American Realty Investors (ARL) 10-Q 13 Aug 15 2015 Q2 Quarterly report Financial data

Document and Entity Information

Document and Entity Information - shares	6 Months Ended
	Jun. 30, 2015	Aug. 05, 2015
Document And Entity Information
Entity Registrant Name	AMERICAN REALTY INVESTORS INC
Entity Central Index Key	1,102,238
Document Type	10-Q
Document Period End Date	Jun. 30, 2015
Amendment Flag	false
Current Fiscal Year End Date	--12-31
Is Entity a Well-known Seasoned Issuer?	No
Is Entity a Voluntary Filer?	No
Is Entity's Reporting Status Current?	Yes
Entity Filer Category	Smaller Reporting Company
Entity Common Stock, Shares Outstanding		15,514,360
Document Fiscal Period Focus	Q2
Document Fiscal Year Focus	2,015

CONSOLIDATED BALANCE SHEETS (Un

CONSOLIDATED BALANCE SHEETS (Unaudited) - USD ($) $ in Thousands	Jun. 30, 2015	Dec. 31, 2014
Assets
Real estate, at cost	$ 921,843	$ 810,214
Real estate subject to sales contracts at cost, net of depreciation ($2,475 for 2015 and $2,300 for 2014)	19,032	19,026
Less accumulated depreciation	(138,961)	(129,477)
Total real estate	801,914	699,763
Notes and interest receivable
Performing (including $130,587 in 2015 and $139,466 in 2014 from related parties)	140,483	149,484
Non-performing	3,181	3,161
Less allowance for doubtful accounts (including $15,537 in 2015 and 2014 from related parties)	(18,279)	(18,279)
Total notes and interest receivable	125,385	134,366
Cash and cash equivalents	19,157	12,299
Restricted cash	52,183	49,266
Investments in unconsolidated joint ventures and investees	1,299	4,279
Receivable from related party	37,360	21,414
Other assets	39,320	44,111
Total assets	1,076,618	965,498
Liabilities:
Notes and interest payable	755,508	638,891
Notes related to assets held for sale	910	1,552
Notes related to subject to sales contracts	18,251	18,616
Deferred revenue (including $72,564 in 2015 and 2014 from sales to related parties)	72,633	74,409
Accounts payable and other liabilities (including $6,732 in 2015 and $11,024 in 2014 to related parties)	43,916	52,442
Total Liabilities	891,218	785,910
Shareholders' equity:
Preferred stock, Series A: $2.00 par value, authorized 15,000,000 shares, issued and outstanding 2,000,614 and 2,461,252 shares in 2015 and 2014 (liquidation preference $10 per share), including 900,000 shares in 2015 and 2014 held by ARL or subsidiaries.	2,205	3,126
Common stock, $0.01 par value, authorized 100,000,000 shares; issued 15,930,145 and 14,443,404 shares; outstanding 15,514,360 and 14,027,619 shares in 2015 and 2014, respectively; including 140,000 shares held by TCI (consolidated) in 2015 and 2014.	156	141
Treasury stock at cost; 415,785 shares	(6,395)	(6,395)
Paid-in capital	110,546	108,378
Retained earnings	23,597	19,090
Total American Realty Investors, Inc. shareholders' equity	130,109	124,340
Non-controlling interest	55,291	55,248
Total shareholders' equity	185,400	179,588
Total liabilities and shareholders' equity	$ 1,076,618	$ 965,498

CONSOLIDATED BALANCE SHEETS (Pa

CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) $ in Thousands	Jun. 30, 2015	Dec. 31, 2014
Performing	$ 140,483	$ 149,484
Allowance for doubtful accounts	18,279	18,279
Deferred revenue from sales to related parties	$ 72,633	$ 74,409
Series A Preferred stock, par value	$ 2	$ 2
Series A Preferred stock, shares authorized	15,000,000	15,000,000
Series A Preferred stock, shares issued	2,000,614	2,461,252
Series A Preferred stock, shares outstanding	2,000,614	2,461,252
Series A Preferred stock, liquidation preference per share	$ 10	$ 10
Series A Preferred stock, liquidation preference shares	900,000	900,000
Common stock, par value	$ 0.01	$ 0.01
Common stock, shares authorized	100,000,000	100,000,000
Common stock, shares issued	15,930,145	14,443,404
Common stock, shares outstanding	15,514,360	14,027,619
Shares held by TCI	140,000	140,000
Treasury stock, shares	415,785	415,785
Related Party [Member]
Depreciation of Real Estate subject to sales contracts at cost	$ 2,475	$ 2,300
Performing	130,587	139,466
Allowance for doubtful accounts	15,537	15,537
Deferred revenue from sales to related parties	72,564	72,564
Accounts payable and other liabilities to related parties	$ 6,732	$ 11,024

CONSOLIDATED STATEMENTS OF OPER

CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2015	Jun. 30, 2014	Jun. 30, 2015	Jun. 30, 2014
Revenues:
Rental and other property revenues (including $173 and $175 for the three months and $343 and $350 for the six months ended 2015 and 2014, respectively, from related parties)	$ 24,241	$ 19,500	$ 47,397	$ 38,659
Expenses:
Property operating expenses (including $187 and $158 for the three months and $349 and $313 for the six months ended 2015 and 2014, respectively, from related parties)	11,301	9,983	22,969	19,911
Depreciation and amortization	5,137	4,323	9,841	8,636
General and administrative (including $912 and $842 for the three months and $1,920 and $1,760 for the six months ended 2015 and 2014, respectively, from related parties)	1,596	3,195	3,798	5,179
Net income fee to related party	45	210	335	700
Advisory fee to related party	2,309	2,202	4,601	4,445
Total operating expenses	20,388	19,913	41,544	38,871
Net operating income (loss)	3,853	(413)	5,853	(212)
Other income (expenses):
Interest income (including $4,246 and $5,959 for the three months and $9,113 and $9,994 for the six months ended 2015 and 2014, respectively, from related parties)	4,535	6,041	9,772	10,158
Other income	14	232	4,111	406
Mortgage and loan interest (including $920 and $933 for the three months and $1,815 and $1,730 for the six ended 2015 and 2014, respectively, from related parties)	(9,794)	(9,693)	(21,439)	(20,332)
Earnings from unconsolidated subsidiaries and investees	151	(124)	196	(54)
Litigation settlement (expense)	(45)	(86)	(117)	3,752
Total other expenses	(5,139)	(3,630)	(7,477)	(6,070)
Loss before gain on land sales, non-controlling interest, and taxes	(1,286)	(4,043)	(1,624)	(6,282)
Gain (loss) on land sales	3,027	(159)	5,903	594
Net income (loss) from continuing operations before taxes	1,741	(4,202)	4,279	(5,688)
Income tax benefit (expense)	(12)	2,195	91	4,244
Net income (loss) from continuing operations	1,729	(2,007)	4,370	(1,444)
Discontinued operations:
Net income (loss) from discontinued operations	$ (34)	(732)	$ 260	(931)
Gain on sale of real estate from discontinued operations		7,003		13,057
Income tax benefit (expense) from discontinued operations	$ 12	(2,195)	$ (91)	(4,244)
Net income (loss) from discontinued operations	(22)	4,076	169	7,882
Net income	1,707	2,069	4,539	6,438
Net (income) loss attributable to non-controlling interest	(540)	(551)	(32)	(1,370)
Net income attributable to American Realty Investors, Inc.	1,167	1,518	4,507	5,068
Preferred dividend requirement	(275)	(613)	(665)	(1,226)
Net income applicable to common shares	$ 892	$ 905	$ 3,842	$ 3,842
Earnings per share - basic
Net income (loss) from continuing operations	$ 0.06	$ (0.28)	$ 0.25	$ (0.35)
Net income from discontinued operations		0.35	0.01	0.68
Net income applicable to common shares	$ 0.06	0.07	0.26	0.33
Earnings per share - diluted
Net income (loss) from continuing operations	$ 0.05	(0.28)	0.21	(0.35)
Net income (loss) from discontinued operations		0.35	0.01	0.68
Net income applicable to common shares	$ 0.05	$ 0.07	$ 0.22	$ 0.33
Weighted average common shares used in computing earnings per share	15,367,320	11,525,389	14,701,170	11,525,389
Weighted average common shares used in computing diluted earnings per share	17,844,339	11,525,389	17,178,190	11,525,389
Amounts attributable to American Realty Investors, Inc.
Net income (loss) from continuing operations	$ 1,189	$ (2,558)	$ 4,338	$ (2,814)
Net income (loss) from discontinued operations	(22)	4,076	169	7,882
Net income applicable to American Realty Investors, Inc.	$ 1,167	$ 1,518	$ 4,507	$ 5,068

CONSOLIDATED STATEMENTS OF OPE5

CONSOLIDATED STATEMENTS OF OPERATIONS (Parenthetical) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2015	Jun. 30, 2014	Jun. 30, 2015	Jun. 30, 2014
Rental and other property revenues	$ 24,241	$ 19,500	$ 47,397	$ 38,659
Property operating expenses	11,301	9,983	22,969	19,911
General and administrative	1,596	3,195	3,798	5,179
Mortgage and loan interest	(9,794)	(9,693)	(21,439)	(20,332)
Related Party [Member]
Rental and other property revenues	173	175	343	350
Property operating expenses	187	158	349	313
General and administrative	912	842	1,920	1,760
Interest income	4,246	5,959	9,113	9,994
Mortgage and loan interest	$ 920	$ 933	$ 1,815	$ 1,730

CONSOLIDATED STATEMENT OF SHARE

CONSOLIDATED STATEMENT OF SHAREHOLDERS' EQUITY (unaudited) - 6 months ended Jun. 30, 2015 - USD ($) $ in Thousands	Comprehensive Income (Loss) [Member]	Preferred Stock [Member]	Common Stock [Member]	Treasury Stock [Member]	Paid-In Capital [Member]	Retained Earnings [Member]	Non-controlling Interest [Member]	Total
Balance, at beginning at Dec. 31, 2014	$ (53,040)	$ 3,126	$ 141	$ (6,395)	$ 108,378	$ 19,090	$ 55,248	$ 179,588
Balance, at beginning (in shares) at Dec. 31, 2014			14,443,404
Net income (loss)	$ 4,539					$ 4,507	32	4,539
Contributions from non-controlling interests							$ 11	11
Assumption of non-controlling interests					$ (336)			(336)
Conversion of preferred stock into common stock		$ (921)	$ 15		3,169			2,263
Conversion of preferred stock into common stock (in shares)			1,070,956
Series A preferred stock dividend ($1.00 per share)					(665)			(665)
Balance, at the end at Jun. 30, 2015	$ (48,501)	$ 2,205	$ 156	$ (6,395)	$ 110,546	$ 23,597	$ 55,291	$ 185,400
Balance, at the end (in shares) at Jun. 30, 2015			15,514,360

CONSOLIDATED STATEMENT OF SHAR7

CONSOLIDATED STATEMENT OF SHAREHOLDERS' EQUITY (Parenthetical)	6 Months Ended
	Jun. 30, 2015$ / shares
Statement of Stockholders' Equity [Abstract]
Series A preferred stock dividend (in dolllars per share)	$ 1

CONSOLIDATED STATEMENTS OF COMP

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (unaudited) - USD ($) $ in Thousands	6 Months Ended
	Jun. 30, 2015	Jun. 30, 2014
Consolidated Statements Of Comprehensive Income
Net income	$ 4,539	$ 6,438
Total comprehensive income	4,539	6,438
Comprehensive (income) loss attributable to non-controlling interest	(32)	(1,370)
Comprehensive income attributable to American Realty Investors, Inc.	$ 4,507	$ 5,068

CONSOLIDATED STATEMENTS OF CASH

CONSOLIDATED STATEMENTS OF CASH FLOWS (unaudited) - USD ($) $ in Thousands	6 Months Ended
	Jun. 30, 2015	Jun. 30, 2014
Cash Flow From Operating Activities:
Net income	$ 4,539	$ 6,438
Adjustments to reconcile net income applicable to common shares to net cash flow from operating activities:
Gain on sale of land	$ (5,903)	(594)
Gain on sale of income-producing properties		(13,057)
Depreciation and amortization	$ 9,841	9,146
Amortization of deferred borrowing costs	969	1,561
Earnings from unconsolidated subsidiaries and investees	(196)	54
Decrease (increase) in assets:
Accrued interest receivable	238	7,249
Other assets	2,647	809
Prepaid expense	(8,663)	(1,214)
Escrow	(3,742)	8,320
Earnest money	(1,395)	335
Rent receivables	(935)	(323)
Related party receivables	(15,946)	(12,008)
Increase (decrease) in liabilities:
Accrued interest payable	550	36
Other liabilities	(8,569)	(12,444)
Net cash used in operating activities	(26,565)	$ (5,692)
Cash Flow From Investing Activities:
Proceeds from notes receivable	16,398
Origination or advances of notes receivable	$ (7,655)	$ (8,385)
Acquisition of land held for development		$ (3,425)
Acquisition of income producing properties	$ (105,729)
Proceeds from sale of income-producing properties		$ 39,271
Proceeds from sale of land	$ 9,675	2,221
Investment in unconsolidated real estate entities	3,176	(98)
Improvement of land held for development	(1,469)	(181)
Improvement of income-producing properties	(6,542)	(3,137)
Sale of non-controlling interest	(336)	(83)
Construction and development of new properties	(3,176)	(620)
Net cash provided by (used in) investing activities	(95,658)	25,563
Cash Flow From Financing Activities:
Proceeds from notes payable	203,270	64,739
Recurring amortization of principal on notes payable	(17,316)	$ (10,530)
Debt assumption by buyer, part of seller proceeds	(17,016)
Payments on maturing notes payable	$ (33,860)	$ (69,884)
Stock-secured borrowings		(376)
Deferred financing costs	$ (7,651)	(5,213)
Contributions (distributions) to non-controlling interests	11	(97)
Preferred stock dividends - Series A	(665)	$ (1,226)
Conversion of preferred stock into common stock	2,308
Net cash provided by (used in) financing activities	129,081	$ (22,587)
Net increase (decrease) in cash and cash equivalents	6,858	(2,716)
Cash and cash equivalents, beginning of period	12,299	16,437
Cash and cash equivalents, end of period	19,157	13,721
Supplemental disclosures of cash flow information:
Cash paid for interest	$ 10,562	$ 10,598

