Greystone Housing Impact Investors Q3 2024 Earnings Call Transcript

Quartr
Provided by Quartr
November 6, 2024

There are 8 speakers on the call.

Operator

Greetings and welcome to Greystone Housing Impact Investor LP Third Quarter 20 24 Earnings Conference Call. At this time, all participants are in a listen only mode. A brief question and answer session will follow the formal presentation. As a reminder, this conference is being recorded. It is now my pleasure to introduce your host, Mr.

Operator

Jesse Curry, Chief Financial Officer. Thank you, Mr. Curry. You may begin.

Speaker 1

Thank you. I would like to welcome everyone to the Greystone Housing Impact Investors LP, NYSE, ticker symbol GHI, Q3 of 2024 earnings conference call. 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.

Speaker 1

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 will not necessarily be informed. Today's discussion will include non GAAP measures and will be explained during this call.

Speaker 1

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 will now turn the call over to our Chief Executive Officer, Ken Rogozinski.

Speaker 2

Good afternoon, everyone. Welcome to Greystone Housing Impact Investors, LP's Q3 2024 Investor Call. Thank you for joining. I will start with an overview of the quarter and our portfolio. Jesse Corey, our Chief Financial Officer, will then present the partnership's financial results.

Speaker 2

I will wrap up with an overview of the market and our investment pipeline. Following that, we look forward to taking your questions. For the Q3 of 2024, the Partnership reported a net loss of $0.23 per unit and $0.27 of cash available for distribution or CAD per unit. In past quarters, we have noted that net income includes noncash unrealized gains and losses that reflects the mark to market associated with our interest rate swap portfolio for the quarter. During the Q3, we recognized a non cash unrealized loss of $9,700,000 from that source or approximately $0.42 per BUC.

Speaker 2

We are currently a net receiver on all of our interest rate swaps as we receive compounded SOFR, which is now 4.90 percent and pay a weighted average fixed rate of 3.52% on our approximately 393,000,000 dollars in swap notional amounts as of September 30, 2024. Assuming that the compounded sulfur level stays constant over the next 6 months, that 138 basis point spread would result in us receiving approximately $2,800,000 in cash payments from our swap counterparties, which would not be reflected in our net income, but would be reflected as an additional $0.12 per unit in CAD. We also reported a book value of $14.15 per unit on $1,550,000,000 of assets and a leverage ratio as defined by the Partnership of 47% excuse me, 74%. On September 16, we announced a regular quarterly cash distribution of $0.37 per unit, which was paid on October 31, 2024. In terms of the partnership's investment portfolio, we currently hold $1,320,000,000 of affordable multifamily investments in the form of mortgage revenue bonds, governmental issuer loans and property loans and $169,000,000 in joint venture equity investments.

Speaker 2

As far as the performance of the investment portfolio is concerned, we have had no forbearance request for multifamily mortgage revenue bonds and all such borrowers are current on their principal and interest payments. Physical occupancy on the underlying properties was 91.5% for the stabilized mortgage revenue bond portfolio as of September 30, 2024. Our Vantage joint venture equity investments consist of interest in 7 properties, 6 where construction is complete with the remaining property in the planning stage. For the 6 properties where construction is complete, we continue to see good leasing activity. We continue to see no material supply chain or labor disruptions on the Vantage projects under construction.

Speaker 2

As we have experienced in the past, the Vantage Group as the managing member of each project owning entity will position a property for sale upon stabilization. As previously announced, the Vantage at Tomball and Vantage at Hutto properties have been listed for sale. We have 4 joint venture equity investments with the 3 Stone Development Group, 1 4 project in Colorado and 3 projects in Texas. 1 project has nearly completed construction and has begun leasing units, 2 projects have commenced construction and one project has commenced site work. Our joint venture equity investment in Vollage Senior Living, Carson Valley, a 102 Bed Seniors Housing property located in Minden, Nevada is nearing completion and the project currently has lease deposits for 65 of the property's 102 units.

Speaker 2

Our joint venture equity investment in the Jessamet Hayes Farm, a new construction 318 unit market rate multifamily property located in Huntsville, Alabama, has commenced construction as well. With that, I will turn things over to Jesse Corey, our CFO, to discuss the financial data for the Q3 of 2024.

