Check the appropriate box
below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the Registrant under any of the following
provisions:
Indicate by check mark whether the Registrant is an emerging growth company as defined in Rule 405 of the Securities Act of
1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
If an emerging growth company, indicate by check mark if the Registrant has elected not to use the
extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section
13(a) of the Exchange Act.
SIGNATURES
Pursuant to the requirements
of the Securities Exchange Act of 1934, the Registrant has duly caused this Current Report on Form 8-K to be signed on its behalf
by the undersigned, hereunto duly authorized.
|
|
Dated: May 15, 2020
|
|
|
|
|
|
|
|
|
|
|
|
TRANSCONTINENTAL REALTY INVESTORS, INC.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
By:
|
/s/ Daniel J. Moos
|
|
|
|
|
Daniel J. Moos
|
|
|
|
|
President and
|
|
|
|
|
Chief Executive Officer
|
Exhibit "99.1"
|
NEWS RELEASE
FOR IMMEDIATE RELEASE
|
Contact:
Transcontinental Realty Investors, Inc.
Investor Relations
Daniel Moos
(469) 522-4200
investor.relations@transconrealty-invest.com
|
Transcontinental Realty
Investors, Inc. reports Earnings for Q1 2020
DALLAS--(May
14, 2020)--Transcontinental Realty Investors, Inc. (NYSE: TCI), a Dallas-based real estate investment company, is reporting its
Results of Operations for the quarter ended March 31, 2020. For the three months ended March 31, 2020, The Company reported a
net income applicable to common shares of $4.6 million or $0.53 per diluted share, compared to a net loss applicable to
common shares of $5.6 million or $0.64 per diluted share for the same period in 2019. This was driven by the overall
strategic direction of both investing and expanding the core multi-family portfolio. In particular, as certain new
multifamily development projects are completed, in which the Company has made significant new investments, it is expected
that net income will again be positively impacted throughout the remainder of 2020. All new multifamily real estate projects
within TCI’s future pipeline are progressing in various stages of development. Of significant note, the Company
experienced a one-time expense as a requirement to pay Franchise Tax due to the Joint Venture Victory Abode Apartments (VAA).
The Company does not anticipate this expense to reoccur in future periods.
With
the current Coronavirus presenting a concern; we remain confident the underlying need for quality multi-family housing will remain
strong. The Company bases this observation on occupancy trends across its portfolio. For the quarter ending March 31, 2020, same
store occupancy was at 93.9% compared to 94.3% for the same period one year ago. To date, TCI’s existing portfolio has seen
a significant increase in value. For FYE 2019, same store aggregate appraised value of TCI’s holdings was approximately
$244.4 million. Whereas for FYE 2020, same store aggregate appraised value of TCI’s holdings was $298.7 million. This represents
a $54.3 million or 22% increase in overall asset value year over year.
The
Company believes that both the development of new projects and the historically low interest rate environment has positioned the
Company along the strategic lines that it previously indicated. The Company has created a dynamic platform to continue its expansion
in the multifamily sector. The ongoing plan is to continue to develop and acquire apartments in the geographic markets where demand
exceeds supply.
Revenues
Rental
and other property revenues were $11.9 million for the three months ended March 31, 2020, and 2019. For the quarter ended March
31, 2020, the Company generated revenues of $7.9 million and $4.0 million from its commercial and residential segments, respectively.
Expenses
Property
operating expenses increased by $0.3 million to $6.3 million for the three months ended March 31, 2020 as compared to $6.0 million
for the same period in 2019. The increase in property operating expenses is due to an increase in real estate taxes of approximately
$0.5 million offset by an overall decrease in general property operating and maintenance expenses of $0.2 million.
Depreciation
and amortization increased by $0.30 million to $3.4 million during the three months ended March 31, 2020 as compared to $3.1 million
for the three months ended March 31, 2019. The increase in depreciation is due to an increase in our ownership of residential
apartments to ten from nine for the same period a year ago which resulted in an increase in depreciation of $0.9 million from
$0.7 million a year ago.
General
and administrative expense was $2.5 million for the three months ended March 31, 2020, compared to $2.2 million for the same period
in 2019. The increase of $0.3 million in general and administrative expenses was primarily due to increases professional fees
of $0.1 million and legal fees of $0.2 million.
Franchise
taxes and other expenses was $1.5 million for the three months ended March 31, 2020, compared to $0.125 million for the same period
in 2019. The increase of $1.4 million in franchise taxes and other expenses was primarily due to increases in franchise taxes
of $1.0 million.
Other
income (expense)
Interest
income was $4.5 million for the three months ended March 31, 2020, compared to $4.6 million for the same period in 2019. The decrease
of $0.1 million was due to an decrease in interest of $0.1 on notes receivable from other related parties.
Other
income decreased by $3.1 million to $0.84 million for the three months ended March 31, 2020, compared to $3.9 million for the
same period in 2019. For the quarter just ended March 31, 2020, the Company received property tax refunds of approximately $0.2
million, and recorded miscellaneous income of $0.6 million. For the same period a year ago, the Company recognized $3.6 million
gain associated with the sale of land held by IOR to third parties.
Mortgage
and loan interest expense was $7.9 million for the three months ended March 31, 2020, and 2019.
Foreign
currency transaction was a gain of $7.8 million for the three months ended March 31, 2020 as compared to a loss of $5.8 million
for the same period in 2019. The unrealized gain was the result of the strengthening of the U.S. Dollar against the Israel Shekels
due to perceived liquidity issues in Israel most likely as a result of the global pandemic outbreak. During the first quarter
just ended, we paid $11.6 million in Series A bond principal and $7.3 million in interest payments to our Series A, B, and C bonds
denominated in Israel Shekels.
Loss
from unconsolidated investments was a net $0.377 million for the three months ended March 31, 2020 as compared to a net loss of
$1.1 million for the three months ended March 31, 2019. The loss from unconsolidated investments during the first quarter just
ended was driven primarily from our share in the losses reported by the VAA Joint Venture of $0.376 million.
Gain
on land sales was $4.1 for the three months ended March 31, 2020, compared to $2.2 million for the same period in 2019. In the
current period we sold approximately 18.7 acres of land for a sales price of $5.7 million which resulted in a gain of $4.1 million.
For the same period in 2019, we sold approximately 22.3 acres of land for a sales price of $8.7 million which resulted in a gain
of $2.2 million.
About
Transcontinental Realty Investors, Inc.
Transcontinental
Realty Investors, Inc., a Dallas-based real estate investment company, holds a diverse portfolio of equity real estate located
across the U.S., including apartments, office buildings, 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. For more information,
visit the Company’s website at www.transconrealty-invest.com.
