American Realty Investors, Inc. reports Earnings for Q4 2021

Rhea-AI Summary

American Realty Investors, Inc. (NYSE: ARL) reported a net loss of $6.8 million, or $0.42 per diluted share, for the quarter ended December 31, 2021, a notable decline from a net income of $0.4 million in the same quarter of 2020. Rental revenues fell sharply by $9.8 million to $7.6 million, largely due to a prior lease termination payment and decreased occupancy in commercial properties. The total occupancy rate was 91%, with multifamily occupancy at 95% and commercial at 70%. Notably, the company executed a Major Decision for property sales and sold a multifamily property for $26.8 million.

Positive

• None.

Negative

• Net loss increased by $7.2 million compared to the same quarter of 2020.
• Rental revenues decreased by $9.8 million, dropping from $17.4 million.
• Net operating loss grew from $3.9 million profit to $3.7 million loss.
• Occupancy in commercial properties dropped to 70%.
• Increased legal fees contributed to higher net operating losses.

DALLAS--(BUSINESS WIRE)-- American Realty Investors, Inc. (NYSE:ARL) is reporting its results of operations for the quarter ended December 31, 2021. For the three months ended December 31, 2021, we reported net loss attributable to common shares of $6.8 million or $0.42 per diluted share, compared to net income attributable to common shares of $0.4 million or $0.03 per diluted share for the same period in 2020.

Financial Highlights

• We collected approximately 97% of our rents for the three months ended December 31, 2021, comprised of approximately 96% from multifamily tenants and approximately 99% from office tenants.

• Total occupancy was 91% at December 31, 2021, which includes 95% at our multifamily properties and 70% at our commercial properties.

• On November 17, 2021, we entered into a Major Decision with Macquarie to engage a broker and initiate a sale of all the properties held by the VAA joint venture. In connection with the sale, VAA will distribute seven of its existing properties to us, and we in turn, will contribute one of our properties into the VAA Portfolio. The remaining forty-five properties will be sold to third party. The Major Decision agreement will expire on August 1, 2022, if the VAA Portfolio has not been sold.

• On January 14, 2022, we sold Toulon, a 240 unit multifamily property in Gautier, Mississippi, for $26.8 million. The proceeds were used to pay off the mortgage note payable on the property and for general corporate purposes.

• On March 3, 2022, we extended our $39.0 million loan on Stanford Center to February 26, 2023.

Financial Results

Rental revenues decreased $9.8 million from $17.4 million for the three months ended December 31, 2020 to $7.6 million for the three months ended December 31, 2021. The decrease in rental revenue is primarily due to the receipt of a $5.9 million lease termination payment at Browning Place in 2020 and a decline in occupancy in our commercial properties.

Net operating loss increased $7.6 million from net operating income of $3.9 million for three months ended December 31, 2020 to net operating loss of $3.7 million for the three months ended December 31, 2021. The increase in net operating loss is primarily due to the lease termination payment at Browning Place in 2020 and an increase in legal fees in 2021.

Net loss attributable to common shares increased $7.2 million from net income of $0.4 million for the three months ended December 31, 2020 to net loss of $6.8 million for the three months ended December 31, 2021. The increase in net loss is primarily attributed to the lease termination payment at Browning Place in 2020, an increase in legal fees in 2021 and a decrease in gain on sale of assets, offset in part by a decrease in loss on foreign currency transactions in 2021.

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. (NYSE: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)
		Three Months Ended December 31,								Twelve Months Ended December 31,
		2021				2020				2021				2020
Revenues:
Rental revenues		$	7,625			$	17,448			$	37,808			$	51,909
Other incomes			989				1,770				4,231				7,117
Total revenue			8,614				19,218				42,039				59,026
Expenses:
Property operating expenses			4,360				5,853				20,860				24,360
Depreciation and amortization			2,397				4,417				11,870				14,755
General and administrative			3,143				2,656				15,942				10,614
Advisory fee to related party			2,391				2,354				13,985				9,409
Total operating expenses			12,291				15,280				62,657				59,138
Net operating (loss) income			(3,677	)			3,938				(20,618	)			(112	)
Interest Income			6,033				6,639				23,421				23,098
Interest expense			(6,604	)			(8,709	)			(29,080	)			(35,004	)
Loss on foreign currency transactions			(7,360	)			(14,152	)			(6,175	)			(13,378	)
Loss on extinguishment of debt			-				-				(1,451	)			-
Equity in income (loss) from unconsolidated joint venture			3,183				263				14,634				(379	)
Gain on sale or write-down of assets, net			382				12,093				24,647				36,895
Income tax provision			(129	)			493				1,067				147
Net (loss) income			(8,172	)			565				6,445				11,267
Net income attributable to noncontrolling interest			1,368				(162	)			(3,098	)			(2,237	)
Net (loss) income attributable to common shares		$	(6,804	)		$	403			$	3,347			$	9,030
Earnings per share - basic
Basic and diluted		$	(0.42	)		$	0.03			$	0.21			$	0.56
Weighted average common shares used in computing earnings per share
Basic and diluted			16,152,043				16,045,796				16,152,043				16,045,796

 

View source version on businesswire.com: https://www.businesswire.com/news/home/20220329005939/en/

American Realty Investors, Inc.

Investor Relations

Erik Johnson (800) 400-6407

Investor.relations@americanrealtyinvest.com

Source: American Realty Investors, Inc.

FAQ

What were the financial results of American Realty Investors for Q4 2021?

American Realty Investors reported a net loss of $6.8 million for Q4 2021, a significant drop from $0.4 million net income in Q4 2020.

How did rental revenues change for American Realty Investors in Q4 2021?

Rental revenues decreased by $9.8 million in Q4 2021, dropping to $7.6 million from $17.4 million in the same quarter of 2020.

What is the occupancy rate for American Realty Investors' properties as of December 31, 2021?

The total occupancy rate was 91% as of December 31, 2021, with multifamily properties at 95% and commercial properties at 70%.

What major property decision did American Realty Investors make recently?

On November 17, 2021, American Realty Investors entered into a Major Decision with Macquarie to initiate the sale of properties held by the VAA joint venture.

What property did American Realty Investors sell in early 2022?

On January 14, 2022, American Realty Investors sold a 240 unit multifamily property named Toulon for $26.8 million.