties on a draw-down basis as summarized below. The property loans and associated GILs are on parity and share a first mortgage position on all real and personal property associated with the secured property.
|
| For the Years Ended December 31, |
| |||||
|
| 2020 |
|
| 2019 |
| ||
Balance, beginning of year |
| $ | 7,393,814 |
|
| $ | 7,393,814 |
|
Provision for loan loss (1) |
|
| 911,232 |
|
|
| - |
|
Balance, end of year |
| $ | 8,305,046 |
|
| $ | 7,393,814 |
|
|
|
In March 2021, the Partnership amended the secured property loan with Live 929 Apartments to increase the total available loan amount to $1.5 million from $1.0 million. The property loan is subordinate to the MRBs associated with the property.
In August 2021, the Partnership received approximately $328,000 as payment in full for outstanding principal and interest on a note receivable due from Arbors at Hickory Ridge.
In December 2021, the Partnership entered into an agreement to provide a taxable bridge loan in the amount of up to $14.5 million, secured by a first mortgage lien on Magnolia Crossing, an existing 65-unit skilled-nursing facility in Houston, Texas.
Activity in 2020
Concurrent with the acquisition of GILs (Note 7), the Partnership committed to provide property loans for the construction of the underlying properties on a draw-down basis as summarized below. The property loans and associated GILs are on parity and share a first mortgage position on all real and personal property associated with the secured property.
12.95
11. Income Tax Provision
The Partnership recognizes current income tax expense for federal, state, and local income taxes incurred by the Greens Hold Co, which owns The 50/50 MF Property and certain property loans. The following table summarizes income tax expense (benefit) for the years ended December 31, 20202021 and 2019:2020:
|
| For the Years Ended December 31, |
|
| For the Years Ended December 31, |
| ||||||||||
|
| 2020 |
|
| 2019 |
|
| 2021 |
|
| 2020 |
| ||||
Current income tax expense |
| $ | 185,910 |
|
| $ | 195,861 |
|
| $ | 152,847 |
| $ | 185,910 |
| |
Deferred income tax benefit |
|
| (105,920 | ) |
|
| (149,874 | ) |
|
| (89,055 | ) |
|
| (105,920 | ) |
Total income tax expense |
| $ | 79,990 |
|
| $ | 45,987 |
|
| $ | 63,792 |
|
| $ | 79,990 |
|
The Partnership’s income tax expense fluctuates from period to period based on the timing of the taxable income in the Greens Hold Co and the impact of deferred income taxes. Deferred income tax expense is generally a function of the period’s temporary differences (i.e. depreciation, amortization of finance costs, etc.). The deferred tax assets and liabilities are valued based on enacted tax rates. The Greens Hold Co had net deferred tax assets of approximately $532,000$621,000 and $426,000$532,000 as of December 31, 20202021 and 2019,2020, respectively. These amounts are reported within “Other assets” on the Partnership’s consolidated balance sheets. The Partnership evaluated whether it is more likely than not that its deferred income tax assets will be realizable and recorded 0 valuation allowance as of December 31, 20202021 and 2019.2020.
For the years ended December 31, 20202021 and 2019,2020, income taxes computed by applying the U.S. federal statutory rates to income from continuing operations before income taxes for the Greens Hold Co differ from the provision for income taxes due to state income taxes (net of the effect on federal income tax).
The Partnership accrues interest and penalties associated with uncertain tax positions as part of income tax expense. There were 0 material uncertain tax positions, accrued interest or penalties as of December 31, 20202021 and 2019.2020.
The Partnership files U.S. federal and state tax returns. The Partnership’s returns for years 20172018 through 20192020 remain subject to examination by the Internal Revenue Service.
13.12. Other Assets
The following table summarizes the Partnership’s other assets as of December 31, 20202021 and 2019:2020:
|
| December 31, 2020 |
|
| December 31, 2019 |
|
| December 31, 2021 |
|
| December 31, 2020 |
| ||||
Deferred financing costs, net |
| $ | 390,649 |
|
| $ | 353,862 |
|
| $ | 1,349,097 |
| $ | 390,649 |
| |
Fair value of derivative instruments (Note 18) |
|
| 321,503 |
|
|
| 10,911 |
|
| 343,418 |
| 321,503 |
| |||
Taxable mortgage revenue bonds, at fair value |
|
| 1,510,437 |
|
|
| 1,383,237 |
|
| 3,428,443 |
| 1,510,437 |
| |||
Taxable governmental issuer loan held in trust |
|
| 1,000,000 |
| - |
| ||||||||||
Bond purchase commitments, at fair value (Note 19) |
|
| 431,879 |
|
|
| - |
|
| 964,404 |
| 431,879 |
| |||
Operating lease right-of-use assets, net |
|
| 1,648,742 |
|
|
| 1,673,242 |
|
| 1,619,714 |
| 1,648,742 |
| |||
Other assets |
|
| 1,605,374 |
|
|
| 1,641,099 |
|
|
| 2,157,809 |
|
|
| 1,605,374 |
|
Total other assets |
| $ | 5,908,584 |
|
| $ | 5,062,351 |
|
| $ | 10,862,885 |
|
| $ | 5,908,584 |
|
As of December 31, 20202021 and 2019,2020, the operating lease right-of-use assets consisted primarily of a ground lease at The 50/50 MF Property (see Note 14)(Note 13).
See Note 24 for a description of the methodology and significant assumptions for determining the fair value of the derivative instruments, taxable MRBs and bond purchase commitments. Unrealized gains or losses on derivative instruments are reported as “interest expense” on the Partnership’s consolidated statements of operations. Unrealized gains or losses on taxable MRBs and bond purchase commitments are recorded inon the Partnership’s consolidated statements of comprehensive income to reflect changes in their estimated fair values resulting from market conditions and fluctuations in the present value of the expected cash flows from the assets.
Concurrent with the acquisition of the Hope on Avalon GIL (Note 7), the Partnership entered into a taxable GIL to provide construction financing for the underlying property on a draw-down basis. The GIL and the taxable GIL are on parity and share a first mortgage lien position on all real and personal property associated with the underlying property.
96
Concurrent with the acquisition of the Residency at the Mayer - Series A MRB (Note 6), the Partnership entered into a taxable MRB to provide construction financing for the underlying property on a draw-down basis. The MRB and the taxable MRB are on parity and share a first mortgage lien position on all real and personal property associated with the underlying property.
The taxable GIL and taxable MRB are held in trust in connection with a TOB Trust financing (Note 16). The following table includes details of the taxable GIL and MRB, and the total funding commitment, that were entered into during the year ended December 31, 2021:
Property Name |
| Date Committed |
| Maturity Date |
| Initial Outstanding Balance |
|
| Total Commitment |
| ||
Hope on Avalon |
| January 2021 |
| 2/1/2023 (1) |
| $ | 1,000,000 |
|
| $ | 10,573,000 |
|
Residency at the Mayer Series A-T |
| October 2021 |
| 4/1/2024 (2) |
| $ | 1,000,000 |
|
| $ | 12,500,000 |
|
The following table includes details of the taxable MRB acquired during the year ended December 31, 2020:
Property Name |
| Date Committed |
| Maturity Date |
| Initial Outstanding Balance |
|
| Total Commitment |
| ||
Ocotillo Springs - Series A-T |
| July 2020 |
| 8/1/2022 (1) |
| $ | - |
| (2) | $ | 7,000,000 |
|
Property Name |
| Month Acquired |
| Property Location |
| Units |
|
| Maturity Date |
| Interest Rate |
|
| Principal Acquired |
| ||
Ocotillo Springs - Series A-T |
| July |
| Brawley, CA |
|
| 75 |
|
| 8/1/2022 |
|
| 4.91 | % | (1) | $ - | (2) |
|
|
|
|
14.13. Accounts Payable, Accrued Expenses and Other Liabilities
The following table summarizes the Partnership’s accounts payable, accrued expenses and other liabilities as of December 31, 20202021 and 2019:2020:
|
| December 31, 2020 |
|
| December 31, 2019 |
|
| December 31, 2021 |
|
| December 31, 2020 |
| ||||
Accounts payable |
| $ | 94,674 |
|
| $ | 93,834 |
|
| $ | 1,234,111 |
| $ | 94,674 |
| |
Accrued expenses |
|
| 2,755,010 |
|
|
| 2,529,982 |
|
| 4,102,381 |
| 2,755,010 |
| |||
Accrued interest expense |
|
| 3,433,247 |
|
|
| 2,690,076 |
|
| 4,229,119 |
| 3,433,247 |
| |||
Operating lease liabilities |
|
| 2,149,001 |
|
|
| 2,138,783 |
|
| 2,151,991 |
| 2,149,001 |
| |||
Other liabilities |
|
| 1,517,633 |
|
|
| 1,583,492 |
|
|
| 1,946,610 |
|
|
| 1,517,633 |
|
Total accounts payable, accrued expenses and other liabilities |
| $ | 9,949,565 |
|
| $ | 9,036,167 |
|
| $ | 13,664,212 |
|
| $ | 9,949,565 |
|
97
The 50/50 MF Property has a ground lease with the University of Nebraska-Lincoln with an initial lease term expiring in March 2048.2048. The Partnership has an option to extend the lease for an additional five-year period, which has not been factored into the calculation of the ROU asset and lease liability. Annual lease payments are $100 per year. The Partnership is also required to make monthly payments, when cash is available at The 50/50 MF Property, to the University of Nebraska-Lincoln. Payment amounts are based on The 50/50 MF Property’s revenues, subject to an annual guaranteed minimum amount. As of December 31, 2020,2021, the minimum aggregate annual payment due under the agreement is approximately $135,000.$138,000. The minimum aggregate annual payment increases 2% annually until July 31, 2034 and increases 3% annually thereafter. The 50/50 MF Property will be required to make additional payments under the agreement if its gross revenues exceed certain thresholds. The Partnership recognized expenses related to the ground lease of approximately $168,000 for the years ended December 31, 20202021 and 2019,2020, respectively, and are reported within “Real estate operating expenses” on the Partnership’s consolidated statements of operations.
The following table summarizes the Partnership’sfuture contractual payments related tofor the Partnership’s operating leases and a reconciliation to the carrying value of operating lease liabilities as of December 31, 2020.2021:
2022 |
| $ | 141,119 |
|
2023 |
|
| 143,561 |
|
2024 |
|
| 144,706 |
|
2025 |
|
| 147,598 |
|
2026 |
|
| 150,548 |
|
Thereafter |
|
| 4,219,127 |
|
Total |
|
| 4,946,659 |
|
Less: Amount representing interest |
|
| (2,794,668 | ) |
Total operating lease liabilities |
| $ | 2,151,991 |
|
98
2021 |
| $ | 138,394 |
|
2022 |
|
| 141,119 |
|
2023 |
|
| 143,561 |
|
2024 |
|
| 144,706 |
|
2025 |
|
| 147,598 |
|
Thereafter |
|
| 4,369,676 |
|
Total |
|
| 5,085,054 |
|
Less: Amount representing interest |
|
| (2,936,053 | ) |
Total operating lease liabilities |
| $ | 2,149,001 |
|
15.14. Unsecured Lines of Credit
The following tables summarizetable summarizes the Partnership’s unsecured lines of credit ("LOC") as of December 31, 20202020:
Unsecured Lines of Credit |
| Outstanding as of December 31, 2020 |
|
| Total |
|
| Commitment |
| Variable / |
| Reset |
| Period End |
| |||
Bankers Trust non-operating |
| $ | 7,475,000 |
|
| $ | 50,000,000 |
|
| June 2022 |
| Variable (1) |
| Monthly |
|
| 2.65 | % |
Bankers Trust operating |
|
| - |
|
|
| 10,000,000 |
|
| June 2022 |
| Variable (1) |
| Monthly |
|
| 3.40 | % |
Total unsecured lines of credit |
| $ | 7,475,000 |
|
| $ | 60,000,000 |
|
|
|
|
|
|
|
|
|
|
In June 2021, the Partnership and 2019:Bankers Trust Company (“Bankers Trust”) agreed to terminate the $10.0 million unsecured operating LOC upon closing of a new $40.0 million secured LOC with BankUnited, N.A. (“BankUnited”) and Bankers Trust (Note 15). There was 0 outstanding principal or accrued interest outstanding as of the termination date.
Unsecured Lines of Credit |
| Outstanding as of December 31, 2020 |
|
| Total Commitment |
|
| Commitment Maturity |
| Variable / Fixed |
| Reset Frequency |
| Period End Rate |
| |||
Bankers Trust non-operating |
| $ | 7,475,000 |
|
| $ | 50,000,000 |
|
| June 2022 |
| Variable (1) |
| Monthly |
|
| 2.65 | % |
Bankers Trust operating |
|
| - |
|
|
| 10,000,000 |
|
| June 2022 |
| Variable (1) |
| Monthly |
|
| 3.40 | % |
Total unsecured lines of credit |
| $ | 7,475,000 |
|
| $ | 60,000,000 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Unsecured Lines of Credit |
| Outstanding as of December 31, 2019 |
|
| Total Commitment |
|
| Commitment Maturity |
| Variable / Fixed |
| Reset Frequency |
| Period End Rate |
| |||
Bankers Trust non-operating |
| $ | 13,200,000 |
|
| $ | 50,000,000 |
|
| June 2021 |
| Variable (1) |
| Monthly |
|
| 4.19 | % |
Bankers Trust operating |
|
| - |
|
|
| 10,000,000 |
|
| June 2021 |
| Variable (1) |
| Monthly |
|
| 4.94 | % |
Total unsecured lines of credit |
| $ | 13,200,000 |
|
| $ | 60,000,000 |
|
|
|
|
|
|
|
|
|
|
|
|
|
TheIn August 2021, the Partnership has entered into a Credit Agreement (the “Credit Agreement”) for an unsecured LOC (“non-operating LOC”) of upand Bankers Trust agreed to terminate the $50.0 million with Bankers Trust, the Partnership’s sole lead arranger and administrative agent. The Credit Agreement originated in May 2015 and has been subsequently amended. Theunsecured non-operating LOC bears interest atand replace it with a secured acquisition LOC (Note 15). There was 0 outstanding principal on the unsecured non-operating LOC as of the termination date.
15. Secured Lines of Credit
The following table summarizes the secured LOCs as of December 31, 2021:
Secured Lines of Credit |
| Outstanding as of December 31, 2021 |
|
| Total Commitment |
|
| Commitment Maturity |
| Variable / |
| Reset |
| Period End |
| |||
BankUnited general |
| $ | 6,500,000 |
|
| $ | 40,000,000 |
|
| June 2023 (1) |
| Variable (2) |
| Monthly |
|
| 3.50 | % |
Bankers Trust acquisition |
|
| 39,214,000 |
|
|
| 50,000,000 |
|
| June 2023 |
| Variable (3) |
| Monthly |
|
| 3.10 | % |
|
| $ | 45,714,000 |
|
| $ | 90,000,000 |
|
|
|
|
|
|
|
|
|
|
In June 2021, the Partnership entered into a secured Credit Agreement (“Secured Credit Agreement”) of up to $40.0 million with BankUnited and Bankers Trust, and the sole lead arranger and administrative agent, BankUnited, for a general secured line of credit (“General LOC”). The aggregate available commitment cannot exceed a borrowing base calculation, that is equal to 40% multiplied by the aggregate value of a pool of eligible encumbered assets. Eligible encumbered assets consist of (i) the net book value of the Suites on Paseo MF Property, and (ii) 100% of the Partnership’s capital contributions to equity investments, subject to certain restrictions. The proceeds of the non-operatingGeneral LOC arewill be used by the Partnership to purchase additional investments and to meet general working capital and liquidity requirements. The Partnership may borrow, prepay and reborrow amounts at any time through the maturity date, subject to the limitations of the borrowing base.
The General LOC is secured by first priority security interests in the Partnership’s investments in unconsolidated entities, a mortgage and assignment of leases and rents of the Suites on Paseo MF Property, and a security interest in a bank account at BankUnited, in which the Partnership must maintain a balance of not less than $5.0 million.In addition, an affiliate of the Partnership, Greystone Select Incorporated (“Greystone Select”), has provided a deficiency guaranty of the Partnership’s obligations under the Secured Credit Agreement. Greystone Select is subject to certain covenants and was in compliance with such covenants as of December 31, 2021. No fees were paid to Greystone Select related to the deficiency guaranty agreement.
The Partnership is subject to various affirmative and negative covenants under the Secured Credit Agreement that, among others, require the Partnership to maintain a minimum liquidity of not less than $5 million, maintain a minimum consolidated tangible net worth of $100.0 million, and to notify BankUnited if the Partnership’s consolidated net worth declines by (a) more than 20% from the immediately preceding quarter, or (b) more than 35% from the date at the end of two consecutive calendar quarters ending immediately thereafter. The Partnership was in compliance with all covenants as of December 31, 2021.
In August 2021, the Partnership and Bankers Trust entered into an amended and restated credit agreement for a secured non-operating line of credit (“Acquisition LOC”) with a maximum commitment of up to $50.0 million. The Acquisition LOC replaces the
99
Partnership’s previous unsecured non-operating line of credit (Note 14). The Acquisition LOC may be used to fund purchases of multifamily real estate, assets, MRBs,tax-exempt or taxable MRBs, and GILs.tax-exempt or taxable loans issued to finance the acquisition, rehabilitation, or construction of affordable housing or which are otherwise secured by real estate or mortgage-backed securities (collectively, the “financed assets”). The Partnership intends to repay each advance either through alternative long-term debt or equity financing. The principal amountfinanced assets acquired with the proceeds of each acquisition advance isthe Acquisition LOC will be held in a custody account and the outstanding balances of the Acquisition LOC will be secured by a first priority interest in the financed assets and will be maintained in the custody account until released by Bankers Trust.
Advances on the Acquisition LOC are due on the 270th day following the advance date (the “Repayment Date”). The Partnershipbut may extend any Repayment Datebe extended for up to three additional 90-day periods. In order to extendperiods, but in no event later than the Repayment Date, the Partnership must makematurity date by providing Bankers Trust with a written request for such extension together with a principal payments equal topayment of 5% of the principal amount of the original acquisition advance for the first such extension, 10% for the second such extension, and 20% for the third such extension. The Repayment Date may not be extended beyond the stated maturity of the non-operating LOC. The Repayment Date for the balance outstanding as of December 31, 2020, exclusive of available extensions, is March 2021, though the Partnership may extend final repayment of the amount due to December 2021 by making partial repayments. The non-operatingAcquisition LOC documents contains a covenant, among others, that the Partnership’s ratio of the lender’s senior debt will not exceed a specified percentage of the market value of the Partnership’s assets, as defined in the Credit Agreement. The Partnership was in compliance with all covenants as of December 31, 2020.2021.
During 2020 and 2019, the Partnership had an unsecured operating Line of Credit (“operating LOC”) with Bankers Trust. The operating LOC bears interest at a variable rate equal to 3.25% plus the 30-day LIBOR. The Partnership is required to make principal payments to reduce the outstanding principal balance on the operating LOC to 0 for fifteen consecutive days during each calendar quarter. The Partnership fulfilled this requirement throughout 2020 and for the first quarter of 2021.
