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ATAX America First Multifamily Investors

Filed: 3 Nov 20, 4:46pm
0001059142 atax:GreensOfPineGlenMember 2020-01-01 2020-09-30

 

 

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C.  20549

 

FORM 10-Q

 

QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended September 30, 2020 

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) 952-1235

(Registrant’s telephone number, including area code)

 

N/A

(Former name, former address and former fiscal year, if changed since last report)

 

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

 

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 this 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 an emerging growth company.  See the 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 check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).  YES  NO 

As of September 30, 2020, the registrant had 60,545,204 Beneficial Unit Certificates representing assignments of limited partnership interests in America First Multifamily Investors, L.P. outstanding.

 

 


 

INDEX

PART I – FINANCIAL INFORMATION

 

 

 


 

Forward-Looking Statements

This 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 heading “Risk Factors” in Item 1A of America First Multifamily Investors, L.P.’s Annual Report on Form 10-K for the year ended December 31, 2019 and in this report.

These forward-looking statements are subject, but not limited, to various risks and uncertainties, including those relating to:

 

current maturities of our financing arrangements and our ability to renew or refinance such financing arrangements;

 

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 use borrowings or obtain capital to finance our assets;

 

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 within the MRB portfolio held by the Partnership; and

 

changes in the U.S. corporate tax code and other government regulations affecting our business.

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 document mean America First Multifamily Investors, L.P. (“ATAX”), its wholly owned subsidiaries and its consolidated variable interest entities. See Item 2, “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” of this report for additional details.

 

 

 

 


 

PART I - FINANCIAL INFORMATION

Item 1. Financial Statements.

AMERICA FIRST MULTIFAMILY INVESTORS, L.P.

CONDENSED CONSOLIDATED BALANCE SHEETS

(UNAUDITED)

 

 

 

September 30, 2020

 

 

December 31, 2019

 

Assets:

 

 

 

 

 

 

 

 

Cash and cash equivalents

 

$

51,160,770

 

 

$

42,308,153

 

Restricted cash

 

 

79,302,009

 

 

 

877,828

 

Interest receivable, net

 

 

8,355,119

 

 

 

7,432,433

 

Mortgage revenue bonds held in trust, at fair value (Note 6)

 

 

759,487,301

 

 

 

743,587,715

 

Mortgage revenue bonds, at fair value (Note 6)

 

 

37,049,300

 

 

 

30,009,750

 

Governmental issuer loans held in trust (Note 7)

 

 

62,085,000

 

 

 

-

 

Public housing capital fund trust certificates, at fair value (Note 8)

 

 

-

 

 

 

43,349,357

 

Real estate assets: (Note 9)

 

 

 

 

 

 

 

 

Land and improvements

 

 

4,875,265

 

 

 

4,906,130

 

Buildings and improvements

 

 

72,290,734

 

 

 

72,011,533

 

Real estate assets before accumulated depreciation

 

 

77,165,999

 

 

 

76,917,663

 

Accumulated depreciation

 

 

(17,486,887

)

 

 

(15,357,700

)

Net real estate assets

 

 

59,679,112

 

 

 

61,559,963

 

Investments in unconsolidated entities (Note 10)

 

 

99,176,922

 

 

 

86,981,864

 

Property loans, net of loan loss allowance (Note 11)

 

 

12,920,719

 

 

 

7,999,094

 

Other assets (Note 13)

 

 

5,408,616

 

 

 

5,062,351

 

Total Assets

 

$

1,174,624,868

 

 

$

1,029,168,508

 

 

 

 

 

 

 

 

 

 

Liabilities:

 

 

 

 

 

 

 

 

Accounts payable, accrued expenses and other liabilities (Note 14)

 

$

9,997,214

 

 

$

9,036,167

 

Distribution payable

 

 

3,686,982

 

 

 

7,607,984

 

Unsecured lines of credit (Note 15)

 

 

11,843,000

 

 

 

13,200,000

 

Debt financing, net (Note 16)

 

 

667,248,701

 

 

 

536,197,421

 

Mortgages payable and other secured financing, net (Note 17)

 

 

26,275,890

 

 

 

26,802,246

 

Total Liabilities

 

 

719,051,787

 

 

 

592,843,818

 

 

 

 

 

 

 

 

 

 

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)

 

 

94,413,465

 

 

 

94,386,427

 

 

 

 

 

 

 

 

 

 

Partnersʼ Capital:

 

 

 

 

 

 

 

 

General Partner (Note 1)

 

 

948,408

 

 

 

735,128

 

Beneficial Unit Certificates ("BUCs," Note 1)

 

 

360,211,208

 

 

 

341,203,135

 

Total Partnersʼ Capital

 

 

361,159,616

 

 

 

341,938,263

 

Total Liabilities and Partnersʼ Capital

 

$

1,174,624,868

 

 

$

1,029,168,508

 

 

The accompanying notes are an integral part of the condensed consolidated financial statements.

4


 

AMERICA FIRST MULTIFAMILY INVESTORS, L.P.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(UNAUDITED)

 

 

 

For the Three Months Ended September 30,

 

 

For the Nine Months Ended September 30,

 

 

 

2020

 

 

2019

 

 

2020

 

 

2019

 

Revenues:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Investment income

 

$

12,043,313

 

 

$

12,589,743

 

 

$

35,988,555

 

 

$

37,072,288

 

Property revenues

 

 

1,548,931

 

 

 

1,974,546

 

 

 

5,358,132

 

 

 

6,002,971

 

Contingent interest income

 

 

-

 

 

 

3,360

 

 

 

12,043

 

 

 

3,045,462

 

Other interest income

 

 

238,185

 

 

 

206,625

 

 

 

686,253

 

 

 

635,732

 

Other income

 

 

9,518

 

 

 

91,428

 

 

 

9,518

 

 

 

120,181

 

Total revenues

 

 

13,839,947

 

 

 

14,865,702

 

 

 

42,054,501

 

 

 

46,876,634

 

Expenses:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Real estate operating (exclusive of items shown below)

 

 

1,454,985

 

 

 

1,381,909

 

 

 

3,484,783

 

 

 

3,477,983

 

Provision for credit loss (Note 6)

 

 

3,463,253

 

 

 

-

 

 

 

5,285,609

 

 

 

-

 

Provision for loan loss (Note 11)

 

 

811,706

 

 

 

-

 

 

 

811,706

 

 

 

-

 

Impairment charge on real estate assets

 

 

-

 

 

 

75,000

 

 

 

25,200

 

 

 

75,000

 

Depreciation and amortization

 

 

719,783

 

 

 

743,503

 

 

 

2,141,302

 

 

 

2,384,115

 

Interest expense

 

 

5,105,432

 

 

 

6,509,021

 

 

 

16,012,716

 

 

 

19,110,876

 

General and administrative

 

 

3,513,024

 

 

 

6,992,528

 

 

 

9,257,921

 

 

 

12,267,917

 

Total expenses

 

 

15,068,183

 

 

 

15,701,961

 

 

 

37,019,237

 

 

 

37,315,891

 

Other Income:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Gain on sale of securities

 

 

-

 

 

 

-

 

 

 

1,416,023

 

 

 

-

 

Gain on sale of investments in unconsolidated entities

 

 

-

 

 

 

10,475,927

 

 

 

-

 

 

 

10,475,927

 

Income (loss) before income taxes

 

 

(1,228,236

)

 

 

9,639,668

 

 

 

6,451,287

 

 

 

20,036,670

 

Income tax expense (benefit)

 

 

(68,219

)

 

 

(68,235

)

 

 

41,199

 

 

 

(9,236

)

Net income (loss)

 

 

(1,160,017

)

 

 

9,707,903

 

 

 

6,410,088

 

 

 

20,045,906

 

Redeemable Series A Preferred Unit distributions and accretion

 

 

(717,763

)

 

 

(717,762

)

 

 

(2,153,288

)

 

 

(2,153,288

)

Net income (loss) available to Partners

 

$

(1,877,780

)

 

$

8,990,141

 

 

$

4,256,800

 

 

$

17,892,618

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net income (loss) available to Partners allocated to:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

General Partner

 

$

(18,778

)

 

$

1,266,157

 

 

$

(33,476

)

 

$

2,078,086

 

Limited Partners - BUCs

 

 

(1,879,096

)

 

 

7,695,468

 

 

 

4,239,515

 

 

 

15,719,693

 

Limited Partners - Restricted units

 

 

20,094

 

 

 

28,516

 

 

 

50,761

 

 

 

94,839

 

 

 

$

(1,877,780

)

 

$

8,990,141

 

 

$

4,256,800

 

 

$

17,892,618

 

BUC holders' interest in net income (loss) per BUC, basic and diluted

 

$

(0.03

)

 

$

0.13

 

 

$

0.07

 

 

$

0.26

 

Weighted average number of BUCs outstanding, basic

 

 

60,545,204

 

 

 

60,519,542

 

 

 

60,614,862

 

 

 

60,457,299

 

Weighted average number of BUCs outstanding, diluted

 

 

60,545,204

 

 

 

60,519,542

 

 

 

60,614,862

 

 

 

60,457,299

 

 

The accompanying notes are an integral part of the condensed consolidated financial statements.

 

5


 

AMERICA FIRST MULTIFAMILY INVESTORS, L.P.

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(UNAUDITED)

 

 

 

For the Three Months Ended September 30,

 

 

For the Nine Months Ended September 30,

 

 

 

2020

 

 

2019

 

 

2020

 

 

2019

 

Net income (loss)

 

$

(1,160,017

)

 

$

9,707,903

 

 

$

6,410,088

 

 

$

20,045,906

 

Reversal of net unrealized gains on sale of securities

 

 

-

 

 

 

-

 

 

 

(1,408,804

)

 

 

-

 

Reversal of net unrealized loss on securities to

  provision for credit loss

 

 

280,711

 

 

 

-

 

 

 

652,880

 

 

 

-

 

Unrealized gain on securities

 

 

18,000,520

 

 

 

19,048,316

 

 

 

31,914,433

 

 

 

42,112,324

 

Unrealized gain on bond purchase commitments

 

 

256,222

 

 

 

-

 

 

 

256,222

 

 

 

-

 

Comprehensive income

 

$

17,377,436

 

 

$

28,756,219

 

 

$

37,824,819

 

 

$

62,158,230

 

 

The accompanying notes are an integral part of the condensed consolidated financial statements.

 

6


 

AMERICA FIRST MULTIFAMILY INVESTORS, L.P.

