Transcontinental Realty Investors, Inc. Reports Earnings for Quarter Ended March 31, 2024

Rhea-AI Summary

Transcontinental Realty Investors, Inc. (NYSE:TCI) reported net income of $2.5 million or $0.30 per diluted share for the quarter ended March 31, 2024, compared to $3.5 million or $0.41 per diluted share in 2023. Total occupancy was 79%, rental revenues increased to $11.3 million, and net operating loss decreased to $1.3 million. The company extended the maturity of its loan on Windmill Farms.

Positive

• Rental revenues increased to $11.3 million for the quarter ended March 31, 2024.

• Total occupancy was 79% at March 31, 2024, including 94% at multifamily properties.

• The company extended the maturity of its loan on Windmill Farms to February 28, 2026 at an interest rate of 7.50%.

Negative

• Net income attributable to the Company decreased by $1.0 million from the same period in 2023, primarily due to a decrease in interest income and gain in foreign currency transactions.

• Net operating loss decreased to $1.3 million for the quarter, resulting from a decrease in general and administrative expenses.

Insights

Financial Analyst

Transcontinental Realty Investors, Inc., a company specializing in the acquisition and management of properties, has shown a mixed financial performance in the recent quarter. Notably, the net income attributable to common shares has decreased by $1.0 million, falling from $3.5 million to $2.5 million year-over-year. This indicates a contraction in profitability, which may be a concern for investors eyeing steady growth.

Regarding revenue, a modest increase in rental revenues can be seen, driven primarily by multifamily properties. This sector holds promise, as high occupancy rates at multifamily properties could indicate a robust demand in residential real estate, even as the company's commercial holdings lag behind. Occupancy levels are particularly telling; while the 94% occupancy in multifamily is commendable, the 49% in commercial properties may signal an area in need of strategic focus or restructuring.

One critical element is the decrease in net operating loss, which improved by $1.2 million. This improvement, attributed mainly to reduced general and administrative expenses, signifies tighter control over operating expenditures. However, the decline in net income is concerning and could overshadow operational efficiencies gained.

Focusing on the debt structure, the extension of the loan maturity for Windmill Farms at a 7.50% interest rate seems to suggest a proactive management of the company's leverage. However, the interest rate itself merits attention as it could impinge on future cash flows, especially in a rising interest rate environment.

Real Estate Market Analyst

The dynamics within the real estate sectors are evident in Transcontinental Realty Investors' recent financials. The occupancy rates present a dichotomy between multifamily and commercial properties. The high occupancy in multifamily properties reflects a possibly resilient residential real estate market, which may continue to drive revenues in the face of economic shifts. On the flip side, the low occupancy rate in commercial real estate could be indicative of broader market challenges or sector-specific issues that need to be addressed to prevent further impact on the company's bottom line.

The lease-up of Landing on Bayou Cane contributing to the revenue uptick is a positive development. It highlights the company's ability to attract tenants and generate income amidst a competitive landscape. However, investors should monitor such developments in the context of overall market trends, as shifts in work culture and retail habits profoundly affect the commercial real estate market.

DALLAS--(BUSINESS WIRE)-- Transcontinental Realty Investors, Inc. (NYSE:TCI) is reporting its results of operations for the three months ended March 31, 2024. For the three months ended March 31, 2024, we reported net income attributable to common shares of $2.5 million or $0.30 per diluted share, compared to a net income of $3.5 million or $0.41 per diluted share for the same period in 2023.

Financial Highlights

• Total occupancy was 79% at March 31, 2024, which includes 94% at our multifamily properties and 49% at our commercial properties.
• On February 8, 2024, we extended the maturity of our loan on Windmill Farms to February 28, 2026 at an interest rate of 7.50%.

Financial Results

Rental revenues increased $0.3 million from $11.0 million for the three months ended March 31, 2023 to $11.3 million for the three months ended March 31, 2024. The increase in rental revenue is primarily due to $0.7 million increase at our multifamily properties offset in part by a decrease of $0.4 million from the commercial properties. The increase in revenue from the multifamily properties is primarily due to the lease-up of Landing on Bayou Cane.

Net operating loss decreased $1.2 million from $2.6 million for three months ended March 31, 2023 to $1.3 million for the three months ended March 31, 2024. The decrease in net operating loss is primarily due to a decrease in general and administrative expenses associated with our bonds payable, which were repaid in 2023.

Net income attributable to the Company decreased $1.0 million from $3.5 million for the three months ended March 31, 2023 to $2.5 million for the three months ended March 31, 2024. The decrease in net income is primarily attributed to a decrease in interest income and gain in foreign currency transactions offset in part by a decrease in net operating loss and interest expense.

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)
(Unaudited)
		Three Months Ended March 31,
		2024				2023
Revenues:
Rental revenues		$	11,279			$	11,009
Other income			620				679
Total revenue			11,899				11,688
Expenses:
Property operating expenses			6,634				6,106
Depreciation and amortization			3,172				3,102
General and administrative			1,261				2,883
Advisory fee to related party			2,165				2,170
Total operating expenses			13,232				14,261
Net operating loss			(1,333	)			(2,573	)
Interest income			6,127				8,828
Interest expense			(1,869	)			(3,087	)
Gain on foreign currency transactions			-				971
Equity in income from unconsolidated joint venture			435				688
Income tax provision			(603	)			(1,112	)
Net income			2,757				3,715
Net income attributable to noncontrolling interest			(208	)			(198	)
Net income attributable to the Company		$	2,549			$	3,517
Earnings per share
Basic and diluted		$	0.30			$	0.41
Weighted average common shares used in computing earnings per share
Basic and diluted			8,639,316				8,639,316

 

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Transcontinental Realty Investors, Inc.

Investor Relations

Erik Johnson (469) 522-4200

investor.relations@transconrealty-invest.com

Source: Transcontinental Realty Investors, Inc.

FAQ

What is Transcontinental Realty Investors, Inc. (TCI) net income for the quarter ended March 31, 2024?

Transcontinental Realty Investors, Inc. reported a net income of $2.5 million for the quarter ended March 31, 2024.

What was the total occupancy rate for Transcontinental Realty Investors, Inc. at March 31, 2024?

The total occupancy rate was 79% at March 31, 2024, including 94% at multifamily properties.

What were the financial results for Transcontinental Realty Investors, Inc. in the quarter ended March 31, 2024?

For the quarter ended March 31, 2024, rental revenues increased to $11.3 million, and net operating loss decreased to $1.3 million.