American Realty Investors (ARL) 10-Q15 Aug 172017 Q2 Quarterly reportFinancial data

Company Profile

Document and Entity Information

Document and Entity Information - shares	6 Months Ended
Document and Entity Information - shares	Jun. 30, 2017	Aug. 14, 2017
Document And Entity Information
Entity Registrant Name	AMERICAN REALTY INVESTORS INC
Entity Central Index Key	1,102,238
Document Type	10-Q
Trading Symbol	ARL
Document Period End Date	Jun. 30, 2017
Amendment Flag	false
Current Fiscal Year End Date	--12-31
Entity a Well-known Seasoned Issuer	No
Entity a Voluntary Filer	No
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	2,017

CONSOLIDATED BALANCE SHEETS (Un

CONSOLIDATED BALANCE SHEETS (Unaudited) - USD ($) $ in Thousands	Jun. 30, 2017	Dec. 31, 2016
Assets
Real estate, at cost	$ 1,059,981	$ 1,017,684
Real estate subject to sales contracts at cost, net of depreciation	48,366	48,919
Less accumulated depreciation	(177,700)	(165,597)
Total real estate	930,647	901,006
Notes and interest receivable:
Performing (including $99,793 in 2017 and $125,799 in 2016 from related parties)	123,911	143,601
Less allowance for estimated losses (including $15,537 in 2017 and 2016 from related parties)	(17,037)	(17,037)
Total notes and interest receivable	106,874	126,564
Cash and cash equivalents	58,260	17,522
Restricted cash	37,585	38,399
Investments in unconsolidated joint ventures and investees	6,294	6,087
Receivable from related party	30,913	24,672
Other assets	62,163	60,659
Total assets	1,232,736	1,174,909
Liabilities:
Notes and interest payable	826,309	845,107
Notes related to real estate held for sale	376	376
Notes related to real estate subject to sales contracts	4,012	5,612
Bond and interest payable	104,505
Deferred revenue (including $70,915 in 2017 and $70,935 in 2016 to related parties)	91,087	91,380
Accounts payable and other liabilities (including $10,769 in 2017 and $10,854 in 2016 to related parties)	48,303	56,303
[Liabilities]	1,074,592	998,778
Shareholders' equity:
Preferred stock, Series A: $2.00 par value, authorized 15,000,000 shares, issued and outstanding 2,000,614 shares in 2017 and 2016 (liquidation preference $10 per share), including 900,000 shares in 2017 and 2016 held by ARL.	2,205	2,205
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 2017 and 2016, including 140,000 shares held by TCI (consolidated) in 2017 and 2016.	159	159
Treasury stock at cost; 415,785 shares in 2017 and 2016, and 140,000 shares held by TCI (consolidated) as of 2017 and 2016	(6,395)	(6,395)
Paid-in capital	110,751	111,510
Retained earnings	(2,202)	14,398
Total American Realty Investors, Inc. shareholders' equity	104,518	121,877
Non-controlling interest	53,626	54,254
Total shareholders' equity	158,144	176,131
Total liabilities and shareholders' equity	$ 1,232,736	$ 1,174,909

CONSOLIDATED BALANCE SHEETS (U3

CONSOLIDATED BALANCE SHEETS (Unaudited) (Parenthetical) - USD ($) $ in Thousands	Jun. 30, 2017	Dec. 31, 2016
Performing	$ 123,911	$ 143,601
Allowance for doubtful accounts	17,037	17,037
Deferred revenue from sales to related parties	91,087	91,380
Accounts payable and other liabilities to related parties	$ 48,303	$ 56,303
Series A Preferred stock, par value (in dollars per share)	$ 2	$ 2
Series A Preferred stock, authorized (in shares)	15,000,000	15,000,000
Series A Preferred stock, issued (in shares)	2,000,614	2,000,614
Series A Preferred stock, outstanding (in shares)	2,000,614	2,000,614
Series A Preferred stock, liquidation preference (in dollars per share)	$ 10	$ 10
Common stock, par value (in dollars per share)	$ 0.01	$ 0.01
Common stock, authorized (in shares)	100,000,000	100,000,000
Common stock, issued (in shares)	15,930,145	14,443,404
Common stock, outstanding (in shares)	15,514,360	14,027,619
Shares held by subsidiaries (in shares)	2,000,614
Treasury stock (in shares)	415,785	415,785
Transcontinential Realty Investors [Member] \| Common Stock [Member]
Shares held by subsidiaries (in shares)	140,000	140,000
Treasury stock (in shares)	140,000	140,000
Series A Cumulative Convertible Preferred Stock [Member]
Shares held by subsidiaries (in shares)	900,000	900,000
Related Party [Member]
Performing	$ 99,793	$ 128,548
Allowance for doubtful accounts	15,537	17,037
Deferred revenue from sales to related parties	70,915	70,935
Accounts payable and other liabilities to related parties	$ 10,769	$ 10,854

CONSOLIDATED STATEMENTS OF OPER

CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2017	Jun. 30, 2016	Jun. 30, 2017	Jun. 30, 2016
Revenues:
Rental and other property revenues (including $199 and $174 for the three months and $389 and $347 for the six months ended 2017 and 2016, respectively, from related parties)	$ 31,587	$ 30,834	$ 63,409	$ 60,039
Expenses:
Property operating expenses (including $239 and $231 for the three months and $476 and $441 for the six months ended 2017 and 2016, respectively, from related parties)	15,429	15,191	31,693	30,407
Depreciation and amortization	6,409	5,868	12,739	11,698
General and administrative (including $552 and $942 for the three months and $1,295 and $1,860 for the six months ended 2017 and 2016, respectively, from related parties)	1,995	2,412	4,026	4,437
Net income fee to related party	77	54	137	126
Advisory fee to related party	2,849	2,687	5,508	5,425
Total operating expenses	26,759	26,212	54,103	52,093
Net operating income	4,828	4,622	9,306	7,946
Other income (expenses):
Interest income (including $4,972 and $4,504 for the three months and $9,092 and $1,355 for the six months ended 2017 and 2016, respectively, from related parties)	5,059	4,788	9,852	10,079
Other income	(116)	902	1,327	1,200
Mortgage and loan interest (including $1,683 and $1,355 for the three months and $3,195 and $2,447 for the six months ended 2017 and 2016, respectively, from related parties)	(17,347)	(13,975)	(34,143)	(28,189)
Earnings from unconsolidated subsidiaries and investees	153	129	208	284
Foreign currency transaction loss	(3,425)		(3,747)
Total other expenses	(15,676)	(8,156)	(26,503)	(16,626)
Loss before gain on sale of income producing properties and land, non-controlling interest, and taxes	(10,848)	(3,534)	(17,197)	(8,680)
Gain on sale of income producing properties		5,168		4,925
Gain (loss) on land sales	(476)	1,719	(31)	3,370
Net income (loss) from continuing operations before taxes	(11,324)	3,353	(17,228)	(385)
Income tax benefit				1
Net income (loss) from continuing operations	(11,324)	3,353	(17,228)	(384)
Discontinued operations:
Net income from discontinued operations				3
Income tax expense from discontinued operations				(1)
Net income from discontinued operations				2
Net income (loss)	(11,324)	3,353	(17,228)	(382)
Net (income) loss attributable to non-controlling interest	435	(864)	628	(334)
Net income (loss) attributable to American Realty Investors, Inc.	(10,889)	2,489	(16,600)	(716)
Preferred dividend requirement	(275)	(53)	(550)	(550)
Net income (loss) applicable to common shares	$ (11,164)	$ 2,436	$ (17,150)	$ (1,266)
Earnings per share - basic
Net income (loss) from continuing operations (in dollars per share)	$ (0.72)	$ 0.16	$ (1.11)	$ (0.08)
Earnings per share - diluted
Net income (loss) from continuing operations (in dollars per share)	$ (0.72)	$ 0.16	$ (1.11)	$ (0.08)
Weighted average common shares used in computing earnings per share (in shares)	15,514,360	15,514,360	15,514,360	15,514,360
Weighted average common shares used in computing diluted earnings per share (in shares)	15,514,360	15,514,360	15,514,360	15,514,360
Amounts attributable to American Realty Investors, Inc.
Net income (loss) from continuing operations	$ (10,889)	$ 2,489	$ (16,600)	$ (718)
Net income from discontinued operations				2
Net loss applicable to American Realty Investors, Inc.	$ (10,889)	$ 2,489	$ (16,600)	$ (716)

CONSOLIDATED STATEMENTS OF OPE5

CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited) (Parenthetical) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2017	Jun. 30, 2016	Jun. 30, 2017	Jun. 30, 2016
Rental and other property revenues	$ 31,587	$ 30,834	$ 63,409	$ 60,039
Property operating expenses	15,429	15,191	31,693	30,407
General and administrative	1,995	2,412	4,026	4,437
Mortgage and loan interest	17,347	13,975	34,143	28,189
Related Party [Member]
Rental and other property revenues	199	174	389	347
Property operating expenses	239	231	476	441
General and administrative	552	942	1,295	1,860
Interest income	4,972	4,504	9,092	10,029
Mortgage and loan interest	$ 1,683	$ 1,355	$ 3,195	$ 2,447

CONSOLIDATED STATEMENT OF SHARE

CONSOLIDATED STATEMENT OF SHAREHOLDERS' EQUITY (Unaudited) - 6 months ended Jun. 30, 2017 - USD ($) $ in Thousands	Total	Comprehensive Income (Loss) [Member]	Preferred Stock [Member]	Common Stock [Member]	Treasury Stock [Member]	Paid-in Capital [Member]	Retained Earnings [Member]	Non-controlling Interest [Member]
Balance, at beginning at Dec. 31, 2016	$ 176,131	$ (58,737)	$ 2,205	$ 159	$ (6,395)	$ 111,510	$ 14,398	$ 54,254
Balance, at beginning (in shares) at Dec. 31, 2016				15,930,145
Net loss	(17,228)	(17,228)					(16,600)	(628)
Assumption of non-controlling interests	(209)					(209)
Series A preferred stock dividend ($1.00 per share)	(550)					(550)
Balance, at the end at Jun. 30, 2017	$ 158,144	$ (75,965)	$ 2,205	$ 159	$ (6,395)	$ 110,751	$ (2,202)	$ 53,626
Balance, at the end (in shares) at Jun. 30, 2017				15,930,145

