American Realty Investors, Inc. Reports Earnings for Quarter Ended September 30, 2024
DALLAS--(BUSINESS WIRE)--November 07, 2024--
American Realty Investors, Inc. $(ARL)$ 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. $(TCI)$. 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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CONTACT: American Realty Investors, Inc.
Investor Relations
Erik Johnson (469) 522-4200
investor.relations@americanrealtyinvest.com
(END) Dow Jones Newswires
November 07, 2024 17:00 ET (22:00 GMT)