16. Debt Financing
The following tables summarize the Partnership’s debt financings, net of deferred financing costs, as of December 31, 2020:2021:
|
| Outstanding Debt |
|
| Restricted |
|
| Year |
| Stated Maturities |
| Reset |
| Variable Rate Index |
| Index |
| Spread/ |
| Period End | ||
TEBS Financings |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||
Fixed - M24 |
| $ | 35,551,762 |
|
| $ | 204,000 |
|
| 2010 |
| May 2027 |
| N/A |
| N/A |
| N/A |
| N/A |
| 3.05% |
Variable - M31 (1) |
|
| 76,964,051 |
|
|
| 4,999 |
|
| 2014 |
| July 2024 |
| Weekly |
| SIFMA |
| 0.13% |
| 1.32% |
| 1.45% |
Fixed - M33 |
|
| 30,191,051 |
|
|
| 2,606 |
|
| 2015 |
| September 2030 |
| N/A |
| N/A |
| N/A |
| N/A |
| 3.24% |
Fixed - M45 (2) |
|
| 213,931,752 |
|
|
| 5,000 |
|
| 2018 |
| July 2034 |
| N/A |
| N/A |
| N/A |
| N/A |
| 3.82% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||
Secured Notes |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||
Variable - Notes |
|
| 102,798,158 |
|
|
| 77,531,264 |
|
| 2020 |
| September 2025 |
| Monthly |
| 3-month LIBOR |
| 0.20% |
| 9.00% |
| 9.20% (3) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||
TOB & Term TOB Trusts |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||
Fixed - Term TOB (4) |
|
| 12,915,190 |
|
|
| - |
|
| 2019 |
| May 2024 |
| N/A |
| N/A |
| N/A |
| N/A |
| 1.98% |
Variable - TOB (5) |
|
| 347,726,750 |
|
|
| - |
|
| 2019 - 2021 |
| July 2022 - July 2024 |
| Weekly |
| SIFMA/OBFR |
| 0.14% - 0.30% |
| 0.89% - 1.67% |
| 1.07% - 1.97% |
Total Debt Financings |
| $ | 820,078,714 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Outstanding Debt Financings as of December 31, 2020, net |
|
| Restricted Cash |
|
| Year Acquired |
| Stated Maturities |
| Reset Frequency |
| Variable Rate Index |
| Index Based Rates |
|
| Spread/ Facility Fees |
|
| Period End Rates |
| |||||
TEBS Financings |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fixed - M24 |
| $ | 39,825,019 |
|
| $ | 238,760 |
|
| 2010 |
| May 2027 |
| N/A |
| N/A |
| N/A |
|
| N/A |
|
| 3.05% |
| |||
Variable - M31 (1) |
|
| 78,272,018 |
|
|
| 4,999 |
|
| 2014 |
| July 2024 |
| Weekly |
| SIFMA |
| 0.12% |
|
| 1.34% |
|
| 1.46% |
| |||
Fixed - M33 |
|
| 30,796,097 |
|
|
| 2,606 |
|
| 2015 |
| September 2030 |
| N/A |
| N/A |
| N/A |
|
| N/A |
|
| 3.24% |
| |||
Fixed - M45 (2) |
|
| 215,825,022 |
|
|
| 5,000 |
|
| 2018 |
| July 2034 |
| N/A |
| N/A |
| N/A |
|
| N/A |
|
| 3.82% |
| |||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Secured Notes |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Variable - Notes |
|
| 103,086,756 |
|
|
| 77,500,000 |
|
| 2020 |
| September 2025 |
| Monthly |
| 3-month LIBOR |
| 0.22% |
|
| 9.00% |
|
| 9.22% (3) |
| |||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
TOB & Term A/B Trusts Securitization |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fixed - Term TOB (4) |
|
| 13,001,530 |
|
|
| - |
|
| 2019 |
| May 2022 |
| N/A |
| N/A |
| N/A |
|
| N/A |
|
| 3.53% |
| |||
Variable - TOB (5) |
|
| 193,151,198 |
|
|
| - |
|
| 2019 - 2020 |
| July 2022 - December 2023 |
| Weekly |
| SIFMA/OBFR |
| 0.29% - 0.39% |
|
| 0.89% - 1.67% |
|
| 1.18% - 2.06% |
| |||
Total Debt Financings |
| $ | 673,957,640 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| (4) The Term TOB Trust is securitized by the Village at Avalon MRB. |
100
|
| Outstanding Financing as of |
|
| Financing |
| Year |
| Stated Maturity |
| Reset |
| Variable Rate Index |
| Index |
| Facility Fees |
| Period End |
| ||
Variable - TOB Securitization |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||
Live 929 Apartments - Series A |
| $ | 31,564,286 |
|
| Mizuho |
| 2019 |
| July 2023 |
| Weekly |
| SIFMA |
| 0.23% |
| 1.66% |
|
| 1.89 | % |
Montecito at Williams Ranch - Series A |
|
| 6,919,404 |
|
| Mizuho |
| 2019 |
| July 2023 |
| Weekly |
| SIFMA |
| 0.23% |
| 1.17% |
|
| 1.40 | % |
Vineyard Gardens - Series A |
|
| 3,590,598 |
|
| Mizuho |
| 2019 |
| July 2023 |
| Weekly |
| SIFMA |
| 0.23% |
| 1.17% |
|
| 1.40 | % |
Avistar at Copperfield - Series A |
|
| 11,617,039 |
|
| Mizuho |
| 2020 |
| July 2023 |
| Weekly |
| SIFMA |
| 0.30% |
| 1.67% |
|
| 1.97 | % |
Avistar at Wilcrest - Series A |
|
| 4,392,032 |
|
| Mizuho |
| 2020 |
| July 2023 |
| Weekly |
| SIFMA |
| 0.30% |
| 1.67% |
|
| 1.97 | % |
Avistar at Wood Hollow - Series A |
|
| 33,446,044 |
|
| Mizuho |
| 2020 |
| July 2023 |
| Weekly |
| SIFMA |
| 0.30% |
| 1.67% |
|
| 1.97 | % |
Gateway Village |
|
| 2,177,527 |
|
| Mizuho |
| 2020 |
| July 2023 |
| Weekly |
| SIFMA |
| 0.30% |
| 1.67% |
|
| 1.97 | % |
Lynnhaven |
|
| 2,891,534 |
|
| Mizuho |
| 2020 |
| July 2023 |
| Weekly |
| SIFMA |
| 0.30% |
| 1.67% |
|
| 1.97 | % |
Montevista - Series A |
|
| 5,674,091 |
|
| Mizuho |
| 2020 |
| December 2023 |
| Weekly |
| SIFMA |
| 0.23% |
| 1.27% |
|
| 1.50 | % |
Ocotillo Springs - Series A |
|
| 13,482,312 |
|
| Mizuho |
| 2020 |
| July 2022 |
| Weekly |
| SIFMA |
| 0.23% |
| 0.89% |
|
| 1.12 | % |
Trust 2020-XF2907 (1) |
|
| 96,297,732 |
|
| Mizuho |
| 2020 |
| September 2023 |
| Weekly |
| OBFR |
| 0.18% |
| 0.89% |
|
| 1.07 | % |
Trust 2020-XF2908 (2) |
|
| 18,845,580 |
|
| Mizuho |
| 2020 |
| September 2023 |
| Weekly |
| OBFR |
| 0.18% |
| 0.89% |
|
| 1.07 | % |
Hope on Avalon |
|
| 7,931,925 |
|
| Mizuho |
| 2021 |
| February 2023 |
| Weekly |
| SIFMA |
| 0.23% |
| 1.42% |
|
| 1.65 | % |
Hope on Broadway |
|
| 2,919,748 |
|
| Mizuho |
| 2021 |
| February 2023 |
| Weekly |
| SIFMA |
| 0.23% |
| 1.42% |
|
| 1.65 | % |
Jackson Manor |
|
| 4,133,705 |
|
| Mizuho |
| 2021 |
| April 2023 |
| Weekly |
| SIFMA |
| 0.23% |
| 1.27% |
|
| 1.50 | % |
Trust 2021-XF-2953 (3) |
|
| 3,139,698 |
|
| Barclays |
| 2021 |
| October 2022 |
| Weekly |
| OBFR |
| 0.14% |
| 1.27% |
|
| 1.41 | % |
Trust 2021-XF2926 (4) |
|
| 71,519,933 |
|
| Mizuho |
| 2021 |
| January 2024 |
| Weekly |
| OBFR |
| 0.18% |
| 0.89% |
|
| 1.07 | % |
Trust 2021-XF2939 (5) |
|
| 27,183,562 |
|
| Mizuho |
| 2021 |
| July 2024 |
| Weekly |
| OBFR |
| 0.18% |
| 1.16% |
|
| 1.34 | % |
Total TOB |
| $ | 347,726,750 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| 1.35 | % |
|
| Outstanding Financing as of December 31, 2020, net |
|
| Financing Facility Provider |
| Year Acquired |
| Stated Maturity |
| Reset Frequency |
| Variable Rate Index |
| Index Based Rates |
|
| Facility Fees |
|
| Period End Rates |
| ||||
Variable - TOB Securitization |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Live 929 |
| $ | 31,553,785 |
|
| Mizuho |
| 2019 |
| July 2023 |
| Weekly |
| SIFMA |
| 0.29% |
|
| 1.66% |
|
|
| 1.95 | % | ||
Montecito at Williams Ranch - Series A |
|
| 6,915,682 |
|
| Mizuho |
| 2019 |
| July 2023 |
| Weekly |
| SIFMA |
| 0.29% |
|
| 1.17% |
|
|
| 1.46 | % | ||
Rosewood Townhomes - Series A |
|
| 7,691,507 |
|
| Mizuho |
| 2019 |
| July 2023 |
| Weekly |
| SIFMA |
| 0.39% |
|
| 1.17% |
|
|
| 1.56 | % | ||
South Pointe Apartments - Series A |
|
| 17,976,559 |
|
| Mizuho |
| 2019 |
| July 2023 |
| Weekly |
| SIFMA |
| 0.29% |
|
| 1.17% |
|
|
| 1.46 | % | ||
Vineyard Gardens - Series A |
|
| 3,587,685 |
|
| Mizuho |
| 2019 |
| July 2023 |
| Weekly |
| SIFMA |
| 0.29% |
|
| 1.17% |
|
|
| 1.46 | % | ||
Avistar at Copperfield - Series A |
|
| 11,729,379 |
|
| Mizuho |
| 2020 |
| July 2023 |
| Weekly |
| SIFMA |
| 0.39% |
|
| 1.67% |
|
|
| 2.06 | % | ||
Avistar at Wilcrest - Series A |
|
| 4,433,372 |
|
| Mizuho |
| 2020 |
| July 2023 |
| Weekly |
| SIFMA |
| 0.39% |
|
| 1.67% |
|
|
| 2.06 | % | ||
Avistar at Wood Hollow - Series A |
|
| 33,776,383 |
|
| Mizuho |
| 2020 |
| July 2023 |
| Weekly |
| SIFMA |
| 0.39% |
|
| 1.67% |
|
|
| 2.06 | % | ||
Gateway Village |
|
| 2,173,253 |
|
| Mizuho |
| 2020 |
| July 2023 |
| Weekly |
| SIFMA |
| 0.39% |
|
| 1.67% |
|
|
| 2.06 | % | ||
Lynnhaven |
|
| 2,887,257 |
|
| Mizuho |
| 2020 |
| July 2023 |
| Weekly |
| SIFMA |
| 0.39% |
|
| 1.67% |
|
|
| 2.06 | % | ||
Montevista - Series A |
|
| 5,668,324 |
|
| Mizuho |
| 2020 |
| December 2023 |
| Weekly |
| SIFMA |
| 0.29% |
|
| 1.27% |
|
|
| 1.56 | % | ||
Ocotillo Springs - Series A |
|
| 1,765,167 |
|
| Mizuho |
| 2020 |
| July 2022 |
| Weekly |
| SIFMA |
| 0.29% |
|
| 0.89% |
|
|
| 1.18 | % | ||
Trust 2020-XF2907 (1) |
|
| 58,353,917 |
|
| Mizuho |
| 2020 |
| September 2023 |
| Weekly |
| OBFR |
| 0.33% |
|
| 0.89% |
|
|
| 1.22 | % | ||
Trust 2020-XF2908 (2) |
|
| 4,638,928 |
|
| Mizuho |
| 2020 |
| September 2023 |
| Weekly |
| OBFR |
| 0.33% |
|
| 0.89% |
|
|
| 1.22 | % | ||
Total TOB Financing\ Weighted Average Period End Rate |
| $ | 193,151,198 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| 1.63 | % |
|
|
|
|
The following table summarizes the Partnership’s Debt Financing, net of deferred financing costs, as of December 31, 2019:2020:
|
| Outstanding Debt |
|
| Restricted |
|
| Year |
| Stated Maturities |
| Reset |
| Variable Rate Index |
| Index |
| Spread/ |
| Period End | ||
TEBS Financings |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||
Fixed - M24 |
| $ | 39,825,019 |
|
| $ | 238,760 |
|
| 2010 |
| May 2027 |
| N/A |
| N/A |
| N/A |
| N/A |
| 3.05% |
Variable - M31 (1) |
|
| 78,272,018 |
|
|
| 4,999 |
|
| 2014 |
| July 2024 |
| Weekly |
| SIFMA |
| 0.12% |
| 1.34% |
| 1.46% |
Fixed - M33 |
|
| 30,796,097 |
|
|
| 2,606 |
|
| 2015 |
| September 2030 |
| N/A |
| N/A |
| N/A |
| N/A |
| 3.24% |
Fixed - M45 (2) |
|
| 215,825,022 |
|
|
| 5,000 |
|
| 2018 |
| July 2034 |
| N/A |
| N/A |
| N/A |
| N/A |
| 3.82% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||
Secured Notes |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||
Variable - Notes |
|
| 103,086,756 |
|
|
| 77,500,000 |
|
| 2020 |
| September 2025 |
| Monthly |
| 3-month LIBOR |
| 0.22% |
| 9.00% |
| 9.22% (3) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||
TOB & Term TOB Trusts |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||
Fixed - Term TOB (4) |
|
| 13,001,530 |
|
|
| - |
|
| 2019 |
| May 2022 |
| N/A |
| N/A |
| N/A |
| N/A |
| 3.53% |
Variable - TOB (5) |
|
| 193,151,198 |
|
|
| - |
|
| 2019 - 2020 |
| July 2022 - December 2023 |
| Weekly |
| SIFMA/OBFR |
| 0.29% - 0.39% |
| 0.89% - 1.67% |
| 1.18% - 2.06% |
Total Debt Financings |
| $ | 673,957,640 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Outstanding Debt Financings as of December 31, 2019, net |
|
| Restricted Cash |
|
| Year Acquired |
| Stated Maturities |
| Reset Frequency |
| SIFMA Based Rates |
|
| Facility Fees |
|
| Period End Rates |
| |||||
TEBS Financings |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fixed - M24 |
| $ | 40,495,442 |
|
| $ | 204,000 |
|
| 2010 |
| May 2027 |
| N/A |
| N/A |
|
| N/A |
|
| 3.05% |
| |||
Variable - M31 (1) |
|
| 79,505,180 |
|
|
| 4,999 |
|
| 2014 |
| July 2024 |
| Weekly |
| 1.64% |
|
| 1.54% |
|
| 3.18% |
| |||
Fixed - M33 |
|
| 31,367,147 |
|
|
| 2,606 |
|
| 2015 |
| September 2030 |
| N/A |
| N/A |
|
| N/A |
|
| 3.24% |
| |||
Fixed - M45 (2) |
|
| 217,603,233 |
|
|
| 5,000 |
|
| 2018 |
| July 2034 |
| N/A |
| N/A |
|
| N/A |
|
| 3.82% |
| |||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
TOB & Term A/B Trusts Securitization |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Variable - TOB (3) |
|
| 102,591,789 |
|
|
| - |
|
| 2019 |
| July 2020 - September 2020 |
| Weekly |
| 1.79% - 2.08% |
|
| 1.12% - 1.66% |
|
| 2.96% - 3.45% |
| |||
Fixed - Term TOB (3) |
|
| 21,073,418 |
|
|
| - |
|
| 2014 - 2019 |
| January 2020 - May 2022 |
| N/A |
| N/A |
|
| N/A |
|
| 3.53% - 4.01% |
| |||
Fixed - Term A/B (3) |
|
| 43,561,212 |
|
|
| - |
|
| 2017 - 2019 |
| February 2020 - February 2027 |
| N/A |
| N/A |
|
| N/A |
|
| 4.46% - 4.53% |
| |||
Total Debt Financings |
| $ | 536,197,421 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
101
|
| Outstanding Financing as of |
|
| Financing |
| Year |
| Stated Maturity |
| Reset |
| Variable Rate Index |
| Index |
| Facility Fees |
|
| Period End |
| |||
Variable - TOB Securitization |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||
Live 929 Apartments - Series A |
| $ | 31,553,785 |
|
| Mizuho |
| 2019 |
| July 2023 |
| Weekly |
| SIFMA |
| 0.29% |
|
| 1.66 | % |
|
| 1.95 | % |
Montecito at Williams Ranch - Series A |
|
| 6,915,682 |
|
| Mizuho |
| 2019 |
| July 2023 |
| Weekly |
| SIFMA |
| 0.29% |
|
| 1.17 | % |
|
| 1.46 | % |
Rosewood Townhomes - Series A |
|
| 7,691,507 |
|
| Mizuho |
| 2019 |
| July 2023 |
| Weekly |
| SIFMA |
| 0.39% |
|
| 1.17 | % |
|
| 1.56 | % |
South Pointe Apartments - Series A |
|
| 17,976,559 |
|
| Mizuho |
| 2019 |
| July 2023 |
| Weekly |
| SIFMA |
| 0.29% |
|
| 1.17 | % |
|
| 1.46 | % |
Vineyard Gardens - Series A |
|
| 3,587,685 |
|
| Mizuho |
| 2019 |
| July 2023 |
| Weekly |
| SIFMA |
| 0.29% |
|
| 1.17 | % |
|
| 1.46 | % |
Avistar at Copperfield - Series A |
|
| 11,729,379 |
|
| Mizuho |
| 2020 |
| July 2023 |
| Weekly |
| SIFMA |
| 0.39% |
|
| 1.67 | % |
|
| 2.06 | % |
Avistar at Wilcrest - Series A |
|
| 4,433,372 |
|
| Mizuho |
| 2020 |
| July 2023 |
| Weekly |
| SIFMA |
| 0.39% |
|
| 1.67 | % |
|
| 2.06 | % |
Avistar at Wood Hollow - Series A |
|
| 33,776,383 |
|
| Mizuho |
| 2020 |
| July 2023 |
| Weekly |
| SIFMA |
| 0.39% |
|
| 1.67 | % |
|
| 2.06 | % |
Gateway Village |
|
| 2,173,253 |
|
| Mizuho |
| 2020 |
| July 2023 |
| Weekly |
| SIFMA |
| 0.39% |
|
| 1.67 | % |
|
| 2.06 | % |
Lynnhaven |
|
| 2,887,257 |
|
| Mizuho |
| 2020 |
| July 2023 |
| Weekly |
| SIFMA |
| 0.39% |
|
| 1.67 | % |
|
| 2.06 | % |
Montevista - Series A |
|
| 5,668,324 |
|
| Mizuho |
| 2020 |
| December 2023 |
| Weekly |
| SIFMA |
| 0.29% |
|
| 1.27 | % |
|
| 1.56 | % |
Ocotillo Springs - Series A |
|
| 1,765,167 |
|
| Mizuho |
| 2020 |
| July 2022 |
| Weekly |
| SIFMA |
| 0.29% |
|
| 0.89 | % |
|
| 1.18 | % |
Trust 2020-XF2907 (1) |
|
| 58,353,917 |
|
| Mizuho |
| 2020 |
| September 2023 |
| Weekly |
| OBFR |
| 0.33% |
|
| 0.89 | % |
|
| 1.22 | % |
Trust 2020-XF2908 (2) |
|
| 4,638,928 |
|
| Mizuho |
| 2020 |
| September 2023 |
| Weekly |
| OBFR |
| 0.33% |
|
| 0.89 | % |
|
| 1.22 | % |
Total TOB |
| $ | 193,151,198 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| 1.63 | % |
(1) The TOB Trust is securitized by the Scharbauer Flats Apartments, Oasis at Twin Lakes, and Centennial Crossings GILs. (2) The TOB Trust is securitized by the Scharbauer Flats Apartments and Centennial Crossings property loans.
|
|
|
|
|
|
|
| Outstanding Financing as of December 31, 2019, net |
|
| Financing Facility Provider |
| Year Acquired |
| Stated Maturity |
| Reset Frequency |
| SIFMA Based Rates |
|
| Facility Fees |
|
| Period End Rates |
| ||||
Variable - TOB Securitization |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Live 929 |
| $ | 31,733,007 |
|
| Mizuho |
| 2019 |
| August 2020 |
| Weekly |
| 1.79% |
|
| 1.66% |
|
|
| 3.45 | % | ||
Montecito at Williams Ranch - Series A |
|
| 6,899,653 |
|
| Mizuho |
| 2019 |
| August 2020 |
| Weekly |
| 1.79% |
|
| 1.17% |
|
|
| 2.96 | % | ||
PHC Certificate Trust 1 |
|
| 20,067,635 |
|
| Mizuho |
| 2019 |
| September 2020 |
| Weekly |
| 2.08% |
|
| 1.12% |
|
|
| 3.20 | % | ||
PHC Certificate Trust 2 |
|
| 3,786,197 |
|
| Mizuho |
| 2019 |
| September 2020 |
| Weekly |
| 2.08% |
|
| 1.12% |
|
|
| 3.20 | % | ||
PHC Certificate Trust 3 |
|
| 10,850,103 |
|
| Mizuho |
| 2019 |
| September 2020 |
| Weekly |
| 2.08% |
|
| 1.12% |
|
|
| 3.20 | % | ||
Rosewood Townhomes - Series A |
|
| 7,687,958 |
|
| Mizuho |
| 2019 |
| July 2020 |
| Weekly |
| 1.79% |
|
| 1.17% |
|
|
| 2.96 | % | ||
South Pointe Apartments - Series A |
|
| 17,992,112 |
|
| Mizuho |
| 2019 |
| July 2020 |
| Weekly |
| 1.79% |
|
| 1.17% |
|
|
| 2.96 | % | ||
Vineyard Gardens - Series A |
|
| 3,575,124 |
|
| Mizuho |
| 2019 |
| August 2020 |
| Weekly |
| 1.79% |
|
| 1.17% |
|
|
| 2.96 | % | ||
Total TOB Financing\ Weighted Average Period End Rate |
| $ | 102,591,789 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| 3.19 | % |
|
| Outstanding Financing as of December 31, 2019, net |
|
| Financing Facility Provider |
| Year Acquired |
| Stated Maturity |
| Fixed Interest Rate |
| ||
Fixed - Term TOB Securitization |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Provision Center 2014-1 |
| $ | 8,010,000 |
|
| Deutsche Bank |
| 2014 |
| January 2020 |
|
| 4.01 | % |
Village at Avalon |
|
| 13,063,418 |
|
| Morgan Stanley |
| 2019 |
| May 2022 |
|
| 3.53 | % |
Total Fixed Term TOB Financing\ Weighted Average Period End Rate |
| $ | 21,073,418 |
|
|
|
|
|
|
|
|
| 3.71 | % |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fixed - Term A/B Trusts Securitization |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Avistar at Copperfield - Series A |
| $ | 8,385,080 |
|
| Deutsche Bank |
| 2017 |
| February 2027 |
|
| 4.46 | % |
Avistar at Wilcrest - Series A |
|
| 3,142,267 |
|
| Deutsche Bank |
| 2017 |
| February 2027 |
|
| 4.46 | % |
Avistar at Wood Hollow - Series A |
|
| 26,773,109 |
|
| Deutsche Bank |
| 2017 |
| February 2027 |
|
| 4.46 | % |
Gateway Village |
|
| 2,260,628 |
|
| Deutsche Bank |
| 2019 |
| February 2020 |
|
| 4.53 | % |
Lynnhaven |
|
| 3,000,128 |
|
| Deutsche Bank |
| 2019 |
| February 2020 |
|
| 4.53 | % |
Total Fixed A/B Trust Financing\ Weighted Average Period End Rate |
| $ | 43,561,212 |
|
|
|
|
|
|
|
|
| 4.47 | % |
The TOB, Term TOB, Term A/B and TEBS Financingfinancing arrangements are consolidated VIE’s to the Partnership (Note 5). The Partnership is the primary beneficiary due to its rights to the underlying assets. Accordingly, the Partnership consolidates the TOB, Term TOB, Term A/B and TEBS Financings infinancings on the Partnership’s consolidated financial statements. See Note 6 for information
regarding the MRBs, GILs, property loans, taxable MRBs and taxable GIL securitized within eachthe TOB, Term TOB, Term A/B and TEBS Financing, Notefinancings in Notes, 6, 7, for information regarding the GILs securitized within each TOB Trust Financing,10, 12 and Note 11 for information regarding the property loans securitized within each TOB Trust Financing.12, respectively. As the residual interest holder in the arrangements, the Partnership may be required to make certain payments or contribute certain assets to the VIEs if certain events occur. Such events include, but are not limited to, a downgrade in the investment rating of the senior securities issued by the VIEs, a ratings downgrade of the liquidity provider for the VIEs, increases in short term interest rates beyond pre-set maximums, an inability to re-market the senior securities or an inability to obtain liquidity for the senior securities. If such an event occurs in an individual VIE, we may be required to deleverage the VIE by repurchasing some or all of the senior securities. Otherwise, the underlying collateral maywill be sold and, if the proceeds are not sufficient to pay the principal amount of the senior securities plus accrued interest and other trust expenses, the Partnership will be required to fund any such shortfall. If the Partnership does not fund the shortfall, the default and liquidation provisions will be invoked against the Partnership. The Partnership has never been, and does not expect in the future, to be required to reimburse the VIEs for any shortfall.
The Partnership’s variable rate debt financing arrangements include maximum interest rate provisions that prevent the debt service on the debt financings from exceeding the cash flows from the underlying securitized assets.
Tax Exempt Bond Securitization (“TEBS”) Financings
The Partnership, through four wholly owned subsidiaries (collectively, the “Sponsors”), has sponsored four separate TEBS financings – the M24 TEBS Financing,financing, the M31 TEBS Financing,financing, the M33 TEBS Financing,financing, and the M45 TEBS Financingfinancing (collectively, the “TEBS Financings”financings”). The TEBS Financingsfinancings are structured such that the Partnership transferred MRBs to Freddie Mac to be securitized into the TEBS Financings.financings. Freddie Mac then issued Class A and Class B Freddie Mac Multifamily Variable Rate Certificates or Class A and Class B Freddie Mac Multifamily Fixed Rate Certificates (collectively, the “TEBS Certificates”), which represent beneficial interests in the securitized assets. The Class A TEBS Certificates are sold to unaffiliated investors and entitle the holders to cash flows from the securitized assets. The Class A TEBS Certificates are credit enhanced by Freddie Mac such that Freddie Mac will cover any shortfall if the cash flows from the securitized assets are less than the contractual principal and interest due to the Class A TEBS Certificate holders. The Sponsors or Partnership would then be required to reimburse Freddie Mac for any credit enhancement payments. The Class B TEBS Certificates are retained by the Sponsors and grant the Partnership rights to certain cash flows from the securitized assets after payment to the Class A Certificates and related facility fees, as well as certain other rights to the securitized assets.
102
As of December 31, 20202021 and 2019,2020, the Partnership posted restricted cash as contractually required under the terms of the four TEBS Financings.financings. In addition, the Partnership has entered into an interest rate cap agreement to mitigate its exposure to interest rate fluctuations on the variable-rate M31 TEBS Financings (see Notefinancing (Note 18).
In June 2019, the Partnership exercised its unilateral right to extend the M31 TEBS Financing with Freddie Mac for an additional five-year period through July 2024.
In July 2019, the Partnership refinanced the M24 TEBS Financing with Freddie Mac. The M24 TEBS Financing was converted to a fixed interest rate of 3.05%, which is inclusive of credit enhancement and servicing fees, and the stated maturity was extended from September 2020 to May 2027. The refinancing was treated as an extinguishment for accounting purposes and the Partnership capitalized approximately $307,000 as deferred financing costs related to the refinancing.
In July 2019, the Partnership refinanced the M33 TEBS Financing with Freddie Mac. The M33 TEBS Financing converted to a fixed interest rate of 3.24%, which is inclusive of credit enhancement and servicing fees, and the stated maturity was extended from July 2020 to September 2030. The refinancing was treated as an extinguishment for accounting purposes and the Partnership expensed approximately $496,000 of previously unamortized deferred financing costs associated with the M33 TEBS Financing. The Partnership capitalized approximately $265,000 as deferred financing costs related to the refinancing. The Partnership received premium proceeds upon refinancing of approximately $435,000, which will be amortized using the effective interest method through the term of the agreement.
Secured Notes FinancingsFinancing (“Secured Notes”)
In September 2020, ATAX TEBS Holdings, LLC, a wholly owned subsidiary of the Partnership, has issued Secured Notes to Mizuho with an aggregate principal amount of $103.5 million. The Secured Notes are secured by the Partnership’s residual certificates associated with its four TEBS Financings.financings. The Secured Notes bear interest at a variable rate equal to the 3-month LIBOR plus 9.00%, payable monthly. Interest due on the Secured Notes will be paid from receipts related to the TEBS Financingfinancing residual certificates. Future receipts of principal related to the TEBS Financingfinancing residual certificates will be used to pay down the principal of the Secured Notes. The Partnership has guaranteed the payment and performance of the responsibilities of ATAX TEBS Holdings, LLC under the Secured Notes. If ATAX TEBS Holdings, LLC defaults on its obligations under the Secured Notes and the Partnership does not cure the default, the Partnership’s TEBS Financingfinancing residual certificates and their related rights to the underlying TEBS assets will be
assigned to Mizuho. If this occurs, the Partnership will cease to be the primary beneficiary of the TEBS Financingfinancing VIEs and such VIEs will no longer be consolidated in the Partnership’s consolidated financial statements. Concurrent with the issuance of the Notes, the Partnership entered into two2 total return swap transactions with Mizuho to reduce the net interest cost related to the Secured Notes (see Note(Note 18). Of the $103.5 million of proceeds from the Secured Notes, approximately $26.0$26.0 million was received in cash by the Partnership during 2020 and approximately $77.5 million was deposited with Mizuho as collateral for the total return swaps.