CONDENSED CONSOLIDATED STATEMENTS OF PARTNERS’ CAPITAL

(UNAUDITED)

 

 

 

General Partner

 

 

# of BUCs -

Restricted and

Unrestricted

 

 

BUCs

- Restricted and

Unrestricted

 

 

Total

 

 

Accumulated

Other

Comprehensive

Income (Loss)

 

Balance as of December 31, 2019

 

$

735,128

 

 

 

60,835,204

 

 

$

341,203,135

 

 

$

341,938,263

 

 

$

99,308,677

 

Distributions paid or accrued ($0.125 per BUC):

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Regular distribution

 

 

(80,501

)

 

 

-

 

 

 

(7,969,618

)

 

 

(8,050,119

)

 

 

-

 

Distribution of Tier 2 loss (Note 3)

 

 

80,501

 

 

 

-

 

 

 

365,218

 

 

 

445,719

 

 

 

-

 

Net income (loss) allocable to Partners

 

 

(53,404

)

 

 

-

 

 

 

2,317,398

 

 

 

2,263,994

 

 

 

-

 

Repurchase of BUCs

 

 

-

 

 

 

(290,000

)

 

 

(2,106,673

)

 

 

(2,106,673

)

 

 

-

 

Restricted units awarded

 

 

-

 

 

 

290,000

 

 

 

-

 

 

 

-

 

 

 

-

 

Restricted unit compensation expense

 

 

391

 

 

 

-

 

 

 

38,677

 

 

 

39,068

 

 

 

-

 

Unrealized loss on securities

 

 

(70,577

)

 

 

-

 

 

 

(6,987,159

)

 

 

(7,057,736

)

 

 

(7,057,736

)

Reversal of net unrealized gains on

   sale of securities

 

 

(14,088

)

 

 

-

 

 

 

(1,394,716

)

 

 

(1,408,804

)

 

 

(1,408,804

)

Reversal of net unrealized loss on securities to

  provision for credit loss

 

 

3,722

 

 

 

-

 

 

 

368,447

 

 

 

372,169

 

 

 

372,169

 

Balance as of March 31, 2020

 

 

601,172

 

 

 

60,835,204

 

 

 

325,834,709

 

 

 

326,435,881

 

 

 

91,214,306

 

Distributions paid or accrued ($0.06 per BUC):

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Regular distribution

 

 

(36,870

)

 

 

-

 

 

 

(3,650,112

)

 

 

(3,686,982

)

 

 

-

 

Net income allocable to Partners

 

 

38,706

 

 

 

-

 

 

 

3,831,880

 

 

 

3,870,586

 

 

 

-

 

Restricted unit compensation expense

 

 

2,962

 

 

 

-

 

 

 

293,306

 

 

 

296,268

 

 

 

-

 

Unrealized gain on securities

 

 

209,716

 

 

 

-

 

 

 

20,761,933

 

 

 

20,971,649

 

 

 

20,971,649

 

Balance as of June 30, 2020

 

 

815,686

 

 

 

60,835,204

 

 

 

347,071,716

 

 

 

347,887,402

 

 

 

112,185,955

 

Distributions paid or accrued ($0.06 per BUC):

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Regular distribution

 

 

(36,870

)

 

 

-

 

 

 

(3,650,113

)

 

 

(3,686,983

)

 

 

-

 

Net loss allocable to Partners

 

 

(18,778

)

 

 

-

 

 

 

(1,859,002

)

 

 

(1,877,780

)

 

 

-

 

Restricted unit compensation expense

 

 

2,996

 

 

 

-

 

 

 

296,528

 

 

 

299,524

 

 

 

-

 

Unrealized gain on securities

 

 

180,005

 

 

 

-

 

 

 

17,820,515

 

 

 

18,000,520

 

 

 

18,000,520

 

Unrealized gain on bond purchase

   commitments

 

 

2,562

 

 

 

-

 

 

 

253,660

 

 

 

256,222

 

 

 

256,222

 

Reversal of net unrealized loss on securities to

  provision for credit loss

 

 

2,807

 

 

 

-

 

 

 

277,904

 

 

 

280,711

 

 

 

280,711

 

Balance as of September 30, 2020

 

$

948,408

 

 

 

60,835,204

 

 

$

360,211,208

 

 

$

361,159,616

 

 

$

130,723,408

 

 

 

 

General Partner

 

 

# of BUCs -

Restricted and

Unrestricted

 

 

BUCs

- Restricted and

Unrestricted

 

 

Total

 

 

Accumulated

Other

Comprehensive

Income (Loss)

 

Balance as of December 31, 2018

 

$

344,590

 

 

 

60,691,467

 

 

$

304,121,151

 

 

$

304,465,741

 

 

$

58,978,042

 

Cumulative effect of accounting change (Note 14)

 

 

(2

)

 

 

-

 

 

 

(210

)

 

 

(212

)

 

 

-

 

Distributions paid or accrued ($0.125 per BUC):

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Regular distribution

 

 

(53,812

)

 

 

-

 

 

 

(5,327,357

)

 

 

(5,381,169

)

 

 

-

 

Distribution of Tier 2 income (Note 3)

 

 

(753,025

)

 

 

-

 

 

 

(2,259,077

)

 

 

(3,012,102

)

 

 

-

 

Net income allocable to Partners

 

 

780,245

 

 

 

-

 

 

 

4,953,805

 

 

 

5,734,050

 

 

 

-

 

Restricted unit compensation expense

 

 

1,842

 

 

 

-

 

 

 

182,342

 

 

 

184,184

 

 

 

-

 

Unrealized gain on securities

 

 

81,439

 

 

 

-

 

 

 

8,062,488

 

 

 

8,143,927

 

 

 

8,143,927

 

Balance as of March 31, 2019

 

 

401,277

 

 

 

60,691,467

 

 

 

309,733,142

 

 

 

310,134,419

 

 

 

67,121,969

 

Distributions paid or accrued ($0.125 per BUC):

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Regular distribution

 

 

(76,631

)

 

 

-

 

 

 

(7,586,433

)

 

 

(7,663,064

)

 

 

-

 

Net income allocable to Partners

 

 

31,684

 

 

 

-

 

 

 

3,136,743

 

 

 

3,168,427

 

 

 

-

 

Restricted unit compensation expense

 

 

1,862

 

 

 

-

 

 

 

184,368

 

 

 

186,230

 

 

 

-

 

Unrealized gain on securities

 

 

149,201

 

 

 

-

 

 

 

14,770,880

 

 

 

14,920,081

 

 

 

14,920,081

 

Balance as of June 30, 2019

 

 

507,393

 

 

 

60,691,467

 

 

 

320,238,700

 

 

 

320,746,093

 

 

 

82,042,050

 

Distributions paid or accrued ($0.125 per BUC):

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Distribution of Tier 2 income (Note 3)

 

 

(1,264,949

)

 

 

-

 

 

 

(3,794,847

)

 

 

(5,059,796

)

 

 

-

 

Distribution of Tier 3 income (Note 3)

 

 

-

 

 

 

-

 

 

 

(3,809,553

)

 

 

(3,809,553

)

 

 

-

 

Net income allocable to Partners

 

 

1,266,157

 

 

 

-

 

 

 

7,723,984

 

 

 

8,990,141

 

 

 

-

 

Restricted units awarded

 

 

-

 

 

 

353,197

 

 

 

-

 

 

 

-

 

 

 

-

 

Restricted unit compensation expense

 

 

32,657

 

 

 

-

 

 

 

3,233,020

 

 

 

3,265,677

 

 

 

-

 

BUCs surrendered to pay tax withholding

   on vested restricted units

 

 

-

 

 

 

(209,460

)

 

 

(1,581,423

)

 

 

(1,581,423

)

 

 

-

 

Unrealized gain on securities

 

 

190,483

 

 

 

-

 

 

 

18,857,833

 

 

 

19,048,316

 

 

 

19,048,316

 

Balance as of September 30, 2019

 

$

731,741

 

 

 

60,835,204

 

 

$

340,867,714

 

 

$

341,599,455

 

 

$

101,090,366

 

 

The accompanying notes are an integral part of the condensed consolidated financial statements.

7


 

AMERICA FIRST MULTIFAMILY INVESTORS, L.P.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(UNAUDITED)

 

 

 

For the Nine Months Ended September 30,

 

 

 

2020

 

 

2019

 

Cash flows from operating activities:

 

 

 

 

 

 

 

 

Net income

 

$

6,410,088

 

 

$

20,045,906

 

Adjustments to reconcile net income to net cash provided by operating activities:

 

 

 

 

 

 

 

 

Depreciation and amortization expense

 

 

2,141,302

 

 

 

2,384,115

 

Provision for loan loss

 

 

811,706

 

 

 

-

 

Gain on sale of investment in securities

 

 

(1,416,023

)

 

 

-

 

Provision for credit loss

 

 

5,285,609

 

 

 

-

 

Gain on sale of investment in an unconsolidated entity

 

 

-

 

 

 

(10,475,927

)

Contingent interest realized on investing activities

 

 

(12,043

)

 

 

(3,045,462

)

Impairment charge on real estate assets

 

 

25,200

 

 

 

75,000

 

(Gain) loss on derivatives, net of cash paid

 

 

(144,546

)

 

 

574,028

 

Restricted unit compensation expense

 

 

634,860

 

 

 

3,636,091

 

Bond premium/discount amortization

 

 

(82,975

)

 

 

(106,114

)

Debt premium amortization

 

 

(30,353

)

 

 

(8,410

)

Amortization of deferred financing costs

 

 

1,288,044

 

 

 

1,476,463

 

Deferred income tax expense & income tax payable/receivable

 

 

2,036

 

 

 

100,804

 

Change in preferred return receivable from unconsolidated entities, net

 

 

(2,414,759

)

 

 

(1,935,286

)

Changes in operating assets and liabilities

 

 

 

 

 

 

-

 

Increase in interest receivable

 

 

(922,686

)

 

 

(915,670

)

Decrease in other assets

 

 

327,508

 

 

 

694,925

 

Increase in accounts payable and accrued expenses

 

 

738,652

 

 

 

327,188

 

Net cash provided by operating activities

 

 

12,641,620

 

 

 

12,827,651

 

Cash flows from investing activities:

 

 

 

 

 

 

 

 

Capital expenditures

 

 

(319,757

)

 

 

(88,110

)

Acquisition of mortgage revenue bonds

 

 

(9,513,450

)

 

 

(19,250,000

)

Advances on governmental issuer loans

 

 

(62,085,000

)

 

 

-

 

Contributions to unconsolidated entities

 

 

(17,542,465

)

 

 

(18,304,139

)

Advances on property loans

 

 

(5,733,331

)

 

 

(405,717

)

Principal payments received on mortgage revenue bonds

 

 

13,836,006

 

 

 

15,508,192

 

Proceeds from sale of PHC Certificates

 

 

43,349,357

 

 

 

-

 

Principal payments received on PHC Certificates

 

 

-

 

 

 

4,775,103

 

Proceeds from sale of investment in an unconsolidated entity

 

 

7,762,166

 

 

 

20,189,663

 

Principal payments received on taxable mortgage revenue bonds

 

 

6,560

 

 

 

25,997

 

Principal payments received on property loans and contingent interest

 

 

12,043

 

 

 

11,413,098

 

Net cash provided by (used in) investing activities

 

 

(30,227,871

)

 

 

13,864,087

 

Cash flows from financing activities:

 

 

 

 

 

 

 

 

Distributions paid

 

 

(21,025,617

)

 

