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): August 14, 2007

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 August 15, 2007, Transcontinental Realty Investors, Inc. (“TCI” or the “Company”) issued a replacement announcement of its operational results for the quarter ended June 30, 2007; the replacement announcement corrected certain items in and replaced an announcement issued August 14, 2007. A copy of the replacement 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

     (c) Exhibits.

     The following exhibit is furnished with this Report:

Exhibit
Designation	Description of Exhibit
99.1*	Press Release dated August 15, 2007 (corrects and replaces release dated August 14, 2007).

* Furnished herewith.

-1-

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: August 16, 2007	TRANSCONTINENTAL REALTY INVESTORS, INC.
	By:	/s/ Steven A. Abney
		Steven A. Abney, Executive Vice
		President and Chief Financial Officer

-2-

EX-99.1

Exhibit 99.1

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

CORRECTING and REPLACING Transcontinental Realty Investors, Inc. Reports Second Quarter 2007 Results

DALLAS—(BUSINESS WIRE)—2007: Please replace the release dated Aug. 14, 2007 with the following corrected version due to multiple revisions.

The corrected release reads:

TRANSCONTINENTAL REALTY INVESTORS, INC. REPORTS SECOND QUARTER 2007 RESULTS

DALLAS (August 15, 2007) — Transcontinental Realty Investors, Inc. (NYSE: TCI), a Dallas-based real estate investment company, today reported a net loss applicable to common shares of ($13.1) million, or ($1.66) per diluted share for the three months ended June 30, 2007, compared to net income of $4.6 million, or $0.56 per share for the same period in 2006.

For the six months ended June 30, 2007, the Company reported a net loss of ($19.6) million or ($2.49) per share, as compared to a net loss of ($3.9) million or ($0.50) per share for the same period in 2006.

For the three and six month periods ended June 30, 2007, as compared to the same periods in 2006, higher operating income from acquisitions and completed developments was generally offset by a) increased interest expense due to acquisitions and refinancing and b) lower gains from fewer land and income-producing property sales.

For the three months ended June 30, 2007:

TCI incurred a net loss of ($13.1) million for the three months ended June 30, 2007, including a loss from discontinued operations of ($496,000), as compared to a net income of $4.6 million for the three months ended June 30, 2006, including income from discontinued operations of $1.7 million and a gain on sale of land of $8.7 million. Fluctuations in this and other components of revenues and expense between the three month period ended June 30, 2007 and 2006 are discussed below.

Rents increased to $40.3 million in 2007 as compared to $29.4 million in 2006. The increase is principally due to additional rental income from the completion of new apartment construction projects and acquisitions of commercial properties including the January 2007 acquisition of the Parkwest I and II office buildings in Dallas, Texas.

Property operating expenses increased to $22.8 million in 2007 as compared to $17.8 million in 2006 due to the completion of new apartment construction projects and acquisition of commercial properties.

Depreciation and amortization increased to $6.8 million in 2007 as compared to $4.9 million in 2006 due to the completion of new construction projects and acquisitions of commercial properties.

Mortgage and loan interest expense increased to $19.6 million in 2007 as compared to $12.4 million in 2006. The increase is due to an increase in mortgages payable related to acquisitions and refinancing of income-producing properties as well as land held for development.

TCI recognized no gains on land sales in the three month period ended June 30, 2007. In 2006, the Company sold 168 acres of land in two separate transactions, generating net cash proceeds of $16.0 million and recognized gains of $8.7 million.

Income from discontinued operations before income taxes decreased to a net loss of ($763,000) in 2007 from net income of $2.7 million in 2006 due principally to no income-producing properties being sold in 2007. In 2006, TCI sold two apartment projects for a total sales price of $9.2 million, generating net cash proceeds of $3.4 million and recognized gains of $3.3 million.

For the six months ended June 30, 2007;

TCI had a net loss of ($19.6) million for the six months ended June 30, 2007, including income from discontinued operations of $1.2 million and gains on land sales of $1.1 million, as compared to a net loss of ($3.9) million for the six months ended June 30, 2006, including income from discontinued operations of $1.3 million and gains on land sales of $9.0 million. Fluctuations in this and other components of revenues and expense between the six-month period ended June 30, 2007 and 2006 are discussed below.