The restricted cash associated with the Secured Notes is collateral posted with Mizuho according to the terms of 2two total return swaps that have the Secured Notes as the reference security (see Note(Note 18). The Partnership may also be required to post additional collateral if the value of TEBS financing residual certificates declines below a threshold under the total return swaps.
TOB, Term TOB and Term A/BTOB Trust Financings
Mizuho Capital Markets and Barclays Bank PLC
The Partnership has entered into various TOB Trust financings with Mizuho and Barclays secured by MRBs, GILs, and property loans. Under eachThe TOB Trust structure,structures under Mizuho and Barclays are functionally similar. Under these TOB Trust financings, the trustee issues senior Floater Certificatessecurities and Residual Certificatesresidual interests that represent beneficial interests in the TOB Trust that entitle the holders to cash flows from the securitized asset held byassets within the TOB Trust. The Floater Certificatessenior securities are sold to unaffiliated investors and entitle the holder to cash flows from the securitized assets at a variable interest rate. The Floater Certificatessenior securities are credit enhanced by Mizuho or Barclays such that Mizuho or Barclays will cover any shortfall if the cash flows from the securitized assets are less than the contractual principal and interest due to the Floater Certificatesenior security holders. The Partnership wouldwill then be required to reimburse Mizuho or Barclays for any credit enhancement payments. The Residual Certificatesresidual interests are retained by the Partnership and grant the Partnership rights to certain cash flows from the securitized assets after payment to the Floater Certificatessenior securities and related trust fees (including liquidity fees for the M31 TEBS financing), as well as certain other rights to the securitized assets.
The TOB Trusts and Secured Notes with Mizuho are subject to a master agreement that contains certain covenants and requirements related to the Partnership’s TOB Trusts and Secured Notes. The TOB Trusts require that the Partnership’s residual interest in the TOB Trustsinterests must maintain a certain value in relation to the total assets in each TOB Trust. In addition, the Master Trust AgreementThe master agreement with Mizuho requires the Partnership’s partners’ capital, as defined, to maintain a certain threshold and that the Partnership remained listed on the NASDAQ. If the Partnership is not in compliance with any of these covenants, a termination event of the financing facility would be triggered, which would require the Partnership to purchase a portion or all of the senior interests issued by each TOB Trust.triggered. The Partnership was in compliance with these covenants as of December 31, 2020.2021.
The TOB Trust with Barclays is subject to a master agreement that contains certain covenants and requirements related to the Partnership’s TOB Trusts. The Partnership’s residual interests in the TOB Trusts must maintain a certain value in relation to the total assets in the TOB Trust. The master agreement with Barclays requires the Partnership’s partners’ capital, as defined, to maintain a certain threshold, limits on the Partnership’s leverage ratio, as defined, and that the Partnership remained listed on the NASDAQ. If the Partnership is not in compliance with any of these covenants, a termination event of the financing facility would be triggered. The Partnership was in compliance with these covenants as of December 31, 2021.
The Partnership may also be required to post collateral, typically in cash, related to the TOB Trusts with Mizuho.Mizuho and Barclays. The amount of collateral posting required is dependent on the valuation of the underlying MRBs, GILs and property loanssecuritized assets in relation to thresholds set by Mizuho.Mizuho and Barclays. There was no requirement to post collateral for the TOB Trusts with Mizuho as of December 31, 20202021 and 2019.2020.
103
Deutsche Bank
The Partnership previously executed a Master Trust Agreement with Deutsche Bank that allowed the Partnership to execute multiple TOB, Term TOB and Term A/B Trust (collectively, “Trusts”) structures upon the approval and agreement of terms by Deutsche Bank. The Master Trust Agreement contained covenants with which the Partnership was required to comply. In April 2020, the Partnership terminated its Master Trust Agreement with Deutsche Bank and the Partnership is no longer subject to the debt covenants in the Master Trust Agreement.
In January 2020, the variable rate TOB Trust financings associated with the PHC Certificates were collapsed and all principal and interest were paid in full in conjunction with the Partnership’s sale of the PHC Certificates to an unrelated party (see Note 8). party.
In April 2020, in conjunction with the termination of the Master Trust Agreement, the Partnership collapsed its Term TOB Trust and all Term A/B Trust financings with Deutsche Bank. All outstanding principal and interest related to the Term A/B Trust financings were paid off in full, and the Partnership paid a one-time fee of approximately $454,000 to terminate the trusts.
Morgan Stanley Bank
In May 2019, theThe Partnership has entered into a Term TOB Trust financing with Morgan Stanley Bank, N.A. (“Morgan Stanley”) secured by an MRB. Under the Term TOB Trust structure, the trustee issued Class A and Class B Certificates that represent beneficial interests in the securitized asset held by the Term TOB Trust. Morgan Stanley has purchased the Class A Certificates and the Partnership has retained the Class B Certificates of the Trust. The Class B Certificates grant the Partnership certain rights to the securitized asset.
The Term TOB Trust with Morgan Stanley is subject to a Trust Agreement and other related agreements that contain covenants with which the Partnership or the underlying MRB are required to comply. The underlying property must maintain certain occupancy and debt service covenants. A termination event will occur if the Partnership’s net assets, as defined, decrease by 25% in one quarter or 35% over one year. The covenants also require the Partnership’s partners’ capital, as defined, to maintain a certain threshold and that the Partnership remains listed on a nationally recognized stock exchange. If the underlying property or the Partnership, as applicable, is out of compliance with any of these covenants, a termination event of the financing facility would be triggered which would require the Partnership to purchase a portion or all of the Class A Certificates held by Morgan Stanley.triggered. The Partnership was in compliance with all covenants as of December 31, 2020.2021.
Contractual Maturities
The Partnership’s contractual maturities of borrowings for the twelve-month periods ending December 31st for the next five years and thereafter are as follows:
2022 |
| $ | 23,169,689 |
|
2023 |
|
| 237,473,815 |
|
2024 |
|
| 199,878,152 |
|
2025 |
|
| 112,692,806 |
|
2026 |
|
| 4,227,863 |
|
Thereafter |
|
| 245,329,018 |
|
Total |
|
| 822,771,343 |
|
Unamortized deferred financing costs and debt premium |
|
| (2,692,629 | ) |
Total debt financing, net |
| $ | 820,078,714 |
|
104
2021 |
| $ | 5,894,456 |
|
2022 |
|
| 21,448,689 |
|
2023 |
|
| 195,504,816 |
|
2024 |
|
| 87,839,152 |
|
2025 |
|
| 11,363,784 |
|
Thereafter |
|
| 354,282,244 |
|
Total |
|
| 676,333,141 |
|
Unamortized deferred financing costs and debt premium |
|
| (2,375,501 | ) |
Total debt financing, net |
| $ | 673,957,640 |
|
17. Mortgages Payable and Other Secured Financing
The Partnership has entered into mortgages payable and other secured financings collateralized by MF Properties. The following is a summary of the mortgages payable and other secured financing, net of deferred financing costs, as of December 31, 20202021 and 2019:
2020:
MF Property Mortgage Payables |
| Outstanding Mortgage Payable as of December 31, 2020, net |
|
| Year Acquired or Refinanced |
| Stated Maturity |
| Variable / Fixed |
| Period End Rate |
| ||
The 50/50 MF Property--TIF Loan |
| $ | 2,521,308 |
|
| 2020 |
| March 2025 |
| Fixed |
|
| 4.40 | % |
The 50/50 MF Property--Mortgage |
|
| 23,463,564 |
|
| 2020 |
| April 2027 |
| Fixed |
|
| 4.35 | % |
Total Mortgage Payable\Weighted Average Period End Rate |
| $ | 25,984,872 |
|
|
|
|
|
|
|
|
| 4.36 | % |
Property Mortgage Payables |
| Outstanding Mortgage |
|
| Outstanding Mortgage |
|
| Year |
| Stated Maturity |
| Variable |
| Period End |
| |||
The 50/50 MF Property--TIF Loan |
| $ | 2,174,453 |
|
| $ | 2,521,308 |
|
| 2020 |
| March 2025 |
| Fixed |
|
| 4.40 | % |
The 50/50 MF Property--Mortgage |
|
| 22,960,090 |
|
|
| 23,463,564 |
|
| 2020 |
| April 2027 |
| Fixed |
|
| 4.35 | % |
Vantage at San Marcos--Mortgage (1) |
|
| 1,690,000 |
|
|
| - |
|
| 2020 |
| February 2022 |
| Variable |
|
| 4.00 | % |
Total Mortgage Payable\Weighted |
| $ | 26,824,543 |
|
| $ | 25,984,872 |
|
|
|
|
|
|
|
|
| 4.33 | % |
MF Property Mortgage Payables |
| Outstanding Mortgage Payable as of December 31, 2019, net |
|
| Year Acquired or Refinanced |
| Stated Maturity |
| Variable / Fixed |
| Reset Frequency |
| Variable Based Rate |
|
| Period End Rate |
| |||
The 50/50 MF Property--TIF Loan |
| $ | 2,859,390 |
|
| 2014 |
| March 2020 |
| Fixed |
| N/A |
| N/A |
|
|
| 4.65 | % | |
The 50/50 MF Property--Mortgage |
|
| 23,942,856 |
|
| 2013 |
| March 2020 |
| Variable |
| Monthly |
|
| 4.75 | % | (1) |
| 4.75 | % |
Total Mortgage Payable\Weighted Average Period End Rate |
| $ | 26,802,246 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| 4.74 | % |
(1) Variable rate is based on Wall Street Journal Prime Rate, but not to exceed 5.0%
InIn February 2020, the Partnership refinanced The 50/50 MF Property Mortgage loan with its existing lender. The Mortgage loan maturity date was extended seven years to April 2027, and the interest rate decreased to a fixed interest rate of 4.35%.
In February 2020, the Partnership refinanced The 50/50 MF Property TIF loan with its existing lender. The TIF loan maturity date was extended by five years to March 2025, and the interest rate decreased to 4.40%.
In November 2020, Vantage at San Marcos, a consolidated VIE (Note 5), entered into a mortgage payable arrangement to fund the purchase of a parcel of land for potential development of a market-rate multifamily property. Vantage at San Marcos became a consolidated VIE in the fourth quarter of 2021 and prior to such date was reported as an investment in an unconsolidated entity.
Contractual Maturities
The Partnership’s contractual maturities of borrowings for the twelve-month periods ending December 31st for the next five years and thereafter are as follows:as
follows
2022 |
| $ | 2,560,283 |
|
2023 |
|
| 909,278 |
|
2024 |
|
| 947,301 |
|
2025 |
|
| 1,747,032 |
|
2026 |
|
| 641,415 |
|
Thereafter |
|
| 20,020,531 |
|
Total |
|
| 26,825,840 |
|
Unamortized deferred financing costs |
|
| (1,297 | ) |
Total mortgages payable and other secured financings, net |
| $ | 26,824,543 |
|
:
2021 |
| $ | 835,130 |
|
2022 |
|
| 869,599 |
|
2023 |
|
| 908,564 |
|
2024 |
|
| 946,558 |
|
2025 |
|
| 1,782,213 |
|
Thereafter |
|
| 20,644,450 |
|
Total |
|
| 25,986,514 |
|
Unamortized deferred financing costs |
|
| (1,642 | ) |
Total mortgages payable and other secured financings, net |
| $ | 25,984,872 |
|
18. Derivative Financial Instruments
In September 2020, the Partnership entered into 2The partnership is party to two total return swap transactions. The following table summarizes the terms of the Partnership’s total return swaps as of December 31, 2021 and 2020:
Purchase Date |
| Notional |
|
| Effective |
| Termination Date |
| Period End |
| Period End |
| Variable Rate |
| Counterparty |
| Fair Value as of |
| ||
Sept 2020 |
|
| 39,607,744 |
|
| Sept 2020 |
| Sept 2025 |
| 4.25% (1) |
| 9.20% (3) |
| 3-month LIBOR |
| Mizuho Capital Markets |
| $ | 77,061 |
|
Sept 2020 |
|
| 63,500,000 |
|
| Sept 2020 |
| Mar 2022 |
| 1.00% (2) |
| 9.20% (3) |
| 3-month LIBOR |
| Mizuho Capital Markets |
|
| 215,267 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| $ | 292,328 |
|
105
Purchase Date |
| Notional |
|
| Effective |
| Termination Date |
| Period End |
| Period End |
| Variable Rate |
| Counterparty |
| Fair Value as of |
| ||
Sept 2020 |
|
| 39,970,485 |
|
| Sept 2020 |
| Sept 2025 |
| 4.25% (1) |
| 9.22% (3) |
| 3-month LIBOR |
| Mizuho Capital Markets |
| $ | 77,995 |
|
Sept 2020 |
|
| 63,500,000 |
|
| Sept 2020 |
| Mar 2022 |
| 1.00% (2) |
| 9.22% (3) |
| 3-month LIBOR |
| Mizuho Capital Markets |
|
| 215,631 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| $ | 293,626 |
|
Purchase Date |
| Notional Amount |
|
| Effective Date |
| Termination Date |
| Period End Variable Rate Paid |
| Period End Variable Rate Received |
| Variable Rate Index |
| Counterparty |
| Fair Value as of December 31, 2020 |
| ||
Sept 2020 |
|
| 39,970,485 |
|
| Sept 2020 |
| Sept 2025 |
| 4.25% (1) |
| 9.22% (3) |
| 3-month LIBOR |
| Mizuho Capital Markets |
| $ | 77,995 |
|
Sept 2020 |
|
| 63,500,000 |
|
| Sept 2020 |
| Mar 2022 |
| 1.00% (2) |
| 9.22% (3) |
| 3-month LIBOR |
| Mizuho Capital Markets |
|
| 215,631 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| $ | 293,626 |
|
|
|
|
|
|
|
Each of the total return swaps havehas the Partnership’s Secured Notes with Mizuho as the specified reference security (see Note(Note 16). The combined notional amount of the total return swaps is $103.5$103.1 million, which is the same as the principal balance of the Secured Notes. The rate received on each total return swap is equal to the interest rate on the Secured Notes such that they offset one another, resulting in a net interest cost equal to the rate paid on each total return swap. Under the total return swaps, the Partnership is liable for any decline in the value of the Secured Notes. If the fair value of the underlying Secured Notes is less than the outstanding principal balance, the Partnership is required to post additional cash collateral equal to the amount of the deficit. Such a deficit will also be reflected in the fair value of the total return swaps.
The Partnership was required to initially fund cash collateral with Mizuho for each total return swap. The total return swap with a notional amount of $40.0$39.6 million, requires the Partnership to maintain cash collateral equal to 35% of the notional amount, which was approximately $14.0 million as of December 31, 2020.2021. The second total return swap with a notional amount of $63.5 million, requires the Partnership to maintain cash collateral equal to 100% of the notional amount, which was approximately $63.5 million as of December 31, 2020.2021. Through March 2022, the Partnership has the option to allocate notional amounts from the second total return swap to the first total return swap, in minimum increments of $10.0 million, and receive net cash proceeds of approximately 65% of the reallocated notional amount. The second total return swap terminates in March 2022 and any remaining cash collateral will be used to pay down the principal balance of the Secured Notes.
The Partnership is party to an interest rate cap agreement. The following tables summarize the Partnership’s interest rate cap agreements as of December 31, 20202021 and 2019:2020:
Purchase |
| Notional Amount |
|
| Maturity |
| Effective |
|
| Index |
| Variable Debt |
| Counterparty |
| Fair Value as of |
| |||
Aug 2019 |
|
| 76,544,336 |
|
| Aug 2024 |
|
| 4.5 | % |
| SIFMA |
| M31 TEBS |
| Barclays Bank PLC |
| $ | 51,090 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| $ | 51,090 |
|
Purchase |
| Notional Amount |
|
| Maturity |
| Effective |
|
| Index |
| Variable Debt |
| Counterparty |
| Fair Value as of |
| |||
Aug 2019 |
|
| 77,979,924 |
|
| Aug 2024 |
|
| 4.5 | % |
| SIFMA |
| M31 TEBS |
| Barclays Bank PLC |
| $ | 27,877 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| $ | 27,877 |
|
Purchase Date |
| Notional Amount |
|
| Maturity Date |
| Effective Capped Rate (1) |
|
| Index |
| Variable Debt Financing Facility Hedged (1) |
| Counterparty |
| Fair Value as of December 31, 2020 |
| |||
Aug 2019 |
|
| 77,979,924 |
|
| Aug 2024 |
|
| 4.5 | % |
| SIFMA |
| M31 TEBS |
| Barclays Bank PLC |
| $ | 27,877 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| $ | 27,877 |
|
|
|
Purchase Date |
| Notional Amount |
|
| Maturity Date |
| Effective Capped Rate (1) |
|
| Index |
| Variable Debt Financing Facility Hedged (1) |
| Counterparty |
| Fair Value as of December 31, 2019 |
| |||
July 2015 |
|
| 27,033,788 |
|
| Aug 2020 |
|
| 3.0 | % |
| SIFMA |
| TOB Trusts |
| Wells Fargo Bank |
| $ | - |
|
July 2015 |
|
| 27,033,788 |
|
| Aug 2020 |
|
| 3.0 | % |
| SIFMA |
| TOB Trusts |
| Royal Bank of Canada |
|
| - |
|
July 2015 |
|
| 27,033,788 |
|
| Aug 2020 |
|
| 3.0 | % |
| SIFMA |
| TOB Trusts |
| SMBC Capital Markets, Inc |
|
| - |
|
June 2017 |
|
| 81,101,364 |
|
| Aug 2020 |
|
| 1.5 | % |
| SIFMA |
| TOB Trusts |
| Barclays Bank PLC |
|
| 4,090 |
|
Sept 2017 |
|
| 58,090,000 |
|
| Sept 2020 |
|
| 4.0 | % |
| SIFMA |
| TOB Trusts |
| Barclays Bank PLC |
|
| - |
|
Aug 2019 |
|
| 79,333,280 |
|
| Aug 2024 |
|
| 4.5 | % |
| SIFMA |
| M31 TEBS |
| Barclays Bank PLC |
|
| 6,821 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| $ | 10,911 |
|
|
|
In August 2019, the Partnership purchased an interest rate derivative intended to cap the variable interest rate component of the M31 TEBS Financing at 4.5%. The Partnership paid approximately $30,000 for the interest rate derivative.
The Partnership’s derivative financial instruments are not designated as hedging instruments and are recorded at fair value. Changes in fair value are included in current period earnings as “Interest expense” on the Partnership’s consolidated statements of operations. See Note 24 for a description of the methodology and significant assumptions for determining the fair value of the derivatives. The derivative financial instruments are presented within “Other assets” on the Partnership’s consolidated balance sheets.
19. Commitments and Contingencies
Legal Proceedings
The Partnership, from time to time, may beis subject to various legal proceedings and claims that arise in the ordinary course of business. These matters are frequently covered by insurance. If it has been determined that a loss is probable to occur and the amount of the loss can be reasonably estimated, the estimated amount of the loss is accrued in the Partnership’sPartnership's consolidated financial statements. If the Partnership determines that a loss is reasonably possible, the Partnership will, if material, disclose the nature of the loss contingency and
106
the estimated range of possible loss, or include a statement that no estimate of loss can be made. While the resolution of these matters cannot be predicted with certainty, the Partnership currently believes there are no pending legal proceedings in which the Partnership is currently involved the outcome of such matterswhich will not have a material effect on the Partnership’s consolidated financial statements.condition, results of operations, or cash flows.
Bond Purchase Commitments
The Partnership may enter into bond purchase commitments related to MRBs to be issued and secured by properties under construction. Upon execution of the bond purchase commitment, the proceeds from the MRBs will be used to pay off the construction related debt. The Partnership bears no construction or stabilization risk during the commitment period. The Partnership accounts for its bond purchase commitments as available-for-sale securities and reports the asset or liability at fair value. Changes in the fair value of bond purchase commitments are recorded in othergains or losses on the Partnership’s consolidated statements of comprehensive income. The following table summarizes the Partnership’s bond purchase commitmentcommitments as of December 31, 2020: 2021:
Bond Purchase Commitments |
| Commitment Date |
| Maximum |
|
| Rate |
|
| Estimated Closing |
| Fair Value as of |
| |||
CCBA Senior Garden Apartments |
| July 2020 |
| $ | 3,807,000 |
|
|
| 4.50 | % |
| Q1 2022 |
| $ | 495,784 |
|
Anaheim & Walnut |
| September 2021 |
|
| 3,900,000 |
|
|
| 4.85 | % |
| Q3 2024 |
|
| 468,620 |
|
|
|
|
| $ | 7,707,000 |
|
|
|
|
|
|
| $ | 964,404 |
|
107
Bond Purchase Commitments |
| Commitment Date |
| Maximum Committed Amounts Remaining |
|
| Rate |
|
| Estimated Closing Date |
| Fair Value as of December 31, 2020 |
| |||
CCBA Senior Garden Apartments |
| July 2020 |
| $ | 3,807,000 |
|
|
| 4.50 | % |
| Q3 2022 |
| $ | 431,879 |
|
Mortgage Revenue Bond and Taxable Mortgage Revenue BondInvestment Commitments
The Partnership has committedremaining commitments to fundprovide additional proceeds related to the Ocotillo Springs - Series A MRB (see Note 6)funding of certain MRBs, taxable MRBs, GILs, taxable GILs, and Series A-T taxable MRB (see Note 13)property loans while the property issecured properties are under construction. The Partnership’s remaining maximum commitments related to the Series A MRB and Series A-T taxable MRB totaled approximately $13.0 million and $7.0 million, respectively, as of December 31, 2020.
Governmental Issuer Loan Commitments
construction or rehabilitation. The Partnership has outstanding commitments to fundcontribute additional proceeds related to its GILs while the properties are under construction. See Note 7 for disclosure of remaining commitments.