ORGANIZATION AND BASIS OF PRESE

ORGANIZATION AND BASIS OF PRESENTATION	6 Months Ended
	Jun. 30, 2015
ORGANIZATION AND BASIS OF PRESENTATION
ORGANIZATION AND BASIS OF PRESENTATION	NOTE 1. ORGANIZATION AND BASIS OF PRESENTATION Organization As used herein, the terms “ARL”, “the Company”, “we”, “our” or “us” refer to American Realty Investors, Inc., a Nevada corporation, which was formed in November 1999. In August 2000, the Company acquired American Realty Trust, Inc. (“ART”), a Georgia corporation and National Realty, L.P. (“NRLP”), a Delaware partnership. The Company is headquartered in Dallas, Texas and its common stock trades on the New York Stock Exchange (“NYSE”) under the symbol (“ARL”). Approximately 86.7% of ARL’s stock is owned by related parties. Subsidiaries of ARL own approximately 80.9% of the outstanding shares of common stock of Transcontinental Realty Investors, Inc. (“TCI”), a Nevada corporation, which has its common stock listed and traded on the NYSE under the symbol (“TCI”). ARL is a “C” corporation for U.S. federal income tax purposes and has consolidated TCI’s accounts and operations since March 2003. During the third quarter 2012, May Realty Holdings, Inc. (“MRHI”) subsidiaries acquired more than 80% of ARL stock and as a result, ARL joined the MRHI consolidated group for federal income tax reporting. We have no employees. TCI, a subsidiary of ARL, owns approximately 81.1% of the common stock of Income Opportunity Realty Investors, Inc. (“IOT”). Effective July 17, 2009, IOT’s financial results were consolidated with those of ARL and TCI and their subsidiaries. Shares of IOT are traded on the New York Stock Exchange Euronext (“NYSE MKT”) under the symbol (“IOT”). ARL invests in real estate through direct ownership, leases and partnerships and also invests in mortgage loans on real estate. Pillar Income Asset Management, Inc. (“Pillar”) is the Company’s external Advisor and Cash Manager. Although the Board of Directors is directly responsible for managing the affairs of ARL, and for setting the policies which guide it, the day-to-day operations of ARL are performed by Pillar, as the contractual Advisor, under the supervision of the Board. Pillar’s duties include, but are not limited to: locating, evaluating and recommending real estate and real estate-related investment opportunities and arranging debt and equity financing for the Company with third party lenders and investors. Additionally, Pillar serves as a consultant to the Board with regard to their decisions in connection with ARL’s business plan and investment policy. Pillar also serves as an Advisor and Cash Manager to TCI and IOT. Regis Realty Prime, LLC (“Regis”) manages our commercial properties and provides brokerage services. ARL engages third-party companies to lease and manage its apartment properties. Properties We own or had interests in a total property portfolio of 53 income-producing properties as of June 30, 2015. The properties consisted of: • Ten commercial properties consisting of five office buildings, one industrial warehouse, three retail centers and a golf course, comprising in aggregate approximately 2.2 million rentable square feet; • 43 apartment communities totaling 7,085 units, excluding apartments being developed; and • 4,159 acres of developed and undeveloped land. We join with various third-party development companies to construct residential apartment communities. We are in the predevelopment process on several residential apartment communities that have not yet begun construction. At June 30, 2015, we had two apartment projects in development. The third-party developer typically holds a general partner as well as a majority limited partner interest in a limited partnership formed for the purpose of building a single property, while we generally take a minority limited partner interest in the limited partnership. We may contribute land to the partnership as part of our equity contribution or we may contribute the necessary funds to the partnership to acquire the land. We are required to fund all necessary equity contributions while the third-party developer is responsible for obtaining construction financing, hiring a general contractor and for the overall management, successful completion and delivery of the project. We generally bear all the economic risks and rewards of ownership in these partnerships and therefore include these partnerships in our Consolidated Financial Statements. The third-party developer is paid a developer fee typically equal to a percentage of the construction costs. When the project reaches stabilized occupancy, we acquire the third-party developer’s partnership interests in exchange for any remaining unpaid developer fees. Basis of Presentation The accompanying unaudited Consolidated Financial Statements have been prepared in accordance with the instructions to Form 10-Q and Article 10 of Regulation S-X. Certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) have been condensed or omitted in accordance with such rules and regulations, although management believes the disclosures are adequate to prevent the information presented from being misleading. In the opinion of management, all adjustments (consisting of normal recurring matters) considered necessary for a fair presentation have been included. The results of operations for the six months ended June 30, 2015, are not necessarily indicative of the results that may be expected for other interim periods or for the full fiscal year. The year-end Consolidated Balance Sheet at December 31, 2014 was derived from the audited Consolidated Financial Statements at that date, but does not include all of the information and disclosures required by U.S. GAAP for complete financial statements. For further information, refer to the Consolidated Financial Statements and notes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2014. Certain 2014 Consolidated Financial Statement amounts have been reclassified to conform to the 2015 presentation, including adjustments for discontinued operations. Principles of Consolidation The accompanying Consolidated Financial Statements include the accounts of the Company, its subsidiaries, generally all of which are wholly-owned, and all entities in which we have a controlling interest. Arrangements that are not controlled through voting or similar rights are accounted for as a Variable Interest Entity (“VIE”), in accordance with the provisions and guidance of ASC Topic 810, “Consolidation”, whereby we have determined that we are a primary beneficiary of the VIE and meet certain criteria of a sole general partner or managing member as identified in accordance with Emerging Issues Task Force (“EITF”) Issue 04-5, Investor’s Accounting for an Investment in a Limited Partnership when the Investor is the Sole General Partner and the Limited Partners have Certain Rights (“EITF 04-5”). VIEs are generally entities that lack sufficient equity to finance their activities without additional financial support from other parties or whose equity holders as a group lack adequate decision making ability, the obligation to absorb expected losses or residual returns of the entity, or have voting rights that are not proportional to their economic interests. The primary beneficiary generally is the entity that provides financial support and bears a majority of the financial risks, authorizes certain capital transactions, or makes operating decisions that materially affect the entity’s financial results. All significant intercompany balances and transactions have been eliminated in consolidation. In determining whether we are the primary beneficiary of a VIE, we consider qualitative and quantitative factors, including, but not limited to: the amount and characteristics of our investment; the obligation or likelihood for us or other investors to provide financial support; our and the other investors’ ability to control or significantly influence key decisions for the VIE; and the similarity with and significance to the business activities of us and the other investors. Significant judgments related to these determinations include estimates about the current future fair values and performance of real estate held by these VIEs and general market conditions. For entities in which we have less than a controlling financial interest or entities where we are not deemed to be the primary beneficiary, the entities are accounted for using the equity method of accounting. Accordingly, our share of the net earnings or losses of these entities is included in consolidated net income. Our investment in Gruppa Florentina, LLC is accounted for under the equity method. Real Estate, Depreciation and Impairment Real estate assets are stated at the lower of depreciated cost or fair value, if deemed impaired. Major replacements and betterments are capitalized and depreciated over their estimated useful lives. Depreciation is computed on a straight-line basis over the useful lives of the properties (buildings and improvements – 10-40 years; furniture, fixtures and equipment – 5-10 years). The Company continually evaluates the recoverability of the carrying value of its real estate assets using the methodology prescribed in ASC Topic 360 (“ASC 360”), “Property, Plant and Equipment”. Factors considered by management in evaluating impairment of its existing real estate assets held for investment include significant declines in property operating profits, annually recurring property operating losses and other significant adverse changes in general market conditions that are considered permanent in nature. Under ASC 360, a real estate asset held for investment is not considered impaired if the undiscounted, estimated future cash flows of an asset (both the annual estimated cash flow from future operations and the estimated cash flow from the theoretical sale of the asset) over its estimated holding period are in excess of the asset’s net book value at the balance sheet date. If any real estate asset held for investment is considered impaired, a loss is provided to reduce the carrying value of the asset to its estimated fair value. Real Estate Held For Sale We periodically classify real estate assets as “held for sale”. An asset is classified as held for sale after the approval of our Board of Directors, after an active program to sell the asset has commenced and if the sale is probable. One of the deciding factors in determining whether a sale is probable is whether the firm purchase commitment is obtained and whether the sale is probable within the year. Upon the classification of a real estate asset as held for sale, the carrying value of the asset is reduced to the lower of its net book value or its estimated fair value, less costs to sell the asset. Subsequent to the classification of assets as held for sale, no further depreciation expense is recorded. Real estate assets held for sale are stated separately on the accompanying Consolidated Balance Sheets. Upon a decision that the sale is no longer probable, the asset is classified as an operating asset and depreciation expense is reinstated. Prior to January 1, 2015, the operating results of real estate assets held for sale and sold are reported as discontinued operations in the accompanying Consolidated Statements of Operations. Income from discontinued operations includes the revenues and expenses, including depreciation and interest expense, associated with the assets. Subsequent to January 1, 2015, Accounting Standards Update 2014-08, “Reporting Discontinued Operations and Disclosures of Disposals of Components of an Entity” (“ASU 2014-08”) substantially changed the criteria for determining whether a disposition qualifies for discontinued operations presentation. Adoption of this standard will result in substantially fewer of the Company's dispositions meeting the discontinued operations criteria. Cost Capitalization Costs related to planning, developing, leasing and constructing a property are capitalized and classified as Real Estate in the Consolidated Balance Sheets. We capitalize interest to qualifying assets under development based on average accumulated expenditures outstanding during the period. In capitalizing interest to qualifying assets, we first use the interest incurred on specific project debt, if any, and next use the weighted average interest rate of non-project specific debt. We capitalize interest, real estate taxes and certain operating expenses until building construction is substantially complete and the building is ready for its intended use, but no later than one year from the cessation of major construction activity. We capitalize leasing costs which include commissions paid to outside brokers, legal costs incurred to negotiate and document a lease agreement and any internal costs that may be applicable. We allocate these costs to individual tenant leases and amortize them over the related lease term. Fair Value Measurement We apply the guidance in ASC Topic 820, “Fair Value Measurements and Disclosures”, to the valuation of real estate assets. These provisions define fair value as the price that would be received to sell an asset or paid to transfer a liability in a transaction between market participants at the measurement date, establish a hierarchy that prioritizes the information used in developing fair value estimates and require disclosure of fair value measurements by level within the fair value hierarchy. The hierarchy gives the highest priority to quoted prices in active markets (Level 1 measurements) and the lowest priority to unobservable data (Level 3 measurements), such as the reporting entity’s own data. The valuation hierarchy is based upon the transparency of inputs to the valuation of an asset or liability as of the measurement date and includes three levels defined as follows: Level 1 – Unadjusted quoted prices for identical and unrestricted assets or liabilities in active markets. Level 2 – Quoted prices for similar assets and liabilities in active markets, and inputs that are observable for the asset or liability, either directly or indirectly, for substantially the full term of the financial instrument. Level 3 – Unobservable inputs that are significant to the fair value measurement. A financial instrument’s categorization within the valuation hierarchy is based upon the lowest level of input that is significant to the fair value measurement. Deferred Costs Costs relating to the financing of properties are deferred and amortized over the life of the related financing agreement. Amortization is reflected as interest expense in the Consolidated Statements of Operations, with remaining terms ranging from 6 months to 40 years. Unamortized financing costs are written off when the financing agreement is extinguished before the maturity date. Related Parties We apply ASC Topic 805, “Business Combinations”, to evaluate business relationships. Related parties are persons or entities who have one or more of the following characteristics, which include entities for which investments in their equity securities would be required, trust for the benefit of persons including principal owners of the entities and members of their immediate families, management personnel of the entity and members of their immediate families and other parties with which the entity may deal if one party controls or can significantly influence the decision making of the other to an extent that one of the transacting parties might be prevented from fully pursuing its own separate interests, or affiliates of the entity. Newly Issued Accounting Standards In April 2014, the Financial Accounting Standards Board (“FASB”) issued ASU 2014-08, “Reporting Discontinued Operations and Disclosures of Disposals of Components of an Entity”, which changes the criteria for determining which disposals qualify to be accounted for as discontinued operations and modifies related reporting and disclosure requirements. Disposals representing a strategic shift in operations, such as change in a major line of business, a major geographical area or major equity investment, that have a major effect on a company’s operations and financial results will be presented as discontinued operations. If the disposal does qualify as a discontinued operation under ASU 2014-08, the company will be required to expand their disclosures about discontinued operations to provide more information on the assets, liabilities, income and expenses of the disposed of component. The classification of operating results as discontinued operations are applied retroactively for all periods presented. The new standard was effective January 1, 2015. We adopted ASU 2014-08 as of January 1, 2015 and believe future sales of our individual operating properties will no longer qualify as discontinued operations. Adoption of this standard has resulted in substantially fewer of the Company's dispositions meeting the discontinued operations criteria. See Note 8 below. In May 2014, Accounting Standards Update (“ASU”) No. 2014-09 (ASU 2014-09), “Revenue from Contracts with Customers,” was issued. This new guidance established a new single comprehensive revenue recognition model and provides for enhanced disclosures. Under the new guidance, the nature, timing and amount of revenue recognized for certain transactions could differ from those recognized under existing accounting guidance. This new guidance does not affect revenue recognized under lease contracts. ASU 2014-09 is effective for reporting periods beginning after December 15, 2017. The Company is currently evaluating the impact the adoption of this guidance, if any, on its financial position and results of operations. In April 2015, the FASB issued ASU 2015-03, “Simplifying the Presentation of Debt Issuance Costs” ("ASU 2015-03"). ASU 2015-03 requires debt issuance costs to be presented in the balance sheet as a direct deduction from the carrying value of the associated debt liability, consistent with the presentation of a debt discount. Prior to the issuance of the standard, debt issuance costs were required to be presented in the balance sheet as an asset. The Company has adopted this standard effective June 30, 2015. The accompanying financials have been reclassified to reflect the adoption.

REAL ESTATE ACTIVITY

REAL ESTATE ACTIVITY	6 Months Ended
	Jun. 30, 2015
Real Estate [Abstract]
REAL ESTATE ACTIVITY	NOTE 2. REAL ESTATE ACTIVITY Below is a summary of the real estate owned as of June 30, 2015 (dollars in thousands): Apartments $ 543,524 Apartments under construction 3,261 Commercial properties 216,941 Land held for development 158,117 Real estate subject to sales contract 21,507 Total real estate $ 943,350 Less accumulated depreciation (141,436 ) Total real estate, net of depreciation $ 801,914 The highlights of our significant real estate transactions for the six months ended June 30, 2015 are listed below: Purchases For the six months ended June 30, 2015, the Company acquired three income-producing apartment complexes from third parties in the states of Texas (1) and Florida (2), increasing the total number of units by 349 for a combined purchase price of $31.5 million. In addition, the Company acquired two income-producing apartment complexes from related parties in the state of Texas (2), increasing the total number of units by 378 for a combined purchase price of $10.6 million. The Company also purchased a commercial office building in Texas, comprised of 92,723 square feet for $16.8 million. Sales For the six months ended June 30, 2015, the Company sold approximately 43 acres of land located in Texas to independent third parties for a total sales price of $9.1 million. We recorded a total gain of $4.1 million from the sales. As of June 30, 2015, there is one apartment complex, one commercial building and 110 acres of land that TCI has sold to a related party and has deferred the recognition of the sale. These are treated as “subject to sales contract” on the Consolidated Balance Sheets. These properties were sold to a related party in order to help facilitate an appropriate debt or organizational restructure and may or may not be transferred back to the seller upon resolution. These properties have mortgages that are secured by the property and many have corporate guarantees. According to the loan documents, the maker is currently in default on these mortgages primarily due to lack of payment and is actively involved in discussions with every lender in order to settle or cure the default situation. TCI has reviewed each asset and taken impairment to the extent it feels the value of the property was less than its current basis. TCI did not recognize or record the sale in accordance with ASC 360-20 due to our continuing involvement, which included the potential payment of cash shortfalls, future obligations under the existing mortgage and guaranty, the buyer’s inadequate initial investment and TCI’s questionable recovery of investment cost. TCI determined that no sale had occurred for financial reporting purposes and therefore the asset remained on the books and continued to record operating expenses and depreciation as a period cost until a sale occurred that met the requirements of ASC 360-20. The buyers received no compensation for the facilitation of the bankruptcy or debt restructuring process. We continue to invest in the development of apartment projects. During the six months ended June 30, 2015, we have expended $3.2 million related to the construction or predevelopment of various apartment complexes and capitalized $25,109 of interest costs.