Speaker 1

Thank you, Ken. Earlier today, we reported earnings for our Q3 ended September 30. We reported GAAP basis net loss of $4,600,000 $0.23 per unit basic and diluted and we reported cash available for distributions or CAD of positive $6,200,000 and $0.27 per unit. As Ken mentioned, our reported net loss was significantly impacted by $9,700,000 of non cash unrealized losses on our interest rate derivatives during the quarter or approximately $0.42 per BUC. We mark the value of our interest rate derivatives to fair value quarterly in accordance with accounting guidance and the change in fair value is reported within net income or loss.

Speaker 1

Our interest rate swap portfolio has a weighted average remaining term of approximately 3 years. So the valuation of our interest rate swap portfolio generally tracks changes in the 3 year SOFR swap rate. The fair value of our interest rate derivatives declined sharply during the quarter due to a roughly 100 basis point decline in the 3 year SOFR sulfur swap rate from June 30 to September 30. Despite the decline in fair value, we expect this to have a minimal impact on our net cash flows as declines in projected future swap settlement payments are expected to be offset by interest cost savings on our variable rate debt financings. Unrealized losses are added back to net income or loss to calculate CAD.

Speaker 1

Our book value per unit as of September 30 was on a diluted basis $14.15 which is an increase of $0.17 from June 30. The increase is primarily a result of an increase in the fair value of our mortgage revenue bond portfolio, offset partially by the difference between our reported GAAP net loss per unit and the 3rd quarter distribution. Our 3rd party service providers estimate the fair value of our mortgage revenue bond investments quarterly with models that predominantly use MMD's tax exempt multifamily yield curves. Tax exempt rates decreased approximately 31 basis points on average across the curve from June 30 to September 30, which resulted in a corresponding increase in the fair value estimates for our mortgage revenue bond portfolio. As a reminder, we are and expect we will continue to be long term holders of our predominantly fixed rate mortgage revenue bond investments.

Speaker 1

So we expect changes in fair value to have no direct impact on our operating cash flows, net income or CAD. As of market close yesterday, November 5, our closing unit price on the New York Stock Exchange was $12.19 which is a 14% discount to our net book value per unit as of September 30. We regularly monitor our liquidity to fund our investment commitments and to protect against potential debt deleveraging events if there are significant declines in asset values. As of September 30, we reported unrestricted cash equivalents of $37,300,000 We also had approximately $55,600,000 of availability on our secured lines of credit. At these levels, we believe that we are well positioned to fund our current financing commitments, which I will discuss later.

Speaker 1

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 100 of our Form 10 Q. The interest rate sensitivity analysis 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 sulfur yield curve as of September 30, which includes market anticipated sulfur 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 200 basis point increase in rates will result in a decrease in our net interest income in CAD of $1,600,000 or approximately $0.071 per unit.

Speaker 1

Alternatively, assuming a 50 basis point decrease in rates across the curve will result in an increase in our net interest income and CAD of $410,000 or approximately $0.018 per unit. We are largely hedged against large fluctuations in our net interest income from market interest rate movements in all scenarios, assuming no significant credit issues. This analysis is based on information as of September 30, 2024 and does not reflect subsequent activity. In October, we terminated our variable rate M31 TEDS financing with Freddie Mac upon the scheduled termination date of Freddie Mac's liquidity facility. The principal repay on the N31 TEDS facility totaled approximately $65,600,000 We then closed alternative financing for many of the mortgage revenue bonds that were previously within the M31 TEBS facility.

Speaker 1

Also in October, we closed on a new securitization transaction, we refer to as our 2024 PFA securitization transaction. This transaction resulted in gross debt proceeds of approximately $75,400,000 The transaction is accounted for as debt financing by the partnership, has a fixed interest rate, is non recourse and is not subject to collateral posting. As the variable rate M31 temps financing has in essence been replaced by the fixed rate 2024 PFA securitization transaction, we have further reduced our exposure to future changes in market interest rates. Our debt investment portfolio consists of mortgage revenue bonds, governmental issuer loans and property loans totaling $1,320,000,000 as of September 30 or 85 percent of our total assets. We currently own 87 mortgage revenue bonds that provide permanent financing for affordable multifamily properties across 14 states.

Speaker 1

Of these mortgage revenue bonds, 29% of our portfolio value relates to properties in California, 26% in Texas and 18% in South Carolina. During the Q3, we advanced funds totaling $40,500,000 for our mortgage revenue bond related taxable mortgage revenue bond investments, which was offset by redemptions totaling $24,500,000 We currently own 8 governmental issuer loans that finance the construction of affordable multifamily properties across 5 states. Such loans often have companion property loans or taxable governmental issuer loans that share the 1st mortgage lien. During the Q3, we advanced funds totaling $17,500,000 for our governmental issuer loan, taxable governmental issuer loan and property loan commitments. Redemptions of such investments totaled $32,800,000 during the Q3.