Equity Investment Commitments
ATAX Vantage Holdings, LLC, a wholly owned subsidiary of the Partnership, has outstanding commitments to contribute equity to unconsolidated entities. See Note 10The following table summarizes the Partnership's total and remaining commitments as of December 31, 2021:
|
|
|
|
|
|
|
|
|
|
|
|
| ||
Property Name |
| Commitment Date |
| Maturity Date |
| Interest Rate |
| Total Initial Commitment |
|
| Remaining Commitment |
| ||
Mortgage Revenue Bonds |
|
|
|
|
|
|
|
|
|
| ||||
Jackson Manor Apartments |
| April 2021 |
| May 2038 |
| 5.00% |
| $ | 6,900,000 |
|
| $ | 2,000,000 |
|
Residency at the Mayer - Series A |
| October 2021 |
| April 2039 |
| SOFR + 3.60% (1) |
|
| 29,500,000 |
|
|
| 5,500,000 |
|
Meadow Valley |
| December 2021 |
| December 2029 |
| 6.25% |
|
| 44,000,000 |
|
|
| 43,900,000 |
|
Subtotal |
|
|
|
|
|
|
|
| 80,400,000 |
|
|
| 51,400,000 |
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||
Taxable Mortgage Revenue Bonds |
|
|
|
|
|
|
|
|
|
| ||||
Ocotillo Springs - Series A-T |
| July 2020 |
| August 2022 (2) |
| LIBOR + 3.55% (1) |
| $ | 7,000,000 |
|
| $ | 6,000,000 |
|
Residency at the Mayer Series A-T |
| October 2021 |
| April 2024 (2) |
| SOFR + 3.70% (1) |
|
| 12,500,000 |
|
|
| 11,500,000 |
|
Subtotal |
|
|
|
|
|
|
|
| 19,500,000 |
|
|
| 17,500,000 |
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||
Governmental Issuer Loans |
|
|
|
|
|
|
|
|
|
| ||||
Hilltop at Signal Hills |
| January 2021 |
| August 2023 (2) |
| SOFR + 3.07% (1) |
| $ | 24,450,000 |
|
| $ | 2,899,416 |
|
Legacy Commons at Signal Hills |
| January 2021 |
| February 2024 (2) |
| SOFR + 3.07% (1) |
|
| 34,620,000 |
|
|
| 1,499,395 |
|
Hope on Avalon |
| January 2021 |
| February 2023 (2) |
| SIFMA + 3.75% (1) |
|
| 23,390,000 |
|
|
| 13,408,800 |
|
Hope on Broadway |
| January 2021 |
| February 2023 (2) |
| SIFMA + 3.75% (1) |
|
| 12,105,623 |
|
|
| 8,414,378 |
|
Osprey Village |
| July 2021 |
| August 2024 (2) |
| SOFR + 3.07% (1) |
|
| 60,000,000 |
|
|
| 53,627,970 |
|
Willow Place Apartments |
| September 2021 |
| October 2024 (2) |
| SOFR + 3.30% (1) |
|
| 25,000,000 |
|
|
| 22,028,214 |
|
Subtotal |
|
|
|
|
|
|
|
| 179,565,623 |
|
|
| 101,878,173 |
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||
Taxable Governmental Issuer Loans |
|
|
|
|
|
|
|
|
|
| ||||
Hope on Avalon (Taxable) |
| January 2021 |
| February 2023 (2) |
| SOFR + 3.55% (1) |
|
| 10,573,000 |
|
|
| 9,573,000 |
|
Subtotal |
|
|
|
|
|
|
|
| 10,573,000 |
|
|
| 9,573,000 |
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||
Property Loans |
|
|
|
|
|
|
|
|
|
|
|
| ||
Scharbauer Flats Apartments |
| June 2020 |
| January 2023 (2) |
| LIBOR + 2.85% |
| $ | 24,160,000 |
|
| $ | 14,451,402 |
|
Oasis at Twin Lakes |
| July 2020 |
| August 2023 (2) |
| LIBOR + 2.50% (1) |
|
| 27,704,180 |
|
|
| 7,096,818 |
|
Centennial Crossings |
| August 2020 |
| September 2023 (2) |
| LIBOR + 2.50% (1) |
|
| 24,250,000 |
|
|
| 12,895,614 |
|
Hilltop at Signal Hills |
| January 2021 |
| August 2023 (2) |
| SOFR + 3.07% (1) |
|
| 21,197,939 |
|
|
| 20,197,939 |
|
Legacy Commons at Signal Hills |
| January 2021 |
| February 2024 (2) |
| SOFR + 3.07% (1) |
|
| 32,233,972 |
|
|
| 29,629,742 |
|
Osprey Village |
| July 2021 |
| August 2024 (2) |
| SOFR + 3.07% (1) |
|
| 25,500,000 |
|
|
| 24,500,000 |
|
Willow Place Apartments |
| September 2021 |
| October 2024 (2) |
| SOFR + 3.30% (1) |
|
| 21,351,328 |
|
|
| 20,351,328 |
|
Magnolia Crossing (3) |
| December 2021 |
| December 2022 (2) |
| SOFR + 6.50% (1) |
|
| 14,500,000 |
|
|
| 1,075,421 |
|
Subtotal |
|
|
|
|
|
|
|
| 190,897,419 |
|
|
| 130,198,264 |
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||
Equity Investments |
|
|
|
|
|
|
|
|
|
|
|
| ||
Vantage at Hutto (4) |
| November 2020 |
| N/A |
| N/A |
| $ | 11,233,000 |
|
| $ | 5,991,269 |
|
Vantage at San Marcos (5) |
| November 2020 |
| N/A |
| N/A |
|
| 9,914,529 |
|
|
| 8,943,914 |
|
Vantage at Loveland |
| April 2021 |
| N/A |
| N/A |
|
| 16,329,000 |
|
|
| 5,883,811 |
|
Vantage at Helotes |
| May 2021 |
| N/A |
| N/A |
|
| 12,590,681 |
|
|
| 1,613,496 |
|
Vantage at Fair Oaks |
| June 2021 |
| N/A |
| N/A |
|
| 11,011,245 |
|
|
| 4,712,690 |
|
Vantage at McKinney Falls |
| December 2021 |
| N/A |
| N/A |
|
| 11,431,272 |
|
|
| 4,922,957 |
|
Subtotal |
|
|
|
|
|
|
|
| 72,509,727 |
|
|
| 32,068,137 |
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||
Bond Purchase Commitments |
|
|
|
|
|
|
|
|
|
|
|
| ||
CCBA Senior Garden Apartments |
| July 2020 |
| Q1 2022 (6) |
| 4.50% |
| $ | 3,807,000 |
|
| $ | 3,807,000 |
|
Anaheim & Walnut |
| September 2021 |
| Q3 2024 (6) |
| 4.85% |
|
| 3,900,000 |
|
|
| 3,900,000 |
|
Subtotal |
|
|
|
|
|
|
|
| 7,707,000 |
|
|
| 7,707,000 |
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||
Total Commitments |
|
|
|
|
|
|
| $ | 561,152,769 |
|
| $ | 350,324,574 |
|
Property Loan Commitments
loan commitment will be used to cover debt service over the twelve month term of the property loan.
108
Construction Loan Guarantees
The Partnership entered into guaranty agreements for constructionbridge loans related to certain investments in unconsolidated entities. The Partnership will only have to perform on the guarantees if a default by the borrower were to occur. All guarantees were initially for the entire amount of the construction loans and decrease based on the achievement of certain events or financial ratios, as defined by the respective construction loan agreement. The Partnership has not accrued any amount for these contingent liabilities because the likelihood of guarantee claims is remote. The following table summarizes the Partnership’s maximum exposure under these guarantee agreements as of December 31, 2020:2021:
Borrower |
| Guarantee Maturity |
| Maximum Balance |
|
| Loan |
|
| Partnership's Maximum Exposure |
|
| Guarantee | |||
Vantage at Stone Creek |
| 2023 |
| $ | 34,222,000 |
|
| $ | 34,222,000 |
|
| $ | 17,111,000 |
|
| (1) |
Vantage at Coventry |
| 2023 |
|
| 34,536,000 |
|
|
| 34,536,000 |
|
|
| 17,268,000 |
|
| (1) |
Vantage at Murfreesboro |
| 2022 (2) |
|
| 30,500,000 |
|
|
| 30,500,000 |
|
|
| 15,250,000 |
|
| (1) |
Borrower |
| Year the Guarantee was Executed |
| Maximum Balance Available on Construction Loan |
|
| Construction Loan Balance as of December 31, 2020 |
|
| Partnership's Maximum Exposure as of December 31, 2020 |
|
| Guarantee Terms | |||
Vantage at Stone Creek |
| 2018 |
| $ | 30,824,000 |
|
| $ | 30,501,955 |
|
| $ | 15,250,978 |
|
| (1) |
Vantage at Coventry |
| 2018 |
|
| 31,500,000 |
|
|
| 29,295,571 |
|
|
| 14,647,786 |
|
| (1) |
|
|
Other Guarantees and Commitments
The Partnership has entered into guarantee agreements with unaffiliated entities under which the Partnership has guaranteed certain obligations of the general partners of certain limited partnerships upon the occurrence of a “repurchase event.” Potential repurchase events include LIHTC tax credit recapture and foreclosure. The Partnership’s maximum exposure is limited to 75% of the equity contributed by the limited partner to each limited partnership. No amount has been accrued for these guarantees because the likelihood of repurchase events is remote. The following table summarizes the Partnership’s maximum exposure under these guarantee agreements as of December 31, 2020:2021:
Limited Partnership(s) |
| End of Guaranty Period |
| Partnership's Maximum Exposure |
|
| |
Ohio Properties |
| 2026 |
| $ | 2,661,066 |
|
|
Greens of Pine Glen, LP |
| 2027 |
|
| 1,854,212 |
|
|
109
Limited Partnership(s) |
| Year the Guarantee was Executed |
| End of Guarantee Period |
| Partnership's Maximum Exposure as of December 31, 2020 |
| |
Ohio Properties |
| 2011 |
| 2026 |
| $ | 3,011,522 |
|
Greens of Pine Glen, LP |
| 2012 |
| 2027 |
|
| 2,046,028 |
|
20. Redeemable Preferred Units
The Partnership has designated three series of non-cumulative, non-voting, non-convertible Preferred Units that represent limited partnership interests in the Partnership consisting of the Series A Preferred Units,
the Series A-1 Preferred Units, and the Series B Preferred Units. The Partnership has previously issued non-cumulative, non-voting, non-convertible Series A Preferred Units via a private placement to five financial institutions. The Partnership has not yet issued Series AA-1 Preferred Units represent limited partnership interests of the Partnership. The or Series AB Preferred Units. The Preferred Units have no stated maturity, are not subject to any sinking fund requirements, and will remain outstanding indefinitely unless redeemed by the Partnership or by the holder.
Upon the sixth anniversary of the closing of the sale or issuance of Series A Preferred Units or Series A-1 Preferred Units to a subscriber, and upon each annual anniversary thereafter, the Partnership and each holder of Series A Preferred Units have the right to redeem, in whole or in part, the Series A Preferred Units or Series A-1 Preferred Units held by such holder at a per unit redemption price equal to $10.00 per unit, plus an amount equal to all declared and unpaid distributions through the date of the redemption. Each holder desiring to exercise its redemption rights must provide written notice of its intent to so exercise no less than 180 calendar days prior to any such redemption date.
Upon the eighth anniversary of the closing of the sale or issuance of Series B Preferred Units to a subscriber, and upon each anniversary thereafter, the Partnership and each holder have the right to redeem, in whole or in part, the Series B Preferred Units held by such holder at a per unit redemption price equal to $10.00 per unit, plus an amount equal to all declared and unpaid distributions through the date of the redemption. Each holder desiring to exercise its redemption rights must provide written notice of its intent to so exercise no less than 180 calendar days prior to any such redemption date.
In the event of any liquidation, dissolution, or winding up of the Partnership, the holders of the Series A Preferred Units, Series A-1 Preferred Units and Series B Preferred Units are entitled to a liquidation preference in connection with their investments. With respect to anticipated quarterly distributions and rights upon liquidation, dissolution, or the winding-up of the Partnership’s affairs, the Series A Preferred Units and Series A-1 Preferred Units will rank: (a) senior to the Partnership’s BUCs and to any other class or series of Partnership interests or securities expressly designated as ranking junior to the Series A Preferred Units; or Series A-1 Preferred Units; (b) junior to all of the Partnership’s existing indebtedness (including indebtedness outstanding under the Partnership’s senior bank credit facility) and other liabilities with respect to assets available to satisfy claims against the Partnership; and (c) junior to any other class or series of Partnership interests or securities expressly designated as ranking senior to the Series A Preferred Units or Series A-1 Preferred Units. The Series B Preferred Units will rank: (a) senior to the BUCs and to any other class or series of Partnership interests or securities that is not expressly designated as ranking senior or on parity with the Series B Preferred Units ; (b) junior to the Series A Preferred Units and Series A-1 Preferred Units and to each other class or series of Partnership interests or securities with terms expressly made senior to the Series B Preferred Units; and (c) junior to all of the Partnership’s existing indebtedness (including indebtedness outstanding under the Partnership’s senior bank credit facility) and other liabilities with respect to assets available to satisfy claims against the Partnership..
The following table summarizes the Series A Preferred Units outstanding as of December 31, 20202021 and 2019:2020:
Month Issued |
| Units |
|
| Purchase Price |
|
| Distribution |
|
| Redemption |
|
| Earliest Redemption | ||||
March 2016 |
|
| 1,000,000 |
|
| $ | 10,000,000 |
|
|
| 3.00 | % |
| $ | 10.00 |
|
| March 2023 (1) |
May 2016 |
|
| 1,386,900 |
|
|
| 13,869,000 |
|
|
| 3.00 | % |
|
| 10.00 |
|
| May 2023 (1) |
September 2016 |
|
| 1,000,000 |
|
|
| 10,000,000 |
|
|
| 3.00 | % |
|
| 10.00 |
|
| September 2022 |
December 2016 |
|
| 700,000 |
|
|
| 7,000,000 |
|
|
| 3.00 | % |
|
| 10.00 |
|
| December 2022 |
March 2017 |
|
| 1,613,100 |
|
|
| 16,131,000 |
|
|
| 3.00 | % |
|
| 10.00 |
|
| March 2023 |
August 2017 |
|
| 2,000,000 |
|
|
| 20,000,000 |
|
|
| 3.00 | % |
|
| 10.00 |
|
| August 2023 |
October 2017 |
|
| 1,750,000 |
|
|
| 17,500,000 |
|
|
| 3.00 | % |
|
| 10.00 |
|
| October 2023 |
Series A Preferred Units outstanding |
|
| 9,450,000 |
|
| $ | 94,500,000 |
|
|
|
|
|
|
|
|
|
Month Issued |
| Units |
|
| Purchase Price |
|
| Distribution Rate |
|
| Redemption Price per Unit |
|
| Earliest Redemption Date | ||||
March 2016 |
|
| 1,000,000 |
|
| $ | 10,000,000 |
|
|
| 3.00 | % |
| $ | 10.00 |
|
| March 2022 |
May 2016 |
|
| 1,386,900 |
|
|
| 13,869,000 |
|
|
| 3.00 | % |
|
| 10.00 |
|
| May 2022 |
September 2016 |
|
| 1,000,000 |
|
|
| 10,000,000 |
|
|
| 3.00 | % |
|
| 10.00 |
|
| September 2022 |
December 2016 |
|
| 700,000 |
|
|
| 7,000,000 |
|
|
| 3.00 | % |
|
| 10.00 |
|
| December 2022 |
March 2017 |
|
| 1,613,100 |
|
|
| 16,131,000 |
|
|
| 3.00 | % |
|
| 10.00 |
|
| March 2023 |
August 2017 |
|
| 2,000,000 |
|
|
| 20,000,000 |
|
|
| 3.00 | % |
|
| 10.00 |
|
| August 2023 |
October 2017 |
|
| 1,750,000 |
|
|
| 17,500,000 |
|
|
| 3.00 | % |
|
| 10.00 |
|
| October 2023 |
Series A Preferred Units outstanding as of December 31, 2020 and December 31, 2019 |
|
| 9,450,000 |
|
| $ | 94,500,000 |
|
|
|
|
|
|
|
|
|
|
|
21. Issuances of Beneficial Unit Certificates
In December 2019, a “shelf” Registration Statement on Form S-3 was declared effective by the SEC and allows the Partnership to offer up to $225.0 million of BUCs for sale from time to time. This Registration Statement will expire in December 2022.2022.
110
In September 2021, the Partnership completed an underwritten public offering of 5,462,500 BUCs. The offering resulted in net cash proceeds of approximately $31.2 million for the Partnership, after payment of underwriting discounts, commissions and offering expenses.
In July 2021, the Partnership entered into a Capital on DemandTM Sales Agreement to offer and sell, from time to time at market prices on the date of sale, BUCs up to an aggregate offering price of $30.0 million via an "at the market offering." As of December 31, 2021, the Partnership had 0t sold any BUCs under this program.
22. Restricted Unit Awards
The Partnership’s 2015 Plan permits the grant of restricted units and other awards to the employees of Greystone Manager, the Partnership, or any affiliate of either, and members of the Board of Managers of Greystone Manager for up to 3.0 million BUCs. RUAs have historically been granted with vesting conditions ranging from three months to up to three years.years. Unvested RUAs are typically entitled to receive distributions during the restriction period. The Plan provides for accelerated vesting of the RUAs if there is a change in control related to the Partnership, the General Partner, or the general partner of the General Partner; or upon death or disability of the Plan participant. In December 2020, the Board of Managers of Greystone Manager determined thatvested 50,000 of the Partnership’s previous CEO’s unvested restricted unit awards were fully vested and all related compensation expense was recognized immediately. In September 2019, all of the restrictions applicable to the previously unvested RUAs lapsed and all such RUAs became immediately vested and nonforfeitable upon the closing of the acquisition of all of the issued and outstanding partnership interests in the General Partner from Burlington Capital LLC by Greystone.
The fair value of each RUA is estimated on the grant date based on the Partnership’s exchange-listed closing price of the BUCs. The Partnership recognizes compensation expense for the RUAs on a straight-line basis over the requisite vesting period. The compensation expense for RUAs totaled approximately $1.0$1.3 million and $3.6$1.0 million for the years ended December 31, 20202021 and 2019,2020, respectively. Compensation expense is reported within “General and administrative expenses” on the Partnership’s consolidated statements of operations.
The following table summarizes the RUA activity for years ended December 31, 20202021 and 2019:2020:
|
| Restricted Units Awarded |
|
| Weighted average Grant-date Fair Value |
| ||||||||||
Nonvested as of January 1, 2019 |
|
| 265,290 |
|
| $ | 6.14 |
| ||||||||
Granted |
|
| 353,197 |
|
|
| 7.74 |
| ||||||||
Vested |
|
| (618,487 | ) |
|
| 7.05 |
| ||||||||
Nonvested as of December 31, 2019 |
|
| - |
|
| $ | - |
| ||||||||
|
| Restricted Units |
|
| Weighted average |
| ||||||||||
Unvested as of January 1, 2020 |
| - |
| $ | - |
| ||||||||||
Granted |
|
| 290,000 |
|
|
| 4.98 |
|
| 290,000 |
| 4.98 |
| |||
Vested |
|
| (154,386 | ) |
|
| 4.98 |
|
| (154,386 | ) |
| 4.98 |
| ||
Forfeited |
|
| (2,802 | ) |
|
| 4.98 |
|
|
| (2,802 | ) |
|
| 4.98 |
|
Nonvested as of December 31, 2020 |
|
| 132,812 |
|
| $ | 4.98 |
| ||||||||
Unvested as of December 31, 2020 |
| 132,812 |
| $ | 4.98 |
| ||||||||||
Granted |
| 266,324 |
| 6.49 |
| |||||||||||
Vested |
| (166,570 | ) |
| 5.89 |
| ||||||||||
Unvested as of December 31, 2021 |
|
| 232,566 |
|
| $ | 6.06 |
|
The unrecognized compensation expense related to nonvestedunvested RUAs granted under the Plan was $412,000$863,000 as of December 31, 2020.2021. The remaining compensation expense is expected to be recognized over a weighted average period of 1.41.3 years. The total intrinsic value of unvested RUAs was approximately $564,000$1.5 million as of December 31, 2020.2021.
23. Transactions with Related Parties
Effective September 10, 2019, Greystone acquired all issued and outstanding partnership interests of AFCA 2 from Burlington Capital LLC and an affiliate, at which time Burlington Capital LLC and its affiliates (collectively, “Burlington”) ceased to be related parties of the Partnership.
The Partnership is managed by AFCA 2, which is controlled by AFCA 2’s general partner, Greystone Manager. The Board of Managers of Greystone Manager act as managers (and effectively as the directors) of the Partnership and certain employees of Greystone Manager are executive officers of the Partnership. Certain services are provided to the Partnership by employees of Greystone Manager and the Partnership reimburses Greystone Manager for its allocated share of these salaries and benefits. The Partnership also reimburses
111
Greystone Manager for its share of general and administrative expenses. These reimbursed costs represent a substantial portion of the Partnership’s general and administrative expenses.
The amounts in the following table represent amounts reimbursable to AFCA 2, the general partner of AFCA 2, or an affiliate for the years ended December 31, 20202021 and 2019:2020:
|
| 2020 |
|
| 2019 |
|
| 2021 |
|
| 2020 |
| ||||
Reimbursable salaries and benefits |
| $ | 4,625,222 |
|
| $ | 4,702,754 |
|
| $ | 4,866,841 |
|
| $ | 4,625,222 |
|
Other expenses |
|
| 57,424 |
|
|
| 19,622 |
|
| 50,712 |
|
|
| 57,424 |
| |
Office expenses |
|
| 257,641 |
|
|
| 17,630 |
|
| 250,785 |
|
|
| 257,641 |
| |
Insurance |
|
| 312,530 |
|
|
| 243,773 |
|
| 408,688 |
|
|
| 312,530 |
| |
Professional fees and expenses |
|
| 105,208 |
|
|
| 82,962 |
|
| 105,500 |
|
|
| 105,208 |
| |
|
| $ | 5,358,025 |
|
| $ | 5,066,741 |
|
| $ | 5,682,526 |
|
| $ | 5,358,025 |
|
The Partnership incurs costs for services and makes contractual payments to AFCA 2, AFCA 2’s general partner, and their affiliates. The costs are reported either as expenses or capitalized costs depending on the nature of each item. The following table summarizes transactions with related parties that are reflected inon the Partnership’s consolidated financial statements for the years ended December 31, 20202021 and 2019:2020:
|
| For the Years Ended December 31, |
| |||||
|
| 2021 |
|
| 2020 |
| ||
Partnership administrative fees paid to AFCA 2 (1) |
| $ | 4,046,000 |
|
| $ | 3,585,000 |
|
Reimbursable franchise margin taxes incurred on behalf of unconsolidated entities (2) |
|
| 156,000 |
|
|
| 53,000 |
|
Referral fees paid to an affiliate (3) |
|
| 224,750 |
|
|
| - |
|
|
| For the Years Ended December 31, |
| |||||
|
| 2020 |
|
| 2019 |
| ||
Partnership administrative fees paid to AFCA 2 (1) |
| $ | 3,585,000 |
|
| $ | 3,620,000 |
|
Property management fees paid to an affiliate (2) |
|
| - |
|
|
| 101,000 |
|
Reimbursable franchise margin taxes incurred on behalf of unconsolidated entities (3) |
|
| 53,000 |
|
|
| 131,000 |
|
|
|
|
|
|
|
AFCA 2 receives fees from the borrowers of the Partnership’s MRBs, GILs, and certain property loans for services provided to the borrower and based on the occurrence of certain investment transactions. These fees were paid by the borrowers and are not reported on the Partnership’s consolidated financial statements. The following table summarizes transactions between borrowers of the Partnership’s MRBs, GILs, and certain property loans and affiliates for the years ended December 31, 20202021 and 2019:
2020:
|
| For the Years Ended December 31, |
| |||||
|
| 2020 |
|
| 2019 |
| ||
Non-Partnership property administrative fees received by AFCA 2 (1) |
| $ | 36,000 |
|
| $ | 36,000 |
|
Investment/mortgage placement fees received by AFCA 2 (2) |
|
| 2,277,000 |
|
|
| 1,362,000 |
|
|
| For the Years Ended December 31, |
| |||||
|
| 2021 |
|
| 2020 |
| ||
Non-Partnership property administrative fees received by AFCA 2 (1) |
| $ | 35,000 |
|
| $ | 36,000 |
|
Investment/mortgage placement fees earned by AFCA 2 (2) |
|
| 7,311,000 |
|
|
| 2,277,000 |
|
|
|
(2) | AFCA 2 received placement fees in connection with the acquisition of certain MRBs, GILs, property loans, and |
Burlington Capital Properties, LLC provided services to seven of the properties collateralizing MRBs and one of the Partnership’s investments in unconsolidated entities for the year ended December 31, 2019. These property management fees were paid out of the revenues generated by the respective property prior to the payment of debt service on the Partnership's MRBs and property loans, as applicable, and the construction loan for the unconsolidated entity.entities.
Greystone Servicing Company LLC, an affiliate of the Partnership, has forward committed to purchase eachseven of the Partnership’s GILs (see Note(Note 7), once certain conditions are met, at a price equal to the outstanding principal plus accrued interest. Greystone Servicing Company LLC is committed to then immediately sell the GILs to Freddie Mac pursuant to a financing commitment between Greystone Servicing Company LLC and Freddie Mac.
In October 2020, the Partnership executed an agreement withGreystone Select, an affiliate of Greystone, in which the Greystone affiliate is entitled to receivePartnership, has provided a referral fee equal to 0.25%deficiency guaranty of the original principal amount of executed tax-exempt loan or tax-exempt bond transactions introducedPartnership’s obligations under the Secured Credit Agreement (Note 15). In November 2021, Greystone Select replaced Greystone Select Holdings LLC as the deficiency guarantor via an amendment to the Partnership bySecured Credit Agreement. The guaranty is enforceable if an event of default occurs, the administrative agent takes certain actions in relation to the collateral and the amounts due under the Secured Credit Agreement are not collected within a certain period of time after the commencement of such actions. NaN fees were paid to Greystone affiliate. There were 0 fees paid under this agreement forSelect or Greystone Select Holdings LLC related to the year ended December 31, 2020.deficiency guaranty agreement.
112
The Partnership reported receivables due from unconsolidated entities of approximately $53,000$149,000 and $116,000$53,000 as of December 31, 20202021 and 2019,2020, respectively. These amounts are reported within “Other assets” on the Partnership’s consolidated balance sheets. The Partnership had outstanding liabilities due to related parties totaling approximately $344,000$417,000 and $301,000$344,000 as of December 31, 20202021 and 2019,2020, respectively. These amounts are reported within “Accounts payable, accrued expenses and other liabilities” on the Partnership’s consolidated balance sheets.