 

(25,758,751

)

Repurchase of BUCs

 

 

(2,106,673

)

 

 

-

 

Payment of tax withholding related to restricted unit awards

 

 

-

 

 

 

(1,581,423

)

Proceeds from debt financing

 

 

277,231,000

 

 

 

122,921,712

 

Principal payments on debt financing

 

 

(146,126,658

)

 

 

(90,025,780

)

Principal payments on mortgages payable

 

 

(535,233

)

 

 

(474,391

)

Principal borrowing on unsecured lines of credit

 

 

10,492,728

 

 

 

23,200,000

 

Principal payments on unsecured lines of credit

 

 

(11,849,728

)

 

 

(45,659,200

)

Decrease in security deposit liability related to restricted cash

 

 

(123,286

)

 

 

(51,324

)

Debt financing and other deferred costs

 

 

(1,093,484

)

 

 

(1,177,696

)

Net cash provided by (used in) financing activities

 

 

104,863,049

 

 

 

(18,606,853

)

Net increase in cash, cash equivalents and restricted cash

 

 

87,276,798

 

 

 

8,084,885

 

Cash, cash equivalents and restricted cash at beginning of period

 

 

43,185,981

 

 

 

33,268,611

 

Cash, cash equivalents and restricted cash at end of period

 

$

130,462,779

 

 

$

41,353,496

 

 

 

 

 

 

 

 

 

 

Supplemental disclosure of cash flow information:

 

 

 

 

 

 

 

 

Cash paid during the period for interest

 

$

14,481,578

 

 

$

16,874,341

 

Cash paid during the period for income taxes

 

 

36,927

 

 

 

155,000

 

Supplemental disclosure of noncash investing and financing activities:

 

 

 

 

 

 

 

 

Distributions declared but not paid for BUCs and General Partner

 

$

3,686,982

 

 

$

8,869,350

 

Distributions declared but not paid for Series A Preferred Units

 

 

708,750

 

 

 

708,750

 

Capital expenditures financed through accounts payable

 

 

60,572

 

 

 

24,504

 

Deferred financing costs financed through accounts payable

 

 

285,108

 

 

 

15,000

 

 

 

The following table provides a reconciliation of cash, cash equivalents and restricted cash reported within the condensed consolidated balance sheets to the total of such amounts shown in the condensed consolidated statements of cash flows:

 

 

 

September 30, 2020

 

 

September 30, 2019

 

Cash and cash equivalents

 

$

51,160,770

 

 

$

40,782,506

 

Restricted cash

 

 

79,302,009

 

 

 

570,990

 

Total cash, cash equivalents and restricted cash

 

$

130,462,779

 

 

$

41,353,496

 

 

The accompanying notes are an integral part of the condensed consolidated financial statements.

 

 

8


 

AMERICA FIRST MULTIFAMILY INVESTORS, L.P.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

 

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 be 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.   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’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. (collectively with its affiliates, “Greystone”).  

The Partnership has issued Beneficial Unit Certificates (“BUCs”) representing assigned limited partner interests to investors (“BUC holders”). The Partnership has also issued non-cumulative, non-voting, non-convertible Series A Preferred Units (“Series A 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 pursuant to subscription agreements with five financial institutions (see Note 20). The holders of the BUCs and Series A Preferred Units are referred to herein collectively as “Unitholders.”     

 

2. Summary of Significant Accounting Policies

Consolidation

The “Partnership,” as used herein, includes America First Multifamily Investors, L.P., its consolidated subsidiaries and consolidated variable interest entities (see Note 5). All intercompany transactions are eliminated.  The consolidated subsidiaries of the Partnership for the periods presented consist of:

 

ATAX TEBS I, LLC, a special purpose entity owned and controlled by the Partnership, created to hold MRBs to facilitate the M24 Tax Exempt Bond Securitization (“TEBS”) Financing with the Federal Home Loan Mortgage Corporation (“Freddie Mac”);

 

ATAX TEBS II, LLC, a special purpose entity owned and controlled by the Partnership, created to hold MRBs to facilitate the M31 TEBS Financing with Freddie Mac;

 

ATAX TEBS III, LLC, a special purpose entity owned and controlled by the Partnership, created to hold MRBs to facilitate the M33 TEBS Financing with Freddie Mac;

 

ATAX TEBS IV, LLC, a special purpose entity owned and controlled by the Partnership, created to hold MRBs to facilitate the M45 TEBS Financing with Freddie Mac;

 

ATAX TEBS Holdings, LLC, a wholly owned subsidiary of the Partnership, which has issued secured notes (“the Secured Notes”) to Mizuho Capital Markets LLC (“Mizuho”);

 

ATAX Vantage Holdings, LLC, a wholly owned subsidiary of the Partnership, which is committed to loan money or provide equity for the development of multifamily properties;

 

NaN wholly owned corporation (“the Greens Hold Co”), which owns 100% of The 50/50 MF Property, a real estate asset, and certain property loans; and

 

The Suites on Paseo MF Property, a real estate asset, is owned directly by the Partnership.

9


 

The Partnership also consolidates variable interest entities (“VIEs”) in which the Partnership is deemed to be the primary beneficiary.

Restricted Cash

Restricted cash is legally restricted as to its use. The Partnership is required to maintain restricted cash collateral related to its two total return swap transactions (see Note 18). In addition, the Partnership is required to maintain restricted cash balances related to the TEBS Financing facilities, resident security deposits, required maintenance reserves, escrowed funds, and property rehabilitation. Restricted cash is presented with cash and cash equivalents on the Partnership’s condensed consolidated statements of cash flows.

Impairment of Mortgage Revenue Bonds

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.

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 condensed 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

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;

 

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.

10


 

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 condensed 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.

Property Loans, Net of Loan Loss Allowance

The Partnership invests in taxable property loans made to the owners of certain multifamily 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 condensed 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 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.  The determination of the need for an allowance for loan loss is subject to considerable judgment.

Estimates and assumptions

The preparation of financial statements in conformity with generally accepted accounting principles in the United States of America (“GAAP”) requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.  The accompanying interim unaudited condensed consolidated financial statements have been prepared in accordance with the rules and regulations of the Securities and Exchange Commission (“SEC”). Certain information and footnote disclosures normally included in financial statements prepared in accordance with GAAP have been condensed or omitted in accordance with such SEC rules and regulations, although management believes that the disclosures are adequate to make the information presented not misleading.

 

The Partnership’s condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and notes thereto included in the Partnership’s Annual Report on Form 10-K for the year ended December 31, 2019. These condensed consolidated financial statements and notes have been prepared consistently with the 2019 Form 10-K. In the opinion of management, all adjustments (consisting of normal and recurring accruals) necessary to present fairly the Partnership’s financial position as of September 30, 2020, and the results of operations for the interim periods presented, have been made. The results of operations for the interim periods are not necessarily indicative of the results to be expected for the full year. The accompanying condensed consolidated balance sheet as of December 31, 2019 was derived from the audited annual consolidated financial statements but does not contain all the footnote disclosures from the annual consolidated financial statements.

 

Risks and Uncertainties

 

The business and economic uncertainty resulting from the COVID-19 pandemic has made estimates and assumptions more difficult to 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 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, 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.

11


 

 

As of September 30, 2020, the Partnership has yet to observe a significant decline in occupancy or operating results at properties securing its MRBs due to the COVID-19 pandemic, with the exception of the Pro Nova 2014-1 and Live 929 Apartments MRBs which are further discussed in Note 6. Furthermore, the Partnership has observed no material negative trends that potentially indicate impairment of The 50/50 MF Property or properties related to its GILs and investments in unconsolidated entities. The Partnership performed an impairment analysis for the Suites at Paseo MF Property due to a significant decline in occupancy as of September 30, 2020 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 impaired.

 

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 now January 1, 2023, and the Partnership has elected to defer adoption until that date.  The delay in implementing 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 determined that its property loans, the interest receivable on property loans, receivables reported within other assets, financial guarantees and commitments are within the scope of ASU 2016-13. The Partnership has also determined that the GILs and the interest receivable on GILs 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 on the Partnership’s condensed 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 is currently evaluating the impact that the adoption of ASU 2020-04 will have on its condensed 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.

 

12


 

4. Net income per BUC

The Partnership has disclosed basic and diluted net income per BUC on the Partnership’s condensed consolidated statements of operations. The unvested Restricted Unit Awards (“RUAs”) issued under the Partnership’s 2015 Equity Incentive Plan (the “2015 Plan”) are considered participating securities. There were 0 dilutive BUCs for the three and nine months ended September 30, 2020 and 2019.

 

5. Variable Interest Entities

Consolidated Variable Interest Entities (“VIEs”)

The Partnership has determined the Tender Option Bond (“TOB”), Term TOB, Term A/B and TEBS Financings are VIEs and the Partnership is the primary beneficiary (see Note 16). 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 Financings 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 Financings on a consolidated basis. The Partnership reports the Floater Certificates related to the TOB Financings, and the Class A Certificates related to the Term TOB, Term A/B and TEBS Financings as secured debt financings on the Partnership’s condensed consolidated balance sheets. The MRBs, GILs, and property loans secured by the TOB, Term TOB, Term A/B and TEBS Financings, and the PHCs secured by the TOB Financings, are reported as assets on the Partnership’s condensed consolidated balance sheets (see Notes 6, 7, 8 and 11).

Non-Consolidated VIEs

The Partnership has variable interests in various entities in the form of MRBs, GILs, 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 condensed consolidated financial statements.

The Partnership held variable interests in 20 and 17 non-consolidated VIEs as of September 30, 2020 and December 31, 2019, respectively. The following table summarizes the Partnership’s variable interests in these entities and maximum exposure to loss as of September 30, 2020 and December 31, 2019:

 

 

 

Maximum Exposure to Loss

 

 

 

September 30, 2020

 

 

December 31, 2019

 

Mortgage revenue bonds

 

$

20,879,500

 

 

$

30,455,000

 

Governmental issuer loans

 

 

62,085,000

 

 

 

-

 

Property loans

 

 

5,327,342

 

 

 

-

 

Investment in unconsolidated entities

 

 

99,176,922

 

 

 

86,981,864

 

 

 

$

187,468,764

 

 

$

117,436,864

 

 

The maximum exposure to loss for the MRBs is equal to the cost adjusted for paydowns. The difference between an MRB’s carrying value on the Partnership’s condensed 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 GILs, property loans and investments in unconsolidated entities is equal to the Partnership’s carrying value.