NOTES AND INTEREST RECEIVABLE

NOTES AND INTEREST RECEIVABLE	6 Months Ended
	Jun. 30, 2015
NOTES AND INTEREST RECEIVABLE
NOTES AND INTEREST RECEIVABLE	NOTE 3. NOTES AND INTEREST RECEIVABLE A portion of our assets are invested in mortgage notes receivable, principally secured by real estate. We may originate mortgage loans in conjunction with providing purchase money financing of property sales. Notes receivable are generally collateralized by real estate or interests in real estate and personal guarantees of the borrower and, unless noted otherwise, are so secured. Management intends to service and hold for investment the mortgage notes in our portfolio. A majority of the notes receivable provide for principal to be paid at maturity. Our mortgage notes receivable consist of first, wraparound and junior mortgage loans (dollars in thousands): Maturity Interest Borrower Date Rate Amount Security Performing loans: Foundation for Better Housing, Inc. (Overlook at Allensville) (1) 11/19 12.00% 2,472 Secured Foundation for Better Housing, Inc. (Overlook at Allensville) (1) 12/17 12.00% 1,408 Secured Foundation for Better Housing, Inc. (Vista Ridge) (1) 04/19 12.00% 3,923 Secured Foundation for Better Housing, Inc. (Vista Ridge) (1) 06/17 12.00% 1,492 Secured H198, LLC (Las Vegas Land) 01/20 12.00% 5,907 Secured One Realco Corporation (1) (2) 01/17 3.00% 7,000 Unsecured Realty Advisors Management, Inc. (1) 12/16 2.20% 20,387 Unsecured Unified Housing Foundation, Inc. (Cliffs of El Dorado) (1) 12/32 12.00% 2,097 100% Membership Interest in Unified Housing of McKinney, LLC Unified Housing Foundation, Inc. (Echo Station) (1) 12/32 12.00% 1,481 100% Membership Interest in Unified Housing of Temple, LLC Unified Housing Foundation, Inc. (Inwood on the Park) (1) 12/32 12.00% 5,059 100% Membership Interest in Unified Housing Inwood, LLC Unified Housing Foundation, Inc. (Kensington Park) (1) 12/32 12.00% 3,936 100% Membership Interest in Unified Housing Kensington, LLC Unified Housing Foundation, Inc. (Lakeshore Villas) (1) 12/32 12.00% 2,000 Secured Unified Housing Foundation, Inc. (Lakeshore Villas) (1) 12/32 12.00% 9,096 Membership interest in Housing for Seniors of Humble, LLC Unified Housing Foundation, Inc. (Limestone Canyon) (1) 12/32 12.00% 3,057 100% Membership Interest in Unified Housing of Austin, LLC Unified Housing Foundation, Inc. (Limestone Canyon) (1) 12/32 12.00% 4,663 100% Membership Interest in Unified Housing of Austin, LLC Unified Housing Foundation, Inc. (Limestone Ranch) (1) 12/32 12.00% 2,250 100% Membership Interest in Unified Housing of Vista Ridge, LLC Unified Housing Foundation, Inc. (Limestone Ranch) (1) 12/32 12.00% 6,000 100% Membership Interest in Unified Housing of Vista Ridge, LLC Unified Housing Foundation, Inc. (Parkside Crossing) (1) 12/32 12.00% 2,272 100% Membership Interest in Unified Housing of Parkside Crossing, LLC Unified Housing Foundation, Inc. (Reserve at White Rock Phase I) (1) 12/32 12.00% 2,485 100% Membership Interest in Unified Housing of Harvest Hill I, LLC Unified Housing Foundation, Inc. (Reserve at White Rock Phase II) (1) 12/32 12.00% 2,555 100% Membership Interest in Unified Housing of Harvest Hill, LLC Unified Housing Foundation, Inc. (Sendero Ridge) (1) 12/32 12.00% 5,174 100% Membership Interest in Unified Housing of Sendero Ridge, LLC Unified Housing Foundation, Inc. (Sendero Ridge) (1) 12/32 12.00% 4,812 100% Membership Interest in Unified Housing of Sendero Ridge, LLC Unified Housing Foundation, Inc. (Timbers at the Park) (1) 12/32 12.00% 1,323 100% Membership Interest in Unified Housing of Terrell, LLC Unified Housing Foundation, Inc. (Tivoli) (1) 12/32 12.00% 7,966 100% Membership Interest in Unified Housing of Tivoli, LLC Unified Housing Foundation, Inc. (Trails at White Rock) (1) 12/32 12.00% 3,815 100% Membership Interest in Unified Housing of Harvest Hill III, LLC Unified Housing Foundation, Inc. (1) 06/17 12.00% 1,261 Unsecured Unified Housing Foundation, Inc. (1) 12/17 12.00% 1,207 Unsecured Unified Housing Foundation, Inc. (1) 12/15 12.00% 2,665 Unsecured Unified Housing Foundation, Inc. (1) 12/16 12.00% 3,657 Unsecured Other related party notes (1) Various Various 2,117 Various secured interests Other related party notes (1) Various Various 4,929 Various unsecured interests Other non-related party notes Various Various 3,164 Various secured interests Other non-related party notes Various Various 503 Various unsecured interests Accrued interest 8,350 Total Performing $ 140,483 Non-Performing loans: Leman Development, Ltd (2) 07/11 7.00% $ 1,500 Unsecured Tracy Suttles (2) 12/11 0.00% 1,077 Unsecured Other non-related party notes Various V arious 507 Various secured interests Accrued interest 97 Total Non-Performing $ 3,181 Allowance for doubtful accounts (18,279) Total $ 125,385 (1) (2) Junior Mortgage Loans At June 30, 2015, we had junior mortgage loans and accrued interest receivable from related parties, net of allowances, totaling $115.1 million. We recognized interest income of $6.9 million related to these notes receivables. The Company has various notes receivable from Unified Housing Foundation, Inc. (“UHF”) and Foundation for Better Housing, Inc. (“FBH”). UHF and FBH are determined to be related parties due to our significant investment in the performance of the collateral secured under the notes receivable. Payments are due from surplus cash flow of operations of the properties. A sale or refinance of any of the properties underlying these notes will be used to repay outstanding interest and principal for the remaining notes for the specific borrower. These notes are cross-collateralized for the specific borrower, but to the extent cash is received from a specific UHF or FBH property, it is applied first against any outstanding interest for the related-property note. The allowance on the UHF notes was a purchase allowance that was netted against the notes when acquired.

INVESTMENT IN UNCONSOLIDATED IN

INVESTMENT IN UNCONSOLIDATED INVESTEES	6 Months Ended
	Jun. 30, 2015
INVESTMENTS IN UNCONSOLIDATED SUBSIDIARIES AND INVESTEES
INVESTMENT IN UNCONSOLIDATED INVESTEES	NOTE 4. INVESTMENT IN UNCONSOLIDATED INVESTEES Investments in unconsolidated investees in which we have a 20% to 50% interest or otherwise exercise significant influence are carried at cost and adjusted for the Company’s proportionate share of their undistributed earnings or losses under the equity method of accounting. Investments in unconsolidated investees consist of the following: Percentage ownership as of June 30, 2015 June 30, 2014 Gruppa Florentina, LLC 20.00% 20.00% Gruppa Florentina, LLC is the sole shareholder of Milano Restaurants International Corporation (“Milano”), which operates 33 pizza parlors under the trade name “Me-N-Ed’s Pizza Parlors” and four pizza parlors operating under the trade name “Blast 825 Pizza”, located primarily in Central and Northern California. Milano has a 100% ownership interest in SienaCorp, which operates two grills under the trade names “Me-N-Ed’s Victory Grill” and “Me-N-Ed’s Coney Island Grill”. Milano has a 100% ownership interest in Piazza del Pane, Inc., which operates two restaurants located in Central California. Milano also has 23 franchised locations, including two operating, under the trade name Angelo & Vito’s Pizzerias. The following is a summary of the financial position and results of operations from our investees (dollars in thousands): As of June 30, 2015 2014 Real estate, net of accumulated depreciation $ 12,518 $ 10,832 Notes receivable 7,681 6,934 Other assets 30,233 31,107 Notes payable (10,685 ) (11,002 ) Other liabilities (6,500 ) (6,631 ) Shareholders' equity (33,247 ) (31,240 ) For the Six Months Ended June 30, 2015 2014 Revenue $ 26,048 $ 23,990 Depreciation (575 ) (575 ) Operating expenses (23,609 ) (22,121 ) Interest expense (404 ) (445 ) Income from continuing operations 1,460 849 Income from discontinued operations — — Net income $ 1,460 $ 849 Company's proportionate share of earnings $ 292 $ 170

NOTES PAYABLE

NOTES PAYABLE	6 Months Ended
	Jun. 30, 2015
NOTES PAYABLE
NOTES PAYABLE	NOTE 5. NOTES PAYABLE Below is a summary of our notes and interest payable as of June 30, 2015 (dollars in thousands): Notes Payable Accrued Interest Total Debt Apartments $ 443,429 $ 1,316 $ 444,745 Commercial 117,392 494 117,886 Land 70,199 116 70,315 Real estate subject to sales contract 16,546 1,705 18,251 Mezzanine financing 123,900 — 123,900 Other 19,096 494 19,590 Total $ 790,562 $ 4,125 $ 794,687 Unamortized deferred borrowing costs (20,018 ) — (20,018 ) Total $ 770,544 $ 4,125 $ 774,669 The segment labeled as “Other” consists of unsecured or stock-secured notes payable. With respect to the additional notes payable due to the acquisition of properties or refinancing of existing mortgages, a summary of some of the more significant transactions is discussed below: On January 28, 2015, the Company modified the existing mortgage on a 200-unit complex located in Texas, to reduce the interest rate. The modified note accrues interest at 3.24% and payments of interest and principal are due monthly, maturing August 1, 2050. On January 28, 2015, the Company modified the existing mortgage on a 240-unit complex located in Mississippi, to reduce the interest rate. The modified note accrues interest at 3.24% and payments of interest and principal are due monthly, maturing December 1, 2051. On April 23, 2015, the Company refinanced the existing mortgage on a 250-unit complex located in Arkansas, for a new mortgage of $21.0 million. We paid off the existing mortgage of $15.7 million and $0.6 million in closing costs. The note accrues interest at 2.74% and payments of interest and principal are due monthly, maturing May 1, 2050. On April 29, 2015, the Company refinanced the existing mortgage on a 240-unit complex located in Texas, for a new mortgage of $15.4 million. We paid $0.7 million in closing costs. The note accrues interest at 3.28% and payments of interest and principal are due monthly, maturing March 31, 2051. On May 28, 2015, the Company secured additional financing of $120.0 million from an independent third party. At closing $84.4 million was advanced to the Company. The financing can be used for general corporate purposes, acquisition of multi-family apartment complexes and to reduce debt. The note has a term of five years at an interest rate of 30 day Libor plus 10.75%. The note is interest only, payable monthly, with the principal due at the end of the five years. The loan is secured by various equity interests in certain residential apartments. The note contains customary restrictions, representations, covenants, corporate and officer guarantees, events of default and require the Company to meet certain financial covenants. The Company believes it is in compliance with these financial covenants at June 30, 2015. Simultaneous with the closing of the above financing, the Company amended its existing financing of $40.0 million from an independent third party. The note has a term of five years at an interest rate of 12.0%. The note is interest only for the first year with quarterly principal payments due of $0.5 million starting April 1, 2015. As of June 30, 2015, the outstanding balance on the loan was $39.5 million. The loan is secured by various equity interests in residential apartments and can be prepaid at a penalty rate of 4% for year 1 with the penalty declining by 1% each year thereafter. The note contains customary restrictions, representations, covenants, corporate and officer guarantees, events of default and require the Company to meet certain financial covenants. The Company believes it is in compliance with these financial covenants at June 30, 2015. There are various land mortgages, secured by the property, that are in the process of a modification or extension to the original note due to expiration of the loan. We are in constant contact with these lenders, working together in order to modify the terms of these loans and we anticipate a timely resolution that is similar to the existing agreement or subsequent modification. In conjunction with the development of various apartment projects and other developments, we drew down $1.7 million in construction loans during the six months ended June 30, 2015. The properties that we have sold to a related party and have deferred the recognition of the sale are treated as “subject to sales contract” on the Consolidated Balance Sheets. These properties were sold to a related party in order to help facilitate an appropriate debt or organizational restructure and may or may not be transferred back to the seller upon resolution. These properties have mortgages that are secured by the property and many have corporate guarantees .

RELATED PARTY TRANSACTIONS

RELATED PARTY TRANSACTIONS	6 Months Ended
	Jun. 30, 2015
RELATED PARTY TRANSACTIONS AND FEES
RELATED PARTY TRANSACTIONS AND FEES	NOTE 6. RELATED PARTY TRANSACTIONS The following table reconciles the beginning and ending balances of accounts receivable from and (accounts payable) to related parties as of June 30, 2015 (dollars in thousands): Pillar Related party receivable, December 31, 2014 $ 21,414 Cash transfers 41,516 Advisory fees (4,600 ) Net income fee (335 ) Fees and commissions (2,391 ) Cost reimbursements (1,829 ) Interest income 408 Expenses paid by Advisor (5,448 ) Financing (mortgage payments) (1,370 ) Sales/purchases transactions (10,005 ) Related party receivable, June 30, 2015 $ 37,360 During the ordinary course of business, we have related party transactions that include, but are not limited to, rent income, interest income, interest expense, general and administrative costs, commissions, management fees and property expenses. In addition, we have assets and liabilities that include related party amounts. The related party amounts included in assets and liabilities, and the related party revenues and expenses received/paid are shown on the face of the Consolidated Financial Statements.