Speaker 1

Our outstanding future funding commitments for our mortgage revenue bond, governmental issuer loan and related investments was 1 $160,200,000 as of September 30. These commitments will be funded over approximately 18 months and will add to our income producing asset base. We also expect to receive redemption proceeds from our existing construction financing investments that are nearing maturity, which will be redeployed into our remaining funding commitments. We apply the CECL standard to establish credit loss reserves for our debt investments and related investment funding commitments. We reduced our allowance for credit losses by $226,000 for the 3rd quarter, which was largely the result of recent governmental issuer loan, taxable governmental issuer loan and property loan redemptions and a reduction in the weighted average life of our remaining investment portfolio.

Speaker 1

We have adjusted back the impact of the provision for credit losses in calculating CAD, consistent with our historical treatment of loss allowances. Our joint venture equity investments portfolio consisted of 12 properties as of September 30 with a reported carrying value of approximately $169,000,000 exclusive of one investment, Vantage at San Marcos, that is reported on a consolidated basis. We advanced $10,400,000 during the Q3 in this investment segment. Our remaining funding commitments for JV Equity Investments totaled $37,700,000 as of September 30. Our debt financing facilities used to leverage our investments had an outstanding principal balance totaling approximately $1,600,000,000 as of September 30.

Speaker 1

This is up approximately $10,000,000 from June 30. We manage and report our debt financing in 4 main categories on Page 94 of our Form 10 Q. 3 of the 4 categories, fixed rate assets with fixed rate debt, variable rate assets with variable rate debt and fixed rate assets with variable rate debt that is hedged with interest rate swaps are designed such that our net return is generally insulated from changes in short term interest rates. These categories account for approximately $1,000,000,000 or 94.2 percent of our total debt financing. The 4th category is fixed rate assets with variable rate debt with no designated hedging, which is where we are most exposed to interest rate risk in the near term.

Speaker 1

This category only represents $62,000,000 or 5.8 percent of our total debt financing. This analysis is as of September 30, 2024 and does not reflect any changes after that date. As I previously mentioned, in October 2024, we terminated our variable rate N31 TEMS financing facility and entered into our new fixed rate 2024 PFA securitization transaction. As we have replaced variable rate debt with new fixed rate debt, we have further reduced our exposure to interest rate risk in the near term. On the preferred capital front, we continue to pursue additional issuances of Series B preferred units under an active offering.

Speaker 1

I'll now turn the call over to Ken for his update on market conditions and our investment pipeline.

Speaker 2

Thanks, Jesse. It's been an interesting 3 months since our last call in the fixed income markets as a whole and for municipal bonds as well. At the time of last quarter's call in August, 10 year MMD was at 2.52% and 30 year MMD was at 3.40%. As of yesterday's close, 10 year MMD was at 2.97% and 30 year MMD was at 3.83%, both roughly 45 basis points higher in yield for those 3 months. As of quarter end on September 30, 2024, 10 year MMD was at 2.54% and 30 year MMD was at 3.48%, So most of the 90 day move higher came during October when the muni market saw a record new issuance monthly supply of $56,000,000,000 From Market Technical's perspective, including that record new issuance month in October, the 1st 10 months of the year saw $431,000,000,000 of gross issuance.

Speaker 2

That's $155,000,000,000 of issuance over the past 3 months. That would put the market on track to potentially see over $500,000,000,000 in total issuance for the year. Through October, year to date fund and ETF inflows totaled $31,000,000,000 according to Refinitiv, up almost $20,000,000,000 over the past 3 months. On the month of October, we saw the Bloomberg Municipal Index and the High Yield Muni Index each post a loss of 1.5%. They are both still in the black for 2024 on a year to date basis as of October 31, 2024, with the investment grade index up 0.8% and the high yield index up 5.8%.

Speaker 2

3 year MMD is the low point of the current muni yield curve as retail demand has focused on the shorter end of the curve leading to its outperformance.

Speaker 1

The

Speaker 2

10 year muni to treasury ratio is up to almost 70%, reflecting October sell off in munis. We are excited about the new construction lending joint venture with BlackRock Impact Opportunities. As we have mentioned on our past quarterly calls, we have seen a pullback in affordable construction lending by commercial banks as a result of the broader pressures on their commercial real estate loan portfolios. That has created a window of opportunity for us to deepen our existing relationships with existing sponsors and to establish new sponsor relationships as we step in to help fill that void. Having a dedicated pool of capital available to us for that purpose allows us to effectively manage that potential pipeline and to offer our clients timely transaction execution to meet their needs.

