TCI Transcontinental Realty Investment Inc

Transcontinental Realty Investors, Inc. (NYSE:TCI) is reporting its results of operations for the quarter ended September 30, 2022. For the three months ended September 30, 2022, we reported net income attributable to the Company of $378.4 million or $43.79 per diluted share, compared to a net income of $26.2 million or $3.04 per diluted share for the same period in 2021.

Financial Highlights

• We collected approximately 99% of our rents for the three months ended September 30, 2022, comprised of approximately 98% from multifamily tenants and approximately 99% from office tenants.
• Total stabilized occupancy was 94% at September 30, 2022, which includes 96% at our multifamily properties and 68% at our commercial properties.
• On September 16, 2022, VAA completed the sale of 45 properties for $1.8 billion, resulting in gain on sale of $738.7 million to the joint venture. In connection with sale, we received an initial distribution of $182.8 million from VAA. We plan to use our share of the proceeds to invest in income-producing real estate, pay down debt and for general corporate purposes.
• In connection with the VAA sale, we sold Sugar Mill Phase III, a 72 unit multifamily property in Baton Rouge, Louisiana for $11.8 million, resulting in gain on sale of $1.9 million. We used the proceeds to pay off the $9.6 million mortgage note payable on the property and for general corporate purposes.

Financial Results

Rental revenues decreased $2.1 million from $9.6 million for the three months ended September 30, 2021 to $7.6 million for the three months ended September 30, 2022. The decrease in rental revenue is primarily due to the sale of 600 Las Colinas in 2021 and the sale of Toulon in the first quarter of 2022.

Net operating loss decreased $1.8 million from $4.6 million for three months ended September 30, 2021 to $2.8 million for the three months ended September 30, 2022. The decrease in net operating loss is primarily due to a reduction of legal costs related to the arbitration settlement in 2021 offset in part by net operating profit from the sale of 600 Las Colinas in 2021.

Net income attributable to the Company increased $352.1 million from $26.2 million for the three months ended September 30, 2021 to $378.4 million for the three months ended September 30, 2022. The increase in net income is primarily attributed to our share of the gain on the sale of the 45 properties by VAA, offset in part by tax expense from the sale.

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 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.

TRANSCONTINENTAL 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,

 

 

 

 

2022

 

 

 

2021

 

 

 

2022

 

 

 

2021

 

  Revenues: Rental revenues

$

7,570

 

$

9,628

 

$

22,310

 

$

30,183

 

Other income

 

749

 

 

406

 

 

1,566

 

 

2,474

 

Total revenue

 

8,319

 

 

10,034

 

 

23,876

 

 

32,657

 

Expenses: Property operating expenses

 

4,701

 

 

5,610

 

 

12,541

 

 

16,500

 

Depreciation and amortization

 

2,193

 

 

2,935

 

 

6,840

 

 

9,473

 

General and administrative

 

2,756

 

 

2,813

 

 

7,348

 

 

8,549

 

Advisory fee to related party

 

1,434

 

 

3,234

 

 

6,885

 

 

10,144

 

Total operating expenses

 

11,084

 

 

14,592

 

 

33,614

 

 

44,666

 

Net operating loss

 

(2,765

)

 

(4,558

)

 

(9,738

)

 

(12,009

)

Interest Income

 

8,087

 

 

5,155

 

 

18,807

 

 

14,518

 

Interest expense

 

(4,700

)

 

(5,910

)

 

(14,787

)

 

(19,096

)

Gain (loss) on foreign currency transactions

 

1,533

 

 

(1,639

)

 

19,437

 

 

1,185

 

Loss on extinguishment of debt

 

(1,166

)

 

(1,451

)

 

(2,805

)

 

(1,451

)

Equity in income from unconsolidated joint ventures

 

464,085

 

 

3,627

 

 

470,428

 

 

11,535

 

Gain on sale or write-down of assets, net

 

1,539

 

 

31,312

 

 

16,580

 

 

22,970

 

Income tax provision

 

(88,037

)

 

(156

)

 

(88,105

)

 

1,037

 

Net income

 

378,576

 

 

26,380

 

 

409,817

 

 

18,689

 

Net income attributable to noncontrolling interest

 

(225

)

 

(134

)

 

(503

)

 

(544

)

Net income attributable to the Company

$

378,351

 

$

26,246

 

$

409,314

 

$

18,145

 

Earnings per share Basic and diluted

$

43.79

 

$

3.04

 

$

47.38

 

$

2.10

 

Weighted average common shares used in computing earnings per share Basic and diluted

 

8,639,316

 

 

8,639,316

 

 

8,639,316

 

 

8,639,316

 

 

View source version on businesswire.com: https://www.businesswire.com/news/home/20221110005105/en/

Transcontinental Realty Investors, Inc. Investor Relations Erik Johnson (469) 522-4200 Investor.relations@transconrealty-invest.com