OPERATING SEGMENTS

OPERATING SEGMENTS	6 Months Ended
	Jun. 30, 2015
Segment Reporting [Abstract]
OPERATING SEGMENTS	NOTE 7. OPERATING SEGMENTS Our segments are based on our method of internal reporting which classifies our operations by property type. Our property types are grouped into commercial properties, apartments, hotels, land and other operating segments. Significant differences among the accounting policies of the operating segments as compared to the Consolidated Financial Statements principally involve the calculation and allocation of administrative and other expenses. Management evaluates the performance of each of the operating segments and allocates resources to them based on their net operating income and cash flow. Items of income that are not reflected in the segments are interest, other income, gain on debt extinguishment, gain on condemnation award, equity in partnerships and gains on sale of real estate. Expenses that are not reflected in the segments are provision for losses, advisory, net income and incentive fees, general and administrative, non-controlling interests and net loss from discontinued operations before gains on sale of real estate. The segment labeled as “Other” consists of revenue and operating expenses related to the notes receivable and corporate debt. Presented below is our reportable segments’ operating income for the three and six months ended June 30, 2015 and 2014, including segment assets and expenditures (dollars in thousands): Commercial For the Three Months Ended June 30, 2015 Properties Apartments Hotels Land Other Total Rental and other property revenues $ 6,974 $ 17,258 $ — $ — $ 9 $ 24,241 Property operating expenses (3,341 ) (7,829 ) — (165 ) 34 (11,301 ) Depreciation (2,230 ) (2,926 ) — — 19 (5,137 ) Mortgage and loan interest (1,642 ) (3,377 ) — (1,304 ) (3,471 ) (9,794 ) Interest income — — — — 4,535 4,535 Gain on land sales — — — 3,027 — 3,027 Segment operating income (loss) $ (239 ) $ 3,126 $ — $ 1,558 $ 1,126 $ 5,571 Capital expenditures 2,943 224 — 485 — 3,652 Real estate assets 162,333 473,908 — 165,673 — 801,914 Property Sales Sales price $ — $ — $ — $ 1,878 $ — $ 1,878 Cost of sale — — — (628 ) — (628 ) Recognized prior deferred gain — — — 1,777 — 1,777 Gain on sale $ — $ — $ — $ 3,027 $ — $ 3,027 Commercial For the Three Months Ended June 30, 2014 Properties Apartments Hotels Land Other Total Rental and other property revenues $ 4,776 $ 14,706 $ — $ — $ 18 $ 19,500 Property operating expenses (3,169 ) (6,535 ) — (279 ) — (9,983 ) Depreciation (1,757 ) (2,585 ) — — 19 (4,323 ) Mortgage and loan interest (1,645 ) (3,869 ) — (1,458 ) (2,721 ) (9,693 ) Interest income — — — — 6,041 6,041 Loss on land sales — — — (159 ) — (159 ) Segment operating income (loss) $ (1,795 ) $ 1,717 $ — $ (1,896 ) $ 3,357 $ 1,383 Capital expenditures 1,862 99 — 66 — 2,027 Real estate assets 131,193 372,674 — 167,293 — 671,160 Property Sales Sales price $ 16,600 $ — $ — $ 717 $ — $ 17,317 Cost of sale (9,597 ) — — (876 ) — (10,473 ) Gain (loss) on sale $ 7,003 $ — $ — $ (159 ) $ — $ 6,844 The table below reconciles the segment information to the corresponding amounts in the Consolidated Statements of Operations (dollars in thousands): For the Three Months Ended June 30, 2015 2014 Segment operating income $ 5,571 $ 1,383 Other non-segment items of income (expense) General and administrative (1,596 ) (3,195 ) Net income fee to related party (45 ) (210 ) Advisory fee to related party (2,309 ) (2,202 ) Other income 14 232 Earnings from unconsolidated investees 151 (124 ) Litigation settlement (45 ) (86 ) Income tax benefit (expense) (12 ) 2,195 Net income (loss) from continuing operations $ 1,729 $ (2,007 ) The table below reconciles the segment information to the corresponding amounts in the Consolidated Balance Sheets (dollars in thousands): As of June 30, 2015 2014 Segment assets $ 801,914 $ 671,160 Investments in unconsolidated investees 1,299 3,833 Notes and interest receivable 125,385 138,014 Other assets 148,020 95,172 Total assets $ 1,076,618 $ 908,179 Commercial For the Six Months Ended June 30, 2015 Properties Apartments Hotels Land Other Total Rental and other property revenues $ 14,065 $ 33,277 $ — $ — $ 55 $ 47,397 Property operating expenses (7,608 ) (14,871 ) — (514 ) 24 (22,969 ) Depreciation (4,157 ) (5,721 ) — — 37 (9,841 ) Mortgage and loan interest (3,258 ) (9,560 ) — (2,421 ) (6,200 ) (21,439 ) Interest income — — — — 9,772 9,772 Gain on land sales — — — 5,903 — 5,903 Segment operating income (loss) $ (958 ) $ 3,125 $ — $ 2,968 $ 3,688 $ 8,823 Capital expenditures 6,135 481 — 1,311 — 7,927 Real estate assets 162,333 473,908 — 165,673 — 801,914 Property Sales Sales price $ — $ — $ — $ 9,135 $ — $ 9,135 Cost of sale — — — (5,009 ) — (5,009 ) Recognized prior deferred gain — — — 1,777 — 1,777 Gain on sale $ — $ — $ — $ 5,903 $ — $ 5,903 Commercial For the Six Months Ended June 30, 2014 Properties Apartments Hotels Land Other Total Rental and other property revenues $ 9,557 $ 29,074 $ — $ — $ 28 $ 38,659 Property operating expenses (6,316 ) (13,000 ) — (590 ) (5 ) (19,911 ) Depreciation (3,571 ) (5,119 ) — — 54 (8,636 ) Mortgage and loan interest (3,144 ) (10,178 ) — (2,543 ) (4,467 ) (20,332 ) Interest income — — — — 10,158 10,158 Gain on land sales — — — 594 — 594 Segment operating income (loss) $ (3,474 ) $ 777 $ — $ (2,539 ) $ 5,768 $ 532 Capital expenditures 2,992 99 — 151 — 3,242 Real estate assets 131,193 372,674 — 167,293 — 671,160 Property Sales Sales price $ 16,600 $ 23,131 $ — $ 2,367 $ — $ 42,098 Cost of sale (9,597 ) (17,077 ) — (1,773 ) — (28,447 ) Gain on sale $ 7,003 $ 6,054 $ — $ 594 $ — $ 13,651 The table below reconciles the segment information to the corresponding amounts in the Consolidated Statements of Operations: For the Six Months Ended June 30, 2015 2014 Segment operating income $ 8,823 $ 532 Other non-segment items of income (expense) General and administrative (3,798 ) (5,179 ) Net income fee to related party (335 ) (700 ) Advisory fee to related party (4,601 ) (4,445 ) Other income 4,111 406 Earnings from unconsolidated investees 196 (54 ) Litigation settlement (117 ) 3,752 Income tax benefit 91 4,244 Net income (loss) from continuing operations $ 4,370 $ (1,444 ) The table below reconciles the segment information to the corresponding amounts in the Consolidated Balance Sheets: As of June 30, 2015 2014 Segment assets $ 801,914 $ 671,160 Investments in unconsolidated investees 1,299 3,833 Notes and interest receivable 125,385 138,014 Other assets 148,020 95,172 Total assets $ 1,076,618 $ 908,179

DISCONTINUED OPERATIONS

DISCONTINUED OPERATIONS	6 Months Ended
	Jun. 30, 2015
Discontinued Operations and Disposal Groups [Abstract]
DISCONTINUED OPERATIONS	NOTE 8. DISCONTINUED OPERATIONS Prior to January 1, 2015, we applied the provisions of ASC 360, “Property, Plant and Equipment”, which required that long-lived assets that are to be disposed of by sale be measured at the lesser of (1) book value or (2) fair value less cost to sell. In addition, it requires that one accounting model be used for long-lived assets to be disposed of by sale and broadens the presentation of discontinued operations to include more disposal transactions. Effective January 1, 2015, the Company adopted the provisions of ASU 2014-08, “Reporting Discontinued Operations and Disclosures of Disposals of Components of an Entity”, which changes the criteria of ASC 360 related to determining which disposals qualify to be accounted for as discontinued operations and modifies related reporting and disclosure requirements. Disposals representing a strategic shift in operations that have a major effect on a company’s operations and financial results will be presented as discontinued operations. Companies will be required to expand their disclosures about discontinued operations to provide more information on the assets, liabilities, income and expenses of the discontinued operations. The new standard was effective January 1, 2015. Adoption of this standard will result in substantially fewer of the Company's dispositions meeting the discontinued operations criteria. There were no sales of income-producing properties in the first six months of 2015. In 2014, we sold two apartment complexes (both in Texas), and two commercial properties (one in Louisiana and one in Alaska). The gain on sale of the properties is also included in discontinued operations for those years. The following table summarizes revenue and expense information for the properties sold and held for sale (dollars in thousands): For the Three Months Ended June 30, For the Six Months Ended June 30, 2015 2014 2015 2014 Revenues: Rental and other property revenues $ — $ 1,341 $ 15 $ 3,912 — 1,341 15 3,912 Expenses: Property operating expenses 26 557 (348 ) 1,875 Depreciation — 179 — 509 General and administrative 7 140 102 313 Total operating expenses 33 876 (246 ) 2,697 Other income (expense): Other income — (528 ) — (486 ) Mortgage and loan interest (1 ) (464 ) (1 ) (1,410 ) Litigation settlement — (205 ) — (250 ) Total other expenses (1 ) (1,197 ) (1 ) (2,146 ) Gain (loss) from discontinued operations before gain on sale of real estate and tax (34 ) (732 ) 260 (931 ) Gain on sale of real estate from discontinued operations — 7,003 — 13,057 Income tax benefit (expense) 12 (2,195 ) (91 ) (4,244 ) Income (loss) from discontinued operations $ (22 ) $ 4,076 $ 169 $ 7,882 Our application of ASC 360 results in the presentation of the net operating results of these qualifying properties sold or held for sale during 2015 as income from discontinued operations. This does not have an impact on net income available to common shareholders and only impacts the presentation of these properties within the Consolidated Statements of Operations.

COMMITMENTS AND CONTINGENCIES A

COMMITMENTS AND CONTINGENCIES AND LIQUIDITY	6 Months Ended
	Jun. 30, 2015
COMMITMENTS AND CONTINGENCIES AND LIQUIDITY
COMMITMENTS AND CONTINGENCIES AND LIQUIDITY	NOTE 9. COMMITMENTS, CONTINGENCIES, AND LIQUIDITY LK-FOUR HICKORY, LLC In conjunction with its sale of Four Hickory in November 2007, the Company agreed to fund amounts to satisfy its commitment to compensate LK-Four Hickory, LLC for move-in discounts and other concessions to existing tenants at the time of sale. The Company also has various agreements with LK-Four Hickory, LLC related to the funding of projection shortfalls, which, to date, they have not had to provide any additional funding. In addition, related parties of the Company have active lease agreements with LK-Four Hickory, LLC, and the Company has since guaranteed amounts related to certain of these leases. On December 17, 2007, both Limkwang Nevada, Inc., the majority owner of LK-Four Hickory, LLC, and ARL unconditionally guaranteed the punctual payment when due, whether at stated maturity, by acceleration or hereafter, including all fees and expenses incurred by the bank on collection of a $28.0 million note payable for LK-Four Hickory, LLC which has a current outstanding balance of $22.1 million. The Company’s investment in LK-Four Hickory, LLC at January 17, 2012 was sold and the Company has additional reserves for estimated potential amounts it could be liable for if various related parties are not able to meet their obligations to LK-Four Hickory, LLC. The Company will continue to evaluate these potential estimates and also the likelihood of having to fund any of these and adjust their reserves accordingly. Liquidity. Partnership Buyouts Litigation. ART and ART Midwest, Inc. While the Company and all entities in which the Company has a direct or indirect equity interest are not parties to or obligated in any way for the outcome, a formerly owned entity (American Realty Trust, Inc.) and its former subsidiary (ART Midwest, Inc.) have been engaged since 1999 in litigation with Mr. David Clapper and entities related to Mr. Clapper (collectively, the “Clapper Parties”). The matter originally involved a transaction in 1998 in which ART Midwest, Inc. was to acquire eight residential apartment complexes from the Clapper Parties. Through the years, a number of rulings, both for and against American Realty Trust, Inc. (“ART”) and ART Midwest, Inc., were issued. In October 2011, a ruling was issued under which the Clapper Parties received a judgment for approximately $74 million, including $26 million in actual damages and $48 million interest. The ruling was against ART and ART Midwest, Inc., but no other entity. During February 2014, the Court of Appeals affirmed a portion of the judgment in favor of the Clapper Parties, but also ruled that a double counting of a significant portion of the damages had occurred and remanded the case back to the trial court to recalculate the damage award, as well as pre and post-judgment interest thereon. ART was also a significant owner of a partnership interest in the partnership that was awarded the initial damages in this matter. In 2005, ART filed suit against a major national law firm over the initial transaction. That action was initially abated while the principal case with the Clapper Parties was pending, but the abatement was recently lifted and the action against the law firm is expected to move forward. The only defendants in the litigation involving the Clapper Parties are ART and ART Midwest, Inc., which, together, had total assets and net worth, as of December 31, 2012, of approximately $10 million. In January 2012, the Company sold all of the issued and outstanding stock of ART to an unrelated party for a promissory note in the amount of $10 million. At December 31, 2012, the Company fully reserved and valued such note at zero. Subsequently, David M. Clapper and two entities related to Mr. Clapper (all, collectively, the “Clapper Parties”) filed a complaint in the U. S. District Court against the Company, its directors and certain of its officers alleging purported transactions to the detriment of the Clapper Parties and others by transferring assets, cash and diverting property. Management of the Company believes that there is no basis for this action against the Company and intends to vigorously defend itself. The complaint does not allege any fact relating to the Company, except that the Company is a Nevada corporation, with its headquarters/principal place of business in Dallas, Texas. Management believes that the Company has no liability for any ultimate judgment in the proceeding involving the Clapper Parties; however, Management of the Company has serious reservations about the current collectability of the $10 million note and, accordingly, has reserved the full amount of the note. Port Olpenitz ARL, through a foreign subsidiary, was involved in developing a maritime harbor town on the 420 acre site of the former naval base of Olpenitz in Kappeln, Germany. Disputes with the local partner related to his mismanagement of the project resulted in his being replaced as the managing partner which was followed by a filing for bankruptcy protection in Germany to completely remove him from the project. An insolvency manager was placed in control of the project in order to protect the creditors and as of December 31, 2013, had sold the vast majority of assets (almost all land) of the project. The Company no longer has any financial responsibility for the obligations of the creditors related to the project and has claims filed for loans relating to our investment in the project. Due to the questionable collectability of these loans from the proceeds of the project, the Company has written off the unreserved balance of $5.3 million in the project. As of December 13, 2013, ARL had filed two lawsuits in Germany to recover funds invested in the project. The lawsuits are against: 1) the former German partner and his company, and 2) against the law firm in Hamburg originally hired to protect ARL’s investment in the project. At this time it is unknown how much can be recovered or how successful the litigation will be. Dynex Capital, Inc. On July 20, 2015, the 68 th An original trial in 2004, which also included Dynex Capital, Inc. as a defendant, resulted in a jury awarding damages in favor of Basic for “lost opportunity,” as well as damages in favor of ART and in favor of TCI and its subsidiaries for “increased costs” and “lost opportunity.” The original Trial Court judge ignored the jury’s findings, however, and entered a “Judgment Notwithstanding the Verdict” (“JNOV”) in favor of the Dynex entities (the judge held the Plaintiffs were not entitled to any damages from the Dynex entities). After numerous appeals by all parties, Dynex Capital, Inc. was ultimately dismissed from the case and the remaining claims against Dynex Commercial were remanded to the Trial Court for a new judgment consistent with the jury’s findings. The Court entered the new Final Judgment against Dynex Commercial, Inc. on July 20, 2015. The Final Judgment entered against Dynex Commercial, Inc. on July 20, 2015 awarded Basic $.256 million in damages, plus pre-judgment interest of $.192 million for a total amount of $.448 million. The Judgment awarded ART $14.2 million in damages, plus pre-judgment interest of $10.6 million for a total amount of $24.9 million. The Judgment awarded TCI $11.1 million, plus pre-judgment interest of $8.4 million for a total amount of $19.5 million. The Judgment also awarded Basic, ART, and TCI post-judgment interest at the rate of 5% per annum from April 25, 2014 until the date their respective damages are paid. Lastly, the Judgement awarded Basic, ART, and TCI $1.6 million collectively in attorneys’ fees from Dynex Commercial, Inc. The Company is reviewing the Final Judgment with counsel to determine the appropriate steps moving forward now that they have obtained this Final Judgment against Dynex Commercial, Inc.