Speaker 2

With regard to our merchant build joint venture equity strategies for market rate multifamily development properties, we will continue to deploy capital there as well. We believe that getting new projects underway now, while other sponsors face significant challenges, will put us in a better position for success with our exits 3 to 5 years down the road when new supply may be limited. We believe that our new JV equity investments made in 2023 2024 are reflective of that approach. With that, Jesse and I are happy to take your questions.

Operator

Thank you. We will now be conducting a question and answer session. The first question comes from the line of Matthew Erdeur with Jones Trading. Please go ahead.

Speaker 3

Hey, good afternoon guys. Thanks for taking the question. With the new change in administration happening next year, are there any foreseeable issues that you see within fiscal policy that might affect current credit or new issuance?

Speaker 2

Thanks, Matt. I think it's still a little too early to tell pending the results of the house race at this point in time to see who ends up in control. I think there is historically been strong bipartisan support for, in particular, the Low Income Housing Tax Credit program. There have been a number of anticipated legislative changes that might help the efficiency of the program. Whether or not that's going to become a legislative priority for the next Congress, I think, is still open to debate, particularly when you've got a lot of the provisions of the 2017 Tax Cuts and Jobs Act that are potentially sunsetting during 2025 that might need to be dealt with.

Speaker 2

But I think in my experience, the fact that there actually is going to be a tax bill early on in this next Congress might be a good vehicle for some of those potential legislative changes to be made to the tax credit program. That's certainly my hope going into the next Congress. We'll just have to see whether or not that right plays itself out.

Speaker 3

Yes, right. That's helpful there. And then kind of touching on the BlackRock partnership, how do you envision deploying this capital? I guess from a timeline perspective, are you going to use some of it this quarter? Like could you just kind of expand on that program as a whole for a little bit if you could please?

Speaker 3

Thank you.

Speaker 2

Sure. Happy to do that, Matt. So from an operational perspective, the product that we're offering to our sponsor relationships is the exact same product that we have used historically in the past directly off the partnership's balance sheet. We're going to be offering fixed and floating rate construction loans that will ultimately be taken out by Freddie MacTel forward permanent loan. So that part of the process really hasn't changed.

Speaker 2

It's only going to be the source of the capital to fund those loans. Rather than doing that execution directly off the partnership's balance sheet, given the scale of the opportunity that we're currently seeing in the marketplace, we as a management team felt that it was better for the long term business strategy for us to have a dedicated pool of capital that we could rely on to fund those loans as opposed to being in a position where the partnership doing in itself may have to raise capital through traditional means that might not be the most efficient source. So that to us is the big benefit that we see of the joint venture with BlackRock that we're able to continue to serve our client base with a relatively stable and reliable source of that capital without having to worry about doing that off the partnership's balance sheet directly ourselves. So we're excited about that. We're excited about the new lending capacity that's been created by that joint venture.

Speaker 2

And we're looking forward to between the direct GHI origination team and the broader Greystone Origination platform being able to put that money to work.

Speaker 3

Yes, that's great. That's very helpful. Thank you, Ken.

Operator

Thank you. Next question comes from the line of Jason Seifert with Janney. Please go back.

Speaker 4

Hey, thanks. Ken, I was hoping you could address recent rate volatility. I mean, it's sort of extended and exacerbated today. But in general, it's been elevated for some period of months. How that's impacted demand for loans that you're seeing in the market today?

Speaker 2

Thanks, Jason. In terms of demand for loans, we really haven't seen that interest rates in and of themselves having a significant impact on our core lending products of the governmental issuer loans and the mortgage revenue bonds. We still have sponsors with allocation of private activity volume cap and low income housing tax credits from state allocating agencies that they need to get done. Even in the higher interest rate environment, people have figured out ways for their deals to continue to pencil. It may have been more challenging, but it hasn't stopped that business pipeline dead in its tracks.

Speaker 2

So we continue to see inbound inquiry from our sponsor relationships and from new sponsor relationships who are looking to get deals executed either with current allocations that they've got for the remaining balance of the Q4 or those project sponsors who have new cap allocation applications that they're expecting to submit early in the New Year and then look to transact with us there. So from that perspective, it certainly made things more challenging, But we continue to see from our sponsor relationships deals in the pipeline that makes sense for them. And we're optimistic about our ability, in particular, to deploy this new capital allocation we have with the BlackRock JV.