CONSOLIDATED STATEMENT OF SHAR7

CONSOLIDATED STATEMENT OF SHAREHOLDERS' EQUITY (Unaudited) (Parenthetical)	6 Months Ended
	Jun. 30, 2017$ / shares
Statement of Stockholders' Equity [Abstract]
Series A preferred stock dividend (in dollars per share)	$ 1

CONSOLIDATED STATEMENTS OF COMP

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (Unaudited) - USD ($) $ in Thousands	6 Months Ended
	Jun. 30, 2017	Jun. 30, 2016
Consolidated Statements Of Comprehensive Income Loss
Net loss	$ (17,228)	$ (382)
Total comprehensive loss	(17,228)	(382)
Comprehensive (income) loss attributable to non-controlling interest	628	(334)
Comprehensive loss attributable to American Realty Investors, Inc.	$ (16,600)	$ (716)

CONSOLIDATED STATEMENTS OF CASH

CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) - USD ($) $ in Thousands	6 Months Ended
	Jun. 30, 2017	Jun. 30, 2016
Cash Flow From Operating Activities:
Net loss	$ (17,228)	$ (382)
Adjustments to reconcile net loss applicable to common shares to net cash flow from operating activities:
Loss (gain) on sale of land	31	(3,370)
Gain on sale of income-producing properties		(4,925)
Depreciation and amortization	12,739	10,635
Amortization of deferred borrowing costs	2,131	2,303
Amortization of bond issuance costs	462
Earnings from unconsolidated subsidiaries and investees	(207)	(284)
Decrease (increase) in assets:
Accrued interest receivable	4,053	(549)
Other assets	(477)	2,016
Prepaid expense	(4,195)	(716)
Escrow	2,857	16,105
Earnest money	(1,164)	(259)
Rent receivables	(1,669)
Related party receivables	(4,930)	21,762
Increase (decrease) in liabilities:
Accrued interest payable	141	(554)
Other liabilities	7,985	(7,370)
Net cash provided by operating activities	529	34,412
Cash Flow From Investing Activities:
Proceeds from notes receivable	19,753	3,788
Origination or advances of notes receivable	(4,116)	(6,850)
Acquisition of income producing properties		(33,857)
Acquisition of land held for development	(11,440)
Proceeds from sale of income-producing properties		9,377
Proceeds from sale of land	1,596	6,347
Investment in unconsolidated real estate entities	207	2,497
Improvement of land held for development	(585)	(1,722)
Improvement of income-producing properties	(1,895)	(2,416)
Construction and development of new properties	(26,708)	(27,966)
Net cash used in investing activities	(23,188)	(50,802)
Cash Flow From Financing Activities:
Proceeds from Series A bonds	102,364	78,487
Proceeds from notes payable	82,865	(7,250)
Recurring amortization of principal on notes payable	(12,083)	(49,094)
Payments on maturing notes payable	(113,838)	(1,283)
Deferred financing costs	676
Bond issuance costs	6,253
Preferred stock dividends - Series A	(550)	(550)
Net cash provided by financing activities	65,687	20,310
Net increase (decrease) in cash and cash equivalents	43,028	3,920
Cash and cash equivalents, beginning of period	17,522	15,232
Cash and cash equivalents, end of period	58,260	19,152
Supplemental disclosures of cash flow information:
Cash paid for interest	$ 28,065	$ 21,124

ORGANIZATION AND BASIS OF PRESE

ORGANIZATION AND BASIS OF PRESENTATION	6 Months Ended
ORGANIZATION AND BASIS OF PRESENTATION	Jun. 30, 2017
Organization, Consolidation and Presentation of Financial Statements [Abstract]
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 1999. The Company is headquartered in Dallas, Texas and its common stock trades on the New York Stock Exchange (“NYSE”) under the symbol (“ARL”). Over 80% of ARL’s stock is owned by related party entities. ARL and a subsidiary own approximately 78% of the outstanding shares of common stock of Transcontinental Realty Investors, Inc. (“TCI”), a Nevada corporation, whose common stock is traded on the NYSE under the symbol (“TCI”). TCI, a subsidiary of ARL, owns approximately 81.1% of the common stock of Income Opportunity Realty Investors, Inc. (“IOR”). Effective July 17, 2009, IOR’s financial results were consolidated with those of ARL and TCI and their subsidiaries. IOR’s common stock is traded on the New York Stock Exchange (“NYSE MKT”) under the symbol (“IOR”). ARL’s Board of Directors is responsible for directing the overall affairs of ARL and for setting the strategic policies that guide the Company. As of April 30, 2011, the Board of Directors delegated the day-to-day management of the Company to Pillar Income Asset Management, Inc. (“Pillar”), a Nevada corporation, under a written Advisory Agreement that is reviewed annually by ARL’s Board of Directors. The directors of ARL are also directors of TCI and IOR. The Chairman of the Board of Directors of ARL also serves as the Chairman of the Board of Directors of TCI and IOR. The officers of ARL also serve as officers of TCI, IOR and Pillar. 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 IOR. 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 59 income-producing properties as of June 30, 2017. The properties consisted of: ● Eight commercial properties consisting of five office buildings and three retail centers comprising in aggregate approximately 2.0 million rentable square feet; ● A golf course comprising approximately 96 acres; ● 50 apartment communities totaling 8,226 units, excluding apartments being developed; and ● 3,674 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, 2017, we had seven 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, 2017, 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, 2016 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, 2016. Certain 2016 Consolidated Financial Statement amounts have been reclassified to conform to the 2017 presentation. 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 is generally 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. Effective 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. Since the Company adopted ASU 2014-08, effective January 1, 2015, we have had no dispositions that met 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 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 policy, the nature, timing and amount of revenue recognized for certain transactions could differ from those recognized under existing accounting guidance. This new standard 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 of the adoption of ASU 2014-09 on its financial position and results of operations, if any. In February 2016, Accounting Standards Update No. 2016-02 (“ASU 2016-02”), Leases was issued. This guidance establishes a new model for accounting for leases and provides for enhanced disclosures. ASU 2016-02 is effective for reporting periods beginning after December 15, 2018. The Company is currently evaluating the impact the adoption of this guidance, if any, on its financial position and results of operations.

REAL ESTATE ACTIVITY

REAL ESTATE ACTIVITY	6 Months Ended
REAL ESTATE ACTIVITY	Jun. 30, 2017
Real Estate [Abstract]
REAL ESTATE ACTIVITY	NOTE 2. REAL ESTATE ACTIVITY Below is a summary of the real estate owned as of June 30, 2017 (dollars in thousands): Apartments $ 695,192 Apartments under construction 64,546 Commercial properties 220,801 Land held for development 79,442 Real estate subject to sales contract 48,366 Total real estate $ 1,108,347 Less accumulated depreciation (177,700 ) Total real estate, net of depreciation $ 930,647 The highlights of our significant real estate transactions for the six months ended June 30, 2017 are listed below: Purchases During the six months ended June 30, 2017, we acquired four land parcels for development for a total purchase price of $12.9 million, adding 34.56 acres to the development portfolio. Sales During the six months ended June 30, 2017, TCI recorded three land sales; selling a total of 10.82 acres of land located in Texas to independent third parties for a total sales price of $1.6 million. We recorded an aggregate loss of less than $0.1 million from the land sales. As of June 30, 2017, the Company has approximately 91 acres of land, at various locations that were sold to related parties in multiple transactions. These transactions are treated as “subject to sales contract” on the Consolidated Balance Sheets. Due to the related party nature of the transactions TCI has deferred the recording of the sales in accordance with ASC 360-20. We continue to invest in the development of multifamily properties. During the six months ended June 30, 2017, we have disbursed $24.4 million related to the construction or predevelopment of various apartment complexes and capitalized $0.9 million of interest costs.

NOTES AND INTEREST RECEIVABLE

NOTES AND INTEREST RECEIVABLE	6 Months Ended
NOTES AND INTEREST RECEIVABLE	Jun. 30, 2017
Receivables [Abstract]
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 guarantees, 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. Below is a summary of our notes receivable as of June 30, 2017 (dollars in thousands): Borrower Maturity Date Interest Rate Amount Security Performing loans: H198, LLC (Las Vegas Land) 01/20 12.00 % $ 5,907 Secured Leman Development, Ltd (2) N/A 0.00 % 1,500 Unsecured One Realco Corporation (1,2) 01 /17 3.00 % 7,000 Unsecured Oulan-Chikh Family Trust 03 /21 8.00 % 174 Secured Realty Advisors Management, Inc. (1) 12 /19 2.28 % 20,387 Unsecured Unified Housing Foundation, Inc. (Echo Station) (1) 12 /32 12.00 % 1,480 Secured 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 % 9,100 Secured Unified Housing Foundation, Inc. (Limestone Canyon) (1) 12 /32 12.00 % 4,640 Secured Unified Housing Foundation, Inc. (Limestone Ranch) (1) 12 /32 12.00 % 1,952 Secured Unified Housing Foundation, Inc. (Limestone Ranch) (1) 12 /32 12.00 % 6,000 Secured Unified Housing Foundation, Inc. (Parkside Crossing) (1) 12 /32 12.00 % 1,935 Secured Unified Housing Foundation, Inc. (Reserve at White Rock Phase I) (1) 12 /32 12.00 % 2,485 Secured Unified Housing Foundation, Inc. (Reserve at White Rock Phase II) (1) 12 /32 12.00 % 2,555 Secured Unified Housing Foundation, Inc. (Sendero Ridge) (1) 12 /32 12.00 % 4,812 Secured Unified Housing Foundation, Inc. (Timbers of Terrell) (1) 12 /32 12.00 % 1,323 Secured Unified Housing Foundation, Inc. (Tivoli) (1) 12 /32 12.00 % 7,966 Secured Unified Housing Foundation, Inc. (1) 12 /17 12.00 % 1,207 Unsecured Unified Housing Foundation, Inc. (1) 12 /18 12.00 % 3,994 Unsecured Unified Housing Foundation, Inc. (1) 12 /18 12.00 % 6,407 Unsecured Unified Housing Foundation, Inc. (1) 06 /19 12.00 % 5,400 Unsecured Unified Housing Foundation, Inc. (1) 06 /20 12.00 % 5,760 Unsecured Other related party notes Various Various 1,349 Various secured interests Other related party notes Various Various 782 Various unsecured interests Other non-related party notes Various Various 3,247 Various secured interests Other non-related party notes Various Various 9,039 Various unsecured interests Accrued interest 5,510 Total Performing $ 123,911 (17,037 ) Allowance for estimated losses Total $ 106,874 (1) (2) We invest in mortgage loans, secured by mortgages that are subordinate to one or more prior liens either on the fee or a leasehold interest in real estate. Recourse on such loans ordinarily includes the real estate on which the loan is made, other collateral and guarantees. At June 30, 2017, we had mortgage loans and accrued interest receivable from related parties, net of allowances, totaling $105.5 million. We recognized interest income of $9.9 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 reliance upon 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
INVESTMENT IN UNCONSOLIDATED INVESTEES	Jun. 30, 2017
Equity Method Investments and Joint Ventures [Abstract]
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, 2017 June 30, 2016 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 Siena Corp, 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, 2017 2016 Real estate, net of accumulated depreciation $ 13,578 $ 13,692 Notes receivable 9,969 8,858 Other assets 30,188 30,655 Notes payable (9,514 ) (10,648 ) Other liabilities (7,821 ) (7,304 ) Shareholders’ equity (36,400 ) (35,253 ) For the Six Months Ended June 30, 2017 2016 Revenue $ 27,458 $ 27,321 Depreciation (575 ) (575 ) Operating expenses (25,533 ) (24,841 ) Interest expense (353 ) (405 ) Income from continuing operations 997 1,500 Income from discontinued operations — — Net income $ 997 $ 1,500 Company’s proportionate share of earnings $ 199 $ 300