EARNINGS PER SHARE

EARNINGS PER SHARE	6 Months Ended
	Jun. 30, 2015
Earnings Per Share [Abstract]
EARNINGS PER SHARE	NOTE 10. EARNINGS PER SHARE Earnings per share (“EPS”) have been computed pursuant to the provisions of ASC Topic 260, “Earnings Per Share”. The computation of basic EPS is calculated by dividing net income available to common shareholders from continuing operations, adjusted for preferred dividends, by the weighted-average number of common shares outstanding during the period. Shares issued during the period shall be weighted for the portion of the period that they were outstanding. As of June 30, 2015, we have 2,000,614 shares of Series A 10.0% cumulative convertible preferred stock, which are outstanding. These shares may be converted into common stock at 90% of the average daily closing price of the common stock for the prior 20 trading days. These are considered in the computation of diluted earnings per share if the effect of applying the if-converted method is dilutive. Of the outstanding 2,000,614 shares of Series A 10.0% cumulative convertible preferred stock, 600,000 shares were owned by ART Hotel Equities, Inc. and 300,000 shares were owned by ART Edina, Inc. a wholly owned subsidiary of ARL. As of May 30, 2014, these 900,000 shares were transferred to ARL. Dividends are not paid on the shares owned by ARL subsidiaries. Prior to July 17, 2014, RAI owned 2,451,435 shares of the outstanding Series A 10.0% convertible preferred stock and had accrued dividends unpaid of $15.1 million. On July 17, 2014, RAI converted 890,797 shares, including $6.3 million in accumulated dividends unpaid for these shares, into the requisite number of shares of common stock. This conversion resulted in the issuance of 2,502,230 new shares of ARL common stock. On April 9, 2015, RAI converted 460,638 shares, including $2.3 million in accumulated dividends unpaid for these shares, into the requisite number of shares of common stock. This conversion resulted in the issuance of 1,486,741 new shares of ARL common stock. As of June 30, 2015, RAI owns 1,100,000 shares of the outstanding Series A 10.0% convertible preferred stock and has accrued dividends unpaid of $8.1 million. Prior to January 1, 2015, the Company had 1,000 shares of stock options outstanding. These options expired unexercised January 1, 2015. The options are no longer included in the dilutive earnings per share calculation for the current period, but are considered in the computation for the prior periods if applying the “treasury stock” method is dilutive. As of June 30, 2015, the Series A convertible preferred stock was dilutive and thus was included in the EPS calculation.

SUBSEQUENT EVENTS

SUBSEQUENT EVENTS	6 Months Ended
	Jun. 30, 2015
Subsequent Events [Abstract]
SUBSEQUENT EVENTS	NOTE 11. SUBSEQUENT EVENTS The date to which events occurring after June 30, 2015, the date of the most recent balance sheet, have been evaluated for possible adjustment to the Consolidated Financial Statements or disclosure is August 13, 2015, which is the date on which the Consolidated Financial Statements were available to be issued. The Company has determined that there are no subsequent events to be reported.

ORGANIZATION AND BASIS OF PRE21

ORGANIZATION AND BASIS OF PRESENTATION ( Policies)	6 Months Ended
	Jun. 30, 2015
Organization And Basis Of Presentation Policies
Organization	Organization As used herein, the terms “ARL”, “the Company”, “we”, “our” or “us” refer to American Realty Investors, Inc., a Nevada corporation, which was formed in November 1999. In August 2000, the Company acquired American Realty Trust, Inc. (“ART”), a Georgia corporation and National Realty, L.P. (“NRLP”), a Delaware partnership. The Company is headquartered in Dallas, Texas and its common stock trades on the New York Stock Exchange (“NYSE”) under the symbol (“ARL”). Approximately 86.7% of ARL’s stock is owned by related parties. Subsidiaries of ARL own approximately 80.9% of the outstanding shares of common stock of Transcontinental Realty Investors, Inc. (“TCI”), a Nevada corporation, which has its common stock listed and traded on the NYSE under the symbol (“TCI”). ARL is a “C” corporation for U.S. federal income tax purposes and has consolidated TCI’s accounts and operations since March 2003. During the third quarter 2012, May Realty Holdings, Inc. (“MRHI”) subsidiaries acquired more than 80% of ARL stock and as a result, ARL joined the MRHI consolidated group for federal income tax reporting. We have no employees. TCI, a subsidiary of ARL, owns approximately 81.1% of the common stock of Income Opportunity Realty Investors, Inc. (“IOT”). Effective July 17, 2009, IOT’s financial results were consolidated with those of ARL and TCI and their subsidiaries. Shares of IOT are traded on the New York Stock Exchange Euronext (“NYSE MKT”) under the symbol (“IOT”). ARL invests in real estate through direct ownership, leases and partnerships and also invests in mortgage loans on real estate. Pillar Income Asset Management, Inc. (“Pillar”) is the Company’s external Advisor and Cash Manager. Although the Board of Directors is directly responsible for managing the affairs of ARL, and for setting the policies which guide it, the day-to-day operations of ARL are performed by Pillar, as the contractual Advisor, under the supervision of the Board. Pillar’s duties include, but are not limited to: locating, evaluating and recommending real estate and real estate-related investment opportunities and arranging debt and equity financing for the Company with third party lenders and investors. Additionally, Pillar serves as a consultant to the Board with regard to their decisions in connection with ARL’s business plan and investment policy. Pillar also serves as an Advisor and Cash Manager to TCI and IOT. Regis Realty Prime, LLC (“Regis”) manages our commercial properties and provides brokerage services. ARL engages third-party companies to lease and manage its apartment properties.
Properties	Properties We own or had interests in a total property portfolio of 53 income-producing properties as of June 30, 2015. The properties consisted of: • Ten commercial properties consisting of five office buildings, one industrial warehouse, three retail centers and a golf course, comprising in aggregate approximately 2.2 million rentable square feet; • 43 apartment communities totaling 7,085 units, excluding apartments being developed; and • 4,159 acres of developed and undeveloped land. We join with various third-party development companies to construct residential apartment communities. We are in the predevelopment process on several residential apartment communities that have not yet begun construction. At June 30, 2015, we had two apartment projects in development. The third-party developer typically holds a general partner as well as a majority limited partner interest in a limited partnership formed for the purpose of building a single property, while we generally take a minority limited partner interest in the limited partnership. We may contribute land to the partnership as part of our equity contribution or we may contribute the necessary funds to the partnership to acquire the land. We are required to fund all necessary equity contributions while the third-party developer is responsible for obtaining construction financing, hiring a general contractor and for the overall management, successful completion and delivery of the project. We generally bear all the economic risks and rewards of ownership in these partnerships and therefore include these partnerships in our Consolidated Financial Statements. The third-party developer is paid a developer fee typically equal to a percentage of the construction costs. When the project reaches stabilized occupancy, we acquire the third-party developer’s partnership interests in exchange for any remaining unpaid developer fees.
Basis of Presentation	Basis of Presentation The accompanying unaudited Consolidated Financial Statements have been prepared in accordance with the instructions to Form 10-Q and Article 10 of Regulation S-X. Certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) have been condensed or omitted in accordance with such rules and regulations, although management believes the disclosures are adequate to prevent the information presented from being misleading. In the opinion of management, all adjustments (consisting of normal recurring matters) considered necessary for a fair presentation have been included. The results of operations for the six months ended June 30, 2015, are not necessarily indicative of the results that may be expected for other interim periods or for the full fiscal year. The year-end Consolidated Balance Sheet at December 31, 2014 was derived from the audited Consolidated Financial Statements at that date, but does not include all of the information and disclosures required by U.S. GAAP for complete financial statements. For further information, refer to the Consolidated Financial Statements and notes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2014. Certain 2014 Consolidated Financial Statement amounts have been reclassified to conform to the 2015 presentation, including adjustments for discontinued operations.
Principles of Consolidation	Principles of Consolidation The accompanying Consolidated Financial Statements include the accounts of the Company, its subsidiaries, generally all of which are wholly-owned, and all entities in which we have a controlling interest. Arrangements that are not controlled through voting or similar rights are accounted for as a Variable Interest Entity (“VIE”), in accordance with the provisions and guidance of ASC Topic 810, “Consolidation”, whereby we have determined that we are a primary beneficiary of the VIE and meet certain criteria of a sole general partner or managing member as identified in accordance with Emerging Issues Task Force (“EITF”) Issue 04-5, Investor’s Accounting for an Investment in a Limited Partnership when the Investor is the Sole General Partner and the Limited Partners have Certain Rights (“EITF 04-5”). VIEs are generally entities that lack sufficient equity to finance their activities without additional financial support from other parties or whose equity holders as a group lack adequate decision making ability, the obligation to absorb expected losses or residual returns of the entity, or have voting rights that are not proportional to their economic interests. The primary beneficiary generally is the entity that provides financial support and bears a majority of the financial risks, authorizes certain capital transactions, or makes operating decisions that materially affect the entity’s financial results. All significant intercompany balances and transactions have been eliminated in consolidation. In determining whether we are the primary beneficiary of a VIE, we consider qualitative and quantitative factors, including, but not limited to: the amount and characteristics of our investment; the obligation or likelihood for us or other investors to provide financial support; our and the other investors’ ability to control or significantly influence key decisions for the VIE; and the similarity with and significance to the business activities of us and the other investors. Significant judgments related to these determinations include estimates about the current future fair values and performance of real estate held by these VIEs and general market conditions. For entities in which we have less than a controlling financial interest or entities where we are not deemed to be the primary beneficiary, the entities are accounted for using the equity method of accounting. Accordingly, our share of the net earnings or losses of these entities is included in consolidated net income. Our investment in Gruppa Florentina, LLC is accounted for under the equity method.
Real Estate, Depreciation and Impairment	Real Estate, Depreciation and Impairment Real estate assets are stated at the lower of depreciated cost or fair value, if deemed impaired. Major replacements and betterments are capitalized and depreciated over their estimated useful lives. Depreciation is computed on a straight-line basis over the useful lives of the properties (buildings and improvements – 10-40 years; furniture, fixtures and equipment – 5-10 years). The Company continually evaluates the recoverability of the carrying value of its real estate assets using the methodology prescribed in ASC Topic 360 (“ASC 360”), “Property, Plant and Equipment”. Factors considered by management in evaluating impairment of its existing real estate assets held for investment include significant declines in property operating profits, annually recurring property operating losses and other significant adverse changes in general market conditions that are considered permanent in nature. Under ASC 360, a real estate asset held for investment is not considered impaired if the undiscounted, estimated future cash flows of an asset (both the annual estimated cash flow from future operations and the estimated cash flow from the theoretical sale of the asset) over its estimated holding period are in excess of the asset’s net book value at the balance sheet date. If any real estate asset held for investment is considered impaired, a loss is provided to reduce the carrying value of the asset to its estimated fair value.
Real Estate Held For Sale	Real Estate Held For Sale We periodically classify real estate assets as “held for sale”. An asset is classified as held for sale after the approval of our Board of Directors, after an active program to sell the asset has commenced and if the sale is probable. One of the deciding factors in determining whether a sale is probable is whether the firm purchase commitment is obtained and whether the sale is probable within the year. Upon the classification of a real estate asset as held for sale, the carrying value of the asset is reduced to the lower of its net book value or its estimated fair value, less costs to sell the asset. Subsequent to the classification of assets as held for sale, no further depreciation expense is recorded. Real estate assets held for sale are stated separately on the accompanying Consolidated Balance Sheets. Upon a decision that the sale is no longer probable, the asset is classified as an operating asset and depreciation expense is reinstated. Prior to January 1, 2015, the operating results of real estate assets held for sale and sold are reported as discontinued operations in the accompanying Consolidated Statements of Operations. Income from discontinued operations includes the revenues and expenses, including depreciation and interest expense, associated with the assets. Subsequent to January 1, 2015, Accounting Standards Update 2014-08, “Reporting Discontinued Operations and Disclosures of Disposals of Components of an Entity” (“ASU 2014-08”) substantially changed the criteria for determining whether a disposition qualifies for discontinued operations presentation. Adoption of this standard will result in substantially fewer of the Company's dispositions meeting the discontinued operations criteria.
Cost Capitalization	Cost Capitalization Costs related to planning, developing, leasing and constructing a property are capitalized and classified as Real Estate in the Consolidated Balance Sheets. We capitalize interest to qualifying assets under development based on average accumulated expenditures outstanding during the period. In capitalizing interest to qualifying assets, we first use the interest incurred on specific project debt, if any, and next use the weighted average interest rate of non-project specific debt. We capitalize interest, real estate taxes and certain operating expenses until building construction is substantially complete and the building is ready for its intended use, but no later than one year from the cessation of major construction activity. We capitalize leasing costs which include commissions paid to outside brokers, legal costs incurred to negotiate and document a lease agreement and any internal costs that may be applicable. We allocate these costs to individual tenant leases and amortize them over the related lease term.
Fair Value Measurement	Fair Value Measurement We apply the guidance in ASC Topic 820, “Fair Value Measurements and Disclosures”, to the valuation of real estate assets. These provisions define fair value as the price that would be received to sell an asset or paid to transfer a liability in a transaction between market participants at the measurement date, establish a hierarchy that prioritizes the information used in developing fair value estimates and require disclosure of fair value measurements by level within the fair value hierarchy. The hierarchy gives the highest priority to quoted prices in active markets (Level 1 measurements) and the lowest priority to unobservable data (Level 3 measurements), such as the reporting entity’s own data. The valuation hierarchy is based upon the transparency of inputs to the valuation of an asset or liability as of the measurement date and includes three levels defined as follows: Level 1 – Unadjusted quoted prices for identical and unrestricted assets or liabilities in active markets. Level 2 – Quoted prices for similar assets and liabilities in active markets, and inputs that are observable for the asset or liability, either directly or indirectly, for substantially the full term of the financial instrument. Level 3 – Unobservable inputs that are significant to the fair value measurement. A financial instrument’s categorization within the valuation hierarchy is based upon the lowest level of input that is significant to the fair value measurement.
Deferred Costs	Deferred Costs Costs relating to the financing of properties are deferred and amortized over the life of the related financing agreement. Amortization is reflected as interest expense in the Consolidated Statements of Operations, with remaining terms ranging from 6 months to 40 years. Unamortized financing costs are written off when the financing agreement is extinguished before the maturity date.
Related Parties	Related Parties We apply ASC Topic 805, “Business Combinations”, to evaluate business relationships. Related parties are persons or entities who have one or more of the following characteristics, which include entities for which investments in their equity securities would be required, trust for the benefit of persons including principal owners of the entities and members of their immediate families, management personnel of the entity and members of their immediate families and other parties with which the entity may deal if one party controls or can significantly influence the decision making of the other to an extent that one of the transacting parties might be prevented from fully pursuing its own separate interests, or affiliates of the entity.
Newly Issued Accounting Standards	Newly Issued Accounting Standards In April 2014, the Financial Accounting Standards Board (“FASB”) issued ASU 2014-08, “Reporting Discontinued Operations and Disclosures of Disposals of Components of an Entity”, which changes the criteria for determining which disposals qualify to be accounted for as discontinued operations and modifies related reporting and disclosure requirements. Disposals representing a strategic shift in operations, such as change in a major line of business, a major geographical area or major equity investment, that have a major effect on a company’s operations and financial results will be presented as discontinued operations. If the disposal does qualify as a discontinued operation under ASU 2014-08, the company will be required to expand their disclosures about discontinued operations to provide more information on the assets, liabilities, income and expenses of the disposed of component. The classification of operating results as discontinued operations are applied retroactively for all periods presented. The new standard was effective January 1, 2015. We adopted ASU 2014-08 as of January 1, 2015 and believe future sales of our individual operating properties will no longer qualify as discontinued operations. Adoption of this standard has resulted in substantially fewer of the Company's dispositions meeting the discontinued operations criteria. See Note 8 below. In May 2014, Accounting Standards Update (“ASU”) No. 2014-09 (“ASU 2014-09”), “Revenue from Contracts with Customers,” was issued. This new guidance established a new single comprehensive revenue recognition model and provides for enhanced disclosures. Under the new guidance, the nature, timing and amount of revenue recognized for certain transactions could differ from those recognized under existing accounting guidance. This new guidance does not affect revenue recognized under lease contracts. ASU 2014-09 is effective for reporting periods beginning after December 15, 2017. The Company is currently evaluating the impact the adoption of this guidance, if any, on its financial position and results of operations. In April 2015, the FASB issued ASU 2015-03, “Simplifying the Presentation of Debt Issuance Costs” (“ASU 2015-03”). ASU 2015-03 requires debt issuance costs to be presented in the balance sheet as a direct deduction from the carrying value of the associated debt liability, consistent with the presentation of a debt discount. Prior to the issuance of the standard, debt issuance costs were required to be presented in the balance sheet as an asset. The Company has adopted this standard effective June 30, 2015. The accompanying financials have been reclassified to reflect the adoption.

