- Earnings call transcript Q3 2022

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Operator

I'd like to welcome everyone to America First Multifamily Investors L.P.'s NASDAQ ticker symbol ATAX Third Quarter of 2022 Earnings Conference Call.

During the presentation, all participants will be in a listen-only mode. After management presents its overview of Q3 2022, you will be invited to participate in a question-and-answer session.

As a reminder, this conference call is being recorded.

During this conference call, comments made regarding ATAX, which are not historical facts are forward-looking statements and are subject to risks and uncertainties that could cause the actual future events or results to differ materially from these statements. made Securities the XXXX. Litigation are of harbor statements Private the Reform forward-looking pursuant safe to provisions Such Act of

statements intend, by may, identified terms. can of Forward-looking like words the should, and focus use plan, other similar expect, be

these ATAX's cautioned speak statements statements differ expressed from actual Changes results that today's and other or only competitive, those the forward-looking economic, to made business, You regulatory of projections implied factors date. forward-looking are as in could or by cause today. materially

For these want that more periodic if not will but Today's and may its projections filed with factors impact other you Internal do, necessarily beliefs the be non-GAAP they informed. Commission. ATAX from and and bases information expectations review the upon, detailed may about Exchange ATAX include discussion will aware FD other operating Securities time-to-time measures by call. change ATAX's risks call question-and-answer business, explained reports during in and of the documents please which be for this session. We you Thank encourage Ken now and the to Chief Officer you to advantage Rogozinski, under and would to take you like to and of make ATAX. interest participation over full turn the is ATAX SEC ATAX. will your Executive that I Regulation

Ken Rogozinski

the the I investment you of an Good Officer Partnership's financial our afternoon, and Financial Thank will up present quarter will market joining. the for pipeline. everyone. our and overview quarter wrap with call. Welcome Coury, to investor I of America with First then third Multifamily Investors results. our portfolio. overview XXXX L.P.'s will Chief start Jesse an

taking look your we forward questions. Following to that,

quarter our $X.XX. of year-to-date which have the CAD of unit both XXXX, those distribution On third solid for net year-to-date income cash per our reported $X.XX net cash $X.XX $X.XX the a fronts. another entire unit XXXX exceeds of available per reported unit per quarter of Similarly year the Partnership the entire fiscal for income $X.XX distribution per per available net fiscal basis, For on we unit per for unit, XXXX exceeds and of unit, of $X.XX reported year. income

sale of distribution the to Vantage fund ratio investments. $XX.XX the of distribution of issued and to at BUC. and form consists the record unit, $X.XX of BUC also leverage quarterly capital $X.XX which value on its BUCs of non-dilutive BUC on in ratio September in payable of form as as a a BUC additional ATAX book at the the paid supplemental X.XXXXX supplemental is in per continuing of of a Partnership's ATAX intent The of of future of On assets for unit defined recent each opportunities distribution cost gains billion to per of was to equal The regular distribute payment the XX, distribution the cash and announced BUCs We retain per low outstanding $X.XX by reflects allows supplemental holders. portion supplemental reported a XX%. a BUCs date. Partnership's current distribution plus to quarterly of the investment per $X.XX a value our distribution additional The we

quarterly distribution a quarter XXXX. fourth the distributions While yet has currently position in regular for in to the expects to any distribution not be make Board addition the to for quarters, Partnership declared subsequent supplemental the a of

estate in form multifamily and governmental $XX loans investment the investments. hold revenue of venture terms and in property of billion issuer bonds, investments in the mortgage Partnership's real direct of joint loans, $XXX investments In $X.X we million currently portfolio, million affordable equity

their and all principal of had XXXX. and forbearance mortgage the current on no have portfolio request Physical XX% revenue averaged the September revenue we borrowers far as for bond for the multifamily portfolio payments. investment mortgage underlying As of interest concerned, XX, occupancy bonds, on performance are as projects is such

joint sold Our venture July XXXX. partners Vantage in at O'Connor

Our properties, where leasing complete, construction the XXX% are stage. equity is is XX interest still underway, four joint consists one under or where remaining in in construction five of venture Vantage and construction the remaining planning properties and investments

