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

Date of Report (Date of earliest event reported): April 1, 2010

TRANSCONTINENTAL REALTY INVESTORS, INC.

(Exact Name of Registrant as Specified in its Charter)

Nevada	001-09240	94-6565852
(State or other jurisdiction of incorporation)	(Commission File No.)	(I.R.S. Employer Identification No.)

1800 Valley View Lane, Suite 300 Dallas, Texas	75234
(Address of principal executive offices)	(Zip Code)

Registrant’s telephone number, including area code 469-522-4200

     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:

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

o     Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

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

o     Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Section 2 — Financial Information

Item 2.02. Results of Operations and Financial Condition

     On April 1, 2010, Transcontinental Realty Investors, Inc. (“TCI” or the “Company”) announced its operational results for the year ended December 31, 2009. 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
Designation	Description of Exhibit
99.1*	Press Release dated April 1, 2010.

* Furnished herewith.

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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: April 2, 2010	TRANSCONTINENTAL REALTY INVESTORS, INC.
	By:	/s/ Gene S. Bertcher
		Gene S. Bertcher, Executive Vice President
		and Chief Financial Officer

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EX-99.1

Exhibit 99.1

NEWS RELEASE

FOR IMMEDIATE RELEASE	Contact:
	Transcontinental Realty Investors, Inc.
	Investors Relations
	(800) 400-6407
	investor.relations@primeasset.com

Transcontinental Realty Investors, Inc. Reports Fourth Quarter and Full Year 2009 Financial Results

DALLAS (April 1, 2010) — Transcontinental Realty Investors, Inc. (NYSE: TCI), a Dallas-based real estate investment company, today reported results of operations for the year ended December 31, 2009. TCI reported a net loss applicable to common shares of $80.7 million or $9.95 per share in 2009, as compared to prior year net income applicable to common shares of $31.2 million or $3.86 per share. Net loss for the three months ended December 31, 2009 was $26.0 million or $3.20 per share, as compared to prior year net loss applicable to common shares of $14.5 million or $1.80 per share.

Results of operations for the year ended December 31, 2009 as compared to the same period ended 2008;

     Rental revenues were $151.6 million for the twelve months ended December 31, 2009. The rental revenues for 2009, as compared to the same period in 2008, increased by $13.3 million, of which the apartment portfolio increased by $11.4 million, the commercial portfolio increased by $3.9 million and the land portfolio decreased $1.1 million with the remaining $0.9 million decrease in our other portfolios.

     Depreciation expense was $29.1 million for the twelve months ended December 31, 2009. The depreciation expense for 2009, as compared to the same period in 2008, increased by $4.7 million of which the apartment portfolio increased by $3.4 million with the remainder due to the commercial portfolio.

     The provision on impairment of notes receivable, investment in real estate partnerships, and real estate assets was $42.5 million for the twelve months ended December 31, 2009. The provision on impairment of notes receivable, investment in real estate partnerships, and real estate assets for 2009, as compared to the same period in 2008, increased by $35.1 million.

     Interest income was $5.4 million for the twelve months ended December 31, 2009. The interest income recorded for 2009, as compared to the same period in 2008, increased by $2.2 million due to the receipt of interest payments due on our Unified Housing surplus cash flow notes. Interest is recognized when interest payments are received.

     Mortgage and loan interest was $70.2 million for the twelve months ended December 31, 2009. The mortgage and loan interest for 2009, as compared to the same period in 2008, decreased by $2.9 million which is due to an increase in the apartments of $1.8 million, a decrease in the commercial portfolio of $1.5 million, an increase in the land portfolio of $0.7 million and a decrease in the other portfolios of $3.9 million.

     Gain on the sale of land was $6.3 million for the twelve months ended December 31, 2009. The gain on the sale of land for 2009, as compared to the same period in 2008, increased by $1.5 million due to an increase in land sales.

     Income from discontinued operations was $2.2 million for the year ended 2009 as compared to the $62.4 million for the same period ended 2008. Included in discontinued operations are a total of seven and 25 income-producing properties as of 2009 and 2008, respectively.

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, hotels, shopping centers and developed and undeveloped land. We invest in real estate through direct equity ownership and partnerships nationwide. For more information, visit the Company’s web site at www.transconrealty-invest.com.

