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): May 15, 2009

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 May 15, 2009, Transcontinental Realty Investors, Inc. (“TCI” or the “Company”) announced its operational results for the quarter ended March 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 May 15, 2009.

* 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: May 18, 2009.	TRANSCONTINENTAL REALTY INVESTORS, INC.
	By:	/s/ Gene S. Bertcher
		Gene S. Bertcher, Executive Vice
		President and Chief Accounting 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 First Quarter 2009 Results

DALLAS (May 15, 2009) — Transcontinental Realty Investors, Inc. (NYSE: TCI), a Dallas-based real estate investment company, today reported results of operations for the first quarter ended March 31, 2009. TCI announced today that the company reported a net loss applicable to common shares of ($ 11.0 million) or ($1.37) per diluted earnings per share which includes a gain on sale of discontinued operations of $0.5 million, as compared to a net income of $67.1 million or $8.07 per diluted earnings per share which includes a gain on sale of discontinued operations of $98.1 million for the same period ended 2008.

Results of operations for the three months ended March 31, 2009, as compared to the same period ended 2008.

Rental and other property revenues increased by $4.7 million as compared to the prior period which by segment is an increase in the apartment portfolio of $2.7 million, the commercial portfolio of $2.5 million, offset by a decrease in the land and other portfolio of $0.5 million.

Property operating expenses increased by $2.1 million as compared to the prior period which by segment is an increase in the apartment portfolio of $3.9 million and an increase in the other portfolio of $0.1 million, offset by decreases in the commercial and land portfolios of $0.8 million and $1.1 million, respectively.

Depreciation and amortization increased by $1.4 million as compared to the prior period which by segment is an increase in the apartment portfolio of $1.0 million, and an increase in the commercial portfolio of $0.4 million.

Other income increased by $3.6 million as compared to the prior period. The increase is due to $2.3 million for gains on the disposition of our investment in the Korean REIT. In addition, we received $0.8 million in litigation settlements and $0.5 million in other non-recurring income.

Mortgage and loan interest expense decreased by $1.1 million as compared to the prior period which by segment is a decrease in the apartment portfolio of $0.4 million, a decrease in the commercial portfolio of $0.4 million, and a decrease in the other portfolio of $0.3 million.

Earnings from unconsolidated subsidiaries and investees decreased by $5.1 million. There were no material amounts of equity pickup from investees in the current period.

Provision for allowance on notes receivables and impairment decreased by $6.6 million. The majority of the prior period amount was due to setting up an allowance for various investments within our portfolio.

Gain on land sales decreased by $1.5 million as compared to the prior period. The decrease was due to recording a loss of $0.3 million on the sale of 0.3 acres of land known as West End land in the current period. In the prior quarter, we sold 14 acres of land for a gain of $1.3 million.

The 2009 discontinued operations consist of the Cullman Shopping Center that was sold subsequent to the quarter ended March 31, 2009. In addition, we recognized the deferred gain on the sale of the Hartford building sold in 2002. Discontinued operations for 2008 relates to 26 income producing properties of which 25 were sold in 2008.

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
(unaudited)

	For the Three Months Ended
	March 31,
	2009			2008
	(dollars in thousands, except
	share and per share amounts)
Revenues:
Rental and other property revenues	$	37,371		$	32,647
Expenses:
Property operating expenses		24,072			21,938
Depreciation and amortization		7,308			5,932
General and administrative		1,563			2,403
Advisory fee to affiliate		2,857			2,997
Total operating expenses		35,800			33,270
Operating income (loss)		1,571			(623	)
Other income (expense):
Interest income		636			763
Other income		3,906			302
Mortgage and loan interest		(16,629	)		(17,734	)
Earnings from unconsolidated subsidiaries and investees		—			5,112
Provision for allowance on notes receivable and impairment		(379	)		(7,000	)
Total other expenses		(12,466	)		(18,557	)
Loss before gain on land sales, non-controlling interest, and tax		(10,895	)		(19,180	)
Gain (loss) on land sales		(251	)		1,275
Loss from continuing operations before tax		(11,146	)		(17,905	)
Income tax benefit (expense)		(110	)		29,836
Net income (loss) from continuing operations		(11,256	)		11,931
Discontinued operations:
Income (loss) from discontinued operations		65			(12,813	)
Gain on sale of real estate from discontinued operations		532			98,059
Income tax expense from discontinued operations		(209	)		(29,836	)
Net income (loss)		(10,868	)		67,341
Less: net income attributable to non-controlling interest		109			—
Net income (loss) attributable to Transcontinental Realty Investors, Inc.		(10,759	)		67,341
Preferred dividend requirement		(250	)		(240	)
Net income (loss) applicable to common shares	$	(11,009	)	$	67,101
Earnings per share — basic
Income (loss) from continuing operations	$	(1.42	)	$	1.45
Discontinued operations		0.05			6.86
Net income (loss) applicable to common shares	$	(1.37	)	$	8.31
Earnings per share — diluted
Income (loss) from continuing operations	$	(1.42	)	$	1.41
Discontinued operations		0.05			6.66
Net income (loss) applicable to common shares	$	(1.37	)	$	8.07
Weighted average common share used in computing earnings per share		8,113,669			8,075,453
Weighted average common share used in computing diluted earnings per share		8,113,669			8,311,693
Amounts attributable to Transcontinental Realty Investors, Inc.
Income (loss) from continuing operations	$	(11,147	)	$	11,931
Income from discontinued operations		388			55,410
Net income (loss)	$	(10,759	)	$	67,341

TRANSCONTINENTAL REALTY INVESTORS, INC.
CONSOLIDATED BALANCE SHEETS
(unaudited)

	March 31,			December 31,
	2009			2008
	(dollars in thousands, except share and
	par value amounts)
Assets
Real estate, at cost	$	1,531,183		$	1,526,016
Real estate held for sale, at cost net of depreciation		4,291			8,018
Real estate subject to sales contracts, at cost net of depreciation		60,367			60,807
Less accumulated depreciation		(120,553	)		(114,050	)
Total real estate		1,475,288			1,480,791
Notes and interest receivable , Performing		34,896			42,413
Less allowance for estimated losses		(988	)		(3,293	)
Total notes and interest receivable		33,908			39,120
Cash and cash equivalents		2,150			5,983
Investments in securities		—			2,775
Investments in unconsolidated subsidiaries and investees		23,446			23,365
Other assets		81,684			88,033
Total assets	$	1,616,476		$	1,640,067
Liabilities and Shareholders’ Equity
Liabilities:
Notes and interest payable	$	1,106,715		$	1,100,852
Notes related to assets held-for-sale		993			4,191
Notes related to subject to sales contracts		62,287			62,972
Accounts payable and other liabilities		135,535			147,356
		1,305,530			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		262,983			263,290
Retained earnings		34,221			44,980
Accumulated other comprehensive income		—			2,575
Total Transcontinental Realty Investors, Inc. shareholders’ equity		297,286			310,927
Non-controlling interest		13,660			13,769
Total equity		310,946			324,696
Total liabilities and equity	$	1,616,476		$	1,640,067