NOTES PAYABLE

NOTES PAYABLE	6 Months Ended
NOTES PAYABLE	Jun. 30, 2017
Debt Disclosure [Abstract]
NOTES PAYABLE	NOTE 5. NOTES PAYABLE Below is a summary of our notes and interest payable as of June 30, 2017 (dollars in thousands): Notes Payable Accrued Total Debt Apartments $ 539,556 $ 1,459 $ 541,015 Apartments under Construction 32,564 — 32,564 Commercial 127,542 599 128,141 Land 29,200 229 29,429 Real estate subject to sales contract 3,542 470 4,012 Mezzanine financing 101,173 — 101,173 Other 12,909 (2 ) 12,907 Total $ 846,486 $ 2,755 $ 849,241 Unamortized deferred borrowing costs (18,544 ) — (18,544 ) Total $ 827,942 $ 2,755 $ 830,697 The segment labeled as “Other” consists of unsecured or stock-secured notes payable. 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 During the six months ended June 30, 2017, we refinanced three loans with a total principal balance of $80.1 million. The transactions provided for lower monthly payments over the term of the loans due to lower interest rates and the extension of maturity dates of the loans. In conjunction with the development of various apartment projects and other developments, we drew down $13.7 million in construction loans during the six months ended June 30, 2017. 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. 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. We have reviewed each asset and taken impairment to the extent we feel the value of the property was less than our current basis.

SERIES A BONDS PAYABLE

SERIES A BONDS PAYABLE	6 Months Ended
SERIES A BONDS PAYABLE	Jun. 30, 2017
Series Bonds Payable
SERIES A BONDS PAYABLE	NOTE 6. SERIES A BONDS PAYABLE On February 13, 2017, Southern Properties Capital LTD, a British Virgin Islands corporation (“Southern”), filed a final prospectus with the Tel Aviv Stock Exchange LTD (the “TASE”) for an offering and sale of nonconvertible Series A Bonds (the “Debentures”), to be issued by Southern, which is an indirect subsidiary of TCI. Southern, in turn, wholly owns interest in other entities, which, in turn, are the principal owners of various residential and commercial properties located in the south and southwestern portions of the United States. The Debentures are unsecured obligations of Southern. On February 14, 2017, Southern commenced the institutional tender of the Debentures and accepted application for 276 million Israeli, new Shekels (approximately $73,651,065 USD, based on the exchange rate of 3.7474 Shekels to the U.S. Dollar effective February 14, 2017) in both institutional and public tenders, at an annual interest rate averaging approximately 7.38%. The Series A Bonds have a stated interest rate of 7.3% and an effective yield of 9.25%. On May 16, 2017, Southern issued nonconvertible Series A Bonds for 100.2 million Israeli, new Shekels (approximately $27,769,615 USD, based on the exchange rate of 3.607 Shekels to the U.S. Dollar) at an annual interest rate of 7.3%. On July 12, 2017, Southern sold nonconvertible Series A Bonds for 23.8 million Israeli, new Shekels (approximately $6,668,998 USD, based on the exchange rate of 3.574 Shekels to the U.S. Dollar) in both institutional and public tenders, at an annual interest rate averaging approximately 7.3%. Foreign Currency Gain or Loss The Company records unrealized gains or losses each quarter based upon the relative exchange values of the US dollar and the Israeli shekel; however, no gain or loss will be realized until a conversion from US dollars to Israeli shekels actually occurs in the future. The recorded unrealized gain or loss is reflected as a separate line item to highlight the fact that it is a non-cash transaction until such time as actual payment of principal and interest on the bonds is made. During the six months ended June 30, 2017, the Company recorded a net loss on foreign currency transaction of $3.7 million.

RELATED PARTY TRANSACTIONS

RELATED PARTY TRANSACTIONS	6 Months Ended
RELATED PARTY TRANSACTIONS	Jun. 30, 2017
Related Party Transactions [Abstract]
RELATED PARTY TRANSACTIONS	NOTE 7. RELATED PARTY TRANSACTIONS The following table reflects the reconciliation of the beginning and ending balances of accounts receivable from and (accounts payable) to related parties as of June 30, 2017 (dollars in thousands): Pillar Related party receivable, December 31, 2016 $ 24,672 Cash transfers 37,397 Advisory fees (5,507 ) Net income fee (137 ) Cost reimbursements (1,205 ) Interest income 431 Notes receivable purchased (447 ) Fees and commissions (1,147 ) Expenses paid by Advisor (2,860 ) Financing (mortgage payments) (17,161 ) Sales/purchases transactions (3,123 ) Tax sharing — Purchase of obligations — Related party receivable, June 30, 2017 $ 30,913 During the ordinary course of business, we have related party transactions that include, but are not limited to, rental 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 and paid are shown on the face of the Consolidated Financial Statements.

OPERATING SEGMENTS

OPERATING SEGMENTS	6 Months Ended
OPERATING SEGMENTS	Jun. 30, 2017
Segment Reporting [Abstract]
OPERATING SEGMENTS	NOTE 8. 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, 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 months ended June 30, 2017 and 2016, including segment assets and expenditures (dollars in thousands): For the Three Months Ended June 30, 2017 Commercial Properties Apartments Land Other Total Rental and other property revenues $ 8,553 $ 23,030 $ — $ 4 $ 31,587 Property operating expenses (4,900 ) (10,211 ) (168 ) (150 ) (15,429 ) Depreciation (2,397 ) (4,030 ) — 18 (6,409 ) Mortgage and loan interest (2,121 ) (5,028 ) (389 ) (9,809 ) (17,347 ) Interest income — — — 5,059 5,059 Loss on land sales — — (476 ) — (476 ) Segment operating income (loss) $ (865 ) $ 3,761 $ (1,033 ) $ (4,878 ) $ (3,015 ) Balance Sheet Data Capital expenditures $ 557 $ — $ 186 $ — $ 743 Real estate assets $ 148,718 $ 654,119 $ 127,810 $ — $ 930,647 Property Sales Sales price $ — $ — $ 507 $ — $ 507 Cost of sale — — (983 ) — (983 ) Loss on sale $ — $ — $ (476 ) $ — $ (476 ) For the Three Months Ended June 30, 2016 Properties Apartments Land Other Total Rental and other property revenues $ 8,947 $ 21,856 $ 30 $ 1 $ 30,834 Property operating expenses (4,836 ) (10,168 ) (169 ) (18 ) (15,191 ) Depreciation (2,270 ) (3,616 ) — 18 (5,868 ) Mortgage and loan interest (1,696 ) (6,109 ) (841 ) (5,329 ) (13,975 ) Loan charges and prepayment penalties — — — — — Interest income — — — 4,788 4,788 Gain on sale of income producing properties 6 5,162 — — 5,168 Gain on land sales — — 1,719 — 1,719 Segment operating income (loss) $ 151 $ 7,125 $ 739 $ (540 ) $ 7,475 Balance Sheet Data Capital expenditures $ 680 $ (146 ) $ 727 $ — $ 1,261 Real estate assets $ 151,759 $ 603,829 $ 145,816 $ — $ 901,404 Property Sales Sales price $ — $ 8,100 $ 3,154 $ — $ 11,254 Cost of sale — (2,932 ) (1,435 ) — (4,367 ) Gain on sale $ — $ 5,168 $ 1,719 $ — $ 6,887 The table below reflects the reconciliation of segment information to the corresponding amounts in the Consolidated Statements of Operations for the three months ended June 30, 2017 and 2016 (dollars in thousands): 2017 2016 Segment operating income $ (3,015 ) $ 7,475 Other non-segment items of income (expense) General and administrative (1,995 ) (2,412 ) Net income fee to related party (77 ) (54 ) Advisory fee to related party (2,849 ) (2,687 ) Other income (3,541 ) 902 Earnings from unconsolidated investees 153 129 Net income (loss) from continuing operations $ (11,324 ) $ 3,353 Presented below is our reportable segments’ operating income for the six months ended June 30, 2017 and 2016, including segment assets and expenditures (dollars in thousands): Commercial For the Six Months Ended June 30, 2017 Properties Apartments Land Other Total Rental and other property revenues $ 17,711 $ 45,691 $ — $ 7 $ 63,409 Property operating expenses (9,839 ) (20,956 ) (447 ) (451 ) (31,693 ) Depreciation (4,699 ) (8,076 ) — 36 (12,739 ) Mortgage and loan interest (3,727 ) (11,787 ) (1,083 ) (17,546 ) (34,143 ) Interest income — — — 9,852 9,852 Loss on land sales — — (31 ) — (31 ) Segment operating income (loss) $ (554 ) $ 4,872 $ (1,561 ) $ (8,102 ) $ (5,345 ) Balance Sheet Data Capital expenditures $ 1,932 $ 585 $ — $ — $ 2,517 Real estate assets $ 148,718 $ 654,119 $ 127,810 $ — $ 930,647 Property Sales Sales price $ — $ — $ 1,596 $ — $ 1,596 Cost of sale — — (1,627 ) — (1,627 ) Loss on sale $ — $ — $ (31 ) $ — $ (31 ) Commercial For the Six Months Ended June 30, 2016 Properties Apartments Land Other Total Rental and other property revenues $ 16,838 $ 43,170 $ 30 $ 1 $ 60,039 Property operating expenses (9,931 ) (19,562 ) (916 ) 2 (30,407 ) Depreciation (4,584 ) (7,151 ) — 37 (11,698 ) Mortgage and loan interest (3,671 ) (12,265 ) (1,153 ) (11,100 ) (28,189 ) Interest income — — — 10,079 10,079 Gain on sale of income producing properties 6 4,919 — — 4,925 Gain on land sales — — 3,370 — 3,370 Segment operating income (loss) $ (1,342 ) $ 9,111 $ 1,331 $ (981 ) $ 8,119 Balance Sheet Data Capital expenditures $ 2,080 $ (146 ) $ 1,498 $ — $ 3,432 Real estate assets $ 151,759 $ 603,829 $ 145,816 $ — $ 901,404 Property Sales Sales price $ 1,500 $ 8,100 $ 7,334 $ — $ 16,934 Cost of sale (1,743 ) (2,932 ) (3,964 ) — (8,639 ) Gain (loss) on sale $ (243 ) $ 5,168 $ 3,370 $ — $ 8,295 The table below reflects the reconciliation of segment information to the corresponding amounts in the Consolidated Statements of Operations for the six months ended June 30, 2017 and 2016 (dollars in thousands): For the Six Months Ended June 30, 2017 2016 Segment operating income (loss) $ (5,345 ) $ 8,119 Other non-segment items of income (expense) General and administrative (4,026 ) (3,562 ) Net income fee to related party (137 ) (126 ) Advisory fee to related party (5,508 ) (5,425 ) Other income (2,420 ) 325 Earnings from unconsolidated investees 208 284 Income tax benefit — 1 Net loss from continuing operations $ (17,228 ) $ (384 ) The table below reflects a reconciliation of the segment information to the corresponding amounts in the Consolidated Balance Sheets (dollars in thousands): As of June 30, 2017 2016 Segment assets $ 930,647 $ 901,404 Investments in unconsolidated investees 6,294 5,868 Notes and interest receivable 106,874 123,854 Other assets 188,921 100,549 Total assets $ 1,232,736 $ 1,131,675