For achieved properties least the XXXX. see complete, leasing where occupancy four at physical XX% activity properties of three XXX% September as to good is construction we continue with having

the to supply Vantage see labor continue projects We construction. material or chain under on no disruptions

at to and together Vantage Group Vantage experienced each work for were remaining involved October commitment will to-date. we property sale a member Development Partnership's In we're Groups venture Development past, XX the of the the formally may joint XXXX, made Development affiliated collaboratively completion million the the future managing joint have and stabilization. we Vantage branded executed Group the Partnership, closely the Development Vantage upon with will Freestone venture owning investments in a $XX of equity sale. As project Group. property investments the bring the XX The is Group, in present principles Vantage Vantage Freestone a key position as entity, The our The investment market-rate to and a equity venture with joint of principles as as ultimate of equity to to remaining opportunities Freestone our Freestone the Freestone group, development first Greeley fund the This investment Group member. XXX-unit Development in multifamily construction managing Greeley, Colorado. key

Our for XX% Both student the case achieved expenses XX/XX academic the their year. service. housing operating project to flow, in cash University XXXX-XXXX have are from levels. at continue obligations properties occupancy of debt covering two leasing the of have and including over of owned properties Nebraska, all Both strong

loan securing discuss the turn taxable I property mortgage existing our for properties construction bond, financial Coury, XXXX. and revenue governmental We investments. multifamily funds advance data mortgage of continue With third issuer our revenue quarter things affordable Jesse that, CFO loan to the the bond, to for over of to will

Jesse Coury

you, Thank Ken.

XX. each at BUCs X.XXXXX ratio form for As additional Ken distribution of October supplemental a a of BUCs, mentioned, we on BUC paid the in outstanding

distribution to split. similar purposes stock treated a GAAP this is For supplemental

BUC for the net on our income been September reflect Earlier supplemental such QX, will and we prior earnings metrics $X.XX retroactive reported unit and cash distribution for We and or basis. BUC As all that $X.XX to all periods for CAD today, adjusted diluted per BUCs and GAAP discuss quarter per I reported XX.X XX.X XXXX we have distributions of ended available per third and reported unit. basic XX. of and a

per of from benefited before third Vantage by $X.XX related the realization earnings expenses. the realized quarter per losses on is, largely difference quarter unit mortgage of Our general O'Connor during unit net and on quarterly which at gain contributed the sale XXXX, between driven the The earnings for and million administrative for July Provision in to bond Center $XX.X of purposes. greatly the CAD income CAD revenue approximately

contributed of proceeds and be the are mortgage As own August for the cash our court of $XX proceeds Tennessee, plan million The estate. bankruptcy developing Provision successfully Partnership which for of as Knoxville bonds bankruptcy mentioned call, XXXX sold Center, liquidation the to distributed. a the can on borrower in settlement the share July a out bankruptcy we Therapy was bankruptcy estate, Center the with Proton such of Treatment revenue Cancer in

the net final XX, $X.X case. approximately accrued for revenue September equals of revenue carrying of our our bond original inclusive This the of million value bond prior by million of previously, purposes, $X.X of GAAP such GAAP proceeds settlement net was which the value less our net bankruptcy As the bankruptcy This impacted expected of as than net not recognized in is investment. upon interest resolution pending carrying that a was mortgage GAAP is mortgage expected loss income reduction periods, income case.