REAL ESTATE ACTIVITY (Table)

REAL ESTATE ACTIVITY (Table)	6 Months Ended
	Jun. 30, 2015
Real Estate Activity Table
Schedule of the real estate owned	Below is a summary of the real estate owned as of June 30, 2015 (dollars in thousands): Apartments $ 543,524 Apartments under construction 3,261 Commercial properties 216,941 Land held for development 158,117 Real estate subject to sales contract 21,507 Total real estate $ 943,350 Less accumulated depreciation (141,436 ) Total real estate, net of depreciation $ 801,914

NOTES AND INTEREST RECEIVABLE (

NOTES AND INTEREST RECEIVABLE (Table)	6 Months Ended
	Jun. 30, 2015
Notes And Interest Receivable Table
Schedule of notes and interest receivable	Our mortgage notes receivable consist of first, wraparound and junior mortgage loans (dollars in thousands): Maturity Interest Borrower Date Rate Amount Security Performing loans: Foundation for Better Housing, Inc. (Overlook at Allensville) (1) 11/19 12.00% 2,472 Secured Foundation for Better Housing, Inc. (Overlook at Allensville) (1) 12/17 12.00% 1,408 Secured Foundation for Better Housing, Inc. (Vista Ridge) (1) 04/19 12.00% 3,923 Secured Foundation for Better Housing, Inc. (Vista Ridge) (1) 06/17 12.00% 1,492 Secured H198, LLC (Las Vegas Land) 01/20 12.00% 5,907 Secured One Realco Corporation (1) (2) 01/17 3.00% 7,000 Unsecured Realty Advisors Management, Inc. (1) 12/16 2.20% 20,387 Unsecured Unified Housing Foundation, Inc. (Cliffs of El Dorado) (1) 12/32 12.00% 2,097 100% Membership Interest in Unified Housing of McKinney, LLC Unified Housing Foundation, Inc. (Echo Station) (1) 12/32 12.00% 1,481 100% Membership Interest in Unified Housing of Temple, LLC Unified Housing Foundation, Inc. (Inwood on the Park) (1) 12/32 12.00% 5,059 100% Membership Interest in Unified Housing Inwood, LLC Unified Housing Foundation, Inc. (Kensington Park) (1) 12/32 12.00% 3,936 100% Membership Interest in Unified Housing Kensington, LLC Unified Housing Foundation, Inc. (Lakeshore Villas) (1) 12/32 12.00% 2,000 Secured Unified Housing Foundation, Inc. (Lakeshore Villas) (1) 12/32 12.00% 9,096 Membership interest in Housing for Seniors of Humble, LLC Unified Housing Foundation, Inc. (Limestone Canyon) (1) 12/32 12.00% 3,057 100% Membership Interest in Unified Housing of Austin, LLC Unified Housing Foundation, Inc. (Limestone Canyon) (1) 12/32 12.00% 4,663 100% Membership Interest in Unified Housing of Austin, LLC Unified Housing Foundation, Inc. (Limestone Ranch) (1) 12/32 12.00% 2,250 100% Membership Interest in Unified Housing of Vista Ridge, LLC Unified Housing Foundation, Inc. (Limestone Ranch) (1) 12/32 12.00% 6,000 100% Membership Interest in Unified Housing of Vista Ridge, LLC Unified Housing Foundation, Inc. (Parkside Crossing) (1) 12/32 12.00% 2,272 100% Membership Interest in Unified Housing of Parkside Crossing, LLC Unified Housing Foundation, Inc. (Reserve at White Rock Phase I) (1) 12/32 12.00% 2,485 100% Membership Interest in Unified Housing of Harvest Hill I, LLC Unified Housing Foundation, Inc. (Reserve at White Rock Phase II) (1) 12/32 12.00% 2,555 100% Membership Interest in Unified Housing of Harvest Hill, LLC Unified Housing Foundation, Inc. (Sendero Ridge) (1) 12/32 12.00% 5,174 100% Membership Interest in Unified Housing of Sendero Ridge, LLC Unified Housing Foundation, Inc. (Sendero Ridge) (1) 12/32 12.00% 4,812 100% Membership Interest in Unified Housing of Sendero Ridge, LLC Unified Housing Foundation, Inc. (Timbers at the Park) (1) 12/32 12.00% 1,323 100% Membership Interest in Unified Housing of Terrell, LLC Unified Housing Foundation, Inc. (Tivoli) (1) 12/32 12.00% 7,966 100% Membership Interest in Unified Housing of Tivoli, LLC Unified Housing Foundation, Inc. (Trails at White Rock) (1) 12/32 12.00% 3,815 100% Membership Interest in Unified Housing of Harvest Hill III, LLC Unified Housing Foundation, Inc. (1) 06/17 12.00% 1,261 Unsecured Unified Housing Foundation, Inc. (1) 12/17 12.00% 1,207 Unsecured Unified Housing Foundation, Inc. (1) 12/15 12.00% 2,665 Unsecured Unified Housing Foundation, Inc. (1) 12/16 12.00% 3,657 Unsecured Other related party notes (1) Various Various 2,117 Various secured interests Other related party notes (1) Various Various 4,929 Various unsecured interests Other non-related party notes Various Various 3,164 Various secured interests Other non-related party notes Various Various 503 Various unsecured interests Accrued interest 8,350 Total Performing $ 140,483 Non-Performing loans: Leman Development, Ltd (2) 07/11 7.00% $ 1,500 Unsecured Tracy Suttles (2) 12/11 0.00% 1,077 Unsecured Other non-related party notes Various V arious 507 Various secured interests Accrued interest 97 Total Non-Performing $ 3,181 Allowance for doubtful accounts (18,279) Total $ 125,385 (1) (2)

INVESTMENT IN UNCONSOLIDATED 24

INVESTMENT IN UNCONSOLIDATED INVESTEES (Table)	6 Months Ended
	Jun. 30, 2015
Investment In Unconsolidated Investees Table
Schedule of investments accounted for via the equity method	Investments in unconsolidated investees consist of the following: Percentage ownership as of June 30, 2015 June 30, 2014 Gruppa Florentina, LLC 20.00% 20.00%
Schedule of the financial position and results of operations - unconsolidated parent	The following is a summary of the financial position and results of operations from our investees (dollars in thousands): As of June 30, 2015 2014 Real estate, net of accumulated depreciation $ 12,518 $ 10,832 Notes receivable 7,681 6,934 Other assets 30,233 31,107 Notes payable (10,685 ) (11,002 ) Other liabilities (6,500 ) (6,631 ) Shareholders' equity (33,247 ) (31,240 ) For the Six Months Ended June 30, 2015 2014 Revenue $ 26,048 $ 23,990 Depreciation (575 ) (575 ) Operating expenses (23,609 ) (22,121 ) Interest expense (404 ) (445 ) Income from continuing operations 1,460 849 Income from discontinued operations — — Net income $ 1,460 $ 849 Company's proportionate share of earnings $ 292 $ 170

NOTES PAYABLE (Table)

NOTES PAYABLE (Table)	6 Months Ended
	Jun. 30, 2015
Notes Payable Table
Schedule of Notes And Interest Payable	Below is a summary of our notes and interest payable as of June 30, 2015 (dollars in thousands): Notes Payable Accrued Interest Total Debt Apartments $ 443,429 $ 1,316 $ 444,745 Commercial 117,392 494 117,886 Land 70,199 116 70,315 Real estate subject to sales contract 16,546 1,705 18,251 Mezzanine financing 123,900 — 123,900 Other 19,096 494 19,590 Total $ 790,562 $ 4,125 $ 794,687 Unamortized deferred borrowing costs (20,018 ) — (20,018 ) Total $ 770,544 $ 4,125 $ 774,669

RELATED PARTY TRANSACTIONS (Tab

RELATED PARTY TRANSACTIONS (Table)	6 Months Ended
	Jun. 30, 2015
Related Party Transactions Table
Schedule of Related Party Transactions	The following table reconciles the beginning and ending balances of accounts receivable from and (accounts payable) to related parties as of June 30, 2015 (dollars in thousands): Pillar Related party receivable, December 31, 2014 $ 21,414 Cash transfers 41,516 Advisory fees (4,600 ) Net income fee (335 ) Fees and commissions (2,391 ) Cost reimbursements (1,829 ) Interest income 408 Expenses paid by Advisor (5,448 ) Financing (mortgage payments) (1,370 ) Sales/purchases transactions (10,005 ) Related party receivable, June 30, 2015 $ 37,360

OPERATING SEGMENTS (Table)

OPERATING SEGMENTS (Table)	6 Months Ended
	Jun. 30, 2015
Operating Segments Table
Schedule of operating segment, including segment assets and expenditures	Presented below is our reportable segments’ operating income for the three and six months ended June 30, 2015 and 2014, including segment assets and expenditures (dollars in thousands): Commercial For the Three Months Ended June 30, 2015 Properties Apartments Hotels Land Other Total Rental and other property revenues $ 6,974 $ 17,258 $ — $ — $ 9 $ 24,241 Property operating expenses (3,341 ) (7,829 ) — (165 ) 34 (11,301 ) Depreciation (2,230 ) (2,926 ) — — 19 (5,137 ) Mortgage and loan interest (1,642 ) (3,377 ) — (1,304 ) (3,471 ) (9,794 ) Interest income — — — — 4,535 4,535 Gain on land sales — — — 3,027 — 3,027 Segment operating income (loss) $ (239 ) $ 3,126 $ — $ 1,558 $ 1,126 $ 5,571 Capital expenditures 2,943 224 — 485 — 3,652 Real estate assets 162,333 473,908 — 165,673 — 801,914 Property Sales Sales price $ — $ — $ — $ 1,878 $ — $ 1,878 Cost of sale — — — (628 ) — (628 ) Recognized prior deferred gain — — — 1,777 — 1,777 Gain on sale $ — $ — $ — $ 3,027 $ — $ 3,027 Commercial For the Three Months Ended June 30, 2014 Properties Apartments Hotels Land Other Total Rental and other property revenues $ 4,776 $ 14,706 $ — $ — $ 18 $ 19,500 Property operating expenses (3,169 ) (6,535 ) — (279 ) — (9,983 ) Depreciation (1,757 ) (2,585 ) — — 19 (4,323 ) Mortgage and loan interest (1,645 ) (3,869 ) — (1,458 ) (2,721 ) (9,693 ) Interest income — — — — 6,041 6,041 Loss on land sales — — — (159 ) — (159 ) Segment operating income (loss) $ (1,795 ) $ 1,717 $ — $ (1,896 ) $ 3,357 $ 1,383 Capital expenditures 1,862 99 — 66 — 2,027 Real estate assets 131,193 372,674 — 167,293 — 671,160 Property Sales Sales price $ 16,600 $ — $ — $ 717 $ — $ 17,317 Cost of sale (9,597 ) — — (876 ) — (10,473 ) Gain (loss) on sale $ 7,003 $ — $ — $ (159 ) $ — $ 6,844 Commercial For the Six Months Ended June 30, 2015 Properties Apartments Hotels Land Other Total Rental and other property revenues $ 14,065 $ 33,277 $ — $ — $ 55 $ 47,397 Property operating expenses (7,608 ) (14,871 ) — (514 ) 24 (22,969 ) Depreciation (4,157 ) (5,721 ) — — 37 (9,841 ) Mortgage and loan interest (3,258 ) (9,560 ) — (2,421 ) (6,200 ) (21,439 ) Interest income — — — — 9,772 9,772 Gain on land sales — — — 5,903 — 5,903 Segment operating income (loss) $ (958 ) $ 3,125 $ — $ 2,968 $ 3,688 $ 8,823 Capital expenditures 6,135 481 — 1,311 — 7,927 Real estate assets 162,333 473,908 — 165,673 — 801,914 Property Sales Sales price $ — $ — $ — $ 9,135 $ — $ 9,135 Cost of sale — — — (5,009 ) — (5,009 ) Recognized prior deferred gain — — — 1,777 — 1,777 Gain on sale $ — $ — $ — $ 5,903 $ — $ 5,903 Commercial For the Six Months Ended June 30, 2014 Properties Apartments Hotels Land Other Total Rental and other property revenues $ 9,557 $ 29,074 $ — $ — $ 28 $ 38,659 Property operating expenses (6,316 ) (13,000 ) — (590 ) (5 ) (19,911 ) Depreciation (3,571 ) (5,119 ) — — 54 (8,636 ) Mortgage and loan interest (3,144 ) (10,178 ) — (2,543 ) (4,467 ) (20,332 ) Interest income — — — — 10,158 10,158 Gain on land sales — — — 594 — 594 Segment operating income (loss) $ (3,474 ) $ 777 $ — $ (2,539 ) $ 5,768 $ 532 Capital expenditures 2,992 99 — 151 — 3,242 Real estate assets 131,193 372,674 — 167,293 — 671,160 Property Sales Sales price $ 16,600 $ 23,131 $ — $ 2,367 $ — $ 42,098 Cost of sale (9,597 ) (17,077 ) — (1,773 ) — (28,447 ) Gain on sale $ 7,003 $ 6,054 $ — $ 594 $ — $ 13,651
Schedule of Segment information to Consolidated Statements of Operations	The table below reconciles the segment information to the corresponding amounts in the Consolidated Statements of Operations (dollars in thousands): For the Three Months Ended June 30, 2015 2014 Segment operating income $ 5,571 $ 1,383 Other non-segment items of income (expense) General and administrative (1,596 ) (3,195 ) Net income fee to related party (45 ) (210 ) Advisory fee to related party (2,309 ) (2,202 ) Other income 14 232 Earnings from unconsolidated investees 151 (124 ) Litigation settlement (45 ) (86 ) Income tax benefit (expense) (12 ) 2,195 Net income (loss) from continuing operations $ 1,729 $ (2,007 ) The table below reconciles the segment information to the corresponding amounts in the Consolidated Statements of Operations: For the Six Months Ended June 30, 2015 2014 Segment operating income $ 8,823 $ 532 Other non-segment items of income (expense) General and administrative (3,798 ) (5,179 ) Net income fee to related party (335 ) (700 ) Advisory fee to related party (4,601 ) (4,445 ) Other income 4,111 406 Earnings from unconsolidated investees 196 (54 ) Litigation settlement (117 ) 3,752 Income tax benefit 91 4,244 Net income (loss) from continuing operations $ 4,370 $ (1,444 )
Schedule of Segment information to Consolidated Balance Sheets	The table below reconciles the segment information to the corresponding amounts in the Consolidated Balance Sheets (dollars in thousands): As of June 30, 2015 2014 Segment assets $ 801,914 $ 671,160 Investments in unconsolidated investees 1,299 3,833 Notes and interest receivable 125,385 138,014 Other assets 148,020 95,172 Total assets $ 1,076,618 $ 908,179 The table below reconciles the segment information to the corresponding amounts in the Consolidated Balance Sheets: As of June 30, 2015 2014 Segment assets $ 801,914 $ 671,160 Investments in unconsolidated investees 1,299 3,833 Notes and interest receivable 125,385 138,014 Other assets 148,020 95,172 Total assets $ 1,076,618 $ 908,179