DISCONTINUED OPERATIONS

DISCONTINUED OPERATIONS	6 Months Ended
DISCONTINUED OPERATIONS	Jun. 30, 2017
Discontinued Operations and Disposal Groups [Abstract]
DISCONTINUED OPERATIONS	NOTE 9. 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, which changed the criteria of ASC 360 related to determining which disposals qualify to be accounted for as discontinued operations and modified 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. There were no sales of income-producing properties in the first six months of 2017. Amounts included in discontinued operations for the six months ended June 30, 2016, represent the residual amounts from sales classified as discontinued operations prior to January 1, 2015. The following table summarizes revenue and expense information for the properties sold and held for sale (dollars in thousands): For the Six Months Ended June 30, 2016 Revenues: Rental and other property revenues $ — Expenses: — Property operating expenses (3 ) Total operating expenses (3 ) Other income (expense): Other income — Total other income (expenses) — Income from discontinued operations before income tax expense 3 Income tax expense (1 ) Income from discontinued operations $ 2 Our application of ASC 360 results in the presentation of the net operating results of these qualifying properties sold or held for sale during 2016 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, CONTINGENCIES, AND

COMMITMENTS, CONTINGENCIES, AND LIQUIDITY	6 Months Ended
COMMITMENTS, CONTINGENCIES, AND LIQUIDITY	Jun. 30, 2017
Commitments and Contingencies Disclosure [Abstract]
COMMITMENTS, CONTINGENCIES, AND LIQUIDITY	NOTE 10. COMMITMENTS, CONTINGENCIES, AND LIQUIDITY Liquidity. Partnership Buyouts Litigation. Guarantees. In connection with its sale of LK–Four Hickory, LLC 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 at June 30, 2017 of $19.9 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. 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. 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. The Plaintiff has filed a lawsuit against ARL which initially alleged multiple causes of actions and claims against the Company. However, after a Memorandum Opinion and Order issued by the court, all of the claims in the lawsuit against the Company were dismissed, except for a claim that the Company was the unlawful transferee of assets previously owned by American Realty Trust and EQK Holdings, Inc. Subsequently the plaintiff added a claim of alter ego. 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 $0.256 million in damages, plus pre-judgment interest of $0.192 million for a total amount of $0.448 million. The Judgment awarded ART $14.2 million in damages, plus pre-judgment interest of $10.6 million for a total amount of $24.8 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. In April 2017, the plaintiffs filed a lawsuit against Dynex Capital, Inc. and Dynex Commercial, Inc. for $50 million alleging, among other things, fraudulent transfer and alter ego.

EARNINGS PER SHARE

EARNINGS PER SHARE	6 Months Ended
EARNINGS PER SHARE	Jun. 30, 2017
Earnings Per Share [Abstract]
EARNINGS PER SHARE	NOTE 11. 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, 2017, 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, 900,000 shares are held by 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, 2017 RAI owns 1,100,000 shares of the outstanding Series A 10.0% convertible preferred stock and has accrued dividends unpaid of $10.3 million.

SUBSEQUENT EVENTS

SUBSEQUENT EVENTS	6 Months Ended
SUBSEQUENT EVENTS	Jun. 30, 2017
Subsequent Events [Abstract]
SUBSEQUENT EVENTS	NOTE 12. SUBSEQUENT EVENTS The date to which events occurring after June 30, 2017, the date of the most recent balance sheet, have been evaluated for possible adjustment to the Consolidated Financial Statements or disclosure is August 14, 2017, which is the date on which the Consolidated Financial Statements were available to be issued. On July 12, 2017, Southern sold nonconvertible Series A Bonds for 23.8 million Israeli, new Shekels (approximately $6,668,998 USD, based on the exchange rate of 3.574 Shekels to the U.S. Dollar) in both institutional and public tenders, at an annual interest rate averaging approximately 7.3%.

ORGANIZATION AND BASIS OF PRE22

ORGANIZATION AND BASIS OF PRESENTATION (Policies)	6 Months Ended
ORGANIZATION AND BASIS OF PRESENTATION (Policies)	Jun. 30, 2017
Organization, Consolidation and Presentation of Financial Statements [Abstract]
Properties	Properties We own or had interests in a total property portfolio of 59 income-producing properties as of June 30, 2017. The properties consisted of: ● Eight commercial properties consisting of five office buildings and three retail centers comprising in aggregate approximately 2.0 million rentable square feet; ● A golf course comprising approximately 96 acres; ● 50 apartment communities totaling 8,226 units, excluding apartments being developed; and ● 3,674 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, 2017, we had seven 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, 2017, 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, 2016 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, 2016. Certain 2016 Consolidated Financial Statement amounts have been reclassified to conform to the 2017 presentation.
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 is generally 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. Effective 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. Since the Company adopted ASU 2014-08, effective January 1, 2015, we have had no dispositions that met 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 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 policy, the nature, timing and amount of revenue recognized for certain transactions could differ from those recognized under existing accounting guidance. This new standard 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 of the adoption of ASU 2014-09 on its financial position and results of operations, if any. In February 2016, Accounting Standards Update No. 2016-02 (“ASU 2016-02”), Leases was issued. This guidance establishes a new model for accounting for leases and provides for enhanced disclosures. ASU 2016-02 is effective for reporting periods beginning after December 15, 2018. The Company is currently evaluating the impact the adoption of this guidance, if any, on its financial position and results of operations.

REAL ESTATE ACTIVITY (Tables)

REAL ESTATE ACTIVITY (Tables)	6 Months Ended
REAL ESTATE ACTIVITY (Tables)	Jun. 30, 2017
Real Estate [Abstract]
Schedule of real estate owned	Below is a summary of the real estate owned as of June 30, 2017 (dollars in thousands): Apartments $ 695,192 Apartments under construction 64,546 Commercial properties 220,801 Land held for development 79,442 Real estate subject to sales contract 48,366 Total real estate $ 1,108,347 Less accumulated depreciation (177,700 ) Total real estate, net of depreciation $ 930,647

NOTES AND INTEREST RECEIVABLE (

NOTES AND INTEREST RECEIVABLE (Tables)	6 Months Ended
NOTES AND INTEREST RECEIVABLE (Tables)	Jun. 30, 2017
Receivables [Abstract]
Schedule of notes receivable	Below is a summary of our notes receivable as of June 30, 2017 (dollars in thousands): Borrower Maturity Date Interest Rate Amount Security Performing loans: H198, LLC (Las Vegas Land) 01/20 12.00 % $ 5,907 Secured Leman Development, Ltd (2) N/A 0.00 % 1,500 Unsecured One Realco Corporation (1,2) 01 /17 3.00 % 7,000 Unsecured Oulan-Chikh Family Trust 03 /21 8.00 % 174 Secured Realty Advisors Management, Inc. (1) 12 /19 2.28 % 20,387 Unsecured Unified Housing Foundation, Inc. (Echo Station) (1) 12 /32 12.00 % 1,480 Secured 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 % 9,100 Secured Unified Housing Foundation, Inc. (Limestone Canyon) (1) 12 /32 12.00 % 4,640 Secured Unified Housing Foundation, Inc. (Limestone Ranch) (1) 12 /32 12.00 % 1,952 Secured Unified Housing Foundation, Inc. (Limestone Ranch) (1) 12 /32 12.00 % 6,000 Secured Unified Housing Foundation, Inc. (Parkside Crossing) (1) 12 /32 12.00 % 1,935 Secured Unified Housing Foundation, Inc. (Reserve at White Rock Phase I) (1) 12 /32 12.00 % 2,485 Secured Unified Housing Foundation, Inc. (Reserve at White Rock Phase II) (1) 12 /32 12.00 % 2,555 Secured Unified Housing Foundation, Inc. (Sendero Ridge) (1) 12 /32 12.00 % 4,812 Secured Unified Housing Foundation, Inc. (Timbers of Terrell) (1) 12 /32 12.00 % 1,323 Secured Unified Housing Foundation, Inc. (Tivoli) (1) 12 /32 12.00 % 7,966 Secured Unified Housing Foundation, Inc. (1) 12 /17 12.00 % 1,207 Unsecured Unified Housing Foundation, Inc. (1) 12 /18 12.00 % 3,994 Unsecured Unified Housing Foundation, Inc. (1) 12 /18 12.00 % 6,407 Unsecured Unified Housing Foundation, Inc. (1) 06 /19 12.00 % 5,400 Unsecured Unified Housing Foundation, Inc. (1) 06 /20 12.00 % 5,760 Unsecured Other related party notes Various Various 1,349 Various secured interests Other related party notes Various Various 782 Various unsecured interests Other non-related party notes Various Various 3,247 Various secured interests Other non-related party notes Various Various 9,039 Various unsecured interests Accrued interest 5,510 Total Performing $ 123,911 (17,037 ) Allowance for estimated losses Total $ 106,874 (1) (2)

