Greystone Housing Impact Investors LP Beneficial Unit Certificates representing assignments of limited partnership interests 2026 Q2 Earnings Call

I would like to welcome everyone to the Greystone Housing Impact Investors LP, NYSE ticker symbol GHI, second quarter of 2026 earnings conference call. During the presentation, all participants will be in a listen-only mode. After management presents its overview of Q2 2026, you will be invited to participate in a question and answer session. As a reminder, this conference call is being recorded. During this conference call, comments made regarding GHI, which are not historical facts, are forward-looking statements and are subject to risks and uncertainties that could cause the actual future events or results to differ materially from these statements. Such forward-looking statements are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Forward-looking statements can be identified by the use of words like may, should, expect, plan, intend, focus, and other similar terms.

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

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

Good morning, everyone. Welcome to Greystone Housing Impact Investors LP's second quarter 2026 investor call. Thank you for joining. I will start with an overview of our portfolio and investment strategy. Eric Nielsen, our Interim Chief Financial Officer, will then present the partnership's financial results. I will wrap up with an overview of the market and our investment pipeline. Following that, we look forward to taking your questions. As we've mentioned on our previous calls, we are pursuing a strategy to reposition our investment portfolio. Specifically, we are focused on exiting our remaining investments in market-rate multifamily JV equity investments while maximizing value to our unitholders from those exits. We will then reinvest the capital returned to us from those exits into additional high-quality tax-exempt mortgage revenue bond investments that are expected to provide longer-term, stable, tax-advantaged earnings, which we believe will provide long-term value for our unitholders.

We believe this change in investment strategy provides three key benefits to our unitholders. First, by their nature, our tax-exempt mortgage revenue bond investments earn stable returns based on the net interest spread between the bond interest rate and our related debt financing rate. As a result, we expect increasingly stable earnings as compared to the uneven returns on joint venture equity investments due to that income being recognized primarily upon property sales. Second, in recent years, the majority of income allocated to our unitholders has been taxable because of the taxable income from joint venture equity investment sales. As we allocate more capital to taxes and mortgage revenue bond investments, we expect that the proportion of income allocated to our unitholders that is tax-exempt for federal income tax purposes will increase in the long term.

In the near term, potential gains from sales of our remaining market-rate multifamily JV equity investments will continue to generate taxable income for unitholders. Third, we are investing capital in a proven investment class that is core to our operations that also leverages the strong relationships and knowledge base of Greystone's other lending platforms. We currently have eight market-rate multifamily JV equity investments that have completed construction and are either in lease-up or stabilized. Overall occupancy is increasing for these investments in their initial lease-up phase. On assets that have reached stabilization, we have seen some variability in occupancy as local market factors impact demand and rent levels. Decisions regarding when to sell an individual property are made by our joint venture partners based on their views of the local market conditions and current leasing trends.

We currently have two market-rate multifamily JV equity investments that are sites for potential development. Our joint venture partners are evaluating the highest and best use for the development sites, which may include a sale of the land or the commencement of construction. Our remaining funding commitments for these investments will be terminated if the land is sold. Meanwhile, we continue to see strong investment opportunities for our traditional investments in tax-exempt mortgage revenue bonds associated with affordable multifamily properties, as well as for seniors housing and skilled nursing properties. Greystone's strong lending relationships across affordable housing, seniors housing, and skilled nursing business lines are also providing investment opportunities for the partnership. We believe these opportunities will allow us to redeploy the capital returned from the market rate multifamily JV equity investment sales events soon after the capital is received.

We at the board of managers acknowledge that it will take some time to cycle our capital out of our market rate JV equity investments and into tax-exempt mortgage revenue bond investments. We currently report minimal earnings related to our JV equity investments during the holding period. We expect that the reinvestment of capital from sales of JV equity investments into tax-exempt mortgage revenue bond investments will increase the partnership's recurring earnings in the long run. We look forward to providing additional details on our progress in this effort in future communications and on future earnings calls. With that, I will turn things over to Eric Nielsen, our interim CFO, to discuss the financial data for the second quarter of 2026.

Thank you, Ken. For our second quarter ended June 30th, we reported a net loss of $1.5 million, or $0.11 per unit, basic and diluted. We reported cash available for distribution, or CAD, a non-GAAP measure of $2.4 million, or $0.10 per unit. A significant driver of our reported GAAP net loss for the second quarter is our proportionate share of losses from non-Vantage JV equity investments of approximately $3.2 million, or $0.14 per unit. As we previously mentioned, we are required to report our proportionate share of losses of such JV equity investments under GAAP. These are not impairments or realized losses to the partnership. Approximately $2 million, or 62% of total reported losses, relate to depreciation and amortization expenses at the respective JV equity investment entities, with the remaining reported losses related to interest expense and property operating expense.

We add back our share of property operating losses to net income when calculating CAD, as such losses are not direct expenses to the partnership, and we expect such losses, which are largely funded by the individual property development budget, to be recovered upon future transaction on the debt. Our book value per unit as of June 30th was, on a diluted basis, $11.20. I will note that this metric is based on our joint venture equity investments marked at net carrying value. As a result, it does not include any potential gains or additional income that may be realized upon sale or recovery of our share of GAAP operating losses that I previously described that are also expected to be recovered upon sale.

As of market close yesterday, August 10th, our closing unit price on the New York Stock Exchange was $5.71, which is a 49% discount to our net book value per unit as of June 30th. We regularly monitor our liquidity to fund our investment commitments and to protect against potential debt de-leveraging events if there are significant declines in asset values. As of June 30th, we reported unrestricted cash and cash equivalents of $30.9 million. We have approximately $34.2 million of availability on our secured lines of credit. We also have a significant amount of investments scheduled to mature in the remainder of 2026, which after repayment of the related debt financing, will provide additional liquidity. Potential sales of our JV equity investments would provide additional liquidity for investment purposes. At our current liquidity levels, we believe that we are well-positioned to meet our future funding commitments.

We regularly monitor our overall exposure to potential increases in interest rates through an interest rate sensitivity analysis, which we report quarterly and is included on page 103 of our Form 10-Q. The interest rate sensitivity table shows the impact on our net interest income given various changes in market interest rates and other various management assumptions. Our base case uses the forward SOFR yield curve as of June 30th, which includes market-anticipated SOFR rate declines over the next 12 months. The scenarios we present assume that there is an immediate shift in the yield curve and that we do nothing in response for 12 months. The analysis shows that an immediate 100-basis-point increase in rates will result in a decrease in our net interest income and CAD of approximately $1 million, or $0.045 per unit.

Conversely, a 100-basis-point decrease in rates across the curve will result in an increase in our net interest income and CAD of approximately $1 million, or $0.045 per unit. We consider ourselves largely hedged against significant fluctuations in our net interest income from market interest rate movements in all scenarios, assuming no significant credit issues. Our debt investment portfolio consisting of mortgage revenue bonds, governmental issuer loans, and property loans totaled $927.5 million as of June 30th, or 67% of our total assets. We owned 80 mortgage revenue bonds as of June 30th that provide financing for affordable multifamily seniors and skilled nursing properties across 12 states, with concentrations in California and Texas. We own two governmental issuer loans as of June 30th that finance the construction or rehabilitation of affordable multifamily properties. During the second quarter, we acquired a $29 million taxable MRB.