DISCONTINUED OPERATIONS (Table)

DISCONTINUED OPERATIONS (Table)	6 Months Ended
	Jun. 30, 2015
Discontinued Operations Table
Schedule of summarizes revenue and expense information for the properties sold and held for sale	The following table summarizes revenue and expense information for the properties sold and held for sale (dollars in thousands): For the Three Months Ended June 30, For the Six Months Ended June 30, 2015 2014 2015 2014 Revenues: Rental and other property revenues $ — $ 1,341 $ 15 $ 3,912 — 1,341 15 3,912 Expenses: Property operating expenses 26 557 (348 ) 1,875 Depreciation — 179 — 509 General and administrative 7 140 102 313 Total operating expenses 33 876 (246 ) 2,697 Other income (expense): Other income — (528 ) — (486 ) Mortgage and loan interest (1 ) (464 ) (1 ) (1,410 ) Litigation settlement — (205 ) — (250 ) Total other expenses (1 ) (1,197 ) (1 ) (2,146 ) Gain (loss) from discontinued operations before gain on sale of real estate and tax (34 ) (732 ) 260 (931 ) Gain on sale of real estate from discontinued operations — 7,003 — 13,057 Income tax benefit (expense) 12 (2,195 ) (91 ) (4,244 ) Income (loss) from discontinued operations $ (22 ) $ 4,076 $ 169 $ 7,882

ORGANIZATION AND BASIS OF PRE29

ORGANIZATION AND BASIS OF PRESENTATION (Details Narrative)	3 Months Ended	6 Months Ended
	Sep. 30, 2012	Jun. 30, 2015ft²aNumber
Ownership after acquisition	80.00%
Number of units		7,085
Number of properties		53
Area of real estate property | ft²		2,200,000
Acres of land | a		4,159
Buildings and Improvements [Member] | Maximum [Member]
Use life		40 years
Buildings and Improvements [Member] | Minimum [Member]
Use life		10 years
Furniture, Fixtures and Equipment [Member] | Maximum [Member]
Use life		10 years
Furniture, Fixtures and Equipment [Member] | Minimum [Member]
Use life		5 years
Transcontinential Realty Investors [Member]
Percentage of ownership		80.90%
Income Opportunity Reality Investors [Member] | Transcontinential Realty Investors [Member]
Percentage of ownership		81.10%
Related Party [Member]
Percentage of ownership		86.70%
Number of properties		2
Related Party [Member] | Transcontinential Realty Investors [Member]
Acres of land | ft²		110
Apartments [Member]
Number of properties		4

REAL ESTATE ACTIVITY (Details N

REAL ESTATE ACTIVITY (Details Narrative) - Jun. 30, 2015 $ in Thousands	USD ($)ft²aNumber
Number of income-producing apartment purchase	53
Number of units	7,085
Payment to acquire the properties | $	$ 31,500
Area of real estate property | ft²	2,200,000
Area of land | a	4,159
Payment for construction or predevelopment of various apartment complexes | $	$ 3,200
Capitalized interest costs | $	$ 25,109
Related Party [Member]
Number of income-producing apartment purchase	2
Related Party [Member] | Transcontinential Realty Investors [Member]
Area of land | ft²	110
FLORIDA [Member]
Number of income-producing apartment purchase	2
TEXAS [Member]
Number of income-producing apartment purchase	1
Area of land | a	43
Proceeds from sale of real estate | $	$ 9,100
Gain on sale of real estate | $	$ 4,100
TEXAS [Member] | Related Party [Member]
Number of income-producing apartment purchase	2
Number of units	378
Payment to acquire the properties | $	$ 10,600
Apartments [Member]
Number of units	349
Office Building [Member] | TEXAS [Member]
Payment to acquire the properties | $	$ 16,800
Area of real estate property | ft²	92,723

REAL ESTATE ACTIVITY (Details)

REAL ESTATE ACTIVITY (Details) - USD ($) $ in Thousands	Jun. 30, 2015	Dec. 31, 2014
Real Estate Activity Details
Apartments	$ 543,524
Apartments under construction	3,261
Commercial properties	216,941
Land held for development	158,117
Real estate subject to sales contract	21,507
Total real estate	943,350
Less accumulated depreciation	(141,436)
Total real estate	$ 801,914	$ 699,763

NOTES AND INTEREST RECEIVABLE32

NOTES AND INTEREST RECEIVABLE (Details) - Jun. 30, 2015 - USD ($) $ in Thousands		Total
Allowance for doubtful accounts		$ (18,279)
Total		125,385
Performing Loans [Member]
Accrued interest		8,350
Total		$ 140,483
Performing Loans [Member] | Foundation for Better Housing, Inc. (Overlook at Allensville) [Member]
Maturity Date		2019-11
Interest rate		12.00%
Amount	[1]	$ 2,472
Description of security		Secured
Performing Loans [Member] | Foundation for Better Housing, Inc. (Overlook at Allensville) [Member]
Maturity Date		2017-12
Interest rate		12.00%
Amount	[1]	$ 1,408
Description of security		Secured
Performing Loans [Member] | Foundation for Better Housing, Inc. (Vista Ridge) [Member]
Maturity Date		2019-04
Interest rate		12.00%
Amount	[1]	$ 3,923
Description of security		Secured
Performing Loans [Member] | Foundation for Better Housing, Inc. (Vista Ridge) [Member]
Maturity Date		2017-06
Interest rate		12.00%
Amount	[1]	$ 1,492
Description of security		Secured
Performing Loans [Member] | H198, LLC (Las Vegas Land) [Member]
Maturity Date		2020-01
Interest rate		12.00%
Amount	[1]	$ 5,907
Description of security		Secured
Performing Loans [Member] | One Realco Corporation [Member]
Maturity Date		2017-01
Interest rate		3.00%
Amount	[1],[2]	$ 7,000
Description of security		Unsecured
Performing Loans [Member] | Realty Advisors Management, Inc. [Member]
Maturity Date		2016-12
Interest rate		2.20%
Amount	[1]	$ 20,387
Description of security		Unsecured
Performing Loans [Member] | Unified Housing Foundation, Inc. (Cliffs of El Dorado) [Member]
Maturity Date		2032-12
Interest rate		12.00%
Amount	[1]	$ 2,097
Security		$ 100
Performing Loans [Member] | Unified Housing Foundation, Inc. (Echo Station) [Member]
Maturity Date		2032-12
Interest rate		12.00%
Amount	[1]	$ 1,481
Security		$ 100
Performing Loans [Member] | Unified Housing Foundation, Inc. (Inwood on the Park) [Member]
Maturity Date		2032-12
Interest rate		12.00%
Amount	[1]	$ 5,059
Security		$ 100
Performing Loans [Member] | Unified Housing Foundation, Inc. (Kensington Park) [Member]
Maturity Date		2032-12
Interest rate		12.00%
Amount	[1]	$ 3,936
Security		$ 100
Performing Loans [Member] | Unified Housing Foundation, Inc. (Lakeshore Villas) [Member]
Maturity Date		2032-12
Interest rate		12.00%
Amount	[1]	$ 2,000
Description of security		Secured
Performing Loans [Member] | Unified Housing Foundation, Inc. (Lakeshore Villas) [Member]
Maturity Date		2032-12
Interest rate		12.00%
Amount	[1]	$ 9,096
Description of security		Membership interest in Housing for Seniors of Humble, LLC
Performing Loans [Member] | Unified Housing Foundation, Inc. (Limestone Canyon) [Member]
Maturity Date		2032-12
Interest rate		12.00%
Amount	[1]	$ 3,057
Security		$ 100
Performing Loans [Member] | Unified Housing Foundation, Inc. (Limestone Canyon) [Member]
Maturity Date		2032-12
Interest rate		12.00%
Amount	[1]	$ 4,663
Security		$ 100
Performing Loans [Member] | Unified Housing Foundation, Inc. (Limestone Ranch) [Member]
Maturity Date		2032-12
Interest rate		12.00%
Amount	[1]	$ 2,250
Security		$ 100
Performing Loans [Member] | Unified Housing Foundation, Inc. (Limestone Ranch) [Member]
Maturity Date		2032-12
Interest rate		12.00%
Amount	[1]	$ 6,000
Security		$ 100
Performing Loans [Member] | Unified Housing Foundation, Inc. (Parkside Crossing) [Member]
Maturity Date		2032-12
Interest rate		12.00%
Amount	[1]	$ 2,272
Security		$ 100
Performing Loans [Member] | Unified Housing Foundation, Inc. (Reserve at White Rock Phase I) [Member]
Maturity Date		2032-12
Interest rate		12.00%
Amount	[1]	$ 2,485
Security		$ 100
Performing Loans [Member] | Unified Housing Foundation, Inc. (Reserve at White Rock Phase II) [Member]
Maturity Date		2032-12
Interest rate		12.00%
Amount	[1]	$ 2,555
Security		$ 100
Performing Loans [Member] | Unified Housing Foundation, Inc. (Sendero Ridge) [Member]
Maturity Date		2032-12
Interest rate		12.00%
Amount	[1]	$ 5,174
Security		$ 100
Performing Loans [Member] | Unified Housing Foundation, Inc. (Sendero Ridge) [Member]
Maturity Date		2032-12
Interest rate		12.00%
Amount	[1]	$ 4,812
Security		$ 100
Performing Loans [Member] | Unified Housing Foundation, Inc. (Timbers at the Park) [Member]
Maturity Date		2032-12
Interest rate		12.00%
Amount	[1]	$ 1,323
Security		$ 100
Performing Loans [Member] | Unified Housing Foundation, Inc. (Tivoli) [Member]
Maturity Date		2032-12
Interest rate		12.00%
Amount	[1]	$ 7,966
Security		$ 100
Performing Loans [Member] | Unified Housing Foundation, Inc. (Trails at White Rock) [Member]
Maturity Date		2032-12
Interest rate		12.00%
Amount	[1]	$ 3,815
Security		$ 100
Performing Loans [Member] | Unified Housing Foundation, Inc. [Member]
Maturity Date		2017-06
Interest rate		12.00%
Amount	[1]	$ 1,261
Description of security		Unsecured
Performing Loans [Member] | Unified Housing Foundation, Inc. [Member]
Maturity Date		2017-12
Interest rate		12.00%
Amount	[1]	$ 1,207
Description of security		Unsecured
Performing Loans [Member] | Unified Housing Foundation, Inc. [Member]
Maturity Date		2015-12
Interest rate		12.00%
Amount	[1]	$ 2,665
Description of security		Unsecured
Performing Loans [Member] | Unified Housing Foundation, Inc. [Member]
Maturity Date		2016-12
Interest rate		12.00%
Amount	[1]	$ 3,657
Description of security		Unsecured
Performing Loans [Member] | Other related party notes [Member]
Description of Maturity Date		Various
Description of Interest rate		Various
Amount	[1]	$ 2,117
Description of security		Various secured interests
Performing Loans [Member] | Other related party notes [Member]
Description of Maturity Date		Various
Description of Interest rate		Various
Amount	[1]	$ 4,929
Description of security		Various unsecured interests
Performing Loans [Member] | Other non-related party notes [Member]
Description of Maturity Date		Various
Description of Interest rate		Various
Amount	[1]	$ 3,164
Description of security		Various secured interests
Performing Loans [Member] | Other non-related party notes [Member]
Description of Maturity Date		Various
Description of Interest rate		Various
Amount		$ 503
Description of security		Various unsecured interests
Non-Performing Loans [Member]
Accrued interest		$ 97
Total		$ 3,181
Non-Performing Loans [Member] | Other non-related party notes [Member]
Description of Maturity Date		Various
Description of Interest rate		Various
Amount		$ 507
Description of security		Various secured interests
Non-Performing Loans [Member] | Leman Development, Ltd [Member]
Maturity Date		2011-07
Interest rate		7.00%
Amount	[2]	$ 1,500
Description of security		Unsecured
Non-Performing Loans [Member] | Tracy Suttles [Member]
Maturity Date		2012-11
Interest rate		0.00%
Amount	[2]	$ 1,077
Description of security		Unsecured
[1]	Related party notes.
[2]	An allowance was taken for estimated losses at full value of note.