 

13


 

6. Investments in Mortgage Revenue Bonds

MRBs owned by the Partnership provide construction and/or permanent financing for Residential Properties and a commercial property.  MRBs are either held directly by the Partnership or are held in trusts created in connection with debt financing transactions (see Note 16). All MRBs are current on contractual debt service as of September 30, 2020. The Partnership had the following investments in MRBs as of September 30, 2020 and December 31, 2019:

 

 

 

September 30, 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

 

$

10,083,199

 

 

$

2,360,586

 

 

$

-

 

 

$

12,443,785

 

Glenview Apartments - Series A (3)

 

CA

 

 

4,496,129

 

 

 

973,537

 

 

 

-

 

 

 

5,469,666

 

Harmony Court Bakersfield - Series A (4)

 

CA

 

 

3,676,474

 

 

 

825,077

 

 

 

-

 

 

 

4,501,551

 

Harmony Terrace - Series A (4)

 

CA

 

 

6,805,898

 

 

 

1,638,021

 

 

 

-

 

 

 

8,443,919

 

Harden Ranch - Series A (2)

 

CA

 

 

6,642,011

 

 

 

1,515,729

 

 

 

-

 

 

 

8,157,740

 

Las Palmas II - Series A (4)

 

CA

 

 

1,668,247

 

 

 

387,698

 

 

 

-

 

 

 

2,055,945

 

Montclair Apartments - Series A (3)

 

CA

 

 

2,435,805

 

 

 

588,172

 

 

 

-

 

 

 

3,023,977

 

Montecito at Williams Ranch Apartments - Series A (6)

 

CA

 

 

7,640,285

 

 

 

2,228,796

 

 

 

-

 

 

 

9,869,081

 

Ocotillo Springs - Series A (6)

 

CA

 

 

2,023,500

 

 

 

136,002

 

 

 

-

 

 

 

2,159,502

 

San Vicente - Series A (4)

 

CA

 

 

3,439,838

 

 

 

749,936

 

 

 

-

 

 

 

4,189,774

 

Santa Fe Apartments - Series A (3)

 

CA

 

 

2,950,886

 

 

 

723,204

 

 

 

-

 

 

 

3,674,090

 

Seasons at Simi Valley - Series A (4)

 

CA

 

 

4,248,522

 

 

 

1,148,131

 

 

 

-

 

 

 

5,396,653

 

Seasons Lakewood - Series A (4)

 

CA

 

 

7,249,761

 

 

 

1,744,848

 

 

 

-

 

 

 

8,994,609

 

Seasons San Juan Capistrano - Series A (4)

 

CA

 

 

12,206,230

 

 

 

2,817,981

 

 

 

-

 

 

 

15,024,211

 

Summerhill - Series A (4)

 

CA

 

 

6,330,829

 

 

 

1,390,308

 

 

 

-

 

 

 

7,721,137

 

Sycamore Walk - Series A (4)

 

CA

 

 

3,528,394

 

 

 

824,890

 

 

 

-

 

 

 

4,353,284

 

The Village at Madera - Series A (4)

 

CA

 

 

3,040,730

 

 

 

682,403

 

 

 

-

 

 

 

3,723,133

 

Tyler Park Townhomes - Series A (2)

 

CA

 

 

5,785,729

 

 

 

986,191

 

 

 

-

 

 

 

6,771,920

 

Vineyard Gardens - Series A (6)

 

CA

 

 

3,976,346

 

 

 

1,160,591

 

 

 

-

 

 

 

5,136,937

 

Westside Village Market - Series A (2)

 

CA

 

 

3,780,963

 

 

 

856,081

 

 

 

-

 

 

 

4,637,044

 

Brookstone (1)

 

IL

 

 

7,383,072

 

 

 

2,247,992

 

 

 

-

 

 

 

9,631,064

 

Copper Gate Apartments (2)

 

IN

 

 

5,005,000

 

 

 

683,989

 

 

 

-

 

 

 

5,688,989

 

Renaissance - Series A (3)

 

LA

 

 

10,904,002

 

 

 

3,564,144

 

 

 

-

 

 

 

14,468,146

 

Live 929 Apartments (6)

 

MD

 

 

36,291,223

 

 

 

-

 

 

 

-

 

 

 

36,291,223

 

Woodlynn Village (1)

 

MN

 

 

4,146,000

 

 

 

14,592

 

 

 

-

 

 

 

4,160,592

 

Gateway Village (6)

 

NC

 

 

2,600,000

 

 

 

140,475

 

 

 

-

 

 

 

2,740,475

 

Greens Property - Series A (2)

 

NC

 

 

7,856,000

 

 

 

756,805

 

 

 

-

 

 

 

8,612,805

 

Lynnhaven Apartments (6)

 

NC

 

 

3,450,000

 

 

 

186,399

 

 

 

-

 

 

 

3,636,399

 

Silver Moon - Series A (3)

 

NM

 

 

7,714,309

 

 

 

1,874,494

 

 

 

-

 

 

 

9,588,803

 

Village at Avalon - Series A (5)

 

NM

 

 

16,217,931

 

 

 

4,567,604

 

 

 

-

 

 

 

20,785,535

 

Ohio Properties - Series A (1)

 

OH

 

 

13,758,000

 

 

 

63,719

 

 

 

-

 

 

 

13,821,719

 

Bridle Ridge (1)

 

SC

 

 

7,235,000

 

 

 

77,658

 

 

 

-

 

 

 

7,312,658

 

Columbia Gardens (4)

 

SC

 

 

12,941,555

 

 

 

2,668,577

 

 

 

-

 

 

 

15,610,132

 

Companion at Thornhill Apartments (4)

 

SC

 

 

11,086,752

 

 

 

2,194,358

 

 

 

-

 

 

 

13,281,110

 

Cross Creek (1)

 

SC

 

 

6,138,945

 

 

 

2,383,041

 

 

 

-

 

 

 

8,521,986

 

Rosewood Townhomes - Series A (6)

 

SC

 

 

9,266,171

 

 

 

1,987,546

 

 

 

-

 

 

 

11,253,717

 

South Pointe Apartments - Series A (6)

 

SC

 

 

21,567,811

 

 

 

4,626,185

 

 

 

-

 

 

 

26,193,996

 

The Palms at Premier Park Apartments (2)

 

SC

 

 

18,675,219

 

 

 

3,044,617

 

 

 

-

 

 

 

21,719,836

 

Village at River's Edge (4)

 

SC

 

 

9,820,327

 

 

 

1,738,232

 

 

 

-

 

 

 

11,558,559

 

Willow Run (4)

 

SC

 

 

12,762,198

 

 

 

2,451,637

 

 

 

-

 

 

 

15,213,835

 

Arbors at Hickory Ridge (2)

 

TN

 

 

10,948,055

 

 

 

2,529,443

 

 

 

-

 

 

 

13,477,498

 

Avistar at Copperfield - Series A (6)

 

TX

 

 

13,848,985

 

 

 

2,878,107

 

 

 

-

 

 

 

16,727,092

 

Avistar at the Crest - Series A (2)

 

TX

 

 

9,169,185

 

 

 

2,197,370

 

 

 

-

 

 

 

11,366,555

 

Avistar at the Oaks - Series A (2)

 

TX

 

 

7,410,639

 

 

 

1,774,121

 

 

 

-

 

 

 

9,184,760

 

Avistar at the Parkway - Series A (3)

 

TX

 

 

12,755,020

 

 

 

2,772,972

 

 

 

-

 

 

 

15,527,992

 

Avistar at Wilcrest - Series A (6)

 

TX

 

 

5,248,485

 

 

 

965,784

 

 

 

-

 

 

 

6,214,269

 

Avistar at Wood Hollow - Series A (6)

 

TX

 

 

39,851,626

 

 

 

7,804,810

 

 

 

-

 

 

 

47,656,436

 

Avistar in 09 - Series A (2)

 

TX

 

 

6,398,800

 

 

 

1,560,811

 

 

 

-

 

 

 

7,959,611

 

Avistar on the Boulevard - Series A (2)

 

TX

 

 

15,620,696

 

 

 

3,472,860

 

 

 

-

 

 

 

19,093,556

 

Avistar on the Hills - Series A (2)

 

TX

 

 

5,073,490

 

 

 

1,237,538

 

 

 

-

 

 

 

6,311,028

 

Bruton Apartments (4)

 

TX

 

 

17,708,333

 

 

 

3,228,263

 

 

 

-

 

 

 

20,936,596

 

Concord at Gulfgate - Series A (4)

 

TX

 

 

18,842,536

 

 

 

4,685,473

 

 

 

-

 

 

 

23,528,009

 

Concord at Little York - Series A (4)

 

TX

 

 

13,200,088

 

 

 

3,403,013

 

 

 

-

 

 

 

16,603,101

 

Concord at Williamcrest - Series A (4)

 

TX

 

 

20,448,350

 

 

 

5,178,003

 

 

 

-

 

 

 

25,626,353

 

Crossing at 1415 - Series A (4)

 

TX

 

 

7,350,633

 

 

 

1,745,850

 

 

 

-

 

 

 

9,096,483

 

Decatur Angle (4)

 

TX

 

 

22,318,001

 

 

 

5,321,998

 

 

 

-

 

 

 

27,639,999

 

Esperanza at Palo Alto (4)

 

TX

 

 

19,253,807

 

 

 

5,564,002

 

 

 

-

 

 

 

24,817,809

 

Heights at 515 - Series A (4)

 

TX

 

 

6,729,631

 

 

 

1,540,848

 

 

 

-

 

 

 

8,270,479

 

Heritage Square - Series A (3)

 

TX

 

 

10,608,706

 

 

 

2,082,726

 

 

 

-

 

 

 

12,691,432

 

Oaks at Georgetown - Series A (4)

 

TX

 

 

12,161,844

 

 

 

2,269,126

 

 

 

-

 

 

 

14,430,970

 

Runnymede (1)

 

TX

 

 

9,865,000

 

 

 

212,185

 

 

 

-

 

 

 

10,077,185

 

Southpark (1)

 

TX

 

 

11,603,714

 

 

 

2,079,073

 

 

 

-

 

 

 

13,682,787

 

15 West Apartments (4)

 

WA

 

 

9,622,192

 

 

 

3,105,572

 

 

 

-

 

 

 

12,727,764

 

Mortgage revenue bonds held in trust

 

 

 

$

632,867,107

 

 

$

126,620,194

 

 

$

-

 

 

$

759,487,301

 

 

(1)

MRBs owned by ATAX TEBS I, LLC (M24 TEBS), Note 16

(2)

MRBs owned by ATAX TEBS II, LLC (M31 TEBS), Note 16

(3)

MRBs owned by ATAX TEBS III, LLC (M33 TEBS), Note 16

14


 

(4)

MRBs owned by ATAX TEBS IV, LLC (M45 TEBS), Note 16

(5)

MRB held by Morgan Stanley in a debt financing transaction, Note 16

(6)

MRBs held by Mizuho Capital Markets, LLC in a debt financing transaction, Note 16

 

 

 

September 30, 2020

 

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

 

CA

 

$

6,720,000

 

 

$

2,263,726

 

 

$

-

 

 

$

8,983,726

 

Solano Vista - Series A

 

CA

 

 

2,665,000

 

 

 

870,630

 

 

 

-

 

 

 

3,535,630

 

Greens Property - Series B

 

NC

 

 

926,759

 

 

 

121,965

 

 

 

-

 

 

 

1,048,724

 

Arby Road Apartments - Series A

 

NV

 

 