INVESTMENT IN UNCONSOLIDATED 25

INVESTMENT IN UNCONSOLIDATED INVESTEES (Tables)	6 Months Ended
INVESTMENT IN UNCONSOLIDATED INVESTEES (Tables)	Jun. 30, 2017
Equity Method Investments and Joint Ventures [Abstract]
Schedule of investments in unconsolidated investees	Investments in unconsolidated investees consist of the following: Percentage ownership as of June 30, 2017 June 30, 2016 Gruppa Florentina, LLC 20.00 % 20.00 %
Schedule of financial position and results of operations from our investees	The following is a summary of the financial position and results of operations from our investees (dollars in thousands): As of June 30, 2017 2016 Real estate, net of accumulated depreciation $ 13,578 $ 13,692 Notes receivable 9,969 8,858 Other assets 30,188 30,655 Notes payable (9,514 ) (10,648 ) Other liabilities (7,821 ) (7,304 ) Shareholders’ equity (36,400 ) (35,253 ) For the Six Months Ended June 30, 2017 2016 Revenue $ 27,458 $ 27,321 Depreciation (575 ) (575 ) Operating expenses (25,533 ) (24,841 ) Interest expense (353 ) (405 ) Income from continuing operations 997 1,500 Income from discontinued operations — — Net income $ 997 $ 1,500 Company’s proportionate share of earnings $ 199 $ 300

NOTES PAYABLE (Tables)

NOTES PAYABLE (Tables)	6 Months Ended
NOTES PAYABLE (Tables)	Jun. 30, 2017
Debt Disclosure [Abstract]
Schedule of Notes and Interest Payable	Below is a summary of our notes and interest payable as of June 30, 2017 (dollars in thousands): Notes Payable Accrued Total Debt Apartments $ 539,556 $ 1,459 $ 541,015 Apartments under Construction 32,564 — 32,564 Commercial 127,542 599 128,141 Land 29,200 229 29,429 Real estate subject to sales contract 3,542 470 4,012 Mezzanine financing 101,173 — 101,173 Other 12,909 (2 ) 12,907 Total $ 846,486 $ 2,755 $ 849,241 Unamortized deferred borrowing costs (18,544 ) — (18,544 ) Total $ 827,942 $ 2,755 $ 830,697

RELATED PARTY TRANSACTIONS (Tab

RELATED PARTY TRANSACTIONS (Tables)	6 Months Ended
RELATED PARTY TRANSACTIONS (Tables)	Jun. 30, 2017
Related Party Transactions [Abstract]
Schedule of net receivable from related parties	The following table reflects the reconciliation of the beginning and ending balances of accounts receivable from and (accounts payable) to related parties as of June 30, 2017 (dollars in thousands): Pillar Related party receivable, December 31, 2016 $ 24,672 Cash transfers 37,397 Advisory fees (5,507 ) Net income fee (137 ) Cost reimbursements (1,205 ) Interest income 431 Notes receivable purchased (447 ) Fees and commissions (1,147 ) Expenses paid by Advisor (2,860 ) Financing (mortgage payments) (17,161 ) Sales/purchases transactions (9,819 ) Tax sharing — Purchase of obligations — Related party receivable, June 30, 2017 $ 24,217

OPERATING SEGMENTS (Tables)

OPERATING SEGMENTS (Tables)	6 Months Ended
OPERATING SEGMENTS (Tables)	Jun. 30, 2017
Segment Reporting [Abstract]
Schedule of segment operating income including segment assets and expenditures	Presented below is our reportable segments’ operating income for the three months ended June 30, 2017 and 2016, including segment assets and expenditures (dollars in thousands): For the Three Months Ended June 30, 2017 Commercial Properties Apartments Land Other Total Rental and other property revenues $ 8,553 $ 23,030 $ — $ 4 $ 31,587 Property operating expenses (4,900 ) (10,211 ) (168 ) (150 ) (15,429 ) Depreciation (2,397 ) (4,030 ) — 18 (6,409 ) Mortgage and loan interest (2,121 ) (5,028 ) (389 ) (9,809 ) (17,347 ) Interest income — — — 5,059 5,059 Loss on land sales — — (476 ) — (476 ) Segment operating income (loss) $ (865 ) $ 3,761 $ (1,033 ) $ (4,878 ) $ (3,015 ) Balance Sheet Data Capital expenditures $ 557 $ — $ 186 $ — $ 743 Real estate assets $ 148,718 $ 654,119 $ 127,810 $ — $ 930,647 Property Sales Sales price $ — $ — $ 507 $ — $ 507 Cost of sale — — (983 ) — (983 ) Loss on sale $ — $ — $ (476 ) $ — $ (476 ) For the Three Months Ended June 30, 2016 Properties Apartments Land Other Total Rental and other property revenues $ 8,947 $ 21,856 $ 30 $ 1 $ 30,834 Property operating expenses (4,836 ) (10,168 ) (169 ) (18 ) (15,191 ) Depreciation (2,270 ) (3,616 ) — 18 (5,868 ) Mortgage and loan interest (1,696 ) (6,109 ) (841 ) (5,329 ) (13,975 ) Loan charges and prepayment penalties — — — — — Interest income — — — 4,788 4,788 Gain on sale of income producing properties 6 5,162 — — 5,168 Gain on land sales — — 1,719 — 1,719 Segment operating income (loss) $ 151 $ 7,125 $ 739 $ (540 ) $ 7,475 Balance Sheet Data Capital expenditures $ 680 $ (146 ) $ 727 $ — $ 1,261 Real estate assets $ 151,759 $ 603,829 $ 145,816 $ — $ 901,404 Property Sales Sales price $ — $ 8,100 $ 3,154 $ — $ 11,254 Cost of sale — (2,932 ) (1,435 ) — (4,367 ) Gain on sale $ — $ 5,168 $ 1,719 $ — $ 6,887 Presented below is our reportable segments’ operating income for the six months ended June 30, 2017 and 2016, including segment assets and expenditures (dollars in thousands): Commercial For the Six Months Ended June 30, 2017 Properties Apartments Land Other Total Rental and other property revenues $ 17,711 $ 45,691 $ — $ 7 $ 63,409 Property operating expenses (9,839 ) (20,956 ) (447 ) (451 ) (31,693 ) Depreciation (4,699 ) (8,076 ) — 36 (12,739 ) Mortgage and loan interest (3,727 ) (11,787 ) (1,083 ) (17,546 ) (34,143 ) Interest income — — — 9,852 9,852 Loss on land sales — — (31 ) — (31 ) Segment operating income (loss) $ (554 ) $ 4,872 $ (1,561 ) $ (8,102 ) $ (5,345 ) Balance Sheet Data Capital expenditures $ 1,932 $ 585 $ — $ — $ 2,517 Real estate assets $ 148,718 $ 654,119 $ 127,810 $ — $ 930,647 Property Sales Sales price $ — $ — $ 1,596 $ — $ 1,596 Cost of sale — — (1,627 ) — (1,627 ) Loss on sale $ — $ — $ (31 ) $ — $ (31 ) Commercial For the Six Months Ended June 30, 2016 Properties Apartments Land Other Total Rental and other property revenues $ 16,838 $ 43,170 $ 30 $ 1 $ 60,039 Property operating expenses (9,931 ) (19,562 ) (916 ) 2 (30,407 ) Depreciation (4,584 ) (7,151 ) — 37 (11,698 ) Mortgage and loan interest (3,671 ) (12,265 ) (1,153 ) (11,100 ) (28,189 ) Interest income — — — 10,079 10,079 Gain on sale of income producing properties 6 4,919 — — 4,925 Gain on land sales — — 3,370 — 3,370 Segment operating income (loss) $ (1,342 ) $ 9,111 $ 1,331 $ (981 ) $ 8,119 Balance Sheet Data Capital expenditures $ 2,080 $ (146 ) $ 1,498 $ — $ 3,432 Real estate assets $ 151,759 $ 603,829 $ 145,816 $ — $ 901,404 Property Sales Sales price $ 1,500 $ 8,100 $ 7,334 $ — $ 16,934 Cost of sale (1,743 ) (2,932 ) (3,964 ) — (8,639 ) Gain (loss) on sale $ (243 ) $ 5,168 $ 3,370 $ — $ 8,295
Schedule of reconciliation of segment information to Consolidated Statements of Operations	The table below reflects the reconciliation of segment information to the corresponding amounts in the Consolidated Statements of Operations for the three months ended June 30, 2017 and 2016 (dollars in thousands): 2017 2016 Segment operating income $ (3,015 ) $ 7,475 Other non-segment items of income (expense) General and administrative (1,995 ) (2,412 ) Net income fee to related party (77 ) (54 ) Advisory fee to related party (2,849 ) (2,687 ) Other income (3,541 ) 902 Earnings from unconsolidated investees 153 129 Net income (loss) from continuing operations $ (11,324 ) $ 3,353 The table below reflects the reconciliation of segment information to the corresponding amounts in the Consolidated Statements of Operations for the six months ended June 30, 2017 and 2016 (dollars in thousands): For the Six Months Ended June 30, 2017 2016 Segment operating income (loss) $ (5,345 ) $ 8,119 Other non-segment items of income (expense) General and administrative (4,026 ) (3,562 ) Net income fee to related party (137 ) (126 ) Advisory fee to related party (5,508 ) (5,425 ) Other income (2,420 ) 325 Earnings from unconsolidated investees 208 284 Income tax benefit — 1 Net loss from continuing operations $ (17,228 ) $ (384 )
Schedule of reconciliation of segment information to Consolidated Balance Sheets	The table below reflects a reconciliation of the segment information to the corresponding amounts in the Consolidated Balance Sheets (dollars in thousands): As of June 30, 2017 2016 Segment assets $ 930,647 $ 901,404 Investments in unconsolidated investees 6,294 5,868 Notes and interest receivable 106,874 123,854 Other assets 188,921 100,549 Total assets $ 1,232,736 $ 1,131,675