24. Fair Value of Financial Instruments
Current accounting guidance on fair value measurements establishes a framework for measuring fair value and provides for expanded disclosures about fair value measurements. The guidance:
|
|
| • Establishes a three-level hierarchy for fair value measurements based upon the transparency of inputs to the valuation of an asset or liability on the measurement date. |
Inputs refer broadly to the assumptions that market participants would use in pricing the asset or liability, including assumptions about risk. To increase consistency and comparability in fair value measurements and related disclosures, the fair value hierarchy prioritizes the inputs to valuation techniques used to measure fair value into three broad levels. The three levels of the hierarchy are defined as follows:
• Level 1 - inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities. • Level 2 - inputs are inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly, for substantially the full term of the financial instrument. • Level 3 - inputs are unobservable inputs for asset or liabilities.
|
|
|
|
|
|
The categorization within the valuation hierarchy is based upon the lowest level of input that is significant to the fair value measurement.
The following is a description of the valuation methodologies used for the assets and liabilities measured at fair value on a recurring basis.
Investments in MRBs, Taxable MRBs and Bond Purchase Commitments
The fair value of the Partnership’s investments in MRBs, taxable MRBs, and bond purchase commitments as of December 31, 20202021 and 2019,2020, is based upon prices obtained from a third-party pricing service, which are estimates of market prices. There is no active trading market for these securities, and price quotes for the securities are not available. The valuation methodology of the Partnership’s third-party pricing service incorporates commonly used market pricing methods. The valuation methodology considers the underlying characteristics of each security as well as other quantitative and qualitative characteristics including, but not limited to, market interest rates, illiquidity, legal structure of the borrower, collateral, seniority to other obligations, operating results of the underlying property, geographic location, and property quality. These characteristics are used to estimate an effective yield for each security. The security fair value is estimated using a discounted cash flow and yield to maturity or call analysis by applying the effective yield to contractual cash flows. Significant increases (decreases) in the effective yield would have resulted in a significantly lower (higher) fair value estimate. Changes in fair value due to an increase or decrease in the effective yield do not impact the Partnership’s cash flows.
The Partnership evaluates pricing data received from the third-party pricing service by evaluating consistency with information from either the third-party pricing service or public sources. The fair value estimates of the MRBs, taxable MRBs and bond purchase commitments are based largely on unobservable inputs believed to be used by market participants and requires the use of judgment on the part of the third-party pricing service and the Partnership. Due to the judgments involved, the fair value measurements of the Partnership’s investments in MRBs, taxable MRBs and bond purchase commitments are categorized as Level 3 assets.
113
The range of effective yields and weighted average effective yields of the Partnership’s investments in MRBs, taxable MRBs and bond purchase commitments as of December 31, 20202021 and 20192020 are as follows:
|
| Range of Effective Yields |
| Weighted Average Effective Yields (1) |
| |||||||
Security Type |
| December 31, 2021 |
| December 31, 2020 |
| December 31, 2021 |
|
| December 31, 2020 |
| ||
Mortgage revenue bonds |
| 0.9% - 19.1% |
| 1.4% - 13.3% |
|
| 3.1 | % |
|
| 3.0 | % |
Taxable mortgage revenue bonds |
| 4.0% - 8.1% |
| 7.1% - 7.4% |
|
| 5.9 | % |
|
| 7.3 | % |
Bond purchase commitments |
| 3.2% - 3.3% |
| 3.5% |
|
| 3.2 | % |
|
| 3.5 | % |
|
| Range of Effective Yields |
| Weighted Average Effective Yields (1) |
| ||||||||
Security Type |
| December 31, 2020 |
|
| December 31, 2019 |
| December 31, 2020 |
|
| December 31, 2019 |
| ||
Mortgage revenue bonds |
| 1.4% - 13.3% |
|
| 2.4% - 8.5% |
|
| 3.0 | % |
|
| 3.8 | % |
Taxable mortgage revenue bonds |
| 7.1% - 7.4% |
|
| 8.7% - 8.9% |
|
| 7.3 | % |
|
| 8.8 | % |
Bond purchase commitments |
| 3.5% |
|
| N/A |
|
| 3.5 | % |
| N/A |
|
| Weighted by the total |
Investments in PHC Certificates
The Partnership sold its investments in the PHC Certificates in January 2020. The fair value of the Partnership’s investment in PHC Certificates as of December 31, 2019 was based upon prices obtained from a third-party pricing service, which were estimates of market prices. There was no active trading market for the PHC Certificates owned by the Partnership. The valuation methodology of the Partnership’s third-party pricing service incorporated commonly used market pricing methods. The valuation methodology considered the underlying characteristics of each PHC Certificate as well as other quantitative and qualitative characteristics including, but not limited to, market interest rates, illiquidity, security ratings from rating agencies, the impact of potential political and regulatory change, and other inputs.
The Partnership reviewed the inputs used by the primary third-party pricing service by reviewing source information and reviewed the methodology for reasonableness. The Partnership also engaged a second third-party pricing service to confirm the values developed by the primary third-party pricing service. The valuation methodologies used by the third-party pricing services encompassed the use of judgment in their application. Due to the judgments involved, the fair value measurement of the Partnership’s investment in PHC Certificates were categorized as Level 3 assets. As of December 31, 2019, the range of effective yields on the PHC Certificates was 4.4% to 5.3% per annum, with a weighted average effective yield of 5.2% when weighted by the principal outstanding of all PHC Certificatesthe respective securities as of the reporting date.
Derivative Financial Instruments
The effect of the Partnership’s interest rate caps is to set a cap, or upper limit, subject to performance of the counterparty, on the base rate of interest paid on the Partnership’s variable rate debt financings equal to the notional amount of the derivative agreement. The inputs in the interest rate cap agreement valuation model include three-month LIBOR rates, unobservable adjustments to account for the SIFMA index, as well as any recent interest rate cap trades with similar terms. The effect of the Partnership’s total return swaps is to lower the net interest rate related to the Partnership’s Secured Notes equal to the notional amount of the derivative instruments. The inputs in the total return swap valuation model include changes in the value of the Secured Notes and the associated changes in value of the underlying assets securing the Secured Notes, accrued and unpaid interest, and any potential gain share amounts. The fair value of the interest rate cap agreements and total return swaps are based on models whose inputs are not observable and therefore the inputs are categorized as Level 3 assets or liabilities.
Assets measured at fair value on a recurring basis as of December 31, 2021 are summarized as follows:
|
| Fair Value Measurements as of December 31, 2021 |
| |||||||||||||
Description |
| Assets at |
|
| Quoted Prices in |
|
| Significant Other |
|
| Significant |
| ||||
Assets |
|
|
|
|
|
|
|
|
|
|
|
| ||||
Mortgage revenue bonds, held in trust |
| $ | 750,934,848 |
|
| $ | - |
|
| $ | - |
|
| $ | 750,934,848 |
|
Mortgage revenue bonds |
|
| 42,574,996 |
|
|
| - |
|
|
| - |
|
|
| 42,574,996 |
|
Bond purchase commitments (reported within other assets) |
|
| 964,404 |
|
|
| - |
|
|
| - |
|
|
| 964,404 |
|
Taxable mortgage revenue bonds (reported within other assets) |
|
| 3,428,443 |
|
|
| - |
|
|
| - |
|
|
| 3,428,443 |
|
Derivative financial instruments (reported within other assets) |
|
| 343,418 |
|
|
| - |
|
|
| - |
|
|
| 343,418 |
|
Total Assets at Fair Value, net |
| $ | 798,246,109 |
|
| $ | - |
|
| $ | - |
|
| $ | 798,246,109 |
|
The following table summarizes the activity related to Level 3 assets and liabilities for the year ended December 31, 2021:
|
| For the Years Ended December 31, 2021 |
| |||||||||||||||||
|
| Fair Value Measurements Using Significant |
| |||||||||||||||||
|
| Unobservable Inputs (Level 3) |
| |||||||||||||||||
|
| Mortgage |
|
| Bond Purchase |
|
| Taxable |
|
| Derivative |
|
| Total |
| |||||
Beginning Balance January 1, 2021 |
| $ | 794,432,485 |
|
| $ | 431,879 |
|
| $ | 1,510,437 |
|
| $ | 321,503 |
|
| $ | 796,696,304 |
|
Total gains (losses) (realized/unrealized) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||
Included in earnings (interest income and |
|
| 137,520 |
|
|
| - |
|
|
| - |
|
|
| 7,126,226 |
|
|
| 7,263,746 |
|
Included in earnings (provision for credit loss) |
|
| (1,856,893 | ) |
|
| - |
|
|
| - |
|
|
| - |
|
|
| (1,856,893 | ) |
Included in other comprehensive income |
|
| (19,013,953 | ) |
|
| 532,525 |
|
|
| (72,319 | ) |
|
| - |
|
|
| (18,553,747 | ) |
Purchases |
|
| 69,672,500 |
|
|
| - |
|
|
| 2,000,000 |
|
|
| - |
|
|
| 71,672,500 |
|
Settlements |
|
| (49,861,815 | ) |
|
| - |
|
|
| (9,675 | ) |
|
| (7,104,311 | ) |
|
| (56,975,801 | ) |
Ending Balance December 31, 2021 |
| $ | 793,509,844 |
|
| $ | 964,404 |
|
| $ | 3,428,443 |
|
| $ | 343,418 |
|
| $ | 798,246,109 |
|
Total amount of gains (losses) for the |
| $ | (1,856,893 | ) |
| $ | - |
|
| $ | - |
|
| $ | 23,214 |
|
| $ | (1,833,679 | ) |
114
Assets and liabilities measured at fair value on a recurring basis as of December 31, 2020 are summarized as follows:
|
| Fair Value Measurements as of December 31, 2020 |
| |||||||||||||
Description |
| Assets |
|
| Quoted Prices in |
|
| Significant Other |
|
| Significant |
| ||||
Assets |
|
|
|
|
|
|
|
|
|
|
|
| ||||
Mortgage revenue bonds, held in trust |
| $ | 768,468,644 |
|
| $ | - |
|
| $ | - |
|
| $ | 768,468,644 |
|
Mortgage revenue bonds |
|
| 25,963,841 |
|
|
| - |
|
|
| - |
|
|
| 25,963,841 |
|
Bond purchase commitments (reported within other assets) |
|
| 431,879 |
|
|
|
|
|
|
|
|
| 431,879 |
| ||
Taxable mortgage revenue bonds (reported within other assets) |
|
| 1,510,437 |
|
|
| - |
|
|
| - |
|
|
| 1,510,437 |
|
Derivative instruments (reported within other assets) |
|
| 321,503 |
|
|
| - |
|
|
| - |
|
|
| 321,503 |
|
Total Assets at Fair Value, net |
| $ | 796,696,304 |
|
| $ | - |
|
| $ | - |
|
| $ | 796,696,304 |
|
|
| Fair Value Measurements as of December 31, 2020 |
| |||||||||||||
Description |
| Assets at Fair Value |
|
| Quoted Prices in Active Markets for Identical Assets (Level 1) |
|
| Significant Other Observable Inputs (Level 2) |
|
| Significant Unobservable Inputs (Level 3) |
| ||||
Assets |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Mortgage revenue bonds, held in trust |
| $ | 768,468,644 |
|
| $ | - |
|
| $ | - |
|
| $ | 768,468,644 |
|
Mortgage revenue bonds |
|
| 25,963,841 |
|
|
| - |
|
|
| - |
|
|
| 25,963,841 |
|
Bond purchase commitments (reported within other assets) |
|
| 431,879 |
|
|
| - |
|
|
| - |
|
|
| 431,879 |
|
Taxable mortgage revenue bonds (reported within other assets) |
|
| 1,510,437 |
|
|
| - |
|
|
| - |
|
|
| 1,510,437 |
|
Derivative financial instruments (reported within other assets) |
|
| 321,503 |
|
|
| - |
|
|
| - |
|
|
| 321,503 |
|
Total Assets at Fair Value, net |
| $ | 796,696,304 |
|
| $ | - |
|
| $ | - |
|
| $ | 796,696,304 |
|
The following table summarizes the activity related to Level 3 assets and liabilities for the year ended December 31, 2020:
|
| For the Year Ended December 31, 2020 |
| |||||||||||||||||||||
|
| Fair Value Measurements Using Significant |
| |||||||||||||||||||||
|
| Unobservable Inputs (Level 3) |
| |||||||||||||||||||||
|
| Mortgage |
|
| Bond Purchase Commitments |
|
| PHC Certificates |
|
| Taxable Mortgage |
|
| Interest Rate |
|
| Total |
| ||||||
Beginning Balance January 1, 2020 |
| $ | 773,597,465 |
|
| $ | - |
|
| $ | 43,349,357 |
|
| $ | 1,383,237 |
|
| $ | 10,911 |
|
| $ | 818,340,970 |
|
Total gains (losses) (realized/unrealized) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
Included in earnings (interest income and |
|
| 125,050 |
|
|
| - |
|
|
| (7,219 | ) |
|
| - |
|
|
| 2,026,070 |
|
|
| 2,143,901 |
|
Included in earnings (impairment of |
|
| (7,318,590 | ) |
|
| - |
|
|
| - |
|
|
| - |
|
|
| - |
|
|
| (7,318,590 | ) |
Included in earnings (gain on sale of |
|
| - |
|
|
| - |
|
|
| 1,416,023 |
|
|
| - |
|
|
| - |
|
|
| 1,416,023 |
|
Included in other comprehensive (loss) |
|
| 34,126,208 |
|
|
| 431,879 |
|
|
| (1,408,804 | ) |
|
| 136,046 |
|
|
| - |
|
|
| 33,285,329 |
|
Purchases |
|
| 9,513,450 |
|
|
| - |
|
|
| - |
|
|
| - |
|
|
| - |
|
|
| 9,513,450 |
|
Sale of securities |
|
| - |
|
|
| - |
|
|
| (43,349,357 | ) |
|
| - |
|
|
| - |
|
|
| (43,349,357 | ) |
Settlements |
|
| (15,611,098 | ) |
|
| - |
|
|
| - |
|
|
| (8,846 | ) |
|
| (1,715,478 | ) |
|
| (17,335,422 | ) |
Ending Balance December 31, 2020 |
| $ | 794,432,485 |
|
| $ | 431,879 |
|
| $ | - |
|
| $ | 1,510,437 |
|
| $ | 321,503 |
|
| $ | 796,696,304 |
|
Total amount of gains (losses) for the |
| $ | (7,318,590 | ) |
| $ | - |
|
| $ | - |
|
| $ | - |
|
| $ | 116,899 |
|
| $ | (7,201,691 | ) |
|
| For the Years Ended December 31, 2020 |
| |||||||||||||||||||||
|
| Fair Value Measurements Using Significant |
| |||||||||||||||||||||
|
| Unobservable Inputs (Level 3) |
| |||||||||||||||||||||
|
| Mortgage Revenue Bonds (1) |
|
| Bond Purchase Commitments |
|
| PHC Certificates |
|
| Taxable Mortgage Revenue Bonds |
|
| Derivative Financial Instruments |
|
| Total |
| ||||||
Beginning Balance January 1, 2020 |
| $ | 773,597,465 |
|
| $ | - |
|
| $ | 43,349,357 |
|
| $ | 1,383,237 |
|
| $ | 10,911 |
|
| $ | 818,340,970 |
|
Total gains (losses) (realized/unrealized) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Included in earnings (interest income and interest expense) |
|
| 125,050 |
|
|
| - |
|
|
| (7,219 | ) |
|
| - |
|
|
| 2,026,070 |
|
|
| 2,143,901 |
|
Included in earnings (impairment of securities and provision for credit loss) |
|
| (7,318,590 | ) |
|
| - |
|
|
| - |
|
|
| - |
|
|
| - |
|
|
| (7,318,590 | ) |
Included in earnings (gain on sale of securities) |
|
| - |
|
|
| - |
|
|
| 1,416,023 |
|
|
| - |
|
|
| - |
|
|
| 1,416,023 |
|
Included in other comprehensive (loss) income |
|
| 34,126,208 |
|
|
| 431,879 |
|
|
| (1,408,804 | ) |
|
| 136,046 |
|
|
| - |
|
|
| 33,285,329 |
|
Purchases |
|
| 9,513,450 |
|
|
| - |
|
|
| - |
|
|
| - |
|
|
| - |
|
|
| 9,513,450 |
|
Sale of securities |
|
| - |
|
|
| - |
|
|
| (43,349,357 | ) |
|
| - |
|
|
| - |
|
|
| (43,349,357 | ) |
Settlements |
|
| (15,611,098 | ) |
|
| - |
|
|
| - |
|
|
| (8,846 | ) |
|
| (1,715,478 | ) |
|
| (17,335,422 | ) |
Ending Balance December 31, 2020 |
| $ | 794,432,485 |
|
| $ | 431,879 |
|
| $ | - |
|
| $ | 1,510,437 |
|
| $ | 321,503 |
|
| $ | 796,696,304 |
|
Total amount of gains (losses) for the period included in earnings attributable to the change in unrealized losses relating to assets or liabilities held on December 31, 2020 |
| $ | (7,318,590 | ) |
| $ | - |
|
| $ | - |
|
| $ | - |
|
| $ | 116,899 |
|
| $ | (7,201,691 | ) |
|
|
Assets and liabilities measured at fair value on a recurring basis as of December 31, 2019 are summarized as follows:
|
| Fair Value Measurements as of December 31, 2019 |
| |||||||||||||
Description |
| Assets at Fair Value |
|
| Quoted Prices in Active Markets for Identical Assets (Level 1) |
|
| Significant Other Observable Inputs (Level 2) |
|
| Significant Unobservable Inputs (Level 3) |
| ||||
Assets |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Mortgage revenue bonds, held in trust |
| $ | 743,587,715 |
|
| $ | - |
|
| $ | - |
|
| $ | 743,587,715 |
|
Mortgage revenue bonds |
|
| 30,009,750 |
|
|
| - |
|
|
| - |
|
|
| 30,009,750 |
|
PHC Certificates |
|
| 43,349,357 |
|
|
| - |
|
|
| - |
|
|
| 43,349,357 |
|
Taxable mortgage revenue bonds (reported within other assets) |
|
| 1,383,237 |
|
|
| - |
|
|
| - |
|
|
| 1,383,237 |
|
Derivative instruments (reported within other assets) |
|
| 10,911 |
|
|
| - |
|
|
| - |
|
|
| 10,911 |
|
Total Assets at Fair Value, net |
| $ | 818,340,970 |
|
| $ | - |
|
| $ | - |
|
| $ | 818,340,970 |
|
The following table summarizes the activity related to Level 3 assets and liabilities for the year ended December 31, 2019:
|
| For the Years Ended December 31, 2019 |
| |||||||||||||||||
|
| Fair Value Measurements Using Significant |
| |||||||||||||||||
|
| Unobservable Inputs (Level 3) |
| |||||||||||||||||
|
| Mortgage Revenue Bonds (1) |
|
| PHC Certificates |
|
| Taxable Mortgage Revenue Bonds |
|
| Interest Rate Derivatives |
|
| Total |
| |||||
Beginning Balance January 1, 2019 |
| $ | 732,153,435 |
|
| $ | 48,672,086 |
|
| $ | 1,409,895 |
|
| $ | 626,633 |
|
| $ | 782,862,049 |
|
Total gains (losses) (realized/unrealized) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Included in earnings (interest income and interest expense) |
|
| 142,356 |
|
|
| (6,708 | ) |
|
| - |
|
|
| (499,835 | ) |
|
| (364,187 | ) |
Included in other comprehensive income |
|
| 39,320,186 |
|
|
| 984,021 |
|
|
| 26,428 |
|
|
| - |
|
|
| 40,330,635 |
|
Purchases |
|
| 19,250,000 |
|
|
| - |
|
|
| - |
|
|
| 29,527 |
|
|
| 19,279,527 |
|
Settlements |
|
| (17,268,512 | ) |
|
| (6,300,042 | ) |
|
| (53,086 | ) |
|
| (145,414 | ) |
|
| (23,767,054 | ) |
Ending Balance December 31, 2019 |
| $ | 773,597,465 |
|
| $ | 43,349,357 |
|
| $ | 1,383,237 |
|
| $ | 10,911 |
|
| $ | 818,340,970 |
|
Total amount of losses for the period included in earnings attributable to the change in unrealized losses relating to assets or liabilities held on December 31, 2019 |
| $ | - |
|
| $ | - |
|
| $ | - |
|
| $ | (499,835 | ) |
| $ | (499,835 | ) |
|
|
Total gains and losses included in earnings for the derivative financial instruments are reported within “Interest expense” onin the Partnership’s consolidated statements of operations.
As of December 31, 2021 and 2020, the Partnership utilized a third-party pricing service to determine the fair value of the Partnership’s GILs and taxable GIL, which is an estimate of their market price. The valuation methodology of the Partnership’s third-party pricing service incorporates commonly used market pricing methods. The valuation methodology considers the underlying characteristics of the GILs as well as other quantitative and qualitative characteristics including, but not limited to, the progress of construction and operations of the underlying properties, and the financial capacity of guarantors, andguarantors. The valuation methodology also considers the probability that conditions to Greystone Servicing Company LLC’sfor the execution of forward commitments to purchase the GILs will be met. Due to the judgments involved, the fair value measurements of the Partnership’s GILs and taxable GILs are categorized as Level 3 assets. The fair value of the GILs approximatesand taxable GIL approximated amortized cost as of December 31, 2021 and 2020.
As of December 31, 20202021 and 2019,2020, the Partnership utilized a third-party pricing service to determine the fair value of the Partnership’s financial liabilities, which are estimates of market prices. The valuation methodology of the Partnership’s third-party pricing service incorporates commonly used market pricing methods. The valuation methodology considers the underlying characteristics of each financial liability as well as other quantitative and qualitative characteristics including, but not limited to, market interest rates, legal structure, seniority to other obligations, operating results of the underlying assets, and asset quality. The financial liability values are then estimated using a discounted cash flow and yield to maturity or call analysis.
The Partnership evaluates pricing data received from the third-party pricing service, including consideration of current market interest rates, quantitative and qualitative characteristics of the underlying collateral, and other information from either the third-party pricing service or public sources. The fair value estimates of these financial liabilities are based largely on unobservable inputs believed to be used by market participants and require the use of judgment on the part of the third-party pricing service and the Partnership. Due to the judgments involved, the fair value measurements of the Partnership’s financial liabilities are categorized as Level 3 liabilities.
115
The TEBS Financingsfinancings are credit enhanced by Freddie Mac. The TOB Trust financings are credit enhanced by Mizuho. either Mizuho or Barclays. The table below summarizes the fair value of the Partnership’s financial liabilities as of December 31, 20202021 and 2019:
2020:
|
| December 31, 2020 |
|
| December 31, 2019 |
| ||||||||||
|
| Carrying Amount |
|
| Fair��Value |
|
| Carrying Amount |
|
| Fair Value |
| ||||
Financial Liabilities: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Debt financing |
| $ | 673,957,640 |
|
|
| 709,760,933 |
|
| $ | 536,197,421 |
|
| $ | 554,993,494 |
|
Unsecured lines of credit |
|
| 7,475,000 |
|
|
| 7,475,000 |
|
|
| 13,200,000 |
|
|
| 13,200,000 |
|
Mortgages payable and other secured financing |
|
| 25,984,872 |
|
|
| 25,986,514 |
|
|
| 26,802,246 |
|
|
| 26,812,851 |
|
|
| December 31, 2021 |
|
| December 31, 2020 |
| ||||||||||
|
| Carrying Amount |
|
| Fair Value |
|
| Carrying Amount |
|
| Fair Value |
| ||||
Financial Liabilities: |
|
|
|
|
|
|
|
|
|
|
|
| ||||
Debt financing |
| $ | 820,078,714 |
|
|
| 854,428,834 |
|
| $ | 673,957,640 |
|
| $ | 709,760,933 |
|
Unsecured lines of credit |
|
| - |
|
|
| - |
|
|
| 7,475,000 |
|
|
| 7,475,000 |
|
Secured lines of credit |
|
| 45,714,000 |
|
|
| 45,714,000 |
|
|
| - |
|
|
| - |
|
Mortgages payable and other secured financing |
|
| 26,824,543 |
|
|
| 26,825,840 |
|
|
| 25,984,872 |
|
|
| 25,986,514 |
|
25. Segments
TheHistorically, the Partnership hashad 4 reportable segments -segments: (1) Mortgage Revenue Bond Investments, (2) MF Properties, (3) Other Investments, and (4) Public Housing Capital Fund Trusts. However, effective as of December 1, 2021 we established a new reportable segment designated as Seniors and Skilled Nursing MRB Investments. In addition, as of December 1, 2021, we renamed our Mortgage Revenue Bond Investments segment as “Affordable Multifamily MRB Investments”, and our Other Investments segment was renamed to “Market-Rate Joint Venture Investments”. Therefore, as of December 31, 2021, we had five reportable segments: (1) Affordable Multifamily MRB Investments, (2) Seniors and Skilled Nursing MRB Investments, (3) MF Properties, (4) Market-Rate Joint Venture Investments, and (5) Public Housing Capital Fund Trusts. All activity in the Public Housing Capital Fund Trusts and Other Investments.segment ceased with the sale of the Public Housing Capital Trust Fund investments in January 2020, as described further below. The Partnership separately reports its consolidation and elimination information because it does not allocate certain items to the segments.