Rents increased to $76.4 million in 2007 as compared to $58.2 in 2006. The increase is due to additional rental income from the completion of new apartment construction projects and the acquisition of commercial properties including the January 2007 acquisition of the Parkwest I and II office buildings in Dallas, Texas.

Property operating expenses increased to $44.3 million in 2007 as compared to $35.3 million in 2006 due to the completion of new apartment construction projects and acquisition of commercial properties.

Depreciation and amortization increased to $12.2 million in 2007 as compared to $9.8 million in 2006 due to the completion of new construction projects and acquisitions of commercial properties.

General and administrative expenses increased to $5.2 million in 2007 as compared to $3.0 million in 2006 due principally to a one-time receipt of litigation settlement proceeds in 2006.

Mortgage and loan interest expense increased to $35.4 million in 2007 as compared to $24.6 million in 2006 due to an increase in mortgages payable related to acquisitions and refinancing of income-producing properties as well as land held for development.

Gain on land sales decreased to $1.1 million in 2007 from $9.0 million in 2006. In 2007, TCI sold 97 acres of land in two separate transactions for sales prices totaling $4.5 million, generating $800,000 in net cash proceeds and recognized gains of $1.1 million. In 2006, the Company sold 179 acres of land in three separate transactions for sales prices totaling $30.1 million, generating $17.3 million in net cash proceeds and $9.0 million in recognized gains.

Income from discontinued operations before income taxes decreased to net income of $1.9 million in 2007 from net income of $2.0 million in 2006. In 2007, the Company sold one apartment complex located in Dallas. Texas for $24.1 million, generating net cash proceeds of $3.1 million and recognized gains of $3.6 million. In 2006, TCI sold two apartment projects for a total sales price of $9.2 million, generating net cash proceeds of $3.4 million and recognized gains of $3.3 million.

For the six month period ended June 30, 2007, TCI acquired over $112 million in income-producing properties, $14 million in land held for development and invested almost $92 million in residential and other development projects. These investments were financed principally with $107 million of acquisition-related debt, $84 million in construction and development financing, proceeds from land and income-producing property sales of $4 million, net proceeds from the refinancing of existing debt totaling $12 million and advances from affiliated companies.

About Transcontinental Realty Investors, Inc.
Transcontinental Realty Investors, Inc., a Dallas-based real estate investment company, invests in real estate through direct equity ownership and partnerships nationwide. For more information, visit the Company’s web site at www.transconrealty.com.

TRANSCONTINENTAL REALTY INVESTORS, INC.
CONDENSED BALANCE SHEETS
(Unaudited)

(dollars in thousands, except share data)

	June 30,			December 31,
	2007			2006
	(dollars in thousands)
	(unaudited)
Assets
Real estate held for investment	$	1,290,270		$	1,089,995
Less—accumulated depreciation		(105,209	)		(97,541	)
		1,185,061			992,454
Real estate held for sale		42,153			54,935
Real estate subject to sales contract		65,174			66,027
Notes and interest receivable (including $4,360 in 2007 and $33,947 in 2006 from affiliates and related parties)		26,188			39,566
Investment in unconsolidated real estate entities		34,232			30,573
Marketable equity securities, at market value		11,226			9,038
Cash and cash equivalents		5,091			4,803
Other assets (including $248 in 2007 and $1,085 in 2006 from affiliates and related parties)		67,687			52,771
	$	1,436,812		$	1,250,167
Liabilities and Stockholders’ Equity
Liabilities:
Notes and interest payable (including $6,762 in 2007 and $6,769 in 2006 to affiliates and related parties)	$	991,191		$	799,069
Liabilities related to assets held for sale		32,224			43,579
Liabilities related to assets subject to sales contract		57,685			58,816
Other liabilities (including $24,083 in 2007 and $1,695 in 2006 to affiliates and related parties)		95,236			66,608
		1,176,336			968,072
Commitments and contingencies
Minority interest		1,623			16,166
Stockholders’ equity:
Common Stock: $.01 par value: authorized 10,000,000 shares; issued 8,113,669 shares at June 30, 2007 and December 31, 2006		81			81
Preferred Stock
Series C Cumulative Convertible: $.01 par value: authorized, issued and outstanding 30,000 shares: (liquidation preference $3,000)		—			—
Series D: $.01 par value; authorized, issued and outstanding 100,000 shares at June 30, 2007 and December 31, 2006 (liquidation preference $100 per share)		1			1
Additional paid-in capital		278,997			266,206
Treasury stock, at cost (236,304 shares at June 30, 2007 and 212,800 shares at December 31, 2006)		(3,479	)		(3,086	)
Retained earnings (deficit)		(17,504	)		1,660
Accumulated other comprehensive income		757			1,067
		258,853			265,929
	$	1,436,812		$	1,250,167