DISCONTINUED OPERATIONS (Tables

DISCONTINUED OPERATIONS (Tables)	6 Months Ended
DISCONTINUED OPERATIONS (Tables)	Jun. 30, 2017
Discontinued Operations and Disposal Groups [Abstract]
Schedule of 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 Six Months Ended June 30, 2016 Revenues: Rental and other property revenues $ — Expenses: — Property operating expenses (3 ) Total operating expenses (3 ) Other income (expense): Other income — Total other income (expenses) — Income from discontinued operations before income tax expense 3 Income tax expense (1 ) Income from discontinued operations $ 2

ORGANIZATION AND BASIS OF PRE30

ORGANIZATION AND BASIS OF PRESENTATION (Details Narrative)	6 Months Ended
ORGANIZATION AND BASIS OF PRESENTATION (Details Narrative)	Jun. 30, 2017ft²aNumber
Number of income-producing properties	59
Rentable square feet \| ft²	2,000,000
Area of land comprising golf course \| ft²	96
Number of apartment units	8,226
Acres of land \| a	3,674
Related Party [Member]
Percentage of ownership	80.00%
Minimum [Member]
Percentage of ownership	20.00%
Remaining amortization period for deferred financing costs	6 months
Maximum [Member]
Percentage of ownership	50.00%
Remaining amortization period for deferred financing costs	40 years
Buildings And Improvements [Member] \| Minimum [Member]
Useful life of fixed assets	10 years
Buildings And Improvements [Member] \| Maximum [Member]
Useful life of fixed assets	40 years
Furniture, Fixtures And Equipment [Member] \| Minimum [Member]
Useful life of fixed assets	5 years
Furniture, Fixtures And Equipment [Member] \| Maximum [Member]
Useful life of fixed assets	10 years
Commercial Real Estate [Member]
Number of income-producing properties	8
Office Buildings [Member]
Number of income-producing properties	5
Retail Centers [Member]
Number of income-producing properties	3
Apartment Buildings [Member]
Number of income-producing properties	50
Projects in development	7
Transcontinential Realty Investors [Member]
Ownership interest	78.00%
Transcontinential Realty Investors [Member] \| Income Opportunity Realty Investors, Inc. [Member]
Ownership interest	81.10%

REAL ESTATE ACTIVITY (Details)

REAL ESTATE ACTIVITY (Details) - USD ($) $ in Thousands	Jun. 30, 2017	Dec. 31, 2016	Jun. 30, 2016
Real Estate [Abstract]
Apartments	$ 695,192
Apartments under construction	64,546
Commercial properties	220,801
Land held for development	79,442
Real estate subject to sales contract	48,366
Total real estate	1,108,347
Less accumulated depreciation	(177,700)
Total real estate	$ 930,647	$ 901,006	$ 901,404

REAL ESTATE ACTIVITY (Details N

REAL ESTATE ACTIVITY (Details Narrative) $ in Thousands	6 Months Ended
REAL ESTATE ACTIVITY (Details Narrative) $ in Thousands	Jun. 30, 2017USD ($)aNumber
Number of income-producing properties \| Number	59
Area of land \| a	3,674
Payment for construction or predevelopment of various apartment complexes	$ 24,400
Capitalized interest costs	$ 900
Related Party [Member]
Area of land sold \| a	91
Transcontinential Realty Investors [Member] \| Land Parcel Acquired [Member]
Number of income-producing properties \| Number	4
Payment to acquire properties	$ 12,900
Area of land \| a	34.56
Transcontinential Realty Investors [Member] \| Land [Member] \| TEXAS
Area of land sold \| a	10.82
Proceeds from sale of real estate	$ 1,100
Loss on sale of real estate	$ (100)

NOTES AND INTEREST RECEIVABLE33

NOTES AND INTEREST RECEIVABLE (Details) - USD ($) $ in Thousands		6 Months Ended
		Jun. 30, 2017	Dec. 31, 2016	Jun. 30, 2016
Allowance for estimated losses		$ (17,037)
Total notes receivable		106,874	$ 126,564	$ 123,854
Performing Loans [Member]
Performing loans, total		123,911
Accrued interest		$ 5,510
Performing Loans [Member] \| H198, LLC [Member]
Maturity Date		Jan. 31, 2020
Description of property		Las Vegas Land
Interest Rate		12.00%
Performing loans, total		$ 5,907
Description of Security		Secured
Performing Loans [Member] \| Leman Development, Ltd [Member]
Interest Rate	[1]	0.00%
Performing loans, total	[1]	$ 1,500
Description of Security	[1]	Unsecured
Performing Loans [Member] \| One Realco Corporation [Member]
Maturity Date	[1],[2]	Jan. 31, 2017
Interest Rate	[1],[2]	3.00%
Performing loans, total	[1],[2]	$ 7,000
Description of Security	[1],[2]	Unsecured
Performing Loans [Member] \| Oulan-Chikh Family Trust [Member]
Maturity Date		Mar. 31, 2021
Interest Rate		8.00%
Performing loans, total		$ 174
Description of Security		Secured
Performing Loans [Member] \| Realty Advisors Management, Inc. [Member]
Maturity Date	[2]	Dec. 31, 2019
Interest Rate	[2]	2.28%
Performing loans, total	[2]	$ 20,387
Description of Security	[2]	Unsecured
Performing Loans [Member] \| Unified Housing Foundation, Inc. (Echo Station) [Member]
Maturity Date	[2]	Dec. 31, 2032
Description of property	[2]	Echo Station
Interest Rate	[2]	12.00%
Performing loans, total	[2]	$ 1,480
Description of Security	[2]	Secured
Performing Loans [Member] \| Unified Housing Foundation, Inc. (Lakeshore Villas #1) [Member]
Maturity Date	[2]	Dec. 31, 2032
Description of property	[2]	Lakeshore Villas
Interest Rate	[2]	12.00%
Performing loans, total	[2]	$ 2,000
Description of Security	[2]	Secured
Performing Loans [Member] \| Unified Housing Foundation, Inc. (Lakeshore Villas #2) [Member]
Maturity Date	[2]	Dec. 31, 2032
Description of property	[2]	Lakeshore Villas
Interest Rate	[2]	12.00%
Performing loans, total	[2]	$ 9,100
Description of Security	[2]	Secured
Performing Loans [Member] \| Unified Housing Foundation, Inc. (Limestone Canyon #2) [Member]
Maturity Date	[2]	Dec. 31, 2032
Description of property	[2]	Limestone Canyon
Interest Rate	[2]	12.00%
Performing loans, total	[2]	$ 4,640
Description of Security	[2]	Secured
Performing Loans [Member] \| Unified Housing Foundation, Inc. (Limestone Ranch #1) [Member]
Maturity Date	[2]	Dec. 31, 2032
Description of property	[2]	Limestone Ranch
Interest Rate	[2]	12.00%
Performing loans, total	[2]	$ 1,952
Description of Security	[2]	Secured
Performing Loans [Member] \| Unified Housing Foundation, Inc. (Limestone Ranch #2) [Member]
Maturity Date	[2]	Dec. 31, 2032
Description of property	[2]	Limestone Ranch
Interest Rate	[2]	12.00%
Performing loans, total	[2]	$ 6,000
Description of Security	[2]	Secured
Performing Loans [Member] \| Unified Housing Foundation, Inc. (Parkside Crossing) [Member]
Maturity Date	[2]	Dec. 31, 2032
Description of property	[2]	Parkside Crossing
Interest Rate	[2]	12.00%
Performing loans, total	[2]	$ 1,935
Description of Security	[2]	Secured
Performing Loans [Member] \| Unified Housing Foundation, Inc. (Reserve at White Rock Phase I) [Member]
Maturity Date	[2]	Dec. 31, 2032
Description of property	[2]	Reserve at White Rock Phase I
Interest Rate	[2]	12.00%
Performing loans, total	[2]	$ 2,485
Description of Security	[2]	Secured
Performing Loans [Member] \| Unified Housing Foundation, Inc. (Reserve at White Rock Phase II) [Member]
Maturity Date	[2]	Dec. 31, 2032
Description of property	[2]	Reserve at White Rock Phase II
Interest Rate	[2]	12.00%
Performing loans, total	[2]	$ 2,555
Description of Security	[2]	Secured
Performing Loans [Member] \| Unified Housing Foundation, Inc. (Sendero Ridge #1) [Member]
Maturity Date	[2]	Dec. 31, 2032
Description of property	[2]	Sendero Ridge
Interest Rate	[2]	12.00%
Performing loans, total	[2]	$ 4,812
Description of Security	[2]	Secured
Performing Loans [Member] \| Unified Housing Foundation, Inc. (Timbers of Terrell) [Member]
Maturity Date	[2]	Dec. 31, 2032
Description of property	[2]	Timbers of Terrell
Interest Rate	[2]	12.00%
Performing loans, total	[2]	$ 1,323
Description of Security	[2]	Secured
Performing Loans [Member] \| Unified Housing Foundation, Inc. (Tivoli) [Member]
Maturity Date	[2]	Dec. 31, 2032
Description of property	[2]	Tivoli
Interest Rate	[2]	12.00%
Performing loans, total	[2]	$ 7,966
Description of Security	[2]	Secured
Performing Loans [Member] \| Unified Housing Foundation, Inc. #1 [Member]
Maturity Date	[2]	Dec. 31, 2017
Interest Rate	[2]	12.00%
Performing loans, total	[2]	$ 1,207
Description of Security	[2]	Unsecured
Performing Loans [Member] \| Unified Housing Foundation, Inc. #2 [Member]
Maturity Date	[2]	Dec. 31, 2018
Interest Rate	[2]	12.00%
Performing loans, total	[2]	$ 3,994
Description of Security	[2]	Unsecured
Performing Loans [Member] \| Unified Housing Foundation, Inc. #3 [Member]
Maturity Date	[2]	Dec. 31, 2018
Interest Rate	[2]	12.00%
Performing loans, total	[2]	$ 6,407
Description of Security	[2]	Unsecured
Performing Loans [Member] \| Unified Housing Foundation, Inc. #4 [Member]
Maturity Date	[2]	Jun. 30, 2019
Interest Rate	[2]	12.00%
Performing loans, total	[2]	$ 5,400
Description of Security	[2]	Unsecured
Performing Loans [Member] \| Unified Housing Foundation, Inc. #5 [Member]
Maturity Date	[2]	Jun. 30, 2020
Interest Rate	[2]	12.00%
Performing loans, total	[2]	$ 5,760
Description of Security	[2]	Unsecured
Performing Loans [Member] \| Other Related Party Notes #1 [Member]
Description of Interest Rate		Various
Performing loans, total		$ 1,349
Description of Security		Various secured interests
Performing Loans [Member] \| Other Related Party Notes #2 [Member]
Description of Interest Rate		Various
Performing loans, total		$ 782
Description of Security		Various unsecured interests
Performing Loans [Member] \| Other Non-Related Party Notes #1 [Member]
Description of Interest Rate		Various
Performing loans, total		$ 3,247
Description of Security		Various secured interests
Performing Loans [Member] \| Other Non-Related Party Notes #2 [Member]
Description of Interest Rate		Various
Performing loans, total		$ 9,039
Description of Security		Various unsecured interests

