American Realty Investors, Inc. Reports Earnings for Quarter Ended September 30, 2024
November 07 2024 - 4:00PM
Business Wire
American Realty Investors, Inc. (NYSE:ARL) is reporting its
results of operations for the three months ended September 30,
2024. For the three months ended September 30, 2024, we reported
net income attributable to common shares of $17.5 million or $1.08
per diluted share, compared to net income attributable to common
shares of $3.0 million or $0.18 per diluted share for the same
period in 2023.
Financial Highlights
- Total occupancy was 79% at September 30, 2024, which includes
95% at our multifamily properties and 48% at our commercial
properties.
- On July 10, 2024, we replaced the existing loan on Forest Grove
with a $6.6 million loan that bears interest at SOFR plus 1.85% and
matures on August 1, 2031.
- On October 18, 2024, we completed a 45,000 square foot lease at
Stanford Center. This is the first new lease at the property
following our major renovation of the property. The new lease
provides a 14% increase in occupancy to the property and a 20%
increase in rent per square foot over recent expired leases at the
property. The lease is expected to commence in April 2025.
- On October 21, 2024, we obtained a $27.5 million construction
loan to finance the development of a 234 unit multifamily property
in Dallas, Texas ("Mountain Creek") that is expected to be
completed in 2026 for a total cost of approximately $49.8 million.
The construction loan on Mountain Creek bears interest at SOFR plus
3.45% and matures on October 20, 2026.
- On October 31, 2024, we paid $23.4 million to resolve all
claims litigation with David Clapper and related entities related
(collectively, the “Clapper") that had been ongoing since 1999. The
matter originally involved a transaction in 1998 in which we were
to acquire eight multifamily properties from the Clapper. As a
result of the settlement, we accrued a loss on real estate
transactions of $23.4 million during the three and nine months
ended September 30, 2024.
Financial Results
Rental revenues decreased $0.8 million from $11.8 million for
the three months ended September 30, 2023 to $11.1 million for the
three months ended September 30, 2024. The decrease in rental
revenue is primarily due to a decrease in occupancy at our
commercial properties. We expect occupancy to improve in the fourth
quarter due to our recently completed 45,000 square foot lease at
Stanford Center.
Net operating loss was $2.1 million for the three months ended
September 30, 2023 and September 30, 2024. Our decrease in revenue
was offset by a decrease in operating expenses, including a
decrease in general and administrative expenses.
Net income attributable to common shares decreased $20.4 million
from net income of $3.0 million for the three months ended
September 30, 2023 to a net loss of $17.5 million for the three
months ended September 30, 2024. The decrease in net income is
primarily attributed to our accrual of the $23.4 million Clapper
Settlement in 2024.
About American Realty Investors, Inc.
American Realty Investors, Inc., a Dallas-based real estate
investment company, holds a diverse portfolio of equity real estate
located across the U.S., including office buildings, apartments,
shopping centers, and developed and undeveloped land. The Company
invests in real estate through direct ownership, leases and
partnerships and invests in mortgage loans on real estate. The
Company also holds mortgage receivables. The Company’s primary
asset and source of its operating results is its investment in
Transcontinental Realty Investors, Inc. (NYSE:TCI). For more
information, visit the Company’s website at
www.americanrealtyinvest.com.
AMERICAN REALTY INVESTORS, INC. CONSOLIDATED
STATEMENTS OF OPERATIONS (Dollars in thousands, except per
share amounts) (Unaudited)
Three Months Ended September
30,
Nine Months Ended September
30,
2024
2023
2024
2023
Revenues: Rental revenues
$
11,074
$
11,838
$
33,541
$
34,236
Other income
533
688
1,738
2,217
Total revenue
11,607
12,526
35,279
36,453
Expenses: Property operating expenses
6,989
7,443
20,247
20,580
Depreciation and amortization
3,120
3,313
9,429
9,615
General and administrative
1,590
1,579
4,550
8,424
Advisory fee to related party
1,971
2,295
5,910
6,883
Total operating expenses
13,670
14,630
40,136
45,502
Net operating loss
(2,063
)
(2,104
)
(4,857
)
(9,049
)
Interest income
5,506
9,008
16,033
25,201
Interest expense
(2,123
)
(1,954
)
(5,958
)
(7,574
)
Gain on foreign currency transactions
-
-
-
993
Loss on early extinguishment of debt
-
-
-
(1,710
)
Equity in income from unconsolidated joint ventures
423
234
1,407
2,946
(Loss) gain on real estate transactions
(23,400
)
(32
)
(23,400
)
156
Income tax provision
4,641
(1,127
)
3,552
(2,416
)
Net (loss) income
(17,016
)
4,025
(13,223
)
8,547
Net income attributable to noncontrolling interest
(444
)
(1,037
)
(1,319
)
(2,456
)
Net (loss) income attributable to the common shares
$
(17,460
)
$
2,988
$
(14,542
)
$
6,091
Earnings per share Basic and diluted
$
(1.08
)
$
0.18
$
(0.90
)
$
0.38
Weighted average common shares used in computing earnings per share
Basic and diluted
16,152,043
16,152,043
16,152,043
16,152,043
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American Realty Investors, Inc. Investor Relations
Erik Johnson (469) 522-4200
investor.relations@americanrealtyinvest.com
American Realty Investors (NYSE:ARL)
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