Transcontinental Realty Investors, Inc. Reports Earnings for Q4 2021

Rhea-AI Summary

Transcontinental Realty Investors (NYSE:TCI) reported a net loss of $8.7 million ($1.01 per diluted share) for Q4 2021, a significant increase from a net loss of $1.5 million ($0.17 per diluted share) in Q4 2020. Rental revenues dropped by $9.8 million to $7.6 million, primarily due to a prior lease termination payment and declining commercial occupancy rates. Net operating loss also increased to $4.2 million from a net operating income of $4.0 million in the previous year. As of December 31, 2021, total occupancy was reported at 91%, with 95% at multifamily properties and 70% at commercial properties.

Positive

• None.

Negative

• Net loss attributable to common shares increased $7.3 million compared to the same quarter in 2020.
• Rental revenues decreased by $9.8 million year-over-year.
• Net operating loss of $4.2 million compared to net operating income of $4.0 million in Q4 2020.

DALLAS--(BUSINESS WIRE)-- Transcontinental Realty Investors, Inc. (NYSE:TCI) 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 $8.7 million or $1.01 per diluted share, compared to $1.5 million or $0.17 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 receipts 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 $8.2 million from net operating income of $4.0 million for three months ended December 31, 2020 to net operating loss of $4.2 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 $7.3 million from $1.5 million for the three months ended December 31, 2020 to $8.7 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 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, 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.

TRANSCONTINENTAL 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					492				1,228				2,966				5,113
	Total revenue					8,117				18,676				40,774				57,022
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					3,876				2,224				12,425				9,287
	Advisory fee to related party					1,638				2,165				11,782				8,648
	Total operating expenses					12,271				14,659				56,937				57,050
	Net operating (loss) income					(4,154	)			4,017				(16,163	)			(28	)
Interest Income						5,054				5,558				19,572				18,660
Interest expense						(5,504	)			(7,375	)			(24,600	)			(29,374	)
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 ventures						2,996				221				14,531				(519	)
Gain on sale or write-down of assets, net						382				10,305				23,352				32,107
Income tax provision						(26	)			342				1,011				(4	)
Net (loss) income						(8,612	)			(1,084	)			10,077				7,464
Net income attributable to noncontrolling interest						(135	)			(395	)			(679	)			(795	)
Net (loss) income attributable to common shares					$	(8,747	)		$	(1,479	)		$	9,398			$	6,669
Earnings per share - basic
	Basic and diluted				$	(1.01	)		$	(0.17	)		$	1.09			$	0.77
Weighted average common shares used in computing earnings per share
	Basic and diluted					8,639,316				8,639,316				8,639,316				8,639,316

 

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Transcontinental Realty Investors, Inc.

Investor Relations

Erik Johnson (800) 400-6407

Investor.relations@transconrealty-invest.com

Source: Transcontinental Realty Investors, Inc.

FAQ

What was Transcontinental Realty Investors' net loss for Q4 2021?

Transcontinental Realty Investors reported a net loss of $8.7 million for Q4 2021.

How much did rental revenues decline in Q4 2021 compared to Q4 2020?

Rental revenues decreased by $9.8 million, from $17.4 million in Q4 2020 to $7.6 million in Q4 2021.

What was the occupancy rate for Transcontinental Realty Investors as of December 31, 2021?

Total occupancy was reported at 91%, with 95% occupancy at multifamily properties and 70% at commercial properties.

What caused the increase in net operating loss for Transcontinental Realty Investors in Q4 2021?

The increase in net operating loss was primarily due to the lease termination payment at Browning Place in 2020 and increased legal fees in 2021.