a the XXXX, substantially borrower However, the million the which liquidated a assets of loss realized $X.X calculating losses realized for reduction in on consistent assets. is is our that and investment CAD quarter all third of considered prior with treatment of as quarter, in

of of the as interest of mortgage Our a result of book a decline which per value June a in from decline was The portfolio fair $XX.XX, is rates. of $X.XX is value bond caused decline September largely market by as rising revenue XX per unit $XX.XX XX. our unit

our We November of monitor NASDAQ liquidity protect to There deleveraging $XX.XX, against net and to price debt values. yesterday investment potential our asset accretive close advantage on take unit both market of is which closing events. regularly premium As over opportunities in our book unit. X, per a XX% are was declines the value significant

reported XX, we September equivalents of cash of and million. $XXX.X unrestricted As cash

current of financing shares of will that quarter. XX, September financed We paydowns information additional bond $XX.X bonds in mortgage XX to currently XX, lines governmental commitments, currently of rates, loans and also construction rising loan, interest $XX XX% mortgage assets on We and of are revenue represent June our share as or I our overall loan unrealized such had positioned the consisting levels, additional affordable and million fund due to relate total market like from mortgage to that due properties These of fair we primarily availability rehabilitation in mortgage an credit. opportunities $XX.X well portfolio our loans $XX.X property affordable portfolio of At which decline additional revenue own in permanent across and million XX with which believe XX issuer in XX% on billion multifamily that near-term. revenue mortgage states. investment states. value for fund Texas, a totaled also lean. and across in assets. gains property our The investment revenue issuer is California X% the will We debt to governmental the of governmental we investments XX% bonds, I'd multifamily provide Alongside first issuer Of current these our that a Carolina. execute million our June later properties South discuss XX, redemptions in properties six commit we $X.X the financing and during declined on to secured loans. million consistent to bonds, own these

governmental issuer The Grove, near Our in loans projects will total fund loan commitments of totaled typically Sacramento. loan funding the funding loans units issuer and $XXX.X located is governmental for governmental taxable our XXX third new commitments completed. quarter, three three have property the issuer closed In million. we after Elk California and properties

and commitments quarter, issuer debt that loans approximately issuer and have loans loan commitments. property million for closed. governmental totaled related funding $XXX MRBs investments totaling loan, our governmental remaining governmental third already our advanced million loan taxable total, In the issuer construction on During we funds for $XX

next the funded Partnership's income-producing base. As to XX these will months, commitments asset they add are over the

GAAP accounting a which scope or higher the CECL will Update accounting. expected audience credit result an Standards X, for I the require the XXXX-XX like to to loss assets standards Accounting CECL On the model, credit within standard from front, be The current guidance. of in XXXX than adopting transition remind would that loss January effective loss reserves model generally current incurred the our the will we

continuing the disclosures are We additional our assess financial in will adoption the SEC to CECL through on our transition statements date. impact filings provide and of

to We the in of current equity gain at returns consolidated Vantage sale reported on advanced of now as Carrying $XX.X sales. totaled Marcos. venture commitments investments the mentioned, the of O'Connor continued The joint we of our upon And our funding as quarter. September which third San as on of third significant $X.X quarter, was Vantage at during XXXX, Vantage totaling Turning Vantage $XXX recognized property our projects XX, portfolio portfolio. one of trend end the million under Vantage a which previously of of the exclusive July equity of investments XX consolidated consisted value million additional a basis. the million

main June Page is is Our a This XX. debt as investment result and our leverage of during quarter. of the XX up on million approximately approximately outstanding and used principal on of as report in Form financing debt funding XX our four financings $XX facility $XXX We from of XX-Q. manage investments million September our our commitments to leverage of categories

or fixed $XXX First assets category rate XX% financing. debt our represents with is and debt of fixed rate associated million total

not rates either rate, is generally long-term by net interest or are both fixed our assets As changes return and the in market impacted short-term rates. debt

rate the variable or rate Variable million without with indices separate are of associated debt debt financing. and instruments largely against or protected vary, but represents we such rate $XXX rates interest floors our swaps. total hedging caps rate variable will assets is category for need second and as rising The XX% interest