[1]	An allowance was taken for estimated losses at full value of note.
[2]	Related party notes

NOTES AND INTEREST RECEIVABLE34

NOTES AND INTEREST RECEIVABLE (Details Narrative) - USD ($) $ in Thousands	6 Months Ended
	Jun. 30, 2017	Dec. 31, 2016	Jun. 30, 2016
Total notes and interest receivable	$ 106,874	$ 126,564	$ 123,854
Interest income	2,900
Related Party [Member]
Total notes and interest receivable	$ 105,500

INVESTMENT IN UNCONSOLIDATED 35

INVESTMENT IN UNCONSOLIDATED INVESTEES (Details)	Jun. 30, 2017	Jun. 30, 2016
Gruppa Florentina LLC [Member]
Schedule of Equity Method Investments [Line Items]
Percentage of ownership	20.00%	20.00%

INVESTMENT IN UNCONSOLIDATED 36

INVESTMENT IN UNCONSOLIDATED INVESTEES (Details 1) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2017	Jun. 30, 2016	Jun. 30, 2017	Jun. 30, 2016	Dec. 31, 2016
Schedule of Equity Method Investments [Line Items]
Real estate, net of accumulated depreciation	$ 930,647	$ 901,404	$ 930,647	$ 901,404	$ 901,006
Other assets	62,163		62,163		60,659
Shareholders' equity/partners capital	104,518		104,518		$ 121,877
Revenue	31,587	30,834	63,409	60,039
Operating expenses	26,759	26,212	54,103	52,093
Income from continuing operations	(10,848)	(3,534)	(17,197)	(8,680)
Net income	(11,324)	3,353	(17,228)	(382)
Company's proportionate share of earnings	153	129	208	284
Gruppa Florentina LLC [Member]
Schedule of Equity Method Investments [Line Items]
Real estate, net of accumulated depreciation	13,578	13,692	13,578	13,692
Notes receivable	9,969	8,858	9,969	8,858
Other assets	30,188	30,655	30,188	30,655
Notes payable	(9,514)	(10,648)	(9,514)	(10,648)
Other liabilities	(7,821)	(7,304)	(7,821)	(7,304)
Shareholders' equity/partners capital	$ (36,400)	$ (35,253)	(36,400)	(35,253)
Revenue			27,458	27,321
Depreciation			(575)	(575)
Operating expenses			(25,533)	(24,841)
Interest expense			(353)	(405)
Income from continuing operations			997	1,500
Net income			997	1,500
Company's proportionate share of earnings			$ 199	$ 300

INVESTMENT IN UNCONSOLIDATED 37

INVESTMENT IN UNCONSOLIDATED INVESTEES (Details Narrative) - Number	Jun. 30, 2017	Jun. 30, 2016
Gruppa Florentina LLC [Member]
Percentage of ownership	20.00%	20.00%
Gruppa Florentina LLC [Member] \| Milano [Member]
Investee's ownership percentage	100.00%
Number of stores	33
Number of restaurants franchise	23
Gruppa Florentina LLC [Member] \| SienaCorp [Member]
Investee's ownership percentage	100.00%
Number of stores	2
Gruppa Florentina LLC [Member] \| Piazza Del Pane, Inc. [Member]
Investee's ownership percentage	100.00%
Number of stores	2
Gruppa Florentina LLC [Member] \| Blast 825 Pizza [Member]
Investee's ownership percentage	100.00%
Number of stores	4
Minimum [Member]
Percentage of ownership	20.00%
Maximum [Member]
Percentage of ownership	50.00%

NOTES PAYABLE (Details)

NOTES PAYABLE (Details) $ in Thousands	Jun. 30, 2017USD ($)
Short-term Debt [Line Items]
Notes Payable	$ 827,942
Accrued Interest	2,755
Total Debt	830,697
Unamortized deferred borrowing costs	(18,544)
Apartments [Member]
Short-term Debt [Line Items]
Notes Payable	539,556
Accrued Interest	1,459
Total Debt	541,015
Apartments Under Construction [Member]
Short-term Debt [Line Items]
Notes Payable	32,564
Total Debt	32,564
Commercial [Member]
Short-term Debt [Line Items]
Notes Payable	127,542
Accrued Interest	599
Total Debt	128,141
Land [Member]
Short-term Debt [Line Items]
Notes Payable	29,200
Accrued Interest	229
Total Debt	29,429
Real Estate Subject To Sales Contract [Member]
Short-term Debt [Line Items]
Notes Payable	3,542
Accrued Interest	470
Total Debt	4,012
Mezzanine Financing [Member]
Short-term Debt [Line Items]
Notes Payable	101,173
Total Debt	101,173
Other [Member]
Short-term Debt [Line Items]
Notes Payable	12,909
Accrued Interest	(2)
Total Debt	12,907
Total Notes Payable [Member]
Short-term Debt [Line Items]
Notes Payable	846,486
Accrued Interest	2,755
Total Debt	849,241
Unamortized deferred borrowing costs	$ (18,544)

NOTES PAYABLE (Details Narrativ

NOTES PAYABLE (Details Narrative) - Construction Loans [Member] $ in Thousands	6 Months Ended
	Jun. 30, 2017USD ($)Number
Number of loans refinanced or modified \| Number	3
Loans refinanced during the period	$ 80,100
Proceeds from construction loans	$ 13,700

SERIES A BONDS PAYABLE (Details

SERIES A BONDS PAYABLE (Details Narrative) ₪ in Thousands	Jul. 12, 2017USD ($)	Jul. 12, 2017ILS (₪)	May 16, 2017USD ($)Number	Feb. 14, 2017USD ($)Number	Jun. 30, 2017USD ($)	Jun. 30, 2016USD ($)	Feb. 14, 2017ILS (₪)Number
Net loss on foreign currency transaction					$ 3,700,000
Issuance of bonds					$ 102,364,000	$ 78,487,000
Nonconvertible Series A Bonds [Member] \| Southern Properties Capital LTD [Member]
Interest rate			7.30%
Number of semiannual principal payment \| Number			10
Description of payment terms			due semiannually beginning in July 2017 through July 2023 with ten semiannual principal payments due beginning July 2019 through July 2023.
Issuance of bonds			$ 27,769,615
Nonconvertible Series A Bonds [Member] \| Southern Properties Capital LTD [Member] \| Subsequent Event [Member]
Interest rate	7.30%	7.30%
Description of payment terms	due semiannually beginning in July 2017 through July 2023 with ten semiannual principal payments due beginning July 2019 through July 2023.	due semiannually beginning in July 2017 through July 2023 with ten semiannual principal payments due beginning July 2019 through July 2023.
Issuance of bonds	$ 6,668,998
Nonconvertible Series A Bonds [Member] \| Israel Shekel [Member] \| Southern Properties Capital LTD [Member]
Exchange rate			3.607
Issuance of bonds			$ 100,200,000
Nonconvertible Series A Bonds [Member] \| Israel Shekel [Member] \| Southern Properties Capital LTD [Member] \| Subsequent Event [Member]
Exchange rate	3.574	3.574
Issuance of bonds \| ₪		₪ 23,800
Transcontinential Realty Investors [Member] \| Nonconvertible Series A Bonds [Member]
Debentures offering amount				$ 73,651,065
Interest rate				7.30%			7.30%
Effective yield				9.25%			9.25%
Number of semiannual principal payment \| Number				10			10
Description of payment terms				due semiannually beginning in July 2017 through July 2023 with ten semiannual principal payments due beginning July 2019 through July 2023.
Transcontinential Realty Investors [Member] \| Nonconvertible Series A Bonds [Member] \| Israel Shekel [Member]
Debentures offering amount \| ₪							₪ 276,000
Exchange rate				3.7474			3.7474

RELATED PARTY TRANSACTIONS (Det

RELATED PARTY TRANSACTIONS (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2017	Jun. 30, 2016	Jun. 30, 2017	Jun. 30, 2016
Related party receivables [Roll Forward]
Related party receivable at beginning			$ 24,672
Advisory fees	$ (2,849)	$ (2,687)	(5,508)	$ (5,425)
Net income fee	(77)	$ (54)	(137)	$ (126)
Interest income			2,900
Related party receivable at end	30,913		30,913
Pillar Income Asset Management, Inc [Member]
Related party receivables [Roll Forward]
Related party receivable at beginning			24,672
Cash transfers			37,397
Advisory fees			(5,507)
Net income fee			(137)
Cost reimbursements			(1,205)
Interest income			431
Notes receivable purchased			(447)
Fees and commissions			(1,147)
Expenses paid by Advisor			(2,860)
Financing (mortgage payments)			(17,161)
Sales/purchases transactions			(3,123)
Related party receivable at end	$ 30,913		$ 30,913

OPERATING SEGMENTS (Details)

