Document_and_Entity_Informatio
Document and Entity Information | 3 Months Ended | |
Mar. 31, 2015 | 5-May-15 | |
Document and Entity Information | ||
Entity Registrant Name | TRANSCONTINENTAL REALTY INVESTORS INC | |
Entity Trading Symbol | TCI | |
Document Type | 10-Q | |
Document Period End Date | 31-Mar-15 | |
Amendment Flag | FALSE | |
Entity Central Index Key | 733590 | |
Current Fiscal Year End Date | -19 | |
Entity Common Stock, Shares Outstanding | 8,717,767 | |
Entity Filer Category | Smaller Reporting Company | |
Entity Current Reporting Status | Yes | |
Entity Voluntary Filers | No | |
Entity Well-known Seasoned Issuer | No | |
Document Fiscal Year Focus | 2015 | |
Document Fiscal Period Focus | Q1 |
CONSOLIDATED_BALANCE_SHEETS
CONSOLIDATED BALANCE SHEETS (USD $) | Mar. 31, 2015 | Dec. 31, 2014 |
In Thousands, unless otherwise specified | ||
Assets {1} | ||
Real estate, at cost | $782,939 | $781,794 |
Real estate subject to sales contracts at cost, net of depreciation ($2,387 for 2015 and $2,300 for 2014) | 20,416 | 20,395 |
Less accumulated depreciation | -117,334 | -113,068 |
Total real estate | 686,021 | 689,121 |
Notes and interest receivable | ||
Performing (including $76,387 in 2015 and $77,853 in 2014 from related parties) | 90,147 | 84,863 |
Non-Performing | 594 | 584 |
Less allowance for doubtful accounts (including $1,825 in 2015 and $1,825 in 2014 from related parties). | -1,990 | -1,990 |
Total notes and interest receivable | 88,751 | 83,457 |
Cash and cash equivalents | 19,605 | 12,201 |
Restricted cash | 35,749 | 48,238 |
Investments in unconsolidated subsidiaries and investees | 1,714 | 1,543 |
Receivable from related party | 47,519 | 58,404 |
Other assets | 38,477 | 37,441 |
Total assets | 917,836 | 930,405 |
Liabilities: | ||
Notes and interest payable | 579,788 | 588,749 |
Notes related to assets held for sale | 1,227 | 1,552 |
Notes related to subject to sales contracts | 18,434 | 18,616 |
Deferred revenue (from sales to related parties) | 51,356 | 51,356 |
Accounts payable and other liabilities (including $5,129 in 2015 and $4,909 in 2014 to related parties) | 33,984 | 36,684 |
Total liabilities | 684,789 | 696,957 |
Shareholders' equity: | ||
Preferred stock, Series C: $0.01 par value, authorized 10,000,000 shares; issued and outstanding zero shares in 2015 and 2014 (liquidation preference $100 per share). Series D: $0.01 par value, authorized,issued and outstanding 100,000 shares in 2015 and 2014 (liquidation preference $100 per share) | 1 | 1 |
Common stock, $0.01 par value, authorized 10,000,000 shares; issued 8,717,967 shares in 2015 and 2014; outstanding 8,717,767 shares in 2015 and 2014 | 87 | 84 |
Treasury stock at cost, 200 shares in 2015 and 2014 | -2 | -2 |
Paid-in capital | 271,427 | 271,649 |
Retained earnings | -56,346 | -56,451 |
Total Transcontinental Realty Investors, Inc. shareholders' equity | 215,167 | 215,284 |
Non-controlling interest | 17,880 | 18,164 |
Total shareholders' equity | 233,047 | 233,448 |
Total liabilities and shareholders' equity | $917,836 | $930,405 |
CONSOLIDATED_BALANCE_SHEETS_PA
CONSOLIDATED BALANCE SHEETS PARENTHETICALS (USD $) | Mar. 31, 2015 | Dec. 31, 2014 |
In Thousands, except Share data, unless otherwise specified | ||
BALANCE SHEETS PARENTHETICALS | ||
Depreciation of Real Estate subject to sales contracts at cost | $2,387 | $2,300 |
Performing Notes and Interest Receivable from related parties | 76,387 | 77,853 |
Allowance for doubtful accounts from related parties | 1,825 | 1,825 |
Accounts payable and other liabilities from related parties | $5,129 | $4,909 |
Preferred stock Series C, par value | $0.01 | $0.01 |
Preferred stock Series C, shares authorized | 10,000,000 | 10,000,000 |
Preferred stock Series C, shares issued | 0 | 0 |
Preferred stock Series C, shares outstanding | 0 | 0 |
Preferred stock Series C, liquidation preference per share | $100,000 | $100,000 |
Preferred stock Series D, par value | $0.01 | $0.01 |
Preferred stock Series D, shares authorized | 100,000 | 100,000 |
Preferred stock Series D, shares issued | 100,000 | 100,000 |
Preferred stock Series D, shares outstanding | 100,000 | 100,000 |
Preferred stock Series D, liquidation preference per share | $100 | $100 |
Common stock, par value | $0.01 | $0.01 |
Common stock, shares authorized | 10,000,000 | 10,000,000 |
Common stock, shares issued | 8,717,967 | 8,717,967 |
Common stock, shares outstanding | 8,717,967 | 8,717,967 |
Treasury stock, shares | 200 | 200 |
CONSOLIDATED_STATEMENTS_OF_OPE
CONSOLIDATED STATEMENTS OF OPERATIONS (USD $) | 3 