The Partnership Agreement authorizes the Partnership to make investments in tax-exempt securities other than in MRBs provided that the tax-exempt investments are rated in 1 of the 4 highest rating categories by a national securities rating agency. The Partnership Agreement also allows the Partnership to invest in other securities whose interest may be taxable for federal income tax purposes. Total tax-exempt and other investments cannot exceed 25% of the Partnership’s total assets at the time of acquisition as required under the Partnership Agreement. Tax-exempt and other investments consist of the PHC Certificates, taxable MRBs, real estate assets and investments in unconsolidated entities. In addition, the amount of other investments is limited based on the conditions to the exemption from registration under the Investment Company Act of 1940.
Mortgage Revenue BondAffordable Multifamily MRB Investments Segment
The Mortgage Revenue BondAffordable Multifamily MRB Investments segment consists of the Partnership’s portfolio of MRBs, GILs and related property loans that have been issued to provide construction and/or permanent financing for Residential Propertiesmultifamily residential and a commercial propertyproperties in their market areas. Such MRBs and GILs are held as investments and the related property loans, net of loan loss allowances, are reported as such on the Partnership’s consolidated balance sheets. As of December 31, 2020,2021, the Partnership reported 7774 MRBs and 39 GILs. The Residential Properties financed bymultifamily residential properties securing the MRBs and GILs contain a total of 11,11410,752 and 7371,832 multifamily rental units, respectively. In addition, 1 MRB (Provision Center 2014-1) is collateralized by commercial real estate. All “General and administrative expenses” on the Partnership’s consolidated statements of operations are reported within this segment.
Seniors and Skilled Nursing MRB Investments Segment
The Seniors and Skilled Nursing MRB Investments segment consists of an MRB and a property loan that have been issued to provide acquisition, construction and/or permanent financing for seniors housing and skilled nursing properties. Seniors housing consists of a combination of the independent living, assisted living and memory care units. The properties securing the MRB and property loan contain a total of 154 seniors housing units and 65 skilled nursing units, respectively.
Market-Rate Joint Venture Investments Segment
The Market-Rate Joint Venture Investments segment consists of the operations of ATAX Vantage Holdings, LLC, which invests in unconsolidated entities (Note 9) and property loans for the construction of market-rate multifamily properties (Note 10). The Market-Rate Joint Venture Investments segment also includes the consolidated VIE of Vantage at San Marcos (Note 5).
MF Properties Segment
The MF Properties segment consists primarily of multifamily and student housing residential properties held by the Partnership (see Note 9)(Note 8). During the time the Partnership holds an interest in an MF Property, any net rental income generated by the MF Properties in excess of debt servicecash flow will be available for distribution to the Partnership. As of December 31, 2020,2021, the Partnership owned 2 MF Properties containing a total of 859 rental units. Income tax expense (benefit) for the Greens Hold Co is reported within this segment.
116
Public Housing Capital Fund Trusts Segment
The Public Housing Capital Fund Trusts segment consisted of the assets, liabilities, and related income and expenses of the Partnership’s PHC Certificates (see Note 8) and the related TOB Trust financings. In January 2020, the Partnership sold the PHC Certificates to an unrelated party, and the related TOB Trust financings were collapsed and all principal and interest was paid in full. As a result, the Public Housing Capital Fund Trusts segment has had no activity after January 2020.
Other Investments Segment
The Other Investments segment consists of the operations of ATAX Vantage Holdings, LLC, which invests in unconsolidated entities (see Note 10) and property loans to certain market-rate multifamily properties (see Note 11).
The following table details certain financial information for the Partnership’s reportable segments for the December 31, 20202021 and 2019:
|
| For the Years Ended December 31, |
| |||||
|
| 2020 |
|
| 2019 |
| ||
Total revenues |
|
|
|
|
|
|
|
|
Mortgage Revenue Bond Investments |
| $ | 41,877,394 |
|
| $ | 41,348,004 |
|
MF Properties |
|
| 6,986,009 |
|
|
| 8,081,029 |
|
Public Housing Capital Fund Trusts |
|
| 174,470 |
|
|
| 2,368,541 |
|
Other Investments |
|
| 6,490,695 |
|
|
| 10,520,439 |
|
Total revenues |
| $ | 55,528,568 |
|
| $ | 62,318,013 |
|
|
|
|
|
|
|
|
|
|
Interest expense |
|
|
|
|
|
|
|
|
Mortgage Revenue Bond Investments |
| $ | 19,821,502 |
|
| $ | 21,862,030 |
|
MF Properties |
|
| 1,196,393 |
|
|
| 1,444,700 |
|
Public Housing Capital Fund Trusts |
|
| 197,993 |
|
|
| 1,410,564 |
|
Other Investments |
|
| - |
|
|
| - |
|
Total interest expense |
| $ | 21,215,888 |
|
| $ | 24,717,294 |
|
|
|
|
|
|
|
|
|
|
Depreciation expense |
|
|
|
|
|
|
|
|
Mortgage Revenue Bond Investments |
| $ | 15,913 |
|
| $ | - |
|
MF Properties |
|
| 2,794,160 |
|
|
| 3,088,117 |
|
Public Housing Capital Fund Trusts |
|
| - |
|
|
| - |
|
Other Investments |
|
| - |
|
|
| - |
|
Total depreciation expense |
| $ | 2,810,073 |
|
| $ | 3,088,117 |
|
|
|
|
|
|
|
|
|
|
Net income (loss) |
|
|
|
|
|
|
|
|
Mortgage Revenue Bond Investments |
| $ | 719,183 |
|
| $ | 3,835,002 |
|
MF Properties |
|
| (1,389,571 | ) |
|
| (964,355 | ) |
Public Housing Capital Fund Trusts |
|
| 1,390,999 |
|
|
| 957,977 |
|
Other Investments |
|
| 6,488,217 |
|
|
| 26,663,527 |
|
Net income (loss) |
| $ | 7,208,828 |
|
| $ | 30,492,151 |
|
2020:
|
| For the Years Ended December 31, |
| |||||
|
| 2021 |
|
| 2020 |
| ||
Total revenues |
|
|
|
|
|
| ||
Affordable Multifamily MRB Investments |
| $ | 46,198,552 |
|
| $ | 41,877,394 |
|
Seniors and Skilled Nursing MRB Investments |
|
| 77,979 |
|
|
| - |
|
Market-Rate Joint Venture Investments |
|
| 14,967,102 |
|
|
| 6,490,695 |
|
MF Properties |
|
| 7,208,661 |
|
|
| 6,986,009 |
|
Public Housing Capital Fund Trusts |
|
| - |
|
|
| 174,470 |
|
Total revenues |
| $ | 68,452,294 |
|
| $ | 55,528,568 |
|
|
|
|
|
|
|
| ||
Interest expense |
|
|
|
|
|
| ||
Affordable Multifamily MRB Investments |
| $ | 20,382,143 |
|
| $ | 19,821,502 |
|
Seniors and Skilled Nursing MRB Investments |
|
| - |
|
|
| - |
|
Market-Rate Joint Venture Investments |
|
| 428,018 |
|
|
| - |
|
MF Properties |
|
| 1,133,724 |
|
|
| 1,196,393 |
|
Public Housing Capital Fund Trusts |
|
| - |
|
|
| 197,993 |
|
Total interest expense |
| $ | 21,943,885 |
|
| $ | 21,215,888 |
|
|
|
|
|
|
|
| ||
Depreciation expense |
|
|
|
|
|
| ||
Affordable Multifamily MRB Investments |
| $ | 23,495 |
|
| $ | 15,913 |
|
Seniors and Skilled Nursing MRB Investments |
|
| - |
|
|
| - |
|
Market-Rate Joint Venture Investments |
|
| - |
|
|
| - |
|
MF Properties |
|
| 2,709,427 |
|
|
| 2,794,160 |
|
Public Housing Capital Fund Trusts |
|
| - |
|
|
| - |
|
Total depreciation expense |
| $ | 2,732,922 |
|
| $ | 2,810,073 |
|
|
|
|
|
|
|
| ||
Net income (loss) |
|
|
|
|
|
| ||
Affordable Multifamily MRB Investments |
| $ | 8,619,813 |
|
| $ | 719,183 |
|
Seniors and Skilled Nursing MRB Investments |
|
| 72,020 |
|
|
| - |
|
Market-Rate Joint Venture Investments |
|
| 30,055,826 |
|
|
| 6,488,217 |
|
MF Properties |
|
| (648,171 | ) |
|
| (1,389,571 | ) |
Public Housing Capital Fund Trusts |
|
| - |
|
|
| 1,390,999 |
|
Net income |
| $ | 38,099,488 |
|
| $ | 7,208,828 |
|
The following table details total assets for the Partnership’s reportable segments as of December 31, 20202021 and 2019:2021:
|
| December 31, 2021 |
|
| December 31, 2020 |
| ||
Total assets |
|
|
|
|
|
| ||
Affordable Multifamily MRB Investments |
| $ | 1,304,626,248 |
|
| $ | 1,114,146,614 |
|
Seniors and Skilled Nursing MRB Investments |
|
| 13,533,020 |
|
|
| - |
|
Market-Rate Joint Venture Investments |
|
| 112,052,513 |
|
|
| 106,931,182 |
|
MF Properties |
|
| 66,501,994 |
|
|
| 67,988,190 |
|
Public Housing Capital Fund Trusts |
|
| - |
|
|
| - |
|
Consolidation/eliminations |
|
| (110,804,292 | ) |
|
| (113,818,107 | ) |
Total assets |
| $ | 1,385,909,483 |
|
| $ | 1,175,247,879 |
|
117
|
| December 31, 2020 |
|
| December 31, 2019 |
| ||
Total assets |
|
|
|
|
|
|
|
|
Mortgage Revenue Bond Investments |
| $ | 1,114,146,614 |
|
| $ | 918,301,172 |
|
MF Properties |
|
| 67,988,190 |
|
|
| 70,569,646 |
|
Public Housing Capital Fund Trusts |
|
| - |
|
|
| 43,591,048 |
|
Other Investments |
|
| 106,931,182 |
|
|
| 87,098,315 |
|
Consolidation/eliminations |
|
| (113,818,107 | ) |
|
| (90,391,673 | ) |
Total assets |
| $ | 1,175,247,879 |
|
| $ | 1,029,168,508 |
|
26. Summary of Unaudited Quarterly Results of Operations
2020 |
| March 31, |
|
| June 30, |
|
| September 30, |
|
| December 31, |
| ||||
Revenues and other income |
| $ | 15,152,158 |
|
| $ | 14,478,419 |
|
| $ | 13,839,947 |
|
| $ | 13,474,067 |
|
Income (loss) from continuing operations |
|
| 2,981,757 |
|
|
| 4,588,348 |
|
|
| (1,160,017 | ) |
|
| 798,740 |
|
Net income (loss) |
| $ | 2,981,757 |
|
| $ | 4,588,348 |
|
| $ | (1,160,017 | ) |
| $ | 798,740 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income (loss) from continuing operations, per BUC |
| $ | 0.04 |
|
| $ | 0.06 |
|
| $ | (0.03 | ) |
| $ | 0.00 |
|
Net income (loss), basic and diluted, per BUC |
| $ | 0.04 |
|
| $ | 0.06 |
|
| $ | (0.03 | ) |
| $ | 0.00 |
|
2021 |
| March 31, |
|
| June 30, |
|
| September 30, |
|
| December 31, |
| ||||
Total revenues |
| $ | 14,387,488 |
|
| $ | 16,406,496 |
|
| $ | 17,681,901 |
|
| $ | 19,976,409 |
|
Other income - gains and losses, net |
|
| 2,809,106 |
|
|
| 5,463,484 |
|
|
| 6,954,649 |
|
|
| 278,710 |
|
Income from continuing operations |
|
| 6,992,854 |
|
|
| 10,264,680 |
|
|
| 12,988,384 |
|
|
| 7,853,570 |
|
Net income |
| $ | 6,992,854 |
|
| $ | 10,264,680 |
|
| $ | 12,988,384 |
|
| $ | 7,853,570 |
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||
Income from continuing operations, per BUC |
| $ | 0.09 |
|
| $ | 0.13 |
|
| $ | 0.19 |
|
| $ | 0.11 |
|
Net income, basic and diluted, per BUC |
| $ | 0.09 |
|
| $ | 0.13 |
|
| $ | 0.19 |
|
| $ | 0.11 |
|
2020 |
| March 31, |
|
| June 30, |
|
| September 30, |
|
| December 31, |
| ||||
Total revenues |
| $ | 13,736,135 |
|
| $ | 14,478,419 |
|
| $ | 13,839,947 |
|
| $ | 13,474,067 |
|
Other income - gains and losses, net |
|
| 1,416,023 |
|
|
| - |
|
|
| - |
|
|
| - |
|
Income (loss) from continuing operations |
|
| 2,981,757 |
|
|
| 4,588,348 |
|
|
| (1,160,017 | ) |
|
| 798,740 |
|
Net income (loss) |
| $ | 2,981,757 |
|
| $ | 4,588,348 |
|
| $ | (1,160,017 | ) |
| $ | 798,740 |
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||
Income (loss) from continuing operations, per BUC |
| $ | 0.04 |
|
| $ | 0.06 |
|
| $ | (0.03 | ) |
| $ | 0.00 |
|
Net income (loss), basic and diluted, per BUC |
| $ | 0.04 |
|
| $ | 0.06 |
|
| $ | (0.03 | ) |
| $ | 0.00 |
|
2019 |
| March 31, |
|
| June 30, |
|
| September 30, |
|
| December 31, |
| ||||
Revenues and other income |
| $ | 17,664,598 |
|
| $ | 14,346,334 |
|
| $ | 25,341,629 |
|
| $ | 21,107,249 |
|
Income from continuing operations |
|
| 6,451,813 |
|
|
| 3,886,190 |
|
|
| 9,707,903 |
|
|
| 10,446,245 |
|
Net income |
| $ | 6,451,813 |
|
| $ | 3,886,190 |
|
| $ | 9,707,903 |
|
| $ | 10,446,245 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income from continuing operations, per BUC |
| $ | 0.08 |
|
| $ | 0.05 |
|
| $ | 0.13 |
|
| $ | 0.16 |
|
Net income, basic and diluted, per BUC |
| $ | 0.08 |
|
| $ | 0.05 |
|
| $ | 0.13 |
|
| $ | 0.16 |
|
27. Subsequent Events
In January 2021,2022, the Partnership committedextended the maturity of the Trust 2021-XF-2953 Barclays credit facility from October 2022 to fund multiple GILs and property loans for the construction of affordable multifamily properties. At closing, the Partnership advanced the initial funding amounts as summarized belowJanuary 2023. There were no additional changes to terms or fees associated with the remaining commitmentsextension.
In January 2022, the Live 929 Apartments property completed a restructuring of MRBs and other outstanding debt. The Partnership’s Live 929 Apartments – Series A and Live 929 Apartments – Series B MRBs were redeemed at par plus accrued interest. Approximately $15.5 million of redemption proceeds were used to be funded as construction progresses. The GIL andpay down the property loan for each respective property share a first mortgage lien position on the property. Acquisition LOC. The following tabletables summarizes the terms of MRBs upon redemption:
Mortgage Revenue Bond Name |
| Month |
| Property Location |
| Units |
| Original |
| Interest Rate |
| Cost Adjusted for Paydowns and Allowances at Restructuring Date |
| |
Live 929 Apartments - Series A |
| January 2022 |
| Baltimore, MD |
| 575 |
| 7/1/2049 |
| 5.78% |
| $ | 36,149,147 |
|
Live 929 Apartments - Series B |
| January 2022 |
| Baltimore, MD |
| 575 |
| 7/1/2039 |
| 1.60% | (1) |
| 17,344,000 |
|
|
|
|
|
|
|
|
|
|
|
|
| $ | 53,493,147 |
|
The Partnership also received $1.0 million of principal and interest due on the Live 929 Apartments property loan. The property loan commitments:had a remaining principal balance of $495,000 after the restructuring transaction.
Upon redemption of the Live 929 Apartments – Series A MRB, the following TOB Trust financing with Mizuho was collapsed and all interest and principal were paid in full:
Debt Financing |
| Debt Facility |
| Month |
| Paydown Applied |
| |
Live 929 Apartments - Series A |
| Variable TOB |
| January 2022 |
| $ | 31,565,000 |
|
Upon restructuring, the Partnership acquired two new series of MRBs secured by the Live 929 Apartments property. The following tables summarizes the MRBs that were acquired as part of the restructuring of the Live 929 Apartments MRBs:
Mortgage Revenue Bond Name |
| Month |
| Property Location |
| Units |
| Original |
| Interest Rate |
| Principal Acquired |
| |
Live 929 Apartments - Series A |
| January 2022 |
| Baltimore, MD |
| 575 |
| 1/1/2029 |
| 4.30% |
| $ | 66,365,000 |
|
Live 929 Apartments - Series B (Taxable) |
| January 2022 |
| Baltimore, MD |
| 575 |
| 1/1/2029 |
| 4.30% |
| $ | 3,625,000 |
|
|
|
|
|
|
|
|
|
|
|
|
| $ | 69,990,000 |
|
118
Commitment |
| Month Acquired |
| Property Location |
| Units |
| Maturity Date |
| Variable Interest Rate |
| Initial Funding |
|
| Maximum Remaining Commitment |
| ||
Legacy Commons at Signal Hills - GIL |
| January 2021 |
| St Paul, MN |
| 247 |
| 2/1/2024 (1) |
| SOFR + 3.07% | (2) | $ | 9,917,887 |
|
| $ | 24,702,113 |
|
Legacy Commons at Signal Hills - Property Loan |
| January 2021 |
| St Paul, MN |
| 247 |
| 2/1/2024 (1) |
| SOFR + 3.07% | (2) |
| 1,000,000 |
|
|
| 31,233,972 |
|
Hilltop at Signal Hills - GIL |
| January 2021 |
| St Paul, MN |
| 146 |
| 8/1/2023 (1) |
| SOFR + 3.07% | (2) |
| 4,075,050 |
|
|
| 20,374,950 |
|
Hilltop at Signal Hills - Property Loan |
| January 2021 |
| St Paul, MN |
| 146 |
| 8/1/2023 (1) |
| SOFR + 3.07% | (2) |
| 1,000,000 |
|
|
| 20,197,939 |
|
Hope on Avalon - GIL |
| January 2021 |
| Los Angeles, CA |
| 88 |
| 2/1/2023 (1) |
| SIFMA + 3.75% | (3) |
| 6,331,200 |
|
|
| 17,058,800 |
|
Hope on Avalon - Property Loan |
| January 2021 |
| Los Angeles, CA |
| 88 |
| 2/1/2023 (1) |
| SOFR + 3.55% | (4) |
| 1,000,000 |
|
|
| 9,573,000 |
|
Hope on Broadway - GIL |
| January 2021 |
| Los Angeles, CA |
| 49 |
| 2/1/2023 (1) |
| SIFMA + 3.75% | (3) |
| 3,691,245 |
|
|
| 8,414,378 |
|
|
|
|
|
|
|
|
|
In January 20212022, the Partnership entered into a TOB Trust financing arrangement with Mizuho to securitize the Oasis at Twin Lakes property loan, the Legacy Commons at Signal Hills GIL and property loan,Live 929 Apartments – Series A MRB and the Hilltop at Signal Hills GIL and property loan. The TOB Trust financing allows for additional borrowings as the Partnership makes additional advances for the related funding commitments.Live 929 Apartments – Series B taxable MRB. The following table summarizes the initial terms of the TOB Trust financing:
TOB Trusts Securitization |
| Initial TOB |
|
| Stated Maturity |
| Reset |
| OBFR |
| Facility Fees |
| Initial | |
TOB Trust 2022-XF2967 |
| $ | 55,990,000 |
|
| February 2024 |
| Weekly |
| 0.19% |
| 1.15% |
| 1.34% |
TOB Trusts Securitization |
| Initial TOB Trust Financing |
|
| Stated Maturity |
| Reset Frequency |
| OBFR Based Rates |
|
| Facility Fees |
|
| Initial Interest Rate |
| |
TOB Trust 2021-XF2926 |
| $ | 15,290,000 |
|
| January 2024 |
| Weekly |
| 0.33% |
|
| 0.89% |
|
| 1.22% |
|
In January 2021,February 2022, the Partnership borrowed approximately $11.0 million on its unsecured non-operating lineentered into an interest rate swap to mitigate interest rate risk for the variable rate TOB Trust 2022-XF2967 securitized by the Live 929 Apartments MRBs. The following table summarizes the terms of creditthe interest rate swap:
Purchase Date |
| Notional Amount |
|
| Effective Date |
| Termination Date |
| Fixed Rate Paid |
| Variable Rate Index Received |
| Counterparty | |
February 2022 |
| $ | 55,990,000 |
|
| February 2022 |
| February 2024 |
| 1.403% |
| SOFR |
| Mizuho Capital Markets |
In February 2022, the maturity date of the Vantage at San Marcos mortgage payable was extended to financeMay 2022. There were no additional changes to terms or fees associated with the investments in the Hope on Broadway GIL, Hope on Avalon GIL and Hope on Avalon property loan investments discussed above.extension.
119
Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure.
Not applicable.
Item 9A. Controls and Procedures.
Evaluation of disclosure controls and procedures. The Chief Executive Officer (“CEO”) and the Chief Financial Officer (“CFO”) of the Partnership have evaluated the effectiveness of the Partnership’s disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) as of the end of the period covered by this Report. Based on that evaluation, the CEO and CFO have concluded that, as of December 31, 2020,2021, the Partnership’s disclosure controls and procedures were effective in ensuring that information required to be disclosed by the Partnership in the reports that it files or submits under the Securities Exchange Act of 1934, as amended, is (i) recorded, processed, summarized, and reported within the time periods specified in the SEC’s rules and forms, and (ii) accumulated and communicated to the Partnership’s management, including its CEO and CFO, or persons performing similar functions, as appropriate to allow timely decisions regarding required disclosure.
Changes in internal control over financial reporting. There were no changes in the Partnership’s internal control over financial reporting (as such term is defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) during the fourth quarter ended December 31, 20202021 that have materially affected, or are reasonably likely to materially affect, the Partnership’s internal control over financial reporting.
Management Report On Internal Control Over Financial Reporting
The Partnership’s management is responsible for establishing and maintaining adequate internal control over financial reporting as such term is defined in Securities Exchange Act Rules 13a-15(f) and 15d-15(f). The Partnership carried out an evaluation under the supervision and with the participation of the Partnership’s management, including the Partnership’s CEO and CFO, of the effectiveness of the Partnership’s internal control over financial reporting. The Partnership’s management used the framework in Internal Control - Integrated Framework (2013) issued by the Committee of Sponsoring Organizations (COSO) to perform this evaluation. Based on that evaluation, the Partnership’s management concluded that the Partnership’s internal control over financial reporting was effective as of December 31, 2020.2021.
This Annual Report on Form 10-K does not include an attestation report of the Partnership’s registered public accounting firm regarding internal control over financial reporting. Management’s report was not subject to attestation by the Partnership’s registered public accounting firm pursuant to Securities and Exchange Commission rules that permit the Partnership to provide only management’s report in this annual report.
Item 9B. Other Information.
None.
Item 9C. Disclosure Regarding Foreign Jurisdictions that Prevent Inspections.
Not applicable.
120
PART III
Item 10. Directors, Executive Officers and Corporate Governance.
The Partnership is managed by its general partner, AFCA 2, which in turn is managed by its general partner, Greystone Manager. The Board of Managers of Greystone Manager act as the directors of the Partnership.