variable costs variable rate with associated we million SOFR where risk been our fixed total most near-term. swaps, monitor our rising rate XX% assets short-term limit have category in hedges debt our This to category for XX% of which resulting assets, hedged via final appropriate. This rates. third category exposure interest regularly is is $XXX accounts debt exposure which financing. funding risk denominated interest in considered exposed increased if are the from with that category or total rate $XXX rate or fixed debt million The The to financing. implement rate is debt this associated We of our only rate and the category interest for they represents rate interest future

addition, an loan rates an loan with rate $XX over the million million, and our rate initial our of rate leverage In to governmental projected of which hedge interest interest have and funding October, variable in our taxable which assets, time debt we schedule debt. interest governmental Grove exposure has associated interest The on issuer increases notional investment of rate based balance $XXX swap commitments. to swap executed issuer three Poppy fixed our on

exposure rise described, of rates quarterly and which Page impact third and approximately increases September shows Form for XX period very sensitivity XX interest net the debt of rates. $X.XX low or our we execution Given is immediate nothing during various level $X.XX our assume an on for XX-Q. GAAP there unit swaps XXXX our This net as decrease of comparison I December of rate to per our rates interest These that shows overall The of included an The our the sustained report analysis reported scenarios from mix increase basis that current exposure per market through response $X.X immediate down assumptions potential in XX-month rates million sensitivity income interest result interest year. in as primarily unit. our those XX, we analysis, approximately $X.XX regularly is an believe interest is in income is monitor CAD rate due to that net based in XXX table in interest a year-to-date rate point to in per we that months. of quarter in unit. the interest this is and We just of of to in of interest changes do will on income scenarios giving a XX

Preferred of million capital Preferred A-X Units A-X same by under exchanges XXXX, our for second issuance. the previously our on Units million the APAC previously This new registration raising issued exchange holder Series option Preferred Series activities. terms A-X as Units to the one Preferred million and and $X The Form the Series A represents all issued S-X A of exchange Units, our held anniversary a we Turning $XX.X October Units. new Series transaction sixth A are redeemable Preferred statement our outstanding Series of Units of in institution. Preferred In for at Series the have for substantially financial on of allowing the

$XX.X redemption turn his As new A And six originally we issued XXXX. a Preferred fixed exchange, capital. access conditions market our exchanged pipeline. of million our extends to our non-dilutive I'll $XX Units, result over of million institutional the the cost update to to for and A-X to maintain we optional have years successfully Units low the date of rate earliest Ken which now on dates investment for Series call Preferred and Series

Ken Rogozinski

Thanks Jesse.

quarter market. the of continuation third XXXX in negative to the muni of trends year The that of we half the a first bond the saw brought

continued the were of month billion Lipper months $X Year-to-date correlates Index Bloomberg Refinitiv XX, revenue return the value another to which on as fund return trend first in cumulative negative fund with year-to-date the outflows basis. in that mutual XXXX, negative Municipal XX, As book mortgage September decline billion negative $XX in of we XXXX, the negative XX.X%. year-to-date the a Municipal according of another for a topped XX me was our of seen This excuse Bloomberg the October X.X% of outflows with XXXX. Index on billion September have on XX.X% data. nine -- bonds $XX now the the and

close, increases of Fed our now particularly yesterday. have after to The call. roughly rate bonds. quarter's plus to of exceeded an muni-to-treasury challenges presented magnitude the at last at short XXX curve latest the has points Volatility rates in the X.XX% at developer the and financing the in new respectively on by hike interest elevated and yesterday's underperformance muni due points is just XX-year inflation at end XXX higher announced of The XX-year approximately than transactions. MMD of is the new MMD the slightly of cost basis level in XX% year rate X% As SOFR cost ratio clients sixth is X.XX% at time of mostly XX-year yield basis October's interest construction XX-day

Our subsidies transactions sources and developer clients housing more to soft other more of money are rely and feasible. their affordable needing on financially make to governmental

work continue loan will Mac use lending. in to capital the the with most possible, our tax-exempt deliver We construction cost-effective clients with to association forward especially our of commitments Freddie