OPERATING SEGMENTS (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
OPERATING SEGMENTS (Details) - USD ($) $ in Thousands	Jun. 30, 2017	Jun. 30, 2016	Jun. 30, 2017	Jun. 30, 2016
Segment Reporting Information [Line Items]
Rental and other property revenues	$ 31,587	$ 30,834	$ 63,409	$ 60,039
Property operating expenses	(15,429)	(15,191)	(31,693)	(30,407)
Interest income	5,059	4,788	9,852	10,079
Gain (loss) on land sales	(476)	1,719	(31)	3,370
Segment operating income (loss)	4,828	4,622	9,306	7,946
Real estate assets	930,647	901,404	930,647	901,404
Commercial Properties [Member]
Segment Reporting Information [Line Items]
Rental and other property revenues	8,553	8,947	17,711	16,838
Property operating expenses	(4,900)	(4,836)	(9,839)	(9,931)
Depreciation	(2,397)	(2,270)	(4,699)	(4,584)
Mortgage and loan interest	(2,121)	(1,696)	(3,727)	(3,671)
Gain on sale of income producing properties		6		6
Segment operating income (loss)	(865)	151	(554)	(1,342)
Capital expenditures	557	680	1,932	2,080
Real estate assets	148,718	151,759	148,718	151,759
Property Sales
Sales price				1,500
Cost of sale				(1,743)
Gain (loss) on sale				(243)
Apartments [Member]
Segment Reporting Information [Line Items]
Rental and other property revenues	23,030	21,856	45,691	43,170
Property operating expenses	(10,211)	(10,168)	(20,956)	(19,562)
Depreciation	(4,030)	(3,616)	(8,076)	(7,151)
Mortgage and loan interest	(5,028)	(6,109)	(11,787)	(12,265)
Gain on sale of income producing properties		5,162		4,919
Segment operating income (loss)	3,761	7,125	4,872	9,111
Capital expenditures		(146)	585	(146)
Real estate assets	654,119	603,829	654,119	603,829
Property Sales
Sales price		8,100		8,100
Cost of sale		(2,932)		(2,932)
Gain (loss) on sale		5,168		5,168
Land [Member]
Segment Reporting Information [Line Items]
Rental and other property revenues		30		30
Property operating expenses	(168)	(169)	(447)	(916)
Mortgage and loan interest	(389)	(841)	(1,083)	(1,153)
Gain (loss) on land sales	(476)	1,719	(31)	3,370
Segment operating income (loss)	(1,033)	739	(1,561)	1,331
Capital expenditures	186	727	399	1,498
Real estate assets	127,810	145,816	127,810	145,816
Property Sales
Sales price	507	3,154	1,596	7,334
Cost of sale	(983)	(1,435)	(1,627)	(3,964)
Gain (loss) on sale	(476)	1,719	(31)	3,370
Other [Member]
Segment Reporting Information [Line Items]
Rental and other property revenues	4	1	7	1
Property operating expenses	(150)	(18)	(451)	2
Depreciation	18	18	36	37
Mortgage and loan interest	(9,809)	(5,329)	(17,546)	(11,100)
Interest income	5,059	4,788	9,852	10,079
Segment operating income (loss)	(4,878)	(540)	(8,102)	(981)
Total Segments [Member]
Segment Reporting Information [Line Items]
Rental and other property revenues	31,587	30,834	63,409	60,039
Property operating expenses	(15,429)	(15,191)	(31,693)	(30,407)
Depreciation	(6,409)	(5,868)	(12,739)	(11,698)
Mortgage and loan interest	(17,347)	(13,975)	(34,143)	(28,189)
Interest income	5,059	4,788	9,852	10,079
Gain on sale of income producing properties		5,168		4,925
Gain (loss) on land sales	(476)	1,719	(31)	3,370
Segment operating income (loss)	(3,015)	7,475	(5,345)	8,119
Capital expenditures	743	1,261	2,517	3,432
Real estate assets	930,647	901,404	930,647	901,404
Property Sales
Sales price	507	11,254	1,596	16,934
Cost of sale	(983)	(4,367)	(1,627)	(8,639)
Gain (loss) on sale	$ (476)	$ 6,887	$ (31)	$ 8,295

OPERATING SEGMENTS (Details 1)

OPERATING SEGMENTS (Details 1) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
OPERATING SEGMENTS (Details 1) - USD ($) $ in Thousands	Jun. 30, 2017	Jun. 30, 2016	Jun. 30, 2017	Jun. 30, 2016
Segment operating income (loss)	$ 4,828	$ 4,622	$ 9,306	$ 7,946
Other non-segment items of income (expense)
General and administrative	(1,995)	(2,412)	(4,026)	(4,437)
Net income fee to related party	(77)	(54)	(137)	(126)
Advisory fee to related party	(2,849)	(2,687)	(5,508)	(5,425)
Other income	(116)	902	1,327	1,200
Earnings from unconsolidated investees	153	129	208	284
Income tax benefit				1
Gain (loss) from continuing operations	(11,324)	3,353	(17,228)	(384)
Total Segments [Member]
Segment operating income (loss)	(3,015)	7,475	(5,345)	8,119
Other non-segment items of income (expense)
Other income	$ (3,541)	$ (902)	$ (2,420)	$ 325

OPERATING SEGMENTS (Details 2)

OPERATING SEGMENTS (Details 2) - USD ($) $ in Thousands	Jun. 30, 2017	Dec. 31, 2016	Jun. 30, 2016
Segment Reporting [Abstract]
Segment assets	$ 930,647	$ 901,006	$ 901,404
Investments in unconsolidated investees	6,294	6,087	5,868
Notes and interest receivable	106,874	126,564	123,854
Other assets	188,921		100,549
Total assets	$ 1,232,736	$ 1,174,909	$ 1,131,675

DISCONTINUED OPERATIONS (Detail

DISCONTINUED OPERATIONS (Details) $ in Thousands	6 Months Ended
DISCONTINUED OPERATIONS (Details) $ in Thousands	Jun. 30, 2016USD ($)
Expenses:
Property operating expenses	$ (3)
Total operating expenses	(3)
Income from discontinued operations before income tax expense	3
Income tax expense	(1)
Income from discontinued operations	$ 2

COMMITMENTS, CONTINGENCIES, A46

COMMITMENTS, CONTINGENCIES, AND LIQUIDITY (Details Narrative) $ in Thousands	Jul. 20, 2015USD ($)	Dec. 31, 2013USD ($)	Oct. 31, 2011USD ($)	Jun. 30, 2017USD ($)a	Dec. 13, 2013ft²	Jan. 31, 2012USD ($)	Dec. 17, 2007USD ($)
Area of land \| a				3,674
Dynex Capital, Inc.Litigation [Member]
Description of plaintiff	Basic Capital Management, Inc., American Realty Trust, Inc., Transcontinental Realty Investors, Inc., Continental Poydras Corp., Continental Common, Inc. and Continental Baronne, Inc.
Description of defendant	Dynex Commercial, Inc.
Domicile of litigation	68th Judicial District Court in Dallas County, Texas
Description of action taken by court	The Final Judgment entered against Dynex Commercial, Inc. on July 20, 2015 awarded Basic $0.256 million in damages, plus pre-judgment interest of $0.192 million for a total amount of $0.448 million. The Judgment awarded ART $14.2 million in damages, plus pre-judgment interest of $10.6 million for a total amount of $24.8 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.
Unfunded loan commitment	$ 160,000
Awarded attorney fees	$ 1,600
Post-judgment interest rate	5.00%
Actions by plantiff	In April 2017, the plaintiffs filed a lawsuit against Dynex Capital, Inc. and Dynex Commercial, Inc. for $50 million alleging, among other things, fraudulent transfer and alter ego.
Dynex Capital, Inc.Litigation [Member] \| Transcontinential Realty Investors [Member]
Damages - awarded amount	$ 11,100
Damages - pre-judgement interest	8,400
Damages - total	19,500
Dynex Capital, Inc.Litigation [Member] \| American Reality Trust, Inc. [Member]
Damages - awarded amount	14,200
Damages - pre-judgement interest	10,600
Damages - total	24,800
Dynex Capital, Inc.Litigation [Member] \| Basic Capital Management, Inc. [Member]
Damages - awarded amount	256
Damages - pre-judgement interest	192
Damages - total	$ 448
ART and ART Midwest, Inc. Litigation [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 (collectively, the “Clapper Parties”)
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.
Notes receivable from the sale of ART						$ 10,000
Port Olpentiz Litigation [Member]
Description of plaintiff		ARL
Description of defendant		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
Description of allegation		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.
Domicile of litigation		Germany
Area of land \| ft²					420
Write-off of loans		$ 5,300
UHF Debt Guarantee [Member]
Loan guarantee amount				$ 39,100
LK-Four Hickory Debt Guarantee [Member]
Loan guarantee amount				$ 19,900			$ 28,000

EARNINGS PER SHARE (Details Nar

EARNINGS PER SHARE (Details Narrative) - USD ($) $ in Thousands	Apr. 09, 2015	Jul. 17, 2014	Jun. 30, 2017	Dec. 31, 2016
Shares held by subsidiaries			2,000,614
Series A Cumulative Convertible Preferred Stock [Member]
Shares held by subsidiaries			900,000	900,000
Percentage of the average daily closing price of common stock			90.00%
Preferred stock, dividend rate			10.00%
Number of trading days			20 days
Series A Cumulative Convertible Preferred Stock [Member] \| RAI [Member]
Shares held by subsidiaries		2,451,435	1,100,000
Accrued dividends unpaid		$ 15,100	$ 10,300
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

SUBSEQUENT EVENTS (Details Narr

SUBSEQUENT EVENTS (Details Narrative) ₪ in Thousands	Jul. 12, 2017USD ($)	Jul. 12, 2017ILS (₪)	May 16, 2017USD ($)	Jun. 30, 2017USD ($)	Jun. 30, 2016USD ($)
Net loss on foreign currency transaction				$ 3,700,000
Issuance of bonds				$ 102,364,000	$ 78,487,000
Southern Properties Capital LTD [Member] \| Nonconvertible Series A Bonds [Member]
Interest rate			7.30%
Issuance of bonds			$ 27,769,615
Southern Properties Capital LTD [Member] \| Nonconvertible Series A Bonds [Member] \| Israel Shekel [Member]
Exchange rate			3.607
Issuance of bonds			$ 100,200,000
Subsequent Event [Member] \| Southern Properties Capital LTD [Member] \| Nonconvertible Series A Bonds [Member]
Interest rate	7.30%	7.30%
Issuance of bonds	$ 6,668,998
Subsequent Event [Member] \| Southern Properties Capital LTD [Member] \| Nonconvertible Series A Bonds [Member] \| Israel Shekel [Member]
Exchange rate	3.574	3.574
Issuance of bonds \| ₪		₪ 23,800