Kenneth C. Rogozinski holds the position of Chief Executive Officer and Jesse A. Coury holds the position of Chief Financial Officer of the Partnership. Mr. Rogozinski and Mr. Coury are the only executive officers of the Partnership and are employed by Greystone Manager.
The Partnership’s general partner, AFCA 2, is not elected by the Unitholders and is not subject to re-election on an annual or other continuing basis in the future. In addition, the Partnership’s Unitholders are not entitled to elect the Board of Managers or executive officers of Greystone Manager or take part in the management or control of the business of the Partnership.
The Board of Managers of Greystone Manager has seven members. The NASDAQ listing rules do not require a listed limited partnership, such as the Partnership, to have a majority of independent directors on the Board of Managers of the general partner of AFCA 2 or to establish a compensation committee or a nominating and corporate governance committee. The Partnership is, however, required to have an audit committee of at least three members, all of whom are required to meet the independence and experience standards established by the NASDAQ listing rules and SEC rules. In this regard, all the members of the Greystone Manager Audit Committee have been determined to be independent under the applicable SEC and NASDAQ independence requirements.
The following table sets forth certain information regarding the current Board of Managers and executive officers of the Partnership. Managers will remain in office until: (i) removed by a written instrument signed by the managing member of Greystone Manager; (ii) such Manager resigns in a written instrument delivered to the managing member of Greystone Manager; or (iii) such Manager dies or is unable to serve.
Name | Position Held with Greystone | Position Held
| ||
Stephen Rosenberg | Chairman of the Board / Manager | 2019 | ||
Kenneth C. Rogozinski | Chief Executive Officer | 2021 | ||
Jesse A. Coury | Chief Financial Officer | 2020 | ||
Jeffrey A. Baevsky | Manager | 2019 | ||
Drew C. Fletcher | Manager | 2019 | ||
Curtis A. Pollock | Manager | 2019 | ||
Steven C. Lilly |
|
| ||
|
|
| ||
|
|
|
|
|
Manager (1) (2) |
| 2019 | ||
W. Kimball Griffith | Manager (1) (2) | 2019 | ||
Deborah A. Wilson | Manager (1) (2) | 2020 |
Set forth below is the biographical information for each of the Managers of Greystone Manager and the executive officers of the Partnership:
Stephen Rosenberg, 65,66, founded Greystone & Co., Inc. (together with its affiliated companies, the “Greystone Companies”) in 1988 as an independent investment banking firm and has developed the Greystone Companies into a diversified company with locations in 2425 states and 3,3001,600 employees that owns or manages over $60 billion in assets. Mr. Rosenberg currently serves as Chief Executive Officer of the Greystone Companies, responsible for executive oversight, coordination and management of matters of the Greystone Companies, as well as the identification and execution of real estate and healthcare-related merchant banking and development opportunities. Mr. Rosenberg received his Bachelor of Business Administration degree from Touro College in New York and a Masters of Business Administration degree from the Wharton School of the University of Pennsylvania, as well as a Doctor of Dental Medicine degree from the University of Pennsylvania School of Dental Medicine. Mr. Rosenberg currently serves on the Board of Trustees of the Touro College and University System.
121
Kenneth C. Rogozinski, 59,60, is the Chief Executive Officer of the Partnership and an employee of Greystone Manager.Manager. Mr. Rogozinski was the Partnership’s Chief Investment Officer beginning in September 2019. Previously, Mr. Rogozinski was an Executive Managing Director of Greystone Capital Advisors LLC, a position he held beginning October 2017. In that role Mr. Rogozinski oversaw Greystone Capital Advisor’sAdvisors originations, structured debt products and complex, specialized financing solutions for real estate owners and developers seeking debt and equity for construction and portfolio refinancing of multifamily and mixed-use assets. From February 2009 to September 2017, Mr. Rogozinski was the Co-Chief Executive Officer and Chief Credit Officer of Dreadnought Capital Management Corporation, an SEC registeredinvestment advisor, that he co-founded in 2009. There, he focused on direct lending and debt investing in public-private housing and project finance, overseeing more than $1.1 billion in deployed capital. Mr. Rogozinski received a Bachelor of Science degree in finance from Fordham University and a Master of Business Administration degree from the Wharton School of the University of Pennsylvania. Mr. Rogozinski is a board member of the Foundation for Affordable Rental Housing Holdings Inc.
Jesse A. Coury, 35,36, is the Chief Financial Officer of the Partnership and an employee of Greystone Manager. Previously, Mr. Coury served as the Partnership’s Corporate Controller from 2017 until 2019. Mr. Coury served as the Director of Internal Audit for Burlington Capital LLC in 2016 and held various positions with RSM US LLP from 2009 to 2015, most recently as an Assurance Manager. Mr. Coury received his Bachelor of Arts in Accounting and Master of Accountancy degrees from the University of Notre Dame. Mr. Coury holds a designation as a Certified Public Accountant (CPA) in the State of Nebraska.
Jeffrey M. Baevsky, 60,61, is the Executive Managing Director of Corporate Finance and Capital Markets at Greystone & Co., Inc. where he has been employed since 2014. Mr. Baevsky is responsible for the Greystone Companies’Greystone’s banking relationships, credit lines, financing development projects, and new product development, as well as overseeing all of the Greystone Companies’Greystone’s capital markets activities. Mr. Baevsky led the closing of the Greystone Companies’Greystone’s inaugural debt fund, as well as threefive CLO offerings, onetwo of which was the first in the markethave been landmark transactions comprised solely of healthcare assets. Prior to joining Greystone, & Co., Inc., Mr. Baevsky served as Head of Capital Markets at Gramercy Capital Corp. handling project debt and secondary loan trading activities. Over his career, he has advised on mortgage-based credit facilities, mezzanine finance, off-balance sheet acquisition and asset development programs, and both public and private debt and equity capital placements as a Managing Director at Deutsche Bank and Wachovia. Mr. Baevsky received an M.B.A. in finance and real estate from the MIT Sloan School of Management and a Bachelor of Science and Engineering degree from the University of Pennsylvania.
Drew C. Fletcher, 42,43, is the President of Greystone Capital Advisors LLC where he has been employed since 2013. Mr. Fletcher brings over 20 years of commercial real estate experience arranging creative debt and equity solutions for institutional and private commercial property owners and developers, and providing strategic advisory services for institutions, investors and borrowers. He has directly originated and executed on more than $10 billion of financing transactions. From 1999 to 2012 he was employed by Edison Properties LLC, one of the largest private real estate owners in New York City, with a $5 billion diversified portfolio of self-storage, office, multifamily and substantial land holdings throughout the New York Metropolitan region, where he ultimately served as Chief Financial Officer. Mr. Fletcher received his Bachelor of Arts degree in Economics and Communications from Wake Forest University; his Master of Business Administration in Finance from New York University; and his Master of Accountancy in Taxation from Rutgers University.
Curtis A. Pollock, 58,59, is the Chief Operating Officer of the Greystone, Companies, where he has been employed since 1993. As Chief Operating Officer, Mr. Pollock is responsible for managing business operations and new business development for the various Greystone companies. He is also responsible for the Greystone Companies’Greystone’s strategic planning and management of lending and general banking relationships; maintenance of quality control in accounting practices; corporate compliance; portfolio and risk management; and human resources, benefits and insurance. From 1993 to 2005, Mr. Pollock served as the Chief Financial Officer of the Greystone, Companies, with responsibility for financial reporting, business tax matters, and maintenance of quality control of accounting practices. He was also responsible for portfolio management and lending activities. Mr. Pollock received his Bachelor of Business Administration degree in accounting from Georgia State University and also attended a Masters of Taxation program at Georgia State University.
Steven C. Lilly, 51,52, currently serves as the Chief Financial Officer of FS/KKR Capital Corp. (NYSE, “FSK”) and. Previously, he also served as the Chief Financial Officer of FS/KKR Capital Corp. II, (NYSE, “FSKR”). Previously, heuntil its merger with FSK in June, 2021. Prior to FSK, Mr. Lilly served as the Chief Financial Officer, Secretary and member of the Board of Directors of Triangle Capital Corporation from 2006 to the sale of Triangle Capital Corporation in August 2018. Prior to its sale, Triangle Capital Corporation was a NYSE-listed specialty finance company that provided customized financing primarily to lower middle market companies located in the United States and is now known as Barings BDC, Inc. Mr. Lilly was also the Chief Compliance Officer of Triangle Capital Corporation from 2007 to August 2018, and a member of its investment committee. Mr. Lilly is a graduate of Davidson College and has completed an executive-sponsored education program at the University of North Carolina’s Kenan-Flagler Business School.
W. Kimball Griffith, 72,73, is of counsel to Norris George & Ostrow PLLC since October 2017, a law firm that specializes in providing finance solutions to affordable housing and community development. From February 2015 to September 2017, was an affordable housing consultant. From 2003 to February 2015, he served as director (2003-2007) and vice president (2007-2015) of the
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Federal Home Loan Mortgage Corporation (Freddie Mac) in its Multifamily Division in charge of mortgage and investment products for affordable properties with federal, state or local financial support. During the period that he was vice president, Freddie Mac affordable housing investments annually approximated $3 to 4 billion, working with 10 to 15 affordable mortgage lenders and investors and supervising 8 production staff as well as working with 15 underwriting staff. From 1974 to 2003, he practiced law, including with Kutak Rock LLP and its predecessor firms, from 1976 until 1999, where he served in numerous management roles, and with Ballard Spahr LLP from 1999 to 2003. Mr. Griffith currently serves on the Board of Directors of Housing Up (formerly Transitional Housing Corporation). He previously served on the Board of Directors of Enterprise Community Investors, Inc. and Enterprise Community Development Inc. (formerly Community Preservation Development Corporation). Mr. Griffith is a graduate of Davidson College and the University of North Carolina Law School.
Deborah A. Wilson, 64,66, is currently a Principal at Ramshead Advisors LLC where she uses her broad and deep experience in the industry to assist existing and potential owners of commercial mortgage banking companies. She focuses on mergers and acquisitions, pricing, due diligence, transitional activities and operational efficiencies of commercial mortgage banking. She has also served as Executive Vice President, Chief Financial Officer and Treasurer of Walker & Dunlop, Inc., as Vice President of Counterparty Risk at Fannie Mae, and as a Partner at KPMG LLP.
Code of Ethical Conduct and Code of Conduct
Greystone Manager has adopted the Code of Business Conduct and Ethics for the senior executive and financial officers of the Partnership as required by Section 406 of the Sarbanes-Oxley Act of 2002. As such, this Code of Business Conduct and Ethics covers all executive officers of the Partnership, including the Partnership’s Chief Executive Officer and Chief Financial Officer. The Code of Business Conduct and Ethics is also applicable to all the members of the Board of Managers of Greystone Manager, officers, and employees working on behalf of the Partnership and is designed to comply with the listing requirements of the NASDAQ Stock Market. The Code of Business Conduct and Ethics is available on the Partnership’s website at www.ataxfund.com.
Hedging Policy
The Partnership has a hedging policy in place for all members of the Board of Managers of Greystone Manager, officers of the Partnership and Greystone Manager, the General Partner, employees of the Partnership or its subsidiaries, and any other Greystone affiliated employees who perform services on behalf of Greystone Manager, the General Partner or the Partnership. The policy also applies to family members, other members of a person’s household, and entities controlled by a person covered by the policy. The policy applies to all transactions in the Partnerships securities, which consists of the Partnership’s BUCs, Series A Preferred Units and any other Partnership securities that may be issued in the future. Our policy prohibits hedging or monetization transactions.
Audit Committee
The Greystone Manager Board of Managers has an Audit Committee. The Charter of the Audit Committee is posted under the “Corporate Governance” section of the Partnership’s website at www.ataxfund.com. The Partnership does not have a compensation committee or a nominating and corporate governance committee. The NASDAQ listing rules do not require a listed limited partnership to establish a compensation committee or a nominating and corporate governance committee. The Partnership is, however, required to have an audit committee comprised solely of members that are “independent” under the NASDAQ listing standards.
The Greystone Manager Audit Committee consists of Steven C. Lilly, W. Kimball Griffith, and Deborah A. Wilson. The Greystone Manager Board of Managers has affirmatively determined that each member of the Audit Committee meets the independence and experience standards established by the NASDAQ listing rules and the rules of the SEC. The Greystone Manager Board of Managers has also reviewed the financial expertise of Mr. Lilly and Ms. Wilson and affirmatively determined that each is an “audit committee financial expert,” as determined by the rules of the SEC. Mr. Lilly, Mr. Griffith and Ms. Wilson are “independent” as defined by the rules of the SEC and the NASDAQ listing standards.
The Audit Committee assists the Board of Managers in its oversight of the integrity of the Partnership’s financial statements and its compliance with legal and regulatory requirements and partnership policies and controls. The Audit Committee has the sole authority to (1) retain and terminate our independent registered public accounting firm, (2) approve all auditing services and related fees and the terms thereof performed by our independent registered public accounting firm, and (3) pre-approve any non-audit services and tax services to be rendered by our independent registered public accounting firm. The Audit Committee is also responsible for confirming
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the independence and objectivity of our independent registered public accounting firm. The Partnership’s independent registered public accounting firm is given unrestricted access to the Audit Committee and Greystone Manager’s management, as necessary.
The Greystone Manager Audit Committee held sixfour meetings during 2020.2021.
Item 11. Executive Compensation.
This section discusses the material elements of the compensation of the individuals who served as the Partnership’s executive officers as of December 31, 20202021 and are referred to as “named executive officers.” For 2020,2021, the Partnership’s named executive officers consisted of Chad L. Daffer,Kenneth C. Rogozinski, the Chief Executive Officer and Jesse A. Coury, the Chief Financial Officer, and Kenneth C. Rogozinski, the Chief Investment Officer. Mr. Daffer,Rogozinski and Mr. Coury and Mr. Rogozinski are employees, but not executive officers, of Greystone Manager.
Based on the standards for determining “executive officers” set forth in Exchange Act Rule 3b-7, and consistent with the Partnership’s management structure, the Partnership has determined that Mr. Daffer,Rogozinski and Mr. Coury and Mr. Rogozinski were the only individuals who served as executive officers of the Partnership as of December 31, 2020.2021.
Under the terms of the Partnership Agreement, other than pursuant to awards under equity plans sponsored by the Partnership or its affiliates, the Partnership is not permitted to provide any compensation to executive officers of Greystone Manager, or to any limited partners of AFCA 2. In this regard, the compensation of the named executive officers of the Partnership was determined exclusively by Greystone Manager. The Partnership reimbursed Greystone Manager for services provided by the Partnership’s named executive officers during 2020.2021. Accordingly, the Partnership does not have an executive compensation program for the named executive officers that is controlled by the Partnership.
Set forth below is information about all compensation paid by the Partnership, pursuant to awards under equity plans sponsored by the Partnership or its affiliates, to the named executive officers for the years ended December 31, 20202021 and 2019.2020.
Summary Compensation Table For 20202021
The following table sets forth information regarding compensation paid by the Partnership, pursuant to awards under equity plans sponsored by the Partnership or its affiliates, to the Partnership’s named executive officers for the years ended December 31, 2021 and 2020.
Name and Principal Position |
| Year |
| Unit |
|
| All Other |
|
| Total |
| |||
Kenneth C. Rogozinski (2) |
| 2021 |
| $ | 367,788 |
|
| $ | - |
|
| $ | 367,788 |
|
Chief Executive Officer |
| 2020 |
|
| 257,117 |
|
|
| - |
|
|
| 257,117 |
|
|
|
|
|
|
|
|
|
|
|
|
| |||
Jesse A. Coury |
| 2021 |
|
| 340,725 |
|
|
| - |
|
|
| 340,725 |
|
Chief Financial Officer |
| 2020 |
|
| 269,622 |
|
|
| - |
|
|
| 269,622 |
|
Name and Principal Position |
| Year |
| Unit Awards (1) ($) |
|
| All Other Compensation (2) ($) |
|
| Total ($) |
| |||
Chad L. Daffer (3) |
| 2020 |
| $ | 373,500 |
|
| $ | - |
|
| $ | 373,500 |
|
Former Chief Executive Officer |
| 2019 |
|
| 533,828 |
|
|
| 476,876 |
|
|
| 1,010,704 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Jesse A. Coury (4) |
| 2020 |
|
| 269,622 |
|
|
| - |
|
|
| 269,622 |
|
Chief Financial Officer |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Kenneth C. Rogozinski (5) |
| 2020 |
|
| 257,117 |
|
|
| - |
|
|
| 257,117 |
|
Chief Investment Officer |
| 2019 |
|
| - |
|
|
| - |
|
|
| - |
|
|
|
(2) |
|
|
|
|
|
(5) Mr. Rogozinski held the position of Chief Investment Officer of the Partnership through December 31, 2020. Effective as of January 1, 2021, Mr. Rogozinski was appointed as the interim Chief Executive Officer of the Partnership. On February 5, 2021, Mr. Rogozinski was appointed as the permanent Chief Executive Officer of the Partnership effective February 10, 2021.
2015 Equity Incentive Plan
On June 24, 2015, the Board of Managers of the then current general partner of the Partnership’s General Partner approved the America First Multifamily Investors, L.P. 2015 Equity Incentive Plan, which was subsequently approved by the Partnership’s BUC holders on September 15, 2015.
The purpose of the Plan is to promote the interests of the Partnership and its Unitholders by providing incentive compensation awards that encourage superior performance. The Plan is also intended to attract and retain the services of individuals who are essential
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for the Partnership’s growth and profitability and to encourage those individuals to devote their best efforts to advancing the Partnership’s business.
The maximum number of BUCs that may be delivered with respect to awards under the Plan is 3,000,000. The Plan is generally administered by the Board of Managers of the general partner of AFCA 2 (the “Board”), or any compensation committee of the Board, if appointed, or any other committee as may be appointed by the Board to administer the Plan (the Board or any such committee is referred to herein as the “Committee”). The Committee has the full authority, subject to the terms of the Plan, to establish, amend, suspend, or waive such rules and regulations and appoint such agents as it shall deem appropriate for the proper administration of the Plan, to designate participants under the Plan, to determine the number of BUCs to be covered by awards, to determine the type or types of awards to be granted to a participant, and to determine the terms and conditions of any award. All employees of the general partner of AFCA 2 and members of the Board, and employees of affiliates of the general partner of AFCA 2, including the Partnership, that perform services for of the general partner of AFCA 2, the Partnership, or an affiliate of either are eligible to be selected to participate in the Plan. The selection of which eligible individuals will receive awards is within the sole discretion of the Committee.
The Plan provides that the Committee may grant any or all of the following types of awards to eligible participants: (i) unit options; (ii) unit appreciation rights; (iii) restricted units; (iv) phantom units; (v) unit awards; and (vi) other unit-based awards. The Committee has full authority, subject to the terms of the Plan, to determine the types and amount of awards granted and the participants eligible to receive awards.
Upon the occurrence of any distribution (whether in cash, units, other securities, or other property), recapitalization, units split, reorganization or liquidation, merger, consolidation, split-up, spin-off, separation, combination, repurchase, acquisition of property or securities, or exchange of units or other securities of the Partnership, issuance of warrants or other rights to purchase units or other securities of the Partnership, or other similar transaction or event affects the units, then the Committee will equitably adjust any or all of (i) the number and type of units (or other securities or property) with respect to which awards may be granted, (ii) the number and type of units (or other securities or property) subject to outstanding awards, (iii) the grant or exercise price with respect to any award, (iv) any performance criteria for performance-based awards, except for awards based on continued service as an employee or manager, (v) the appropriate fair market value and other price determinations for such awards, and (vi) any other limitations in the Plan or, subject to Section 409A of the IRC, as amended, make provision for a cash payment to the holder of an outstanding award.
The effective date of the Plan is June 24, 2015 (the “Effective Date”). The term of the Plan will expire on the earlier of (i) the date it is terminated by the Board; (ii) the date units are no longer available under the plan for delivery pursuant to awards; or (iii) the tenth anniversary of the Effective Date (which is June 24, 2025). The Board may amend the Plan at any time; provided, however, that BUC holder approval will be obtained for any amendment to the Plan to the extent necessary to comply with any applicable law, regulation, or securities exchange rule. The Committee may also amend any award agreement evidencing an award made under the Plan, provided that no change in any outstanding award may be made that would adversely affect the rights of the participant under any previously granted award without the consent of the affected participant. Repricing of unit options and unit appreciation rights is prohibited under the Plan without the approval of our BUC holders, except in the case of adjustments implemented to reflect certain Partnership transactions, as described above.
Restricted units granted under the Plan totaled 290,000266,324 and 353,197290,000 for the years ended December 31, 20202021 and 2019,2020, respectively. No other types of awards have been granted under the Plan as of December 31, 2020.2021. There are 1,854,235 1,635,476BUCs available for future issuance under the Plan as of December 31, 2020.2021.
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Outstanding Equity Awards at Fiscal Year-End 20202021
Name |
| Number of Shares or |
|
| Market Value of Shares |
| ||
Kenneth C. Rogozinski |
|
| 54,990 |
|
| $ | 353,586 |
|
Jesse A. Coury |
|
| 53,047 |
|
|
| 341,092 |
|
Name |
| Number of Shares or Units of Stock That Have Not Vested (1) (#) |
|
| Market Value of Shares or Units of Stock That Have Not Vested ($) |
| ||
Chad L. Daffer |
|
| - |
|
| $ | - |
|
Jesse A. Coury |
|
| 36,094 |
|
|
| 153,400 |
|
Kenneth C. Rogozinski |
|
| 34,420 |
|
|
| 146,285 |
|
|
|
|
|
Manager Compensation for 20202021
The Greystone Manager Board of Managers effectively acts as the Partnership’s board of directors. Although Greystone Manager is not a public company and its securities are not listed on any stock market or otherwise publicly traded, its Board of Managers is constituted in a manner that complies with rules of the SEC and the NASDAQ Stock Market related to public companies with securities listed on the NASDAQ Global Select Market in order for the Partnership and its BUCs to comply with the rules applicable to registrants that are limited partnerships. During 2020, the Partnership paid $25,625 to Greystone Manager as reimbursement for services provided to the Partnership by independent Managers. The Partnership did not pay any other compensation of any nature to any of the Managers of Greystone Manager and did not reimburse Greystone Manager for any other amounts representing compensation to its Board of Managers, other than what is disclosed in the table below.
The following table sets forth the total compensation paid to the Greystone Manager Board of Managers for the year ended December 31, 20202021 for their services to the Partnership.
Name |
| Total Fees Earned or |
|
| Restricted Unit |
|
| Total |
| |||
Stephen Rosenberg (2) |
| $ | - |
|
| $ | 48,675 |
|
| $ | 48,675 |
|
Jeffrey A. Baevsky (2) |
|
| - |
|
|
| 48,675 |
|
|
| 48,675 |
|
Drew C. Fletcher (2) |
|
| - |
|
|
| 48,675 |
|
|
| 48,675 |
|
Curtis A. Pollock (2) |
|
| - |
|
|
| 48,675 |
|
|
| 48,675 |
|
Steven C. Lilly |
|
| 38,500 |
|
|
| 40,563 |
|
|
| 79,063 |
|
W. Kimball Griffith |
|
| 33,500 |
|
|
| 35,156 |
|
|
| 68,656 |
|
Deborah A. Wilson |
|
| 33,500 |
|
|
| 35,156 |
|
|
| 68,656 |
|
Name |
| Total Fees Earned or Paid in Cash ($) |
|
| Restricted Unit Awards (1) ($) |
|
| Total Compensation ($) |
| |||
Stephen Rosenberg (2) |
| $ | - |
|
| $ | 28,386 |
|
| $ | 28,386 |
|
Jeffrey A. Baevsky (2) |
|
| - |
|
|
| 28,386 |
|
|
| 28,386 |
|
Drew C. Fletcher (2) |
|
| - |
|
|
| 28,386 |
|
|
| 28,386 |
|
Curtis A. Pollock (2) |
|
| - |
|
|
| 28,386 |
|
|
| 28,386 |
|
Steven C. Lilly |
|
| 37,500 |
|
|
| 23,406 |
|
|
| 60,906 |
|
W. Kimball Griffith |
|
| 32,500 |
|
|
| 20,493 |
|
|
| 52,993 |
|
William P. Mando (3) |
|
| 29,792 |
|
|
| 20,493 |
|
|
| 50,285 |
|
Deborah A. Wilson |
|
| 5,417 |
|
|
| - |
|
|
| 5,417 |
|
|
|
|
|
|
|
Item 12. Security Ownership of Certain Beneficial Owners and Management.
(a) No person is known by the Partnership to own beneficially more than 5% of the Partnership’s BUCs.