Speaker 4

Great. That's helpful. And then you touched on the market rate side and I sort of I was hoping you could expand on your comment there. Just given the cadence of sales activity has slowed, which is I think normal and somewhat expected, but it does not sound like that's impacted your commitment to continue to put shovels in the ground and expand that. Is that right?

Speaker 4

And maybe you could talk a little bit more about what you're seeing in terms of maybe secular opportunity and market rate multi? Thanks.

Speaker 2

Yes. Thanks, Jason. I think that's a fair statement. We've continued to be, I would say, safe to say, more selective about the opportunities that we're evaluating on the merchant build JV equity side in terms of the sponsors that we're doing business with and the markets that those investments are being made into. Certainly, with some of the volatility in the marketplace, we've been evaluating the overall risk profile of the strategy and what we can do from a management perspective to try to derisk things there.

Speaker 2

So that's something that we're actively taking a look at on new investment opportunities. But as I said earlier, we continue to believe that given the lack of activity that we see in a lot of the markets that we've historically been invested in, good opportunities for good well structured deals such that 36 to 48 months down the road, given the difficulty that other sponsors may have in terms of sourcing capital for those types of investments, we think that's going to stand us in good stead as those assets look to be harvested at the direction of our JV partners at that point in time.

Speaker 4

Great. Thank you. Appreciate it.

Operator

Thank you. Next question comes from the line of Chris Mueller with Citizens JMP. Please go ahead.

Speaker 5

Hey, guys. Thanks for taking the questions. So I'm curious on your thoughts on capital deployment into year end and then into 2025. Should we expect to see investment portfolios just trending higher slowly? And then I guess where are you guys thinking that capital deployment may be?

Speaker 5

It looks like the MRB portfolio has grown in recent quarters. Do you expect that dynamic to continue? And I guess, how much visibility do you have into the pipeline for those type of things?

Speaker 2

So, Chris, I think I'll start at a high level in terms of the investment philosophy we as a management team take. We as sort of a starting point for discussion or evaluation are requiring that assets be accretive to our current level of dividend yield. So if you look at where we stand in the marketplace today, at least based on the trading earlier on in the day, we're give or take at a 12.5% current dividend yield. So all of the investment opportunities that we're evaluating as a starting point have to meet that threshold from our Board guidance and from our investment committee criteria. So depending on where that level shakes out in the balance of the 4th quarter, that's going to have an impact on the opportunities that we're able to pursue there, be it new governmental issuer loans or MRBs or potential merchant build JV equity investments.

Speaker 2

So that is a first starting threshold at what we look at. You layer into that the new capital allocation that we have from the BlackRock Construction Lending JV. Our goal there is to find transactions that meet the investment criteria that we have with BlackRock to try to put that work in that or put that capital in that specific strategy to work as quickly as we can, because I think our goal as a management team is to show the BlackRock team and other institutional investors who may want to follow a similar strategy, our ability to at least commit that capital with potential new construction lending opportunities and put ourselves in a position to grow that in the future. So that's sort of the approach that taking at a high level as we evaluate new investments, and I think it's really going to be a question of where we see windows of opportunity that meet that sort of baseline hurdle or threshold from our perspective.

Speaker 5

Got it. That's very helpful. And then I guess on the JV, the new construction JV of BlackRock, I see the initial commitment is only $8,300,000 from you guys. Do you plan to scale that larger? Or is the size kind of capped due to partnership restrictions similar some of the other JVs?

Speaker 2

So the size really isn't capped from a partnership perspective because given that the end investments are in qualified mortgage investments under the partnership agreement. We don't have the same limitation that we have there with our traditional JV equity investments. So I think in terms of the partnership itself allocating additional capital to that strategy. As I said, I think it's a question of us seeing the right opportunities and having additional capital available to us either through a potential expansion of commitment from BlackRock or the involvement of other potential institutional investors into that strategy itself. But at least as of where we sit right now, that's the initial allocation of capital that we've got to put to work within the parameters of the initial allocation that we have from BlackRock to the strategy.

Speaker 5

Got it. That's very helpful. And that's great that you guys can scale that up as you see needed. And thanks for taking the questions.

Speaker 2

Thanks, Chris.

Operator

Thank you. Next question comes from the line of Larry Linden with GHI. Please go ahead.