7,475,000

 

 

 

15,996

 

 

 

-

 

 

 

7,490,996

 

Ohio Properties - Series B

 

OH

 

 

3,490,490

 

 

 

14,476

 

 

 

-

 

 

 

3,504,966

 

Rosewood Townhomes - Series B

 

SC

 

 

469,855

 

 

 

2,694

 

 

 

-

 

 

 

472,549

 

South Pointe Apartments - Series B

 

SC

 

 

1,099,660

 

 

 

6,305

 

 

 

-

 

 

 

1,105,965

 

Pro Nova 2014-1

 

TN

 

 

8,196,200

 

 

 

-

 

 

 

-

 

 

 

8,196,200

 

Avistar at the Crest - Series B

 

TX

 

 

737,241

 

 

 

133,980

 

 

 

-

 

 

 

871,221

 

Avistar at the Oaks - Series B

 

TX

 

 

539,614

 

 

 

94,852

 

 

 

-

 

 

 

634,466

 

Avistar at the Parkway - Series B

 

TX

 

 

124,059

 

 

 

42,955

 

 

 

-

 

 

 

167,014

 

Avistar in 09 - Series B

 

TX

 

 

445,133

 

 

 

79,970

 

 

 

-

 

 

 

525,103

 

Avistar on the Boulevard - Series B

 

TX

 

 

438,071

 

 

 

74,669

 

 

 

-

 

 

 

512,740

 

Mortgage revenue bonds held by the Partnership

 

 

 

$

33,327,082

 

 

$

3,722,218

 

 

$

-

 

 

$

37,049,300

 

 

15


 

 

 

 

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

 

Pro Nova 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)

MRBs owned by ATAX TEBS I, LLC (M24 TEBS), Note 16

(2)

MRBs held by Deutsche Bank in a debt financing transaction, Note 16

(3)

MRBs owned by ATAX TEBS II, LLC (M31 TEBS), Note 16

16


 

(4)

MRBs owned by ATAX TEBS III, LLC (M33 TEBS), Note 16

(5)

MRBs owned by ATAX TEBS IV, LLC (M45 TEBS), Note 16

(6)

MRB held by Morgan Stanley in a debt financing transaction, see Note 16

(7)

MRB held by Mizuho Capital Markets, LLC in a debt financing transaction, see Note 16

(8)

As of the date presented, the MRB had been in a cumulative unrealized loss position for less than 12 consecutive months.

 

 

 

 

 

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 23 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 in the Partnership’s condensed 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.

 

During the three months ended September 30, 2020, the Partnership recognized a provision for credit loss of approximately $3.5 million related to the Live 929 Apartments MRB in its condensed consolidated statements of operations. During the nine months ended September 30, 2020, the Partnership recognized a provision for credit loss of approximately $5.3 million related to the Live 929 Apartments MRB and the Pro Nova 2014-1 MRB in its condensed consolidated statements of operations. 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 MRB was due to recent operational results, the borrower’s continued covenant forbearance, and a decline 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 Pro Nova 2014-1 MRB was due to debt service shortfalls by the underlying commercial property, the borrower’s request for forbearance, and the general creditworthiness of proton therapy centers in the United States, including the impacts of the COVID-19 pandemic.

MRB Activity in the First Nine Months of 2020

 

Acquisitions:

 

The following MRBs were acquired at prices that approximated the principal outstanding plus accrued interest during the nine months ended September 30, 2020:

 

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

 

 

(1)

Both MRBs are part of the same series but have different interest rates and maturity dates.

(2)

The Partnership has committed to provide total funding of the MRB up to $15.0 million during construction and lease-up of the property on a drawdown basis. Upon stabilization of the property, the MRB will be partially repaid and the maximum balance of the MRB after stabilization is approximately $3.5 million.

(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. After stabilization, the MRB will convert to a fixed interest rate of 4.35%.

17


 

Redemptions:

 

The following MRBs were redeemed at a price that approximated the Partnership’s carrying value plus accrued interest during the nine months ended September 30, 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 the First Nine Months of 2019

 

Acquisitions:

 

The following MRBs were acquired at prices that approximated the principal outstanding during the nine months ended September 30, 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

 

 

Redemptions:

 

The following MRBs were redeemed at prices that approximated the Partnership’s carrying value plus accrued interest during the nine months ended September 30, 2019:

 

 

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 during the nine months ended September 30, 2019.  The principal outstanding on the Series B MRBs were collapsed into the principal outstanding on the associated 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

 

 

 

7. Governmental Issuer Loans

 

Governmental issuer loans (“GILs”) owned by the Partnership are issued by state governmental authorities to provide construction financing for 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

18


 

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 are secured by the borrower’s non-recourse obligation evidenced by a mortgage on all real and personal property associated with the underlying property. The sole source of the funds to pay principal and interest on the GILs is the net cash flow or the sale or refinancing proceeds from the underlying property. The GILs share a first mortgage lien position with the associated property loans also owned by the Partnership (see Note 11). The GILs are held in trust in connection with TOB Trust financing (see Note 16). 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 its GILs as of September 30, 2020:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

As of September 30, 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%

 

3.22%

 

 

$

40,000,000

 

 

$

-

 

Oasis at Twin Lakes

 

July 2020

 

Roseville, MN

 

228

 

8/1/2023 (2)

 

SIFMA + 3.25% (3), (4)

 

3.75%

 

 

 

12,410,000

 

 

 

21,590,000

 

Centennial Crossings

 

August 2020

 

Centennial, CO

 

209

 

9/1/2023 (2)

 

SIFMA + 2.75% (4)

 

3.25%

 

 

 

9,675,000

 

 

 

23,405,000

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

$

62,085,000

 

 

$

44,995,000

 

 

(1)

The borrower may automatically extend the maturity to July 2023 and may further extend the maturity to January 2024 upon payment of a non-refundable extension fee.

(2)

The borrower may extend the maturity date to for a period not to exceed six months upon payment of a non-refundable extension fee.

(3)

The variable rate decreases to SIFMA plus 2.25% upon completion of construction.

(4)

The SIFMA index interest rate component is subject to a floor of 0.50%.

 

An affiliate of the Partnership has forward committed to purchase the GILs at maturity if the property has reached stabilization and other conditions are met (see Note 22). 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.

 

 

8. Public Housing Capital Fund Trust (“PHC”) 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 investments in the PHC Certificates as of December 31, 2019:

 

 

 

 

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

 

 

See Note 23 for a description of the methodology and significant assumptions that were used for determining the fair value of the PHC Certificates. Unrealized gains or losses on the PHC Certificates were recorded in the Partnership’s condensed 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.

 

19


 

9. Real Estate Assets

The following tables summarize information regarding the Partnership’s real estate assets as of September 30, 2020 and December 31, 2019:

 

Real Estate Assets as of September 30, 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

 

 

$

39,349,880

 

 

$

42,549,148

 

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

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

$

77,165,999

 

Less accumulated depreciation

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(17,486,887

)

Total real estate assets

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

$

59,679,112

 

 

(1)

Land held for development consists of land and development costs for parcels in Gardner, KS; Richland County, SC and Omaha, NE.

 

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

 

 

 

(2)

 

 

 

1,706,862

 

 

 

-

 

 

 

1,706,862

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

$

76,917,663

 

Less accumulated depreciation

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(15,357,700

)

Total real estate assets

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

$

61,559,963

 

 

(2)

Land held for development consists of land and development costs for parcels in Gardner, KS; Richland County, SC and Omaha, NE.

Activity in the First Nine Months of 2020

As of September 30, 2020, the land held for development in Gardner, KS was under contract for sale.  

 

In June 2020, the Partnership determined that the land held for development in Gardner, Kansas 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.

Activity in the First Nine Months of 2019

In September 2019, the Partnership determined that the land held for development in Gardner, KS was impaired and recorded an impairment charge of $75,000, which represents the difference between the Partnership’s carrying value and the estimated fair value of the land.

 

 

10. 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 for a period of time approximating two to three years after construction completion. The return on these investments earned by the Partnership is reported as “Investment income” on the Partnership’s condensed consolidated statements of operations.

 

20


 

The following table provides the details of the investments in unconsolidated entities as of September 30, 2020 and December 31, 2019 and remaining equity commitment amounts as of September 30, 2020:

 

Property Name

 

Location

 

Units

 

 

Month

Commitment

Executed

 

Construction

Completion

Date

 

Carrying Value as of September 30, 2020

 

 

Carrying Value as of December 31, 2019

 

 

Maximum

Remaining

Equity Commitment as of September 30, 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

 

N/A

 

 

14,564,613

 

 

 

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

 

 

10,151,000

 

 

 

8,078,519

 

 

 

-

 

Vantage at O'Connor

 

San Antonio, TX

 

 

288

 

 

October 2019

 

N/A

 

 

8,043,132

 

 

 

5,016,811

 

 

 

-

 

Vantage at Westover Hills

 

San Antonio, TX

 

 

288

 

 

January 2020

 

N/A

 

 

7,824,302

 

 

 

-

 

 

 

-

 

Vantage at Tomball

 

Tomball, TX

 

 

288

 

 

August 2020

 

N/A

 

 

6,455,139

 

 

 

-

 

 

 

4,056,333

 

 

 

 

 

 

3,180

 

 

 

 

 

 

$

99,176,922

 

 

$

86,981,864

 

 

$

4,056,333

 

 

Activity in the First Nine Months of 2020

In January 2020, the Partnership executed a $7.3 million equity commitment to fund construction of the Vantage at Westover Hills multifamily property.

 

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 $10.6 million as a result of the sale. The Partnership recognized approximately $1.3 million of “Investment Income” associated with the sale.  The Partnership may also be entitled to up to $213,000 of additional proceeds in 2020 if certain gain contingencies are satisfied.  

 

In August 2020, the Partnership executed a $10.4 million equity commitment to fund construction of the Vantage at Tomball multifamily property.

 

Activity in the First Nine Months of 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 investment in an unconsolidated entity associated with the sale. The Partnership may also be entitled to receive up to $325,000 of additional proceeds if certain gain contingencies are satisfied.

 

The following table provides combined summary financial information for the Partnership’s investments in unconsolidated entities for the three and nine months ended September 30, 2020 and 2019:

 

 

 

For the Three Months Ended September 30,

 

 

For the Nine Months Ended September 30,

 

 

 

2020

 

 

2019

 

 

2020

 

 

2019

 

Property Revenues

 

$

3,501,288

 

 

$

3,713,106

 

 

$

8,971,999

 

 

$

9,534,250

 

Gain on sale of property

 

$

372,974

 

 

$

22,556,694

 

 

$

6,635,966

 

 

$

22,556,694

 

Net income (loss)

 

$

(1,495,383

)

 

$

21,606,621

 

 

$

341,905

 

 

$

20,918,176

 

 

21


 

11. Property Loans, Net of Loan Loss Allowances

The following tables summarize the Partnership’s property loans, net of loan loss allowances, as of September 30, 2020 and December 31, 2019:

 

 

 

September 30, 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

 

 

811,706

 

 

 

(811,706

)

 

 

-

 

Ohio Properties

 

 

2,390,446

 

 

 

-

 

 

 

2,390,446

 

Scharbauer Flats Apartments (1)

 

 

2,309,613

 

 

 

-

 

 

 

2,309,613

 

Total

 

$

21,126,239

 

 

$

(8,205,520

)

 

$

12,920,719

 

 

(1)

Property loans are held in trust in connection with a TOB Financing (see Note 16).

