American Realty Investors, Inc. reports Earnings for Quarter Ended September 30, 2022

Rhea-AI Summary

American Realty Investors, Inc. reports net income of $302.3 million for Q3 2022, compared to $19.4 million in Q3 2021. Rental revenues decreased to $7.6 million from $9.6 million in Q3 2021.

Positive

• American Realty Investors, Inc. reported a significant increase in net income, with a growth of $282.9 million compared to the same period last year.
• The company collected approximately 99% of its rents for Q3 2022, indicating strong rental payment performance.
• The sale of 45 properties for $1.8 billion resulted in a gain on sale of $738.7 million to the joint venture, providing a boost to the company's financials.

Negative

• Rental revenues decreased by $2.1 million in Q3 2022 compared to Q3 2021, primarily due to property sales.
• Net operating loss decreased by $2.0 million in Q3 2022 compared to Q3 2021, mainly due to a reduction in legal costs offset by the sale of a property.

DALLAS--(BUSINESS WIRE)-- American Realty Investors, Inc. (NYSE:ARL) is reporting its results of operations for the quarter ended September 30, 2022. For the three months ended September 30, 2022, we reported net income attributable to the Company of $302.3 million or $18.72 per diluted share, compared to net income of $19.4 million or $1.20 per diluted share for the same period in 2021.

Financial Highlights

• We collected approximately 99% of our rents for the three months ended September 30, 2022, comprised of approximately 98% from multifamily tenants and approximately 99% from office tenants.
• Total stabilized occupancy was 94% at September 30, 2022, which includes 96% at our multifamily properties and 68% at our commercial properties.
• On September 16, 2022, VAA completed the sale of 45 properties for $1.8 billion, resulting in gain on sale of $738.7 million to the joint venture. In connection with sale, we received an initial distribution of $182.8 million from VAA. We plan to use our share of the proceeds to invest in income-producing real estate, pay down debt and for general corporate purposes.
• In connection with the VAA sale, we sold Sugar Mill Phase III, a 72 unit multifamily property in Baton Rouge, Louisiana for $11.8 million, resulting in gain on sale of $1.9 million. We used the proceeds to pay off the $9.6 million mortgage note payable on the property and for general corporate purposes.

Financial Results

Rental revenues decreased $2.1 million from $9.6 million for the three months ended September 30, 2021 to $7.6 million for the three months ended September 30, 2022. The decrease in rental revenue is primarily due to the sale of 600 Las Colinas in 2021 and the sale of Toulon in the first quarter of 2022.

Net operating loss decreased $2.0 million from $5.2 million for three months ended September 30, 2021 to $3.2 million for the three months ended September 30, 2022. The decrease in net operating loss is primarily due to a reduction of legal costs related to the Clapper litigation and arbitration settlement in 2021 offset in part by net operating profit from the sale of 600 Las Colinas in 2021.

Net income attributable to the Company increased $282.9 million from $19.4 million for the three months ended September 30, 2021 to $302.3 million for the three months ended September 30, 2022. The increase in net income is primarily attributed to our share of the gain on the sale of the 45 properties by VAA, offset in part by the tax expense from the sale.

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)
(Unaudited)
		Three Months Ended September 30,								Nine Months Ended September 30,
		2022				2021				2022				2021
Revenues:
Rental revenues		$	7,570			$	9,628			$	22,310			$	30,183
Other income			749				866				1,925				3,242
Total revenue			8,319				10,494				24,235				33,425
Expenses:
Property operating expenses			4,701				5,610				12,541				16,500
Depreciation and amortization			2,193				2,935				6,840				9,473
General and administrative			3,042				3,698				7,956				12,799
Advisory fee to related party			1,571				3,419				7,614				11,594
Total operating expenses			11,507				15,662				34,951				50,366
Net operating loss			(3,188	)			(5,168	)			(10,716	)			(16,941	)
Interest Income			9,482				6,128				25,683				17,388
Interest expense			(6,491	)			(7,057	)			(19,047	)			(22,476	)
Gain (loss) on foreign currency transactions			1,533				(1,639	)			19,437				1,185
Loss on extinguishment of debt			(1,166	)			(1,451	)			(2,805	)			(1,451	)
Equity in income from unconsolidated joint ventures			464,143				3,543				471,385				11,451
Gain on sale or write-down of assets, net			1,539				31,312				16,580				24,265
Income tax provision			(81,548	)			(605	)			(81,616	)			1,196
Net income			384,304				25,063				418,901				14,617
Net income attributable to noncontrolling interest			(82,015	)			(5,652	)			(88,986	)			(4,466	)
Net income attributable to the Company		$	302,289			$	19,411			$	329,915			$	10,151
Earnings per share
Basic and diluted		$	18.72			$	1.20			$	20.43			$	0.63
Weighted average common shares used in computing earnings per share
Basic and diluted			16,512,043				16,152,043				16,152,043				16,152,043

 

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American Realty Investors, Inc.

Investor Relations

Erik Johnson (469) 522-4200

Investor.relations@americanrealtyinvest.com

Source: American Realty Investors, Inc.

FAQ

What was American Realty Investors' net income for Q3 2022?

American Realty Investors reported a net income of $302.3 million for Q3 2022.

How much did rental revenues decrease in Q3 2022?

Rental revenues decreased by $2.1 million in Q3 2022 compared to the same period last year.

What percentage of rents did American Realty Investors collect for Q3 2022?

American Realty Investors collected approximately 99% of its rents for Q3 2022.

What was the gain on sale from the sale of 45 properties?

The sale of 45 properties resulted in a gain of $738.7 million to the joint venture.

What was the total stabilized occupancy for American Realty Investors at the end of Q3 2022?

The total stabilized occupancy for American Realty Investors was 94% at the end of Q3 2022.