INVESTMENT IN UNCONSOLIDATED 33

INVESTMENT IN UNCONSOLIDATED INVESTEES (Details Narrative) - Number	Jun. 30, 2015	Jun. 30, 2014
Gruppa Florentina LLC [Member]
Percentage of ownership	20.00%	20.00%
SienaCorp [Member]
Number of stores	2
Number of restaurants franchise	23
Percentage of ownership	100.00%
Milano Restaurants International Corporation [Member] | Gruppa Florentina LLC [Member]
Number of stores	35
Number of restaurants franchise	23
Percentage of ownership	100.00%

INVESTMENT IN UNCONSOLIDATED 34

INVESTMENT IN UNCONSOLIDATED INVESTEES (Details 1) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2015	Jun. 30, 2014	Jun. 30, 2015	Jun. 30, 2014	Dec. 31, 2014
Total real estate	$ 801,914		$ 801,914		$ 699,763
Other assets	39,320		39,320		44,111
Shareholders' equity	130,109		130,109		$ 124,340
Revenue	24,241	$ 19,500	47,397	$ 38,659
Depreciation	(5,137)	(4,323)	(9,841)	(8,636)
Operating expenses	20,388	19,913	41,544	38,871
Income from continuing operations	1,741	(4,202)	4,279	(5,688)
Income from discontinued operations	(22)	4,076	169	7,882
Net income	1,707	2,069	4,539	6,438
Company's proportionate share of earnings	151	(124)	196	(54)
Gruppa Florentina LLC [Member]
Total real estate	12,518	10,832	12,518	10,832
Notes receivable	7,681	6,934	7,681	6,934
Other assets	30,233	31,107	30,233	31,107
Notes payable	(10,685)	(11,002)	(10,685)	(11,002)
Other liabilities	(6,500)	(6,631)	(6,500)	(6,631)
Shareholders' equity	$ (33,247)	$ (31,240)	(33,247)	(31,240)
Revenue			26,048	23,990
Depreciation			(575)	(575)
Operating expenses			(23,609)	(22,121)
Interest expense			(404)	(445)
Income from continuing operations			1,460	849
Net income			1,460	849
Company's proportionate share of earnings			$ 292	$ 170

NOTES PAYABLE (Details Narrativ

NOTES PAYABLE (Details Narrative) $ in Thousands	May. 28, 2015USD ($)	Apr. 29, 2015USD ($)Number	Apr. 23, 2015USD ($)Number	Jan. 28, 2015Number	Jun. 30, 2015USD ($)Number
Number of units | Number					7,085
Notes oustanding balance					$ 774,669
Mortgage Notes Payable [Member] | TEXAS [Member]
Number of units | Number				200
Interest rate				3.24%
Description of frequency payment				Monthly
Maturity date				Aug. 1, 2050
Mortgage Notes Payable [Member] | MISSISSIPPI [Member]
Number of units | Number				240
Interest rate				3.24%
Description of frequency payment				Monthly
Maturity date				Dec. 1, 2051
New Mortgage Notes Payable [Member] | ARKANSAS [Member]
Number of units | Number			250
Interest rate			2.74%
Description of frequency payment			Monthly
Maturity date			May 1, 2050
Notes Payable			$ 21,000
Repayment of notes payable			15,700
Repayment of notes payable closing cost			$ 600
New Mortgage Notes Payable [Member] | TEXAS [Member]
Number of units | Number		240
Interest rate		3.28%
Description of frequency payment		Monthly
Maturity date		Mar. 31, 2051
Notes Payable		$ 15,400
Repayment of notes payable closing cost		$ 700
Secured Notes Payable [Member] | Independent Third Party [Member]
Description of frequency payment	Monthly
Notes Payable	$ 120,000
Notes oustanding balance	$ 84,400
Notes payable term	5 years
Description of interest rate	Interest rate of 30 day Libor plus 10.75%
Description of collteral	The loan is secured by various equity interests in certain residential apartments.
New Secured Notes Payable [Member] | Independent Third Party [Member]
Interest rate	12.00%
Description of frequency payment	Quarterly
Notes oustanding balance	$ 40,000				39,500
Notes payable term	5 years
Description of collteral	The loan is secured by various equity interests in residential apartments and can be prepaid at a penalty rate of 4% for year 1 with the penalty declining by 1% each year thereafter.
Notes payable principal payment	$ 500
Construction Loans [Member]
Notes oustanding balance					$ 1,700

NOTES PAYABLE (Details)

NOTES PAYABLE (Details) $ in Thousands	Jun. 30, 2015USD ($)
Notes Payable	$ 770,544
Accrued Interest	4,125
Total Debt	774,669
Unamortized deferred borrowing costs	(20,018)
Apartments [Member]
Notes Payable	443,429
Accrued Interest	1,316
Total Debt	444,745
Commercial [Member]
Notes Payable	117,392
Accrued Interest	494
Total Debt	117,886
Land [Member]
Notes Payable	70,199
Accrued Interest	116
Total Debt	70,315
Real Estate Subject to Sales Contract [Member]
Notes Payable	16,546
Accrued Interest	1,705
Total Debt	18,251
Mezzanine Financing [Member]
Notes Payable	$ 123,900
Accrued Interest
Total Debt	$ 123,900
Other [Member]
Notes Payable	19,096
Accrued Interest	494
Total Debt	19,590
Total Notes Payable [Member]
Notes Payable	790,562
Accrued Interest	4,125
Total Debt	$ 794,687

RELATED PARTY TRANSACTIONS (Det

RELATED PARTY TRANSACTIONS (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2015	Jun. 30, 2014	Jun. 30, 2015	Jun. 30, 2014
Related party receivable, December 31, 2014			$ 21,414
Advisory fee to related party	$ (2,309)	$ (2,202)	(4,601)	$ (4,445)
Net income fee to related party	(45)	$ (210)	(335)	$ (700)
Related party receivable, June 30, 2015	37,360		37,360
Pillar Income Asset Management, Inc [Member]
Related party receivable, December 31, 2014			21,414
Cash transfers			41,516
Advisory fee to related party			(4,600)
Net income fee to related party			(335)
Fees and commissions			(2,391)
Cost reimbursements			(1,829)
Interest income			408
Expenses paid by Advisor			(5,448)
Financing (mortgage payments)			(1,370)
Sales/purchases transactions			(10,005)
Related party receivable, June 30, 2015	$ 37,360		$ 37,360

OPERATING SEGMENTS (Details)

OPERATING SEGMENTS (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2015	Jun. 30, 2014	Jun. 30, 2015	Jun. 30, 2014	Dec. 31, 2014
Segment Reporting Information [Line Items]
Rental and other property revenues	$ 24,241	$ 19,500	$ 47,397	$ 38,659
Property operating expenses	(11,301)	(9,983)	(22,969)	(19,911)
Depreciation	(5,137)	(4,323)	(9,841)	(8,636)
Mortgage and loan interest	(9,794)	(9,693)	(21,439)	(20,332)
Interest income	4,535	6,041	9,772	10,158
Gain on land sales	3,027	(159)	5,903	594
Segment operating income (loss)	5,571	1,383	8,823	532
Capital expenditures	3,652	2,027	7,927	3,242
Real estate assets	801,914		801,914		$ 699,763
Property Sales
Sales price	1,878	17,317	9,135	42,098
Cost of sale	(628)	(10,473)	(5,009)	(28,447)
Recognized prior deferred gain	1,777		1,777
Gain on sale	3,027	6,844	5,903	13,651
Commercial Properties [Member]
Segment Reporting Information [Line Items]
Rental and other property revenues	6,974	4,776	14,065	9,557
Property operating expenses	(3,341)	(3,169)	(7,608)	(6,316)
Depreciation	(2,230)	(1,757)	(4,157)	(3,571)
Mortgage and loan interest	$ (1,642)	$ (1,645)	$ (3,258)	$ (3,144)
Interest income
Gain on land sales
Segment operating income (loss)	$ (239)	$ (1,795)	$ (958)	$ (3,474)
Capital expenditures	2,943	1,862	6,135	2,992
Real estate assets	162,333	131,193	162,333	131,193
Property Sales
Sales price		16,600		16,600
Cost of sale		(9,597)		(9,597)
Gain on sale		7,003		7,003
Apartments [Member]
Segment Reporting Information [Line Items]
Rental and other property revenues	17,258	14,706	33,277	29,074
Property operating expenses	(7,829)	(6,535)	(14,871)	(13,000)
Depreciation	(2,926)	(2,585)	(5,721)	(5,119)
Mortgage and loan interest	$ (3,377)	$ (3,869)	$ (9,560)	$ (10,178)
Interest income
Gain on land sales
Segment operating income (loss)	$ 3,126	$ 1,717	$ 3,125	$ 777
Capital expenditures	224	99	481	99
Real estate assets	$ 473,908	$ 372,674	$ 473,908	372,674
Property Sales
Sales price				23,131
Cost of sale				(17,077)
Gain on sale				$ 6,054
Hotels [Member]
Segment Reporting Information [Line Items]
Rental and other property revenues
Property operating expenses
Depreciation
Mortgage and loan interest
Interest income
Gain on land sales
Segment operating income (loss)
Capital expenditures
Real estate assets
Land [Member]
Segment Reporting Information [Line Items]
Rental and other property revenues
Property operating expenses	$ (165)	$ (279)	$ (514)	$ (590)
Depreciation
Mortgage and loan interest	$ (1,304)	$ (1,458)	$ (2,421)	$ (2,543)
Interest income
Gain on land sales	$ 3,027	$ (159)	$ 5,903	$ 594
Segment operating income (loss)	1,558	(1,896)	2,968	(2,539)
Capital expenditures	485	66	1,311	151
Real estate assets	165,673	167,293	165,673	167,293
Property Sales
Sales price	1,878	717	9,135	2,367
Cost of sale	(628)	(876)	(5,009)	(1,773)
Recognized prior deferred gain	1,777		1,777
Gain on sale	3,027	(159)	5,903	594
Other [Member]
Segment Reporting Information [Line Items]
Rental and other property revenues	9	$ 18	55	28
Property operating expenses	34		24	(5)
Depreciation	19	$ 19	37	54
Mortgage and loan interest	(3,471)	(2,721)	(6,200)	(4,467)
Interest income	$ 4,535	$ 6,041	$ 9,772	$ 10,158
Gain on land sales
Segment operating income (loss)	$ 1,126	$ 3,357	$ 3,688	$ 5,768
Capital expenditures
Real estate assets

OPERATING SEGMENTS (Details 1)

OPERATING SEGMENTS (Details 1) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2015	Jun. 30, 2014	Jun. 30, 2015	Jun. 30, 2014
Subsequent Events [Abstract]
Segment operating income	$ 5,571	$ 1,383	$ 8,823	$ 532
Other non-segment items of income (expense)
General and administrative	(1,596)	(3,195)	(3,798)	(5,179)
Net income fee to related party	(45)	(210)	(335)	(700)
Advisory fee to related party	(2,309)	(2,202)	(4,601)	(4,445)
Other income	14	232	4,111	406
Earnings from unconsolidated investees	151	(124)	196	(54)
Litigation settlement (expense)	(45)	(86)	(117)	3,752
Income tax benefit (expense)	(12)	2,195	91	4,244
Net income (loss) from continuing operations	$ 1,729	$ (2,007)	$ 4,370	$ (1,444)

OPERATING SEGMENTS (Details 2)

OPERATING SEGMENTS (Details 2) - USD ($) $ in Thousands	Jun. 30, 2015	Dec. 31, 2014
Segment assets	$ 801,914	$ 699,763
Investments in real estate partnerships	1,299	4,279
Other assets	39,320	44,111
Total assets	1,076,618	965,498
Total Segments [Member]
Segment assets	801,914	671,160
Investments in real estate partnerships	1,299	3,833
Notes and interest receivable	125,385	138,014
Other assets	148,020	95,172
Total assets	$ 1,076,618	$ 908,179

DISCONTINUED OPERATIONS (Detail

DISCONTINUED OPERATIONS (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2015	Jun. 30, 2014	Jun. 30, 2015	Jun. 30, 2014
Revenues:
Rental and other property revenues		$ 1,341	$ 15	$ 3,912
Revenues		1,341	15	3,912
Expenses:
Property operating expenses	$ 26	557	$ (348)	1,875
Depreciation		179		509
General and administrative	$ 7	140	$ 102	313
Total operating expenses	$ 33	876	$ (246)	2,697
Other income (expense):
Other income		(528)		(486)
Mortgage and loan interest	$ (1)	(464)	$ (1)	(1,410)
Litigation settlement		(205)		(250)
Total other expenses	$ (1)	(1,197)	$ (1)	(2,146)
Gain (loss) from discontinued operations before gain on sale of real estate and tax	$ (34)	(732)	$ 260	(931)
Gain on sale of real estate from discontinued operations		7,003		13,057
Income tax benefit (expense)	$ 12	(2,195)	$ (91)	(4,244)
Income (loss) from discontinued operations	$ (22)	$ 4,076	$ 169	$ 7,882

COMMITMENTS AND CONTINGENCIES42

COMMITMENTS AND CONTINGENCIES AND LIQUIDITY (Details Narrative) - USD ($) $ in Thousands	1 Months Ended			6 Months Ended
	Feb. 28, 2014	Jan. 31, 2012	Oct. 31, 2011	Jun. 30, 2015	Dec. 31, 2012	Dec. 17, 2007
Notes oustanding balance				$ 774,669
Clapper Parties [Member]
Damages sought value			$ 74,000
Actual damages sought value			26,000
Interest damages sought value			$ 48,000
Description of plaintiff			Mr. David Clapper and entities related to Mr. Clapper
Description of defendant			A formerly owned entity (American Realty Trust, Inc.) and its former subsidiary (ART Midwest, Inc.)
Description of allegation			The matter originally involved a transaction in 1998 in which ART Midwest, Inc. was to acquire eight residential apartment complexes from the Clapper Parties.
Description of action taken by court	The Court of Appeals affirmed a portion of the judgment in favor of the Clapper Parties, but also ruled that a double counting of a significant portion of the damages had occurred and remanded the case back to the trial court to recalculate the damage award, as well as pre and post-judgment interest thereon.
Litigation Case Against Major National Law Firm [Member]
Description of plaintiff				A formerly owned entity (American Realty Trust, Inc.) and its former subsidiary (ART Midwest, Inc.)
Description of defendant				Against a major national law firm over the initial transaction.
Description of allegation				That action was initially abated while the principal case with the Clapper Parties was pending, but the abatement was recently lifted and the action against the law firm is expected to move forward.
Net worth					$ 10,000
Litigation Case Against Major National Law Firm [Member] | Unrelated Party [Member]
Proceeds from issuance of notes		$ 10,000
LK-FOUR HICKORY, LLC [Member]
Notes oustanding balance				$ 22,100		$ 28,000

EARNINGS PER SHARE (Details Nar

EARNINGS PER SHARE (Details Narrative) - USD ($) $ in Thousands	Apr. 09, 2015	Jul. 17, 2014	Jun. 30, 2015	Dec. 31, 2014	May. 30, 2014
Preferred stock outstanding"			2,000,614	2,461,252
Stock options outstanding				1,000
Series A Cumulative Convertible Preferred Stock [Member]
Preferred stock outstanding"			2,000,614		900,000
Description of conversion basic			These shares may be converted into common stock at 90% of the average daily closing price of the common stock for the prior 20 trading days.
Series A Cumulative Convertible Preferred Stock [Member] | Transcontinential Realty Investors [Member]
Preferred stock outstanding"			600,000
Series A Cumulative Convertible Preferred Stock [Member] | ART Edina, Inc [Member]
Preferred stock outstanding"			300,000
Series A Cumulative Convertible Preferred Stock [Member] | RAI [Member]
Preferred stock outstanding"		2,451,435	1,100,000
Accrued dividends unpaid		$ 15,100	$ 8,100
Number of preferred stock converted	460,638	890,797
Accumulated dividends unpaid upon conversion	$ 2,300	$ 6,300
Number of common stock issued for conversion	1,486,741	2,502,230