Speaker 6

Thank you. I have a question that's preceded by a statement. Over the past year, GHI has seen its value decrease by almost 27%. This 1 year volatility range from a low of today $11.85 to $17.55 is extremely troublesome in this quality. From January to September 2019, 5 years ago, I bought considerable shares valued between $19 $23 This investment has lost 50% of its paper value.

Speaker 6

The only reason I have stayed with GHI is because of its dividends. But I fear that if GHI continues to sink in value, at some point, it will be inevitable that its ability to pay dividends will be dramatically impacted and diminished. Please honestly and clearly explain what is happening and clarify the reasons for continuous unabated accelerating decline in value and its impact on future dividends? Thank you.

Speaker 2

Well, Mr. Linden, I can't give you any answers in terms of what drives the price of the stock either on a day to day basis or over an extended period of time. That's driven by the marketplace. All I can really talk about is the investment strategy and that has been implemented by the management team and what we've done there. And there has not been a significant change in our core investment strategy over that 5 year time horizon since Greystone acquired the general partner of the partnership.

Speaker 2

From our perspective and historically from the Board's perspective, the determination of the distribution has really been driven by the cash available for distribution and other factors as we look at our overall investment portfolio. So, historically, distribution decisions have not been made based on the then current market price of the units in the secondary market. It's really been driven by that cash available for distribution and the core earnings power of the partnership's investment portfolio itself. So that is something that we as a management team do not see changing. I can't speak to the market's view of the value of the units themselves, but all I can talk about is the strategy that we've been consistent with over the years and that we've continued to try to implement here as a management team.

Speaker 6

I just want to pursue this as a layman, but an investor. I'm just curious what was the tenor of the market 5 years ago that enabled it to go from up to $23 a share and whereas now it's $11 plus a share? I mean, what factors took place over that 5 year period that caused such a precipitous drop in the share value?

Speaker 2

Well, again, Mr. Linden, I can't explain the market's view as expressed through our trading price of our units. What I can say at a high level is that one thing since we are an income oriented investment has been there's been a significant change in interest rates over that 5 year time horizon. If you look back 5 years ago where short term rates were basically at 0 and you had longer term interest rates at levels significantly lower than they were today, that to me has been the sort of the primary change that we've seen in the overall investment landscape from a fixed income perspective to sort of get as to where we are today. The dividend distribution made by the partnership is basically, for all intents and purposes, the same as it was in the fall of 2019.

Speaker 2

On a split adjusted basis, it was $0.50 then and we're at $1.48 now. So that level hasn't changed. It's really been the market's view of what is the required yield on the investment generating those same dollars of return to the unitholders.

Speaker 6

Thank you.

Operator

Thank you. Ladies and gentlemen, we have a question here. It is from Jim Merrick, Private Investor. Please go ahead.

Speaker 7

Thanks guys for taking my call. With the book value being 14, 15 and the price and the stock being a lot less than that, does that make sense to do share buybacks at this point?

Speaker 2

Thank you, Mr. Merrick. I think from our perspective, when we look at making new investments, as I was speaking with one of the analysts earlier, we're looking at the returns that we can generate being accretive versus the that current dividend yield. So from our perspective, if we look at the return on the partnership's capital that we would expect from either these new construction loans we're making through the BlackRock joint venture or other potential JV equity investments on the merchant build side for market rate multifamily. I think our expectation will be that as long as we're able to see accretive investments there that a better use of the partnership's capital for the long term is actually making those investments as opposed to utilizing that capital to buy units back in the secondary market.

Speaker 2

So I think from our perspective, until we see that dynamic change, that really is the sort of the preferred approach or the preferred philosophy from us as a management team going forward.

Speaker 7

Okay. Thank you. Is there any chance that give us small investors a little more hope to see some of the insiders purchase some of the stock at these prices? I know it's kind of a personal question to me. It's not the right question, but I decided to ask it anyway.

Speaker 2

Well, all I can tell you is that at least for insiders in advance of our 10 Q filing today, our window has been closed for activity. And so we will have to see whether or not after today's announcement that the partnership is in a position that window could be opened for insiders activity.

Speaker 7

Okay, great. Thanks a lot guys. Appreciate it.

Operator

Thank you. Ladies and gentlemen, we have reached the end of question and answer session. I would now like to turn the floor over to Ken Rogozinski for closing comments.

Speaker 2

Thank you everyone for joining us today. We look forward to chatting with you again next quarter.

Operator

Thank you. This concludes today's teleconference. You may disconnect your lines at this time. Thank you for your participation.

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