(b) Kenneth C. Rogozinski and Jesse A. Coury are the only executive officers of the Partnership, but they are employed by Greystone Manager. The other persons constituting management of the Partnership are employees of Greystone Manager as well. The following table and notes set forth information with respect to the beneficial ownership of the Partnership’s BUCs by Mr. Rogozinski, Mr. Coury, and each of the Greystone Manager Board of Managers and by such persons as a group. Unless otherwise indicated, the
information is as of February 24, 2021,23, 2022, and is based upon information furnished to us by such persons. Unless otherwise noted, all persons listed in the following table have sole voting and investment power over the BUCs they beneficially own and own such BUCs directly. For purposes of this table, the term “beneficially owned” means any person who, directly or indirectly, has the power to vote or to direct the voting of a BUC or the power to dispose or to direct the disposition of a BUC or
126
has the right to acquire BUCs within 60 days. The percentages in the table below are based on 60,823,67466,282,474 issued and outstanding BUCs as of December 31, 2020.2021.
Name |
| Number of |
|
| Percent of | |
Stephen Rosenberg, Chairman and Manager of Greystone Manager |
|
| 55,700 |
| (1) | * |
Kenneth C. Rogozinski, Chief Executive Officer |
|
| 208,381 |
| (2) | * |
Jesse A. Coury, Chief Financial Officer |
|
| 103,921 |
| (3) | * |
Jeffrey A. Baevsky, Manager of Greystone Manager |
|
| 15,456 |
| (4) | * |
Drew C. Fletcher, Manager of Greystone Manager |
|
| 10,800 |
| (5) | * |
Curtis A. Pollock, Manager of Greystone Manager |
|
| 12,219 |
| (6) | * |
Steven C. Lilly, Manager of Greystone Manager |
|
| 11,000 |
|
| * |
W. Kimball Griffith, Manager of Greystone Manager |
|
| 57,839 |
|
| * |
Deborah A. Wilson, Manager of Greystone Manager |
|
| 8,253 |
|
| * |
All current executive officers and Managers of Greystone Manager as a group |
|
| 483,569 |
|
| * |
* Denotes ownership of less than 1%.
|
|
| ||||
|
|
|
| |||
|
|
|
| |||
|
|
|
| |||
|
|
|
| |||
|
|
|
| |||
|
|
|
| |||
|
|
| ||||
|
|
| ||||
|
|
| ||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(c) There are no arrangements known to the Partnership, the operation of which may at any subsequent date result in a change in control of the Partnership.
(d) For information regarding the compensation plan under which equity securities of the Partnership are currently authorized for issuance, see “Equity Compensation Plan Information” in Part II, Item 5, of this Report on Form 10-K.
Review, Approval or Ratification of Transactions with Related Persons
The general partner of the Partnership is AFCA 2 and the sole general partner of AFCA 2 is Greystone Manager.
The Audit Committee of Greystone Manager is responsible for reviewing and approving any related party transactions. The Audit Committee of Greystone Manager reviews the material facts of all interested transactions. Interested transactions are those transactions, arrangements, or relationships in which (i) the aggregate amount involved exceeds a pre-established dollar threshold, (ii) the Partnership is a participant, and (iii) an executive officer or Manager of the Partnership, a greater than 5% beneficial owner of the Partnership’s BUCs, an immediate family member of any of the foregoing, affiliates of the Partnership, entities for which the Partnership has an investment accounted for under the equity method, or trusts for the benefit of employees, has or will have an interest. In determining whether to approve or ratify an interested transaction, the Audit Committee of Greystone Manager takes into account, among other factors, the benefits to the Partnership; whether the interested transaction is on terms no less favorable than terms generally available to an unaffiliated third-party under the same or similar circumstances and the extent of the related person’s interest in the transaction; whether the transaction is material to the Partnership; the approximate dollar value of the transaction as it relates to the related party; and the role the related party plays in arranging the transaction. The Partnership did not enter into any material financial transactions with any related party or immediate family member of a Manager or executive officer of the Partnership during 20202021 and 2019,2020, except as indicated below. If any such material financial transaction were contemplated, the terms of the transaction would be reviewed and approved by the Audit Committee of Greystone Manager prior to the Partnership entering into such transaction.
For the identification of the members of the Board of Managers of Greystone Manager who are independent under the applicable SEC and NASDAQ requirements, see the disclosures in “Item 10. Directors, Executive Officers and Corporate Governance” of this Report on Form 10-K.
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Transactions with Related Persons
Salaries, Benefits, General and Administrative Cost Reimbursements
TheExcept as described in Note 23 to the Partnership’s consolidated financial statements filed in response to Item 8 of this Report, the Partnership is managed bynot a party to any transaction or proposed transaction with AFCA 2, which is controlled by AFCA 2’s general partner. The BoardGreystone or with any person who is: (i) a manager or executive officer of Managers and certain employees of AFCA 2’s general partner act as managers (and effectively as the directors) and executive officers of the Partnership. Certain services are provided to the Partnership by employees of the AFCA 2 general partner and the Partnership reimburses the AFCA 2 general partner for its allocated share of these salaries and benefits. The Partnership also reimburses the AFCA 2 general partner for its share of general and administrative expenses. The Partnership reimbursed theGreystone or any general partner of AFCA 22; (ii) a nominee for such expenses totaling approximately $5.4 million and $5.1 million during the years ended December 31, 2020 and 2019, respectively.
Administrative Fees
AFCA 2 is entitled to receiveelection as a manager of Greystone Manager; (iii) an administrative fee from the Partnership equal to 0.45% per annumowner of more than five percent of the outstanding principal balanceBUCs; or, (iv) a member of the immediate family of any of the Partnership’s MRBs, property loans collateralized by real property, and other investments for which the owner of the financed property or other third party is not obligatedforegoing persons. The disclosures set forth in Note 23 to pay such administrative fee directly to AFCA 2. The Partnership paid administrative fees to AFCA 2 totaling approximately $3.6 million during the years ended December 31, 2020 and 2019. AFCA 2 received administrative fees directly from the owners of certain properties financed by certain MRBs held by the Partnership totaling approximately $36,000 during the years ended December 31, 2020 and 2019.
Property Management Fees
A former affiliate of AFCA 2, Burlington Capital Properties, LLC, provided property management, administrative and marketing services for The 50/50 MF Property during 2020 and 2019. The Partnership paid fees to Burlington Capital Properties, LLC totaling approximately $140,000 and $152,000 during the years ended December 31, 2020 and 2019, respectively. Burlington Capital Properties, LLC ceased to be a related party of the Partnership effective September 10, 2019.
Franchise Margin Tax Reimbursement
The Partnership pays franchise margin taxes on revenues in Texas related to its investments in unconsolidated entities, which in 2020 included Vantage at Waco, Vantage at Bulverde, Vantage at Conroe and Vantage at O’Connor and in 2019 included Vantage at Boerne, Vantage at Waco, and Vantage at Bulverde. Such taxes are paid by the Partnership as the unconsolidated entities are required by tax regulations to be included in the Partnership’s group tax return. The unconsolidated entities reimburse the Partnership for their share of franchise margin taxes due. The Partnership incurred franchise margin taxes reimbursable by unconsolidated entities totaling approximately $53,000 and $131,000 during the years ended December 31, 2020 and 2019, respectively.
Investment/Mortgage Placement Fees
AFCA 2 received placement fees in connection with the acquisition of certain MRBs, GILs, property loans and investments in unconsolidated entities. These fees were paid by the borrowers out of proceeds received at closing and are not reported on the Partnership’s consolidated financial statements. AFCA 2 received placement fees totaling approximately $2.3 million and $1.4 million during the years ended December 31, 2020 and 2019, respectively.statements filed in response to Item 8 of this Report are incorporated by reference herein.
Item 14. Principal Accountant Fees and Services.
The Audit Committee of Greystone Manager engaged PricewaterhouseCoopers LLP (“PwC”) as the independent registered public accounting firm for the Partnership for 2020.2021.
The Audit Committee regularly reviews and determines whether any non-audit services provided by PwC potentially affects its independence with respect to the Partnership. The Audit Committee’s policy is to pre-approve all audit and permissible non-audit services provided by PwC. Pre-approval is generally provided by the Audit Committee for up to one year, is detailed as to the particular service or category of services to be rendered and is generally subject to a specific budget. The Audit Committee may also pre-approve additional services or specific engagements on a case-by-case basis. Management provides annual updates to the Audit Committee regarding the extent of any services provided in accordance with this pre-approval, as well as the cumulative fees for all non-audit services incurred to date. During 2020,2021, all services performed by PwC with respect to the Partnership were pre-approved by the Audit Committee in accordance with this policy.
The following table sets forth the aggregate fees billed by PwC with respect to audit and non-audit services for the Partnership during the years ended December 31, 20202021 and 2019:2020:
|
| 2021 |
|
| 2020 |
| ||
Audit Fees (1) |
| $ | 994,341 |
|
| $ | 852,728 |
|
Audit-Related Fees (2) |
|
| - |
|
|
| - |
|
Tax Fees (3) |
|
| 397,960 |
|
|
| 326,284 |
|
All Other Fees |
|
| 2,963 |
|
|
| 2,763 |
|
|
| 2020 |
|
| 2019 |
| ||
Audit Fees (1) |
| $ | 852,728 |
|
| $ | 1,064,000 |
|
Audit-Related Fees (2) |
|
| - |
|
|
| - |
|
Tax Fees (3) |
|
| 326,284 |
|
|
| 261,881 |
|
All Other Fees |
|
| 2,763 |
|
|
| 2,763 |
|
128 |
|
|
|
|
|
PART IV
Item 15. Exhibits and Financial Statement Schedules.
(a) Documents filed as part of this Annual Report on Form 10-K
The following documents are filed as part of this Report:
1. Financial Statements. The following financial statements of the Partnership are included in response to Item 8 of this Report:
Report of Independent Registered Public Accounting Firm.Firm (PCAOB ID 238).
Consolidated Balance Sheets as of December 31, 20202021 and 2019.2020.
Consolidated Statements of Operations for the years ended December 31, 20202021 and 2019.2020.
Consolidated Statements of Comprehensive Income for the years ended December 31, 20202021 and 2019.2020.
Consolidated Statements of Partners’ Capital for the years ended December 31, 20202021 and 2019.2020.
Consolidated Statements of Cash Flows for the years ended December 31, 20202021 and 2019.2020.
Notes to Consolidated Financial Statements.
2. Financial Statement Schedules. The information required to be set forth in the financial statement schedules is included in the notes to consolidated financial statements of the Partnership filed in response to Item 8 of this Report.
3. Exhibits. The following exhibits are filed as required by Item 15(a)(3) of this Report. Exhibit numbers refer to the paragraph numbers under Item 601 of Regulation S-K:
3.1 | |
3.2 | |
3.3 | |
3.4 | |
3.5 | |
3.6 | |
3.7 | |
3.8 | |
|
129
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4.1 | |
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4.3 |
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10.1 | |
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| |
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130
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10.21 | |
| |
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| |
|
131
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10.33 | First Amendment to Credit Agreement dated November 30, 2021 between America First Multifamily Investors, L.P., the Lenders, and BankUnited, N.A., as Administrative Agent (incorporated herein by reference to Exhibit 10.1 to Form 8-K (No. 000-24843), filed by the Partnership on December 6, 2021). |
10.34 | |
10.35 | |
10.36 | |
10.37 | |
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10.43 | |
21 | |
23.1 | |
23.2 | |
24.1 | |
31.1 | Certification of CEO pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. |
31.2 | Certification of CFO pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. |
132
32.1 | Certification of CEO pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. |
32.2 | Certification of CFO pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. |
101 | The following materials from the Partnership’s Annual Report on Form 10-K for the year ended December 31, |
104 | Cover Page Interactive Data File (embedded within the Inline XBRL document) |
(b) Exhibits
The exhibits at Item 15(a)(3) above are filed pursuant to the requirements of Item 601 of Regulation S-K.
(c) Other Financial Statement Schedules
Schedule I – audited balance sheet of America First Capital Associates Limited Partnership Two, the general partner of the Partnership, as of December 31, 2020.2021.
Item 16. Form 10-K Summary.
None.
133
SIGNATURES
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this Report to be signed on its behalf by the undersigned, thereunto duly authorized.
AMERICA FIRST MULTIFAMILY INVESTORS, L.P. | |||
Date: | February | ||
By |
| ||
Kenneth C. Rogozinski | |||
Chief Executive Officer | |||
America First Multifamily Investors, L.P. |
Pursuant to the requirements of the Securities and Exchange Act of 1934, this Report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.
Date: | February | By |
| |
Stephen Rosenberg, | ||||
Chairman and Manager of Greystone AF Manager LLC | ||||
Date: | February | By |
| |
Kenneth C. Rogozinski | ||||
Chief Executive Officer of the Registrant | ||||
(Principal Executive Officer) | ||||
Date: | February | By |
| |
Jesse A. Coury | ||||
Chief Financial Officer of the Registrant | ||||
(Principal Financial Officer and Principal Accounting Officer) | ||||
Date: | February | By |
| |
Jeffrey A. Baevsky, | ||||
Manager of Greystone AF Manager LLC | ||||
Date: | February | By |
| |
Drew C. Fletcher, | ||||
Manager of Greystone AF Manager LLC | ||||
Date: | February | By |
| |
Curtis A. Pollock, | ||||
Manager of Greystone AF Manager LLC | ||||
Date: | February | By |
| |
Steven C. Lilly, | ||||
Manager of Greystone AF Manager LLC | ||||
Date: | February | By |
| |
W. Kimball Griffith, | ||||
Manager of Greystone AF Manager LLC | ||||
Date: | February | By |
| |
Deborah A Wilson, | ||||
Manager of Greystone AF Manager LLC |
*By | Jesse A. Coury, | |
Attorney-in-Fact | ||
By |
| |
Jesse A. Coury |
134
Schedule I
AMERICA FIRST CAPITAL ASSOCIATES LIMITED PARTNERSHIP TWO
Balance Sheet
And
Independent Auditors’ Report
December 31, 2020
AMERICA FIRST CAPITAL ASSOCIATES LIMITED PARTNERSHIP TWO
Balance Sheet
And
Independent Auditors’ Report
December 31, 2021
AMERICA FIRST CAPITAL ASSOCIATES LIMITED PARTNERSHIP TWO
TABLE OF CONTENTS
| |
| |
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136
INDEPENDENT AUDITORS’ REPORT
Partners
Partners
America First Capital Associates Limited Partnership Two
Omaha, Nebraska
Opinion
We have audited the accompanying balance sheet of America First Capital Associates Limited Partnership Two (the Company), which comprise the balance sheets as of December 31, 2020,2021, and the related notes to the balance sheet.
In our opinion, the accompanying balance sheet presents fairly, in all material respects, the balance sheet of the Company as of December 31, 2021 in accordance with accounting principles generally accepted in the United States of America.
Management’s ResponsibilityBasis for Opinion
We conducted our audit in accordance with auditing standards generally accepted in the United States of America (GAAS). Our responsibilities under those standards are further described in the Auditors’ Responsibilities for the Audit of the Balance Sheet section of our report. We are required to be independent of the Company and to meet our other ethical responsibilities, in accordance with the relevant ethical requirements relating to our audit. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.
Responsibilities of Management for the Balance Sheet
Management is responsible for the preparation and fair presentation of the balance sheet in accordance with accounting principles generally accepted in the United States of America; this includesAmerica, and for the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of a balance sheet that are free from material misstatement, whether due to fraud or error.
In preparing the balance sheet, management is required to evaluate whether there are conditions or events, considered in the aggregate, that raise substantial doubt about the Company’s ability to continue as a going concern for one year after February 24, 2022.
Auditors’ Responsibilities for the Audit of the Balance Sheet
Our objectives are to obtain reasonable assurance about whether the balance sheet as a whole is free from material misstatement, whether due to fraud or error.
Auditors’ Responsibility
Our responsibilityerror, and to issue an auditors’ report that includes our opinion. Reasonable assurance is to expressa high level of assurance but is not absolute assurance and therefore is not a guarantee that an opinionaudit conducted in accordance with GAAS will always detect a material misstatement when it exists. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control. Misstatements are considered material if there is a substantial likelihood that, individually or in the aggregate, they would influence the judgment made by a reasonable user based on the balance sheet based on our audit. We conducted oursheet.
In performing an audit in accordance with auditing standards generally accepted inGAAS, we:
An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the balance sheet. The procedures selected depend on the auditors’ judgment, including the assessment ofassess the risks of material misstatement of the balance sheet, whether due to fraud or error. In makingerror, and design and perform audit procedures responsive to those risk assessments,risks. Such procedures include examining, on a test basis, evidence regarding the auditor considersamounts and disclosures in the balance sheet.
We believe the audit evidence we have obtained is sufficient and appropriate to provide a basis for
Opinion
In our opinion, the balance sheet referred to above presents fairly, in all material respects, the financial position of America First Capital Associates Limited Partnership Two as of December 31, 2020 in accordance with accounting principles generally acceptedjudgment, there are conditions or events, considered in the United Statesaggregate, that raise substantial doubt about the Company’s ability to continue as a going concern for a reasonable period of America.time.
137
We are required to communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audits, significant audit findings, and certain internal control–related matters that we identified during the audit.
/s/ Lutz & Company, P.C.
February 24, 2022
February 25, 2021
138
AMERICA FIRST CAPITAL ASSOCIATES LIMITED PARTNERSHIP TWO
BALANCE SHEET
|
| December 31, 2020 |
|
| December 31, 2021 |
| ||
Assets: |
|
|
|
|
|
|
| |
Current assets: |
|
|
|
|
|
|
| |
Cash and cash equivalents |
| $ | 600 |
|
| $ | 573 |
|
Accounts receivable |
|
| 349,191 |
|
|
| 577,500 |
|
Related party accounts receivable |
|
| 541,528 |
| ||||
Total current assets |
|
| 349,791 |
|
|
| 1,119,601 |
|
|
|
|
|
|
|
|
| |
Investment in partnership |
|
| 934,892 |
|
|
| 765,550 |
|
Total Assets |
| $ | 1,284,683 |
|
| $ | 1,885,151 |
|
|
|
|
|
|
|
|
| |
Liabilities: |
|
|
|
|
|
|
| |
Accounts payable |
| $ | 12 |
|
| $ | 12 |
|
Total Liabilities |
|
| 12 |
|
|
| 12 |
|
|
|
|
|
|
|
|
| |
Partnersʼ Capital: |
|
|
|
|
|
|
| |
General partner |
|
| 128 |
|
|
| 189 |
|
Limited partner |
|
| 1,284,543 |
|
|
| 1,884,950 |
|
Total Partnersʼ Capital |
|
| 1,284,671 |
|
|
| 1,885,139 |
|
Total Liabilities and Partnersʼ Capital |
| $ | 1,284,683 |
|
| $ | 1,885,151 |
|
See accompanying notes to balance sheet.
139
AMERICA FIRST CAPITAL ASSOCIATES LIMITED PARTNERSHIP TWO
NOTES TO BALANCE SHEET
Note 1. Description of the Business
America First Capital Associates Limited Partnership Two (the “Company”) was formed in 1985 under the Delaware Revised Uniform Limited Partnership Act. The Company is the sole general partner of America First Multifamily Investors, L.P. (“ATAX”), a publicly traded limited partnership formed for the primary purpose of acquiring a portfolio of mortgage revenue bonds (“MRBs”) that are issued by state and local housing authorities to provide construction and/or permanent financing for affordable multifamily and student housing and commercial properties in their market areas. ATAX trades on the NASDAQ Global Select Market under the symbol “ATAX.”
The Company has full, complete, and exclusive authority to manage and control the business affairs of ATAX. The Company may be removed as ATAX’s general partner if consented to by two-thirds of the limited partnership interests of ATAX. ATAX can be dissolved upon the consent of a majority of the limited partnership interests of ATAX.
The Company’s sole general partner is Greystone AF Manager LLC, and its sole limited partner is Greystone AF Holdings LLC. Both Greystone AF Manager LLC and Greystone AF Holdings LLC are affiliates of Greystone & Co., Inc. II LLC.
Note 2. Summary of Significant Accounting Policies
Basis of Presentation
The accompanying balance sheet is presented in conformity with accounting principles generally accepted in the United States of America (“GAAP”).
Use of Estimates in Preparation of Balance Sheet
The preparation of the balance sheet in conformity with GAAP requires the Company to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities as of the date of the balance sheet. Actual results could differ significantly from those estimates.
Cash and Cash Equivalents
The Company considers all short-term investments with an original maturity of three months or less when purchased to be cash equivalents.
Concentration of Credit Risk
The Company maintains its cash and cash equivalent balances at one financial institution. The balances insured by the Federal Deposit Insurance Corporation are equal to $250,000. From time to time, the Company’s cash and cash equivalent balances exceed $250,000. The Company does not anticipate any non-performance.
Accounts Receivable and Related Party Accounts Receivable
The Company's receivables include administrative fees receivable, distributions receivable from ATAX, and origination fee receivable paid by a third party. Such receivables are recorded at the contractual amount. The Company assesses the need for an allowance for doubtful accounts for estimated losses inherent in its accounts receivable portfolio.
Investment in Partnership
The general partnership interest in ATAX is unregistered and non-transferrable. The Company analyzed the investment in ATAX under the variable interest entity and voting interest rules and determined that the investment is an equity method investment. Investment in the partnership is recorded at cost plus the Company’s share of ATAX's cumulative income or losses, distributions, and unrealized gains and losses on available-for-sale securities.
140
Income Taxes
The Company is a limited partnership and a disregarded entity for tax purposes. The results of the Company’s operations are reported by the managing member of Greystone AF Manager, LLC and Greystone AF Holdings, LLC. Accordingly, the Company has made no provision for income taxes.
Fair Value of Financial Instruments
The fair value of the Company’s assets and liabilities, which qualify as financial instruments under Accounting Standards Codification (“ASC”) Topic 820, “Fair Value Measurements and Disclosures,” approximates the carrying amounts represented on the accompanying balance sheet, primarily due to their short-term nature.
Related Party Transactions
In general, the Company is entitled to 1% of Net Interest Income of ATAX pursuant to the terms of the ATAX’s Amended and Restated Agreement of Limited Partnership, dated as of September 15, 2015, as amended (the “Partnership Agreement”). In addition, the Company is entitled to 25% of Net Interest Income representing contingent interest and Net Residual Proceeds up to a maximum amount equal to 0.9% per annum of the principal amount of all mortgage bondsinvestments held by the Partnership, as the case may be. The Company is also entitled to an administrative fee in an amount equal to 0.45% per annum of the average principal amount of the MRBs, Governmental Issuer Loans (“GILs”), taxable MRBs, taxable GILs, property loans, and other investments held by ATAX. In general, the administrative fee is payable by the owners of the properties financed by MRBs and GILs held by ATAX and is subordinate to the payment of all base interest on ATAX’s MRBs and GILs. In addition, the Partnership Agreement provides that ATAX will pay the administrative fee to the Company with respect to any foreclosed MRBs.
ATAX will reimburse the Company and its affiliates for out-of-pocket costs related directly to ATAX’s operations, including allocable portions of salaries and fringe benefits of employees of the Company or its affiliates. Notwithstanding the foregoing, ATAX is not allowed to reimburse the Company or its affiliates for salaries or fringe benefits of any partner of the Company or the officers or board of managers of the Company’s general partner regardless of whether such persons provide services to ATAX.
Under the Delaware LP Act and the terms of the Partnership Agreement, the Company will be liable to third parties for all general obligations of ATAX to the extent not paid by ATAX. However, the Partnership Agreement provides that the Company has no liability to ATAX for any act or omission reasonably believed to be within the scope of authority conferred by the Partnership Agreement and in the best interest of ATAX. The Partnership Agreement also provides that, except as otherwise expressly set forth in the Partnership Agreement, the Company does not owe any fiduciary duties to the limited partners and BUCBeneficial Unit Certificate holders of ATAX.
Recent Issued Accounting Pronouncements
The Company does not believe that any recently issued, but not yet effective, accounting pronouncements, if currently adopted, would have a material effect on the Company’s balance sheet.
Subsequent Events
Management evaluated transactions and events occurring subsequent to December 31, 20202021 through February 25, 2021,24, 2022, noting no material transactions or events in the subsequent period requiring disclosure or recognition in the balance sheet.
Note 3. Related Party Transactions
As of December 31, 2020,2021, the Company had administrative fees receivable of $312,328$377,739 and distributions receivable of $36,863$163,789 due from ATAX. These amounts are included in “Accounts“Related party accounts receivable” on the accompanying balance sheet.
132141