As of and for the three months ended
- Total revenues of
- Net income, basic and diluted, of
$0.19per Beneficial Unit Certificate (“BUC”)
- Cash Available for Distribution (“CAD”) of
- Total assets of
- Total Mortgage Revenue Bond (“MRB”) and Governmental Issuer Loan (“GIL”) investments of
For the nine months ended
- Total revenues of approximately
- Net income, basic and diluted, of
- Cash Available for Distribution of
The Partnership reported the following notable transactions during the third quarter of 2021:
- Completed a public offering of 5,462,500 BUCs for net proceeds of
$31.2 millionafter payment of underwriting discounts, commissions and direct expenses.
- Extended the maturity of the Partnership’s
$50 millionacquisition line of credit with Bankers Trust Companyto June 2023and converted to a secured facility.
- Received proceeds from the sale of Vantage at
Bulverdein Texastotaling $18.9 millionon the Partnership’s initial investment commitment of $8.6 millionin March 2018.
- Redemptions of four MRBs with total principal of
$32.4 million. Two of the MRBs were redeemed at a premium totaling $1.8 million.
- Advanced funds for six GIL investment commitments totaling
$35.6 millionand four related property loan investment commitments totaling $14.4 million. This includes GIL and property loan commitments for two new projects totaling $131.9 millionclosed in the third quarter. The commitments will provide construction financing for affordable multifamily properties in Floridaand Georgia. The Partnership has funded $7.6 millionof these commitments as of September 30, 2021.
- Advanced funds for two MRB investment commitments totaling
$4.0 millionand one taxable MRB totaling $1.0 million.
- Made equity investments in three unconsolidated entities totaling
Investment Updates and Management Remarks
The Partnership announced the following updates regarding its investment portfolio:
- The Partnership has received no requests for forbearance of contractual principal and interest payments from borrowers associated with multifamily MRBs and all multifamily MRBs are current on contractual principal and interest payments as of
November 1, 2021.
- The Partnership has provided forbearance on its only student housing MRB, Live 929 Apartments in
Baltimore, MD. The nearby university, Johns Hopkins University, has resumed on-campus, in-person classes for the Fall 2021 semester and is requiring all faculty, staff, and students to be vaccinated for COVID-19. The property is 95% occupied as of September 30, 2021, which exceeds pre-COVID occupancy levels.
- The borrower for the Partnership’s only commercial property MRB, the Provision Center, filed for Chapter 11 bankruptcy protection in
December 2020and continues to work through the bankruptcy process. The property is a cancer proton therapy center located in Knoxville, TN.The Partnership owns approximately 9% of the senior MRBs issued to finance the property and continues to assess forbearance and restructuring options with the other senior bondholders.
- Four Vantage property investments have exceeded 90% physical occupancy as of
September 30, 2021. Two other Vantage property investments are over 85% occupied and six others are under construction or in development.
- No Vantage projects under construction have experienced material supply chain disruptions for either construction materials or labor to date.
- The Partnership’s two owned student housing properties, The 50/50 MF Property (near the
University of Nebraska-Lincoln) and the Suites on Paseo MF Property (near San Diego State University), have completed Fall 2021 lease-up. The 50/50 MF Property is 88% occupied and the Suites on Paseo MF Property is 97% occupied as of September 30, 2021. Both properties are meeting all direct mortgage and operating obligations with cash flows from operations.
“The sustained performance of our multifamily MRB and GIL portfolios throughout the COVID-19 pandemic puts us in a strong position as the
“We are also very pleased with the occupancy at our two student housing
Disclosure Regarding Non-GAAP Measures
This report refers to Cash Available for Distribution (“CAD”), which is identified as a non-GAAP financial measure. We believe CAD provides relevant information about our operations and is necessary, along with net income, for understanding our operating results. Net income is the GAAP measure most comparable to CAD. There is no generally accepted methodology for computing CAD, and our computation of CAD may not be comparable to CAD reported by other companies. Although we consider CAD to be a useful measure of our operating performance, CAD is a non-GAAP measure and should not be considered as an alternative to net income that is calculated in accordance with GAAP, or any other measures of financial performance presented in accordance with GAAP. See the table at the end of this press release for a reconciliation of our net income as determined in accordance with GAAP and our CAD for the periods set forth.
Earnings Webcast & Conference Call
The Partnership will host a Webcast & Earnings Call for Unitholders on
- Participants can register for access to the live broadcast in listen-only mode using the following link: https://edge.media-server.com/mmc/p/xnzdgf2s for registration on
Thursday, November 4, 2021, approximately 30 minutes prior to the start of the earnings call, or
- Participants wanting to ask questions may dial toll free (855) 854-0934, (International Participants may dial (720) 634-2907), using Conference ID# 2091395. To ensure a timely connection, calls should be placed at least 15 minutes prior to the start of the earnings call. At the conclusion of management’s presentation, the operator will open the lines for questions.