Given venture invested return the strategy. O'Connor sold Westover we year, we and will capital have Murfreesboro, that equity to the for multiple at capital this in three other deploy times to joint investments opportunities on properties, Vantage realized continue average X.X of have this Hills, look the

scale in take in order questions. or expand Texas other We asset to exploring experienced evaluating classes venture are our investment your other equity partners, I, portfolio. investment With opportunities expanding Jesse and markets, of to through seeking in traditional are our segment JV the to footprint other achieve that, joint more in happy

Operator

our Thank you. first actually question Stewart. [Operator have Jason from We Instructions]

live. now are You

Jason Stewart

was of And just like? do rates out family looks profile I Okay. what settle return you that think at? cap wondering what sort the

Ken Rogozinski

year. that the seen in significant Yes. increases, markets, with the multifamily Jason. a we but cost interesting of question this in well lot seen sold on with or expected rent dynamics as year over It's for work all consistent is year-over-year increases buyers sector of what rates in a of we've have in that past capital this which the lot to-date curve. at the realized an In assets actually we've seen year, seen connection increase of we we've also the We've points

basis our really of offset look perspective look be a a kind value Wakefield the historically our a Cushman we at them of sale certainly the expansion eye focused you we're is is you on income I future. Do the has Do is how But at from the of TX by at our rent not think a from has determined they think the colleagues cap time? versus in still number? by as driven ultimate much for rates much do over and big expansion rates. think and make look increase way been is price. couple in but basis. past shifted back number? portion an the I fully that of that taxes sells We can income I to when sales that a so they of and income project retroactive for to rate How is has years. increases in hearing it of cap take on that definitely wind But see the been is that at & haven't the be of expect certainly you an see rates are of cap adjustments into lot the closed a on go property beholder. that at TXX the once a There Do a for first you the calculation components everything

Jason Stewart

year? I expect So now? would be what say And, guess next you I would like sales maybe to what year-over-year you them same-store right mean,

Ken Rogozinski

Yes.

success achieved has It's time, per point really at we The we measure been to I the on it's these upon this multiple deals used always our that bar the of unit capital have two-fold. for we've to internally been price that been forecast think and that's property. on the that realized invested hard sale our us in the Jason.

Westover year I think price that the sold and the basis, in probably a Vantage you to the think the that look it Murfreesboro if per per you seen try got XX-Q O'Connor unit right and is I believe of sort ever three those now Hills the gives to at sale. we've we've assets results on price this a are Jesse on we I a unit that... flipping that table find highest

Jason Stewart

forward. just been of I to this trying mean in very I'm ask successful color you have guys very, like a for selling. how goes

Ken Rogozinski

direction for of give not really It's kind now Jason. me to that you -- right

we've early sales this I in second our for the contract were fortunate think, part of the projects been year of under quarter. all the terms that say, by

higher of be of achieved future of past they've it's So over been offset we've really in that determined achieve get the assets. pricing of for the to still any level sales reflected the the erosion have I increase But rates on just think yields by will whether either to the Group wasn't able to as those potential board that as interest the is to the with a going six lot available terms deterioration marketing rents was that financing. that's or acquisition that to short-term they seen to be as those closer in incur the of in able Vantage higher well in cap all their not buyers terms the cost months across driven assets market the of

Jason Stewart

then one should we a that terms Jesse bit little be lower Thank were it. forward just going And that. in thinking perspective? you a you. model We for expense. for of How about Got on

Jesse Coury

clarify, Just Jason. to

talking You're

Jason Stewart

G&A.