 

 

 

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

 

 

 

The Partnership recognized a provision for loan loss and associated loan loss allowance of approximately $812,000 for the three and nine months ended September 30, 2020 related to 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 on nonaccrual status for the three and nine months ended September 30, 2020 and 2019. The discounted cash flow method used by management to establish the net realizable value of these property loans determined the collection of the interest earned since inception was not probable.  In addition, for the three and nine months ended September 30, 2020 and 2019, interest to be earned on approximately $983,000 of property loan principal for the Ohio Properties was in nonaccrual status as, in management’s opinion, the interest was not considered collectible. 

 

Activity in the First Nine Months of 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 the first nine months of 2020:

 

 

 

 

 

 

 

As of September 30, 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

 

 

(1)

The borrower has the option to extend the maturity date with two six-month extensions.

(2)

The borrower has the option to extend the maturity date up to six months.

22


 

 

During the third quarter of 2020, the Partnership advanced Live 929 Apartments approximately $406,000 under the secured property loan entered into in August 2019.

Activity in the First Nine Months of 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 are reported as “Contingent interest income” on the Partnership’s condensed 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.

 

12. 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 three and nine months ended September 30, 2020 and 2019:

 

 

 

For the Three Months Ended September 30,

 

 

For the Nine Months Ended September 30,

 

 

 

2020

 

 

2019

 

 

2020

 

 

2019

 

Current income tax expense (benefit)

 

$

(33,618

)

 

$

13,932

 

 

$

107,681

 

 

$

129,095

 

Deferred income tax benefit

 

 

(34,601

)

 

 

(82,167

)

 

 

(66,482

)

 

 

(138,331

)

Total income tax expense (benefit)

 

$

(68,219

)

 

$

(68,235

)

 

$

41,199

 

 

$

(9,236

)

 

The Partnership evaluated whether it is more likely than not that its deferred income tax assets will be realizable. There was 0 valuation allowance recorded as of September 30, 2020 and December 31, 2019.

 

13. Other Assets

The following table summarizes the other assets as of September 30, 2020 and December 31, 2019:

 

 

 

September 30, 2020

 

 

December 31, 2019

 

Deferred financing costs, net

 

$

430,578

 

 

$

353,862

 

Fair value of derivative instruments (Note 18)

 

 

155,457

 

 

 

10,911

 

Taxable mortgage revenue bonds, at fair value

 

 

1,486,883

 

 

 

1,383,237

 

Bond purchase commitments, at fair value (Note 19)

 

 

256,222

 

 

 

-

 

Operating lease right-of-use assets, net

 

 

1,650,360

 

 

 

1,673,242

 

Other assets

 

 

1,429,116

 

 

 

1,641,099

 

Total other assets

 

$

5,408,616

 

 

$

5,062,351

 

 

As of September 30, 2020 and December 31, 2019, the operating lease right-of-use assets consisted primarily of a ground lease at the 50/50 MF Property (see Note 14).  

 

See Note 23 for a description of the methodology and significant assumptions for determining the fair value of derivative instruments and taxable MRBs. Unrealized gains or losses on these assets are recorded in the Partnership’s condensed 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.

 

23


 

The following table includes details of the taxable MRB acquired during the nine months ended September 30, 2020:

 

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)

 

(1)

The taxable MRB has a variable interest rate equal to the 1-month LIBOR plus 3.55%, subject to a floor of 4.91%.

(2)

The Partnership has committed to provide total funding of the taxable MRB up to $7.0 million during construction and lease-up of the property on a drawdown basis. NaN funds have been advanced as of September 30, 2020.  

 

14. Accounts Payable, Accrued Expenses and Other Liabilities

The following table summarizes the accounts payable, accrued expenses and other liabilities as of September 30, 2020 and December 31, 2019:

 

 

 

 

September 30, 2020

 

 

December 31, 2019

 

Accounts payable

 

$

425,445

 

 

$

93,834

 

Accrued expenses

 

 

2,950,430

 

 

 

2,529,982

 

Accrued interest expense

 

 

3,037,449

 

 

 

2,690,076

 

Operating lease liabilities

 

 

2,142,308

 

 

 

2,138,783

 

Other liabilities

 

 

1,441,582

 

 

 

1,583,492

 

Total accounts payable, accrued expenses and other liabilities

 

$

9,997,214

 

 

$

9,036,167

 

 

 

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. No changes have been made to the Partnership’s condensed consolidated financial statements dated prior to the effective date related to the adoption of ASC 842.

 

The 50/50 MF Property has a ground lease with the University of Nebraska-Lincoln with an initial lease term expiring in March 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 September 30, 2020, the minimum aggregate annual payment due under the agreement is approximately $135,000. 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 $42,000 and $126,000 for the three and nine months ended September 30, 2020 and 2019, respectively, and are reported within “Real estate operating expenses” on the Partnership’s condensed consolidated statements of operations.  

 

The following table summarizes future contractual payments for the Partnership’s operating leases and a reconciliation to the carrying value of operating lease liabilities as of September 30, 2020:

 

Remainder of 2020

 

$

33,785

 

2021

 

 

136,366

 

2022

 

 

139,091

 

2023

 

 

141,871

 

2024

 

 

144,706

 

Thereafter

 

 

4,517,274

 

Total

 

 

5,113,093

 

Less:  Amount representing interest

 

 

(2,970,785

)

Total operating lease liabilities

 

$

2,142,308

 

 

24


 

15. Unsecured Lines of Credit

The following tables summarize the unsecured lines of credit (“LOC”) as of September 30, 2020 and December 31, 2019:

 

Unsecured Lines of Credit

 

Outstanding as of September 30, 2020

 

 

Total

Commitment

 

 

Commitment

Maturity

 

Variable /

Fixed

 

Reset

Frequency

 

Period End

Rate

 

Bankers Trust non-operating

 

$

11,843,000

 

 

$

50,000,000

 

 

June 2022

 

Variable (1)

 

Monthly

 

 

2.66

%

Bankers Trust operating

 

 

-

 

 

 

10,000,000

 

 

June 2022

 

Variable (1)

 

Monthly

 

 

3.41

%

Total unsecured lines of credit

 

$

11,843,000

 

 

$

60,000,000

 

 

 

 

 

 

 

 

 

 

 

 

(1)

The variable rate is indexed to LIBOR plus an applicable margin.

 

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 (2)

 

Monthly

 

 

4.19

%

Bankers Trust operating

 

 

-

 

 

 

10,000,000

 

 

June 2021

 

Variable (2)

 

Monthly

 

 

4.94

%

Total unsecured lines of credit

 

$

13,200,000

 

 

$

60,000,000

 

 

 

 

 

 

 

 

 

 

 

 

(2)

The variable rate is indexed to LIBOR plus an applicable margin.

 

The principal amount of each acquisition advance is due on the 270th day following the advance date and may be extended for up to three additional 90-day periods by making partial repayments in accordance with the Credit Agreement. The outstanding balances of the non-operating LOC as of September 30, 2020 are due in December 2020 and March 2021, though the Partnership may extend final repayment of the amounts due in March 2021 to December 2021 by making partial repayments. The non-operating LOC contains a covenant, among others, that the Partnership’s ratio of the lender’s senior debt will not exceed 75% of the market value of the Partnership’s assets, as defined in the Credit Agreement. The Partnership was in compliance with all covenants in the Credit Agreement as of September 30, 2020.

 

The Partnership is required to make principal payments to reduce the operating LOC to 0 for fifteen consecutive calendar days during each calendar quarter. The Partnership has fulfilled its prepayment obligation for all periods presented. In addition, the Partnership has fulfilled its fourth quarter of 2020 repayment obligation as it maintained a 0 balance in the operating LOC for fifteen consecutive days during October 2020.  

 

 

25


 

16. Debt Financing

 

The following tables summarize the Partnership’s debt financings, net of deferred financing costs, as of September 30, 2020 and December 31, 2019:

 

 

 

Outstanding Debt

Financings as of September 30, 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

 

$

40,134,588

 

 

$

4,000

 

 

2010

 

May 2027

 

N/A

 

N/A

 

N/A

 

 

N/A

 

 

3.05%

 

Variable - M31 (1)

 

 

78,624,164

 

 

 

4,999

 

 

2014

 

July 2024

 

Weekly

 

SIFMA

 

0.15%

 

 

1.38%

 

 

1.53%

 

Fixed - M33

 

 

30,941,969

 

 

 

2,606

 

 

2015

 

September 2030

 

N/A

 

N/A

 

N/A

 

 

N/A

 

 

3.24%

 

Fixed - M45 (2)

 

 

216,280,562

 

 

 

5,000

 

 

2018

 

July 2034

 

N/A

 

N/A

 

N/A

 

 

N/A

 

 

3.82%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Secured Notes

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Variable - Notes

 

 

103,135,193

 

 

 

78,729,063

 

 

2020

 

September 2025

 

Monthly

 

3-month LIBOR

 

0.22%

 

 

9.00%

 

 

9.22% (3)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

TOB Trusts Securitization

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Mizuho Capital Markets:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Variable - TOB

 

 

1,756,362

 

 

 

-

 

 

2020

 

July 2022

 

Weekly

 

SIFMA

 

0.37%

 

 

0.89%

 

 

1.26%

 

Variable - TOB

 

 

122,881,252

 

 

 

-

 

 

2019

 

July 2023

 

Weekly

 

SIFMA

 

0.32% - 0.54%

 

 

1.17% - 1.67%

 

 

1.49% - 2.21%

 

Variable - TOB

 

 

60,477,672

 

 

 

-

 

 

2020

 

September 2023 (4)

 

Weekly

 

OBFR

 

0.37%

 

 

0.89%

 

 

1.26%

 

Morgan Stanley:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Fixed - Term TOB

 

 

13,016,939

 

 

 

-

 

 

2019

 

May 2022

 

N/A

 

N/A

 

N/A

 

 

N/A

 

 

3.53%

 

Total Debt Financings

 

$

667,248,701

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(1)

Facility fees have a variable component.

(2)

The M45 TEBS has an initial interest rate of 3.82% through July 31, 2023. From August 1, 2023 through the stated maturity date, the interest rate is 4.39%. These rates are inclusive of credit enhancement fees payable to Freddie Mac.

(3)

The Partnership has entered into 2 total return swap transactions with the Secured Notes as the reference security and notional amounts totaling the outstanding principal on the Secured Notes. The total return swaps effectively net down the interest rate on the Secured Notes. Considering the effect of the total return swaps, the effective net interest rate is 4.25% for approximately $40.0 million of the Secured Notes and 1.00% for approximately $63.5 million of the Secured Notes as of September 30, 2020. See Note 18 for further information on the total return swaps.

