Greystone Housing Impact Investors (NYSE:GHI) used its fourth-quarter 2025 earnings call to outline a portfolio repositioning strategy while discussing a quarter that included a GAAP net loss, continued lease-up losses in its market-rate joint venture (JV) equity investments, and a post-quarter deed-in-lieu process that transferred four South Carolina multifamily properties onto the partnership’s balance sheet.
Strategy: Exit market-rate JV equity, redeploy into tax-exempt bonds
Chief Executive Officer Ken Rogozinski said the partnership is pursuing a strategy to “reposition” its investment portfolio by exiting its remaining market-rate multifamily JV equity investments and reinvesting returned capital into “additional high-quality tax-exempt Mortgage Revenue Bond investments.” Rogozinski said the goal is to provide “longer-term, stable, tax-advantaged earnings” and long-term value for unitholders.
- More stable earnings driven by net interest spread, compared with JV equity returns that are recognized primarily upon property sales.
- A higher proportion of income that is expected to be tax-exempt for federal income tax purposes over the long term, though management noted that near-term gains from sales of remaining JV equity investments could continue to generate taxable income.
- Greater focus on what management called a “proven asset class” core to operations, leveraging Greystone’s lending relationships across affordable housing, seniors housing, and skilled nursing.
Rogozinski noted the partnership has eight market-rate multifamily JV equity investments that have completed construction and are in lease-up or stabilized, plus two market-rate multifamily JV equity investments that are potential development sites. Partners are evaluating “highest and best use” for the sites, including a potential land sale or starting construction; remaining commitments would be terminated if land is sold.
He also said the partnership and its board recognize it will take time to cycle capital out of JV equity investments and into MRBs, and that JV equity investments currently contribute “minimal earnings” during the holding period. The quarterly distribution level of $0.14 per unit, which management referenced as “new,” was described as sustainable while the repositioning is underway.
Fourth-quarter results: GAAP net loss, positive CAD
Chief Financial Officer Jesse Coury reported a net loss of $2.6 million, or $0.17 per unit (basic and diluted), for the fourth quarter ended Dec. 31, 2025. The partnership reported cash available for distribution (CAD) of $2.8 million, or $0.12 per unit, a non-GAAP measure.
Coury said a significant driver of the reported GAAP net loss was the partnership’s proportionate share of losses from non-Vantage JV equity investments of approximately $7.4 million, or $0.32 per unit. He emphasized these were not impairments or realized losses, but rather losses recognized under GAAP that are typical during development and early lease-up phases. Coury said the increase in fourth-quarter property operating losses was due to the completion of construction of four properties during 2025: Valage Senior Living at Carson Valley, The Jessam at Hays Farm, Freestone Greenville, and Freestone Ladera.
In the Q&A, Coury broke down the lease-up losses further, saying roughly half of the fourth-quarter operating losses were non-capitalized interest expense and roughly half were non-cash depreciation. He said fourth quarter is often the largest hit because occupancy can be “in the 10-ish % level” right after construction completes. As occupancy rises, management expects losses to narrow and potentially approach breakeven on a GAAP basis by stabilization.
Book value, market price, and liquidity
Coury said book value per unit was $11.70 as of Dec. 31, 2025 (diluted basis), noting that joint venture equity investments are carried at net carrying value and do not include potential gains upon sale or recovery of GAAP operating losses that management expects to recover on sale.
He also cited the partnership’s unit price as of March 18, stating the NYSE closing unit price was $5.87, which he described as about a 50% discount to net book value per unit as of Dec. 31.
On liquidity, Coury said the partnership regularly monitors its ability to fund investment commitments and protect against potential debt deleveraging events. As of Dec. 31, it had $39.5 million of unrestricted cash and cash equivalents and $49.2 million of availability on secured lines of credit. He added that a “significant amount” of investments are scheduled to mature in the first half of 2026, which after repayment of related debt financings should provide additional liquidity. Management said current liquidity is sufficient to meet current funding commitments.
Debt portfolio performance and South Carolina deed-in-lieu actions
Coury said the debt investment portfolio totaled $1.28 billion as of Dec. 31, representing 85% of total assets. The portfolio included 83 MRBs across 12 states with concentrations in California, Texas, and South Carolina, plus four governmental issuer loans financing affordable multifamily construction in California.