Jesse Coury

expense? G&A

Jason Stewart

Correct:

Jesse Coury

award in had Little lower. questions restricted to timing pretty in talk few G&A, expense to don't administrative size. around where quarters, the fees later has just our balance regular lower bulk with the line disclosures been previously. think the -- to But year We've model. those the our salaries expense. unit we've We restricted been have to in pending variability if in offline. and unit sales little have sheet a announced there's you year-to-date a expense or to in I within Q expense happy too of our G&A specific seen on been the for certain issue much were Vantage able those distribute differentials of been and terms that we've particularly, we've But well the adjusted if and compensation

Ken Rogozinski

Ken. it's Jason,

I'll add with timing We're being is our I estate of at two ends there. months real looking September turn part student assets are where housing look of us if estate operating real in there season think particular assets other the that that nine owned you And is for is that made the at thing kind already. the that's XX. July/August/September units expenses

perspective bit So we I on start the here just a lumpiness think year. new from of have a new timing of because little lease the in our expenses the there academic of

I will into the out at so as aren't And of annual kind where quarter we the have that itself think level. expenses occurred individual smooth onetime fourth quarter those project a

Jason Stewart

Got on line. want we solid right I guys guys I pretty offline. but bottom it. mean you it the you make sure going -- Okay. the beat follow just forward get up you number to with I'll

Ken Rogozinski

Okay. Thanks, Jason.

Operator

from our comes next you. Muller. Chris And question Thank

open. now is line Your

Chris Muller

this and for Ken on Jesse. question, Thanks especially market. my Hey in taking another and congrats quarter nice

been to the earlier, the generate have months. has guys the the properties. Ken sales Vantage six deteriorated this dramatically gains mentioned on you you some pretty macro But So last able of over pretty impressive

like pipeline result headwinds So as have the slower maybe seen either of your on any slowdown or that? existing leasing you any in portfolio, a

Ken Rogozinski

in at time got we've I call XX% Chris, would operations occupancy. three over this leasing the activity point seen we've projects I think levels of are what that terms that at that In stabilized

and of the they ahead leases been rolls a trying a order question broker the from sale. optimize it's perspective, next property to for in retain and really in to a to and decision make it the in be set a Vantage put position rent there the go So to best fine-tuning management of light when their list really

think at of that great job I we've the margin, seen them a do So historically.

And the ability we have in do have continue stabilization. to their a deals on three to that reached lot that so confidence of

from the lease-up, still not we've terms leasing that companies, at issues of management which any reporting On deals at we of and decline the least Vantage all there construction seen in other that of one in a is under have terms in still are velocity. seen the in

past are peak We season. the

perspective before school their season sure residents to and them want the the their year I to school are a seems perspective starts be from leasing be -- think year of make But in that at summertime from kids think leasing still past to the people a the make have that that that where change start they year. point that seeing in I projects push leasing At the we're we're levels. think to continue at I even now peak those. with at I think -- that their we're we're this season, leasing rent to peak ability of pleased good activity time, new those

at So I based we in concern point performance. the have getting that the don't this we're are at think from in least real-time any from data projects that lease-up, time their on

Chris Muller

what can Freestone relative Could portfolio? Vantage forward? Got and those you have to Do going in it. the That's that of any grow guess maybe helpful. running JV new on the size And expectations I the second tandem question is see nice relationship. be to to

Ken Rogozinski

that to directly me It's hard answer for Chris.

all bandwidth when together Freestone the I group at Group were so think if you look speak, at they a than smaller Vantage. is to the

if of think tiny I maybe looking -- in from we're maybe ability size was work given were to transactions, with to in on do hopefully that and I behind collaboratively together. Vantage think smaller look a to that all But find them their they for probably present us good benchmark, historically at I they're think what basis than the the multiple of a to somewhat the an historically particularly bit opportunities solid to terms transactions some we're going Group continue I annual So we the for range saw they when future.

Chris Muller

for Thanks Very taking it. helpful. questions. Got the

Ken Rogozinski

Thanks Chris.

Operator

turn If back Thank we Ken you. remarks. have for to closing [Operator no it questions, I'll Instructions] further

Ken Rogozinski

joining quarter Thank today. to you. forward the appreciate much us the we February. in to everyone to of you very communicate you, the again everybody with look speaking We results for and opportunity Thank

Operator

Thank you conclude program. for the your participation in today's conference. This does

You disconnect. may now

Greystone Housing Impact Investors (GHI) 4 Nov 222022 Q3 Earnings call transcript