(4)

Date represents the stated maturity date of the related liquidity and credit enhancement facilities which is the effective maturity of the TOB Trust financing.

 

 

 

 

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

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Deutsche Bank:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Fixed - Term TOB

 

 

8,010,000

 

 

 

-

 

 

2014

 

January 2020

 

N/A

 

N/A

 

 

N/A

 

 

4.01%

 

Fixed - Term A/B

 

 

5,260,756

 

 

 

-

 

 

2019

 

February 2020

 

N/A

 

N/A

 

 

N/A

 

 

4.53%

 

Fixed - Term A/B

 

 

38,300,456

 

 

 

-

 

 

2017

 

February 2027

 

N/A

 

N/A

 

 

N/A

 

 

4.46%

 

Mizuho Capital Markets:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Variable - TOB

 

 

25,680,070

 

 

 

-

 

 

2019

 

July 2020

 

Weekly

 

1.79%

 

 

1.17%

 

 

2.96%

 

Variable - TOB

 

 

42,207,784

 

 

 

-

 

 

2019

 

August 2020

 

Weekly

 

1.79%

 

 

1.17% - 1.66%

 

 

2.96% - 3.45%

 

Variable - TOB

 

 

34,703,935

 

 

 

-

 

 

2019

 

September 2020

 

Weekly

 

2.08%

 

 

1.12%

 

 

3.20%

 

Morgan Stanley:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Fixed - Term TOB

 

 

13,063,418

 

 

 

-

 

 

2019

 

May 2022

 

N/A

 

N/A

 

 

N/A

 

 

3.53%

 

Total Debt Financings

 

$

536,197,421

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(1)

Facility fees have a variable component.

26


 

(2)

The M45 TEBS has an initial interest rate of 3.82% through July 31, 2023. From August 1, 2023 through the stated maturity date, the interest rate is 4.39%. These rates are inclusive of credit enhancement fees payable to Freddie Mac.

 

The TOB, Term TOB, Term A/B and TEBS Financing arrangements are consolidated VIE’s to the Partnership (see 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 in the Partnership’s condensed consolidated financial statements. See Note 6 for information regarding the MRBs securitized within each TOB, Term TOB, Term A/B and TEBS Financing, Note 7 for information regarding the GILs securitized within each TOB Trust Financing, and Note 11 for information regarding the property loans securitized within each TOB Trust Financing.  As the residual interest holder, 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, the underlying collateral may 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.

 

As of September 30, 2020 and December 31, 2019, the Partnership posted restricted cash as contractually required under the terms of the four TEBS Financings. The restricted cash associated with the Secured Notes is collateral posted with Mizuho according to the terms of 2 total return swaps that have the Secured Notes as the reference security (see Note 18). The Partnership may also be required to post collateral, typically in cash, related to the TOB Trusts with Mizuho. The amount of collateral posting required is dependent on the valuation of the underlying MRBs, GILs and property loans in relation to thresholds set by Mizuho. There was no requirement to post collateral for the TOB Trusts with Mizuho as of September 30, 2020 and December 31, 2019.

 

 

The Partnership has entered into various TOB Trust financings with Mizuho secured by MRBs, GILs, and property loans. The Mizuho TOB Trusts 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 it remains 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 all covenants as of September 30, 2020.

 

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. 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 September 30, 2020.

 

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 asset.

 

Activity in the First Nine Months of 2020

 

 

27


 

New Debt Financings:

 

The following is a summary of the Mizuho TOB Trust financings that were entered into during the first nine months of 2020:

 

TOB Trusts Securitization

 

TOB

Trust Financing

 

 

Stated Maturity

 

Reset

Frequency

 

Variable Rate Index

 

Facility Fees

 

Avistar at Copperfield - Series A

 

$

11,818,000

 

 

May 2021

 

Weekly

 

SIFMA

 

1.67%

 

Avistar at Wilcrest - Series A

 

 

4,479,000

 

 

May 2021

 

Weekly

 

SIFMA

 

1.67%

 

Avistar at Wood Hollow - Series A

 

 

34,007,000

 

 

May 2021

 

Weekly

 

SIFMA

 

1.67%

 

Gateway Village

 

 

2,184,000

 

 

May 2021

 

Weekly

 

SIFMA

 

1.67%

 

Lynnhaven

 

 

2,898,000

 

 

May 2021

 

Weekly

 

SIFMA

 

1.67%

 

Ocotillo Springs - Series A

 

 

1,818,000

 

 

July 2022

 

Weekly

 

SIFMA

 

0.89%

 

Oasis at Twin Lakes GIL (1)

 

 

11,160,000

 

 

July 2023

 

Weekly

 

SIFMA

 

0.89%

 

Scharbauer Flats Apartments GIL (1)

 

 

36,000,000

 

 

July 2023

 

Weekly

 

SIFMA

 

0.89%

 

Centennial Crossings GIL (1)

 

 

8,707,000

 

 

August 2023

 

Weekly

 

SIFMA

 

0.89%

 

Scharbauer Flats, Twin Lakes, &

  Centennial Crossings GILs (1)

 

 

55,870,000

 

 

September 2023

 

Weekly

 

OBFR

 

0.89%

 

Scharbauer Flats & Centennial

  Crossings Property Loans

 

 

4,790,000

 

 

September 2023

 

Weekly

 

OBFR

 

0.89%

 

Total TOB Trust Financing

 

$

173,731,000

 

 

 

 

 

 

 

 

 

 

 

 

(1)

Three TOB Trust financings associated with individual GILs were originated and subsequently collapsed during 2020. The three related GILs were then combined and re-securitized into a single TOB Trust financing in September 2020. The new TOB Trust financing was created to take advantage of lower interest rate spread adjustments compared to the previous TOB Trust financings. The termination of the single-GIL TOB Trust financings were treated as extinguishments for accounting purposes and the Partnership expensed approximately $364,000 of deferred financings costs.

In September 2020, ATAX TEBS Holdings, LLC, a wholly owned subsidiary of the Partnership, 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. 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 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 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 Financing 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 Financing VIEs and such VIEs will no longer be consolidated in the Partnership’s condensed consolidated financial statements. Concurrent with the issuance of the Notes, the Partnership entered into two total return swap transactions with Mizuho to reduce the net interest cost related to the Secured Notes (see Note 18). Of the $103.5 million of proceeds from the Secured Notes, approximately $24.8 million was received in cash by the Partnership, approximately $1.2 million was deposited in a reserve account at U.S. Bank which will be released to the Partnership at such time as the Partnership can arrange for principal and interest payments related to the TEBS Financing residual certificates to be remitted directly to U.S. Bank, and approximately $77.5 million was deposited with Mizuho as collateral for the total return swaps.

Refinancing Activity:

 

In July 2020, the Partnership extended the maturity dates of all Mizuho TOB Trust financings with stated maturity dates of 2021 to July 2023.  There were no additional changes to terms or fees associated with the amendments.

 

Redemptions:

 

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).  

 

In April 2020, the Partnership terminated its Master Trust Agreement and collapsed its Term TOB Trust and all Term A/B Trust financings with Deutsche Bank.  As of the termination, the Partnership is no longer subject to the debt covenants in the Master Trust Agreement.  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.  

 

28


 

The following is a summary of the Deutsche Bank Term A/B and Term TOB Trust financings that were collapsed and paid off in April 2020:

 

Debt Financing

 

Debt Facility

 

Month

 

Paydown Applied

 

Avistar at Copperfield - Series A

 

Term A/B Trust

 

April 2020

 

$

8,417,739

 

Avistar at Wilcrest - Series A

 

Term A/B Trust

 

April 2020

 

 

3,162,435

 

Avistar at Wood Hollow - Series A

 

Term A/B Trust

 

April 2020

 

 

26,860,536

 

Gateway Village

 

Term A/B Trust

 

April 2020

 

 

2,262,000

 

Lynnhaven

 

Term A/B Trust

 

April 2020

 

 

3,001,500

 

Pro Nova 2014-1

 

Term TOB

 

April 2020

 

 

8,010,000

 

 

 

 

 

 

 

$

51,714,210

 

 

Activity in the First Nine Months of 2019

 

New Debt Financings:

 

In February 2019, the Partnership entered into 2 Term A/B Trusts financings secured by MRBs. The following table summarizes the gross principal and terms of the Term A/B Trusts:

 

Term A/B Trusts Securitization

 

Outstanding Term A/B

Trust Financing

 

 

Stated Maturity

 

Fixed Interest

Rate

 

Gateway Village

 

$

2,262,000

 

 

February 2020

 

 

4.53

%

Lynnhaven Apartments

 

 

3,001,500

 

 

February 2020

 

 

4.53

%

Total Term A/B Trust Financing

 

$

5,263,500

 

 

 

 

 

 

 

 

In May 2019, the Partnership entered into a Term TOB Trust financing with Morgan Stanley secured by an MRB. The following table summarizes the gross principal and terms of the Term TOB Trust:

 

Term TOB Trusts Securitization

 

Outstanding Term TOB

Trust Financing

 

 

Stated Maturity

 

Fixed Interest

Rate

 

Village at Avalon

 

$

13,167,000

 

 

May 2022

 

 

3.53

%

Total Term TOB Trust Financing

 

$

13,167,000

 

 

 

 

 

 

 

 

During the third quarter of 2019, The Partnership entered into various TOB Trust financings with Mizuho secured by MRBs and PHC Certificates. The following table summarizes the gross principal and terms of the TOB Trusts:

 

TOB Trusts Securitization

 

Outstanding TOB

Trust Financing

 

 

Stated Maturity

 

Reset

Frequency

 

Variable Rate Index

 

Facility Fees

 

Rosewood Townhomes

 

$

7,715,000

 

 

July 2020

 

Weekly

 

SIFMA

 

1.17%

 

South Pointe Apartments

 

 

18,035,000

 

 

July 2020

 

Weekly

 

SIFMA

 

1.17%

 

Live 929 Apartments

 

 

31,800,000

 

 

August 2020

 

Weekly

 

SIFMA

 

1.66%

 

Montecito at Williams Ranch

 

 

6,925,000

 

 

August 2020

 

Weekly

 

SIFMA

 

1.17%

 

Vineyard Gardens

 

 

3,595,000

 

 

August 2020

 

Weekly

 

SIFMA

 

1.17%

 

PHC Trust I

 

 

20,121,000

 

 

September 2020

 

Weekly

 

SIFMA

 

1.12%

 

PHC Trust II

 

 

3,803,000

 

 

September 2020

 

Weekly

 

SIFMA

 

1.12%

 

PHC Trust III

 

 

12,062,000

 

 

September 2020

 

Weekly

 

SIFMA

 

1.12%

 

Total TOB Trust Financing

 

$

104,056,000

 

 

 

 

 

 

 

 

 

 

 

 

Refinancing Activity:

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 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 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

29


 

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.