During the fourth quarter, the partnership funded about $38.7 million of MRB and governmental issuer loan-related commitments, offset by redemptions and paydowns of about $12.1 million. Coury said outstanding future funding commitments for MRBs, governmental issuer loans, and related investments totaled $11.6 million as of Dec. 31 (before consideration of related debt proceeds and excluding investments expected to transfer to a construction lending joint venture with BlackRock), and that these commitments are expected to be funded over about 12 months.
Coury said all MRB and governmental issuer loan investments were current on principal and interest payments as of Dec. 31. Stabilized MRB portfolio physical occupancy was 86.7% at quarter-end, down from 87.8% at Sept. 30. He attributed the decline primarily to Texas properties experiencing higher vacancies due to increased multifamily supply and said management expects occupancies to recover as new supply deliveries decline and units are absorbed.
Coury also discussed four MRB investments in South Carolina that did not meet underwritten operating levels, including three 501(c)(3) nonprofit MRBs and a fourth property, The Ivy Apartments (also known as Century Plaza Apartments). He said that in January and February 2026, the partnership completed deed-in-lieu of foreclosure processes on these properties. The original MRBs were redeemed, related tender option bond financing trusts were collapsed, and the partnership now owns the underlying multifamily properties directly, financed with a first mortgage provided by two banks. Management said the properties will be operated by a third-party property manager under partnership oversight with assistance from Greystone’s corporate asset management team, and results will be reported in the MF Properties segment going forward.
In response to a question about accounting impacts, Coury said the company was still finalizing accounting for the properties and described an initial basis estimate of “around $112–$150 million,” referencing the $120 million of MRBs less the credit loss previously recorded. Rogozinski said management believes the properties are “well located” and in “good markets,” and said the partnership intends to focus on stabilizing operations and ultimately seeking to recover its basis, though he said it was too early to provide a sale timeline.
Financing mix, interest-rate sensitivity, and market backdrop
On the liability side, Coury reported outstanding debt financings of approximately $1.02 billion as of Dec. 31, relatively unchanged from Sept. 30. He said three of four debt financing categories are structured so net return is generally insulated from short-term interest rate changes, representing $802 million or 79% of total debt financing. The remaining category—fixed-rate assets with variable-rate debt and no designated hedging—represented about $217 million or 21%, including about $150 million associated with investments maturing on or before May 2026, which management expects will shorten the unhedged period.
Coury also summarized the partnership’s interest rate sensitivity analysis, stating that a 100 basis point rate increase would reduce net interest income in cash by $1.1 million (about $0.049 per unit), while a 100 basis point decrease would increase net interest income by the same amount. He said the partnership considers itself largely hedged against significant fluctuations in net interest income.
Rogozinski said the U.S. municipal bond market recovered in the second half of 2025, with the high-grade index returning 4.3% and the high-yield index returning 2.5% for the year. He cited 2025 muni issuance of $582 billion and total funds flows of $49 billion. He also said the HUD appropriation bill fully funding the department’s programs for the remainder of the current federal fiscal year was passed by Congress and signed by President Trump, and that the Low-Income Housing Tax Credit program is beginning to adjust to new rules in the “One Big Beautiful Bill Act.”
During Q&A, management said decisions around distributions depend on how quickly JV equity capital can be recycled into MRBs, and Rogozinski said the board could consider unit repurchases depending on timing and proceeds, though he said he did not want to speak for the board. Management also noted insiders are subject to trading restrictions and blackout windows, adding that recent insider activity had been buying rather than selling.
About Greystone Housing Impact Investors (NYSE:GHI)
Greystone Housing Impact Investors (NYSE:GHI) is a publicly traded real estate investment trust focused on financing and preserving affordable and sustainable rental housing in the United States. As the country’s first social‐impact REIT dedicated to housing, GHI aims to deliver stable, long‐term cash flows to its shareholders while supporting underserved communities through strategic capital deployment.
The company originates, underwrites and manages a diversified portfolio of first‐mortgage loans secured by multifamily residential properties, with an emphasis on workforce, affordable and mixed‐income developments.