TRANSCONTINENTAL REALTY INVESTORS, INC CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
(dollars in thousands, except share data)

	For the Three Months						For the Six Months
	Ended June 30,						Ended June 30,
	2007			2006			2007			2006
	(dollars in thousands)						(dollars in thousands)
Property revenue:
Rental and other property revenues ($702 in 2007 and $517 in 2006 from affiliates)	$	40,287		$	29,384		$	76,440		$	58,241
Expenses:
Property operating expenses ($3,472 in 2007 and $3,309 in 2006 to affiliates)		22,849			17,811			44,279			35,318
Depreciation and amortization		6,767			4,875			12,194			9,819
General and administrative ($1,588 in 2007 and $1,538 in 2006 to affiliates)		2,027			1,667			5,205			3,038
Advisory fee to affiliate		2,696			2,161			5,096			4,187
Total operating expenses		34,339			26,514			66,774			52,362
Operating income		5,948			2,870			9,666			5,879
Other income (expense):
Interest income from notes receivable ($688 in 2007 and $424 in 2006 from affiliates)		1,379			793			1,392			1,668
Gain (loss) on foreign currency transactions		(135	)		2			(4	)		4
Other income (loss)		(210	)		(123	)		819			238
Mortgage and loan interest ($363 in 2007 and $232 in 2006 to affiliates)		(19,557	)		(12,436	)		(35,432	)		(24,607	)
Litigation settlement		—			1,804			704			1,804
Total other income (expense)		(18,523	)		(9,960	)		(32,521	)		(20,893	)
Loss before gain on land sales, minority interest and equity in earnings of investees		(12,575	)		(7,090	)		(22,855	)		(15,014	)
Gain on land sales		—			8,690			1,122			9,022
Minority interest		—			361			4			189
Equity in earnings of investees		450			—			700			—
Income (loss) from continuing operations		(12,125	)		1,961			(21,029	)		(5,803	)
Income tax benefit (expense)		(267	)		941			653			687
Net income (loss) from continuing operations		(12,392	)		2,902			(20,376	)		(5,116	)
Income (loss) from discontinued operations		(763	)		2,689			1,865			1,961
Income tax benefit (expense)		267			(941	)		(653	)		(687	)
Net income (loss) from discontinued operations		(496	)		1,748			1,212			1,274
Net income (loss)		(12,888	)		4,650			(19,164	)		(3,842	)
Preferred dividend requirement		(228	)		(53	)		(455	)		(105	)
Net income (loss) applicable to common shares	$	(13,166	)	$	4,597		$	(19,619	)	$	(3,947	)

TRANSCONTINENTAL REALTY INVESTORS. INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
(dollars in thousands, except share data)

	For the Three Months					For the Six Months
	Ended June 30,					Ended June 30,
	2007			2006		2007			2006
	(dollars in thousands)					(dollars in thousands)
Basic earnings per share:
Income (loss) from continuing operations	$	(1.60	)	$	0.36	$	(2.64	)	$	(0.66	)
Income (loss) from discontinued operations		(0.06	)		0.22		0.15			0.16
Net income (loss) applicable to common shares	$	(1.66	)	$	0.58	$	(2.49	)	$	(0.50	)
Diluted earnings per share:
Income (loss) from continuing operations	$	(1.60	)	$	0.35	$	(2.64	)	$	(0.66	)
Income (loss) from discontinued operations		(0.06	)		0.21		0.15			0.16
Net income (loss) applicable to common shares	$	(1.66	)	$	0.56	$	(2.49	)	$	(0.50	)
Weighted average common shares used in computing earnings per share:
Basic		7,877,365			7,900,869		7,888,008			7.900,869
Diluted		7,877,365			8.190.519		7,888,008			7,900,869