Following completion of the earnings call, a recorded replay will be available on the Partnership’s Investor Relations website at www.ataxfund.com.
Safe Harbor Statement
Certain statements in this press release are intended to be covered by the safe harbor for “forward-looking statements” provided by the Private Securities Litigation Reform Act of 1995. These forward-looking statements generally can be identified by use of statements that include, but are not limited to, phrases such as “believe,” “expect,” “future,” “anticipate,” “intend,” “plan,” “foresee,” “may,” “should,” “will,” “estimates,” “potential,” “continue,” or other similar words or phrases. Similarly, statements that describe objectives, plans, or goals also are forward-looking statements. Such forward-looking statements involve inherent risks and uncertainties, many of which are difficult to predict and are generally beyond the control of the Partnership. The Partnership cautions readers that a number of important factors could cause actual results to differ materially from those expressed in, implied, or projected by such forward-looking statements. Risks and uncertainties include, but are not limited to: defaults on the mortgage loans securing our mortgage revenue bonds and governmental issuer loans; the competitive environment in which the Partnership operates; risks associated with investing in multifamily and student residential properties and commercial properties; general economic conditions, including the current and future impact of the novel coronavirus (COVID-19) on business operations, employment, and government-mandated mitigation measures; changes in interest rates; the Partnership’s ability to access debt and equity capital to finance its assets; current maturities of the Partnership’s financing arrangements and the Partnership’s ability to renew or refinance such financing arrangements; potential exercising of redemption rights by the holders of the Series A Preferred Units; local, regional, national and international economic and credit market conditions; recapture of previously issued Low Income Housing Tax Credits in accordance with Section 42 of the Internal Revenue Code; geographic concentration within the mortgage revenue bond and governmental issuer loan portfolio held by the Partnership; changes in the Internal Revenue Code and other government regulations affecting the Partnership’s business; and the other risks detailed in the Partnership’s
If any of these risks or uncertainties materializes or if any of the assumptions underlying such forward-looking statements proves to be incorrect, the developments and future events concerning the Partnership set forth in this press release may differ materially from those expressed or implied by these forward-looking statements. You are cautioned not to place undue reliance on these statements, which speak only as of the date of this document. We anticipate that subsequent events and developments will cause our expectations and beliefs to change. The Partnership assumes no obligation to update such forward-looking statements to reflect events or circumstances after the date of this document or to reflect the occurrence of unanticipated events, unless obligated to do so under the federal securities laws.
Cash Available for Distribution (“CAD”)
The following table shows the calculation of CAD (and a reconciliation of the Partnership’s net income, as determined in accordance with GAAP, to CAD) for the three and nine months ended
|For the Three Months Ended
||For the Nine Months Ended
|Net income (loss)||$||12,988,384||$||(1,160,017||)||$||30,245,918||$||6,410,088|
|Change in fair value of derivatives and interest rate derivative
|Depreciation and amortization expense||680,925||719,783||2,049,269||2,141,302|
|Provision for credit loss (1)||-||3,463,253||900,080||5,285,609|
|Provision for loan loss (2)||-||811,706||330,116||811,706|
|Reversal of impairment on securities (3)||-||-||-||(1,902,979||)|
|Impairment charge on real estate assets||-||-||-||25,200|
|Amortization of deferred financing costs||368,829||497,018||823,212||1,288,044|
|Restricted unit compensation expense||570,467||299,524||839,551||634,860|
|Deferred income taxes||(42,011||)||(34,601||)||(77,681||)||(66,482||)|
|Redeemable Preferred Unit distributions and accretion||(717,762||)||(717,763||)||(2,153,288||)||(2,153,288||)|
|Tier 2 (Income distributable) Loss allocable to the
General Partner (4)
|Bond purchase premium (discount) amortization (accretion), net
of cash received
|Weighted average number of BUCs outstanding, basic||60,646,528||60,545,204||60,637,976||60,614,862|
|Net income per BUC, basic||$||0.19||$||(0.03||)||$||0.42||$||0.07|
|Total CAD per BUC, basic||$||0.22||$||0.06||$||0.50||$||0.20|
|Distributions declared, per BUC||$||0.11||$||0.06||$||0.31||$||0.245|
|(1)||The provision for credit loss for the nine months ended
|(2)||The provision for loan loss for the nine months ended
|(3)||This amount represents previous impairments recognized as adjustments to CAD in prior periods related to the PHC Certificates. Such adjustments were reversed in the first quarter of 2020 upon the sale of the PHC Certificates in
|(4)||As described in Note 3 to the Partnership’s condensed consolidated financial statements, Net Interest Income representing contingent interest and Net Residual Proceeds representing contingent interest (Tier 2 income) will be distributed 75% to the limited partners and BUC holders, as a class, and 25% to the General Partner. This adjustment represents the 25% of Tier 2 income due to the General Partner.|
|For the nine months ended
Chief Executive Officer
Source: America First Multifamily Investors, L.P.