TRANSCONTINENTAL REALTY INVESTORS, INC .
CONSOLIDATED STATEMENTS OF OPERATIONS

	For the Years Ended December 31,
	2009			2008
	(dollars in thousands, except share
	and per share amounts)
Revenues:
Rental and other property revenues	$	151,647		$	138,337
Expenses:
Properly operating expenses		85,087			86,237
Depreciation and amortization		29,098			24,377
General and administrative		11,063			10,349
Provision on impairment of notes receivable and real estate assets		42,513			7,417
Advisory fee to affiliate		11,903			12,064
Total operating expenses		179,664			140,444
Operating income (loss)		(28,017	)		(2,107	)
Other income (expense):
Interest income		5,407			3,227
Other income		3,631			3,918
Mortgage and loan interest		(70,157	)		(73,053	)
Earnings from unconsolidated subsidiaries and investees		(451	)		(1,096	)
Involuntary conversion		—			—
Litigation Settlement		356			—
Total other expenses		(61,214	)		(67,004	)
Loss before gain on land sales, non-controlling interest, and tax		(89,231	)		(69,111	)
Gain on land sales		6,296			4,798
Loss from continuing operations before lax		(82,935	)		(64,313	)
Income lax benefit (expense)		1,180			33,441
Net income (loss) from continuing operations		(81,755	)		(30,872	)
Discontinued operations:
Loss from discontinued operations		(162	)		(8,368	)
Gain on sale of real estate from discontinued operations		3,524			104,411
Income tax expense from discontinued operations		(1,180	)		(33,616	)
Net income (loss)		(79,573	)		31,555
Net income (loss) attributable to non-controlling interest		(125	)		654
Net income (loss) attributable to Transcontinental Realty Investors, Inc.		(79,698	)		32,209
Preferred dividend requirement		(1,023	)		(975	)
Net income (loss) applicable to common shares	$	(80,721	)	$	31,234
Earnings per share — basic
Gain (loss) from continuing operations	$	(10.22	)	$	(3.86	)
Discontinued operations		0.27			7.72
Net income (loss) applicable to common shares	$	(9.95	)	$	3.86
Earnings per share — diluted
Gain (loss) from continuing operations	$	(10.22	)	$	(3.86	)
Discontinued operations		0.27			7.72
Net income (loss) applicable to common shares	$	(9.95	)	$	3.86
Weighted average common share used in computing earnings per share		8,113,669			8,086,640
Weighted average common share used in computing diluted earnings per shore		8,113,669			8,086,640
Amounts attributable to Transcontinental Really Investors, Inc.
Income (loss) from continuing operations	$	(81,755	)	$	(30,872	)
Income from discontinued operations		2,182			62,427
Net income (loss)	$	(79,573	)	$	31,555

TRANSCONTINENTAL REALTY INVESTORS, INC.
CONSOLIDATED BALANCE SHEETS

	December 31,			December 31,
	2009			2008
	(dollars in thousands, except share and
	par value amounts)
Assets
Real estate, at cost	$	1,520,043		$	1,526,016
Real estate held for sale at cost, net of depreciation		5,147			8,018
Real estate subject to sales contracts at cost, net of depreciation		59,048			60,807
Less accumulated depreciation		(137,054	)		(114,050	)
Total real estate		1,447,184			1,480,791
Notes and interest receivable
Performing		48,051			42,413
Less allowance for estimated losses		(2,804	)		(3,293	)
Total notes and interest receivable		45,247			39,120
Cash and cash equivalents		5,665			5,983
Investments in securities					2,775
Investments in unconsolidated subsidiaries and investees		9,358			23,365
Other assets		100,833			88,033
Total assets	$	1,608,287		$	1,640,067
Liabilities and Shareholders’ Equity
Liabilities:
Notes and interest payable	$	1,121,737		$	1,100,852
Notes related to assets held-for-sale		5,002			4,191
Notes related to subject to sales contracts		61,886			62,972
Affiliate payables		50,163			62,367
Accounts payable and other liabilities		124,083			84,989
		1,362,871			1,315,371
Commitments and contingencies:
Shareholders’ equity:
Preferred Stock, Series C: $.01 par value, authorized 10,000,000 shares, issued and outstanding 30,000 shares in 2009 and 2008 respectively (liquidation preference $100 per share). Series D: $.01 par value, authorized, issued and outstanding 100,000 shares in 2009 and 2008 respectively		1			1
Common Stock, $.01 par value, authorized 10,000,000 shares; issued and outstanding 8,113,669 for 2009 and 2008		81			81
Paid-in capital		262,118			263,290
Retained earnings		(34,718	)		44,980
Accumulated other comprehensive income		—			2,575
Total Transcontinental Realty Investors, Inc. shareholders’ equity		227,482			310,927
Non-controlling interest		17,934			13,769
Total equity		245,416			324,696
Total liabilities and equity	$	1,608,287		$	1,640,067