8-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 8-K

Current Report

Pursuant to Section 13 or 15(d)

of the Securities Exchange Act of 1934

Date of Report (Date of earliest event reported) May 11, 2023

Transcontinental Realty Investors, Inc.

(Exact name of registrant as specified in its charter)

Nevada		001-09240		94-6565852
(State or other jurisdiction of  Incorporation or organization)		(Commission File Number)		(IRS Employer Identification Number)
1603 LBJ Freeway,	Suite 800	Dallas	TX	75234
(Address of principal executive offices)				(Zip Code)

(469) 522-4200

Registrant’s Telephone Number, including area code

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:

 ☐  Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

 ☐  Soliciting material pursuant to Rule 14a-12 under the Securities Act (17 CFR 230.425)

 ☐  Pre-commencement communications pursuant to Rule 14d-2(b) under the Securities Act (17 CFR 240.14d-2(b))

 ☐  Pre-commencement communications pursuant to Rule 13e-4(c) under the Securities Act (17 CFR 240.413e-4(c))

Securities registered pursuant to Section 12(b) of the Act:

Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common Stock	TCI	NYSE

Indicate by check mark whether teh Registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 ((17 CFR 230.405 of or Rule 12b-2 of the Securities Act of 1934 (17 CFR 230.405):

☐  Emerging growth company

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. ☐

Section 2 – Financial Information

Item 2.02. Results of Operations and Financial Condition

On May 11, 2023, Transcontinental Realty Investors, Inc. (“TCI” or the “Company”) announced its operational results for the quarter ended March 31, 2023. A copy of the announcement is attached as Exhibit “99.1.”

The information furnished pursuant to Item 2.02 in this Form 8-K, including Exhibit “99.1” attached hereto, shall not be deemed to be “filed” for purposes of Section 18 of the Securities Exchange Act of 1934 or otherwise subject to the liabilities of that Section, unless we specifically incorporate it by reference in a document filed under the Securities Act of 1933 or the Securities Exchange Act of 1934. We undertake no duty or obligation to publicly update or revise the information furnished pursuant to Item 2.02 of this Current Report on Form 8-K.

Section 9 – Financial Statements and Exhibits

Item 9.01. Financial Statements and Exhibits

(d) Exhibits.

The following exhibit is furnished with this Report:

Exhibit No.	Description
99.1*	Press release dated	May 11, 2023

_________________________

* Furnished herewith

SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

		TRANSCONTINENTAL REALTY INVESTORS, INC.
Dated: May 11, 2023	By:	/s/  ERIK L. JOHNSON
		Erik L. Johnson
		Executive Vice President and Chief Financial Officer
		(Principal Executive and Financial Officer)

EX-99.1

NEWS RELEASE	Contact:
	Transcontinental Realty Investors, Inc. Investor Relations
FOR IMMEDIATE RELEASE	Erik Johnson (469) 522-4200 investor.relations@transconrealty-invest.com

Transcontinental Realty Investors, Inc. reports Earnings for Q1 2023

DALLAS (May 11, 2023) -- Transcontinental Realty Investors, Inc. (NYSE:TCI) is reporting its results of operations for the quarter ended March 31, 2023. For the three months ended March 31, 2023, we reported net income attributable to common shares of $3.5 million or $0.41 per diluted share, compared to a net income of $14.5 million or $1.68 per diluted share for the same period in 2022.

Financial Highlights

•Total occupancy was 80% at March 31, 2023, which includes 92% at our multifamily properties and 59% at our commercial properties.

•On January 31, 2023, we paid off our $67.4 million Series C bonds from cash received from the sale of the VAA Sale Portfolio.

•On March 15, 2023, we entered into an agreement to develop a 240 unit multifamily property in Lake Wales, Florida that is expected to be completed in 2025 for a total cost of approximately $55.3 million. The cost of construction will be funded in part by a $33.0 million construction loan. As of March 31, 2023, we have incurred a total of $10.1 million in development costs.

•On May 4, 2023, we paid off the remaining $43.1 million balances of the Series A and Series B Bonds. In connection with the repayment of the bonds, our wholly-owned subsidiary, Southern Properties Capital Ltd. withdrew from the Tel-Aviv Stock Exchange.

Financial Results

Rental revenues increased $3.5 million from $7.5 million for the three months ended March 31, 2022 to $11.0 million for the three months ended March 31, 2023. The increase in rental revenue is primarily due to $4.1 million increase at our multifamily properties offset in part by a decrease of $0.6 million from the commercial properties. The increase in revenue from the multifamily properties is primarily due to the acquisition of the VAA Holdback Portfolio in 2022.

Net operating loss decreased $1.6 million from $4.1 million for three months ended March 31, 2022 to $2.6 million for the three months ended March 31, 2023. The decrease in net operating loss is primarily due to the $3.5 million increase in rental revenue as noted above offset in part by an increase of $2.8 million in property operating and depreciation expenses. The increase in property and depreciation expenses is due to the acquisition of the VAA Holdback Portfolio.

Net income attributable to the Company decreased $11.0 million from $14.5 million for the three months ended March 31, 2022 to $3.5 million for the three months ended March 31, 2023. The decrease in net income is primarily attributed to $11.1 million gain on sale or write down of assets in 2022. The gain on sale or write down of assets is primarily due to the sale of Toulon, a 240 unit multifamily property in Gautier, Mississippi, in 2022.

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 March 31,
	2023		2022
Revenues:
Rental revenues	$	11,009	$	7,481
Other income	679		306
Total revenue	11,688		7,787
Expenses:
Property operating expenses	6,106		4,028
Depreciation and amortization	3,102		2,349
General and administrative	2,883		2,531
Advisory fee to related party	2,170		3,005
Total operating expenses	14,261		11,913
Net operating loss	(2,573)		(4,126)
Interest income	9,772		5,814
Interest expense	(4,031)		(5,027)
Gain on foreign currency transactions	971		3,772
Loss on early extinguishment of debt	—		(1,639)
Equity in income from unconsolidated joint venture	688		4,706
Gain on sale or write down of assets, net	—		11,148
Income tax provision	(1,112)		(28)
Net income	3,715		14,620
Net income attributable to noncontrolling interest	(198)		(118)
Net income attributable to the Company	$	3,517	$	14,502
Earnings per share
Basic and diluted	$	0.41	$	1.68
Weighted average common shares used in computing earnings per share
Basic and diluted	8,639,316		8,639,316

XML

Cover	May 11, 2023
Cover [Abstract]
Document Type	8-K
Document Period End Date	May 11, 2023
Entity Registrant Name	Transcontinental Realty Investors, Inc.
Entity Incorporation, State or Country Code	NV
Entity File Number	001-09240
Entity Tax Identification Number	94-6565852
Entity Address, Address Line One	1603 LBJ Freeway,
Entity Address, Address Line Two	Suite 800
Entity Address, City or Town	Dallas
Entity Address, State or Province	TX
Entity Address, Postal Zip Code	75234
City Area Code	469
Local Phone Number	522-4200
Written Communications	false
Soliciting Material	false
Pre-commencement Tender Offer	false
Pre-commencement Issuer Tender Offer	false
Title of 12(b) Security	Common Stock
Trading Symbol	TCI
Security Exchange Name	NYSE
Entity Emerging Growth Company	false
Entity Central Index Key	0000733590
Amendment Flag	false