Redemptions:

The following debt financing facilities were collapsed and redeemed in full at prices that approximated the Partnership’s carrying value plus accrued interest:

 

Debt Financing

 

Debt Facility

 

Month

 

Paydown Applied

 

Live 929 Apartments

 

Term TOB Trust

 

August 2019

 

$

37,553,300

 

Montecito at Williams Ranch

 

Term A/B Trust

 

August 2019

 

 

6,921,000

 

Vineyard Gardens

 

Term A/B Trust

 

August 2019

 

 

3,595,000

 

PHC Trust I

 

TOB Trust

 

September 2019

 

 

19,755,000

 

PHC Trust II

 

TOB Trust

 

September 2019

 

 

3,430,000

 

PHC Trust III

 

TOB Trust

 

September 2019

 

 

11,000,000

 

 

 

 

 

 

 

$

82,254,300

 

 

Future Maturities

 

The Partnership’s contractual maturities of borrowings as of September 30, 2020 for the twelve-month periods ending December 31st for the next five years and thereafter are as follows:

 

Remainder of 2020

 

$

1,650,787

 

2021

 

 

6,129,456

 

2022

 

 

21,232,689

 

2023

 

 

187,223,816

 

2024

 

 

87,839,152

 

Thereafter

 

 

365,616,422

 

Total

 

 

669,692,322

 

Unamortized deferred financing costs and debt premium

 

 

(2,443,621

)

Total debt financing, net

 

$

667,248,701

 

 

17. Mortgages Payable and Other Secured Financing

 

The following tables summarize the Partnership’s mortgages payable and other secured financing, net of deferred financing costs, as of September 30, 2020 and December 31, 2019:

 

MF Property Mortgage Payables

 

Outstanding Mortgage

Payable as of

September 30, 2020, net

 

 

Year

Acquired

or

Refinanced

 

Stated Maturity

 

Variable

/ Fixed

 

Period End

Rate

 

The 50/50 MF Property--TIF Loan

 

$

2,680,639

 

 

2020

 

March 2025

 

Fixed

 

 

4.40

%

The 50/50 MF Property--Mortgage

 

 

23,595,251

 

 

2020

 

April 2027

 

Fixed

 

 

4.35

%

Total Mortgage Payable\Weighted

   Average Period End Rate

 

$

26,275,890

 

 

 

 

 

 

 

 

 

4.36

%

 

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 the Wall Street Journal Prime Rate, but not to exceed 5.0%.

30


 

Activity in the First Nine Months of 2020

 

In 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%.

Future Maturities

 

The Partnership’s contractual maturities of borrowings as of September 30, 2020 for the twelve-month periods ending December 31st for the next five years and thereafter are as follows:

 

Remainder of 2020

 

$

287,779

 

2021

 

 

832,032

 

2022

 

 

869,313

 

2023

 

 

908,265

 

2024

 

 

946,246

 

Thereafter

 

 

22,433,983

 

Total

 

 

26,277,618

 

Unamortized deferred financing costs

 

 

(1,728

)

Total mortgages payable and other secured financings, net

 

$

26,275,890

 

 

18. Derivative Financial Instruments

In September 2020, the Partnership entered into 2 total return swap transactions. The following table summarizes the terms of the Partnership’s total return swaps as of September 30, 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

September 30, 2020

 

Sept 2020

 

 

40,000,000

 

 

Sept 2020

 

Sept 2025

 

4.25% (1)

 

9.22% (3)

 

3-month LIBOR

 

Mizuho Capital Markets

 

$

38,675

 

Sept 2020

 

 

63,500,000

 

 

Sept 2020

 

Mar 2022

 

1.00% (2)

 

9.22% (3)

 

3-month LIBOR

 

Mizuho Capital Markets

 

 

101,525

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

$

140,200

 

 

(1)

Variable rate equal to 3-month LIBOR + 3.75%, subject to a floor of 4.25%.

(2)

Variable rate equal to 3-month LIBOR + 0.50%, subject to a floor of 1.00%.

(3)

Variable rate equal to 3-month LIBOR + 9.00%.

Each of the total return swaps have the Partnership’s Secured Notes with Mizuho as the specified reference security (see Note 16). The combined notional amount of the total return swaps is $103.5 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 million, requires the Partnership to maintain cash collateral equal to 35% of the notional amount, which was approximately $14.0 million as of September 30, 2020. 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 September 30, 2020. 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.  

31


 

The following tables summarize the Partnership’s interest rate cap agreements as of September 30, 2020 and December 31, 2019:

 

Purchase

Date

 

Notional Amount

 

 

Maturity

Date

 

Effective

Capped

Rate (1)

 

 

Index

 

Variable Debt

Financing Facility

Hedged (1)

 

Counterparty

 

Fair Value as of

September 30, 2020

 

Aug 2019

 

 

78,362,798

 

 

Aug 2024

 

 

4.5

%

 

SIFMA

 

M31 TEBS

 

Barclays Bank PLC

 

$

15,257

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

$

15,257

 

 

(1)

See Notes 16 and 23 for additional details.

 

Purchase Date

 

Notional Amount

 

 

Maturity

Date

 

Effective

Capped

Rate (2)

 

 

Index

 

Variable Debt

Financing Facility

Hedged (2)

 

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

 

 

(2)

See Notes 16 and 23 for additional details.

 

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 condensed consolidated statements of operations. See Note 23 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 condensed consolidated balance sheets.  

 

19. Commitments and Contingencies

Legal Proceedings

The Partnership, from time to time, may be 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, the estimated amount of the loss is accrued in the Partnership’s condensed consolidated financial statements. While the resolution of these matters cannot be predicted with certainty, the Partnership believes the outcome of such matters will not have a material effect on the Partnership’s condensed consolidated financial statements.

Bond Purchase Commitments

As part of the Partnership’s strategy of acquiring MRBs, the Partnership will 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 other comprehensive income. The following table summarizes the Partnership’s bond purchase commitments as of September 30, 2020: 

 

Bond Purchase Commitments

 

Commitment Date

 

Maximum

Committed

Amounts

Remaining

 

 

Rate

 

 

Estimated Closing

Date

 

Fair Value as of

September 30, 2020

 

CCBA Senior Garden Apartments

 

July 2020

 

$

3,807,000

 

 

 

4.50

%

 

Q3 2022

 

$

256,222

 

Total

 

 

 

$

3,807,000

 

 

 

 

 

 

 

 

$

256,222

 

 

Mortgage Revenue Bond and Taxable Mortgage Revenue Bond Commitments

 

32


 

The Partnership has committed to fund additional proceeds related to the Ocotillo Springs Series A MRB (see Note 6) and Series A-T taxable MRB (see Note 13) while the property is under construction. The Partnership’s remaining maximum commitments related to the Series A MRB and Series A-T taxable MRB totaled $13.0 million and $7.0 million, respectively, as of September 30, 2020.

 

Governmental Issuer Loan Commitments

 

The Partnership has outstanding commitments to fund the proceeds related to its GILs while the property is under construction.  See Note 7 for remaining commitments disclosures.  

 

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 10 for additional information.

Property Loan Commitments

The Partnership has committed to fund additional proceeds related to property loans for Scharbauer Flats Apartments, Oasis at Twin Lakes Apartments and Centennial Crossings Senior Apartments while the properties are under construction. The Partnership’s remaining maximum commitments totaled approximately $70.8 million as of September 30, 2020. See Note 11 for disclosures related to the property loans.

Construction Loan Guarantees

The Partnership entered into guaranty agreements for construction 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 September 30, 2020:

 

Borrower

 

Year the Guarantee

was Executed

 

Maximum Balance

Available on

Construction Loan

 

 

Construction Loan

Balance as of September 30, 2020

 

 

Partnership's Maximum Exposure

as of September 30, 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

 

 

 

26,665,010

 

 

 

26,665,010

 

 

(1)

 

(1)

The Partnership’s maximum exposure will decrease to 50% of the construction loan balance upon receipt of the certificate of occupancy and to 25% of the construction loan balance when certain debt service coverage levels are achieved by the borrower.

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 September 30, 2020:

 

Limited Partnership(s)

 

Year the Guarantee

was Executed

 

End of Guarantee

Period

 

Partnership's Maximum Exposure

as of September 30, 2020

 

Ohio Properties

 

2011

 

2026

 

$

3,361,979

 

Greens of Pine Glen, LP

 

2012

 

2027

 

 

2,237,843

 

 

 

 

33


 

20. Redeemable Series A Preferred Units

 

The Partnership has issued non-cumulative, non-voting, non-convertible Series A Preferred Units via a private placement to five financial institutions. The Series A Preferred Units represent limited partnership interests of the Partnership.  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 anniversary of the closing of the sale of Series A 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 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.

 

In the event of any liquidation, dissolution, or winding up of the Partnership, the holders of the Series A 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 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; (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.

 

The following table summarizes the outstanding Series A Preferred Units as of September 30, 2020 and December 31, 2019:  

 

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 September 30, 2020 and

   December 31, 2019

 

 

9,450,000

 

 

$

94,500,000

 

 

 

 

 

 

 

 

 

 

 

 

 

21. Restricted Unit Awards

The Partnership’s 2015 Plan permits the grant of RUAs 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. 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 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 $300,000 and $3.3 million for the three months ended September 30, 2020 and 2019, respectively. The compensation expense for RUAs totaled approximately $635,000 and $3.6 million for the nine months ended September 30, 2020 and 2019, respectively. Compensation expense is reported within “General and administrative expenses” on the Partnership’s condensed consolidated statements of operations.

34


 

The following table summarizes the RUA activity as of and for the nine months ended September 30, 2020 and the year ended December 31, 2019:

 

 

 

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

 

 

0

 

 

$

0

 

Granted

 

 

290,000

 

 

 

4.98

 

Nonvested as of September 30, 2020

 

 

290,000

 

 

$

4.98

 

 

The unrecognized compensation expense related to nonvested RUAs granted under the Plan was $809,000 as of September 30, 2020. The remaining compensation expense is expected to be recognized over a weighted average period of 1.1 years.  The total intrinsic value of unvested RUAs was approximately $1.2 million as of September 30, 2020.

 

22. Transactions with Related Parties  

 

Effective September 10, 2019, Greystone acquired all the 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 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 in the Partnership’s condensed consolidated financial statements for the three and nine months ended September 30, 2020 and 2019:  

 

 

 

For the Three Months Ended September 30,

 

 

For the Nine Months Ended September 30,

 

 

 

2020

 

 

2019

 

 

2020

 

 

2019

 

Partnership administrative fees paid to AFCA 2 (1)

 

$

922,000

 

 

$

914,000

 

 

$

2,653,000

 

 

$

2,714,000

 

Property management fees paid to an affiliate (2)

 

 

-

 

 

 

28,000

 

 

 

-

 

 

 

101,000

 

Reimbursable franchise margin taxes incurred on behalf of

   unconsolidated entities (3)

 

 

6,000

 

 

 

12,000

 

 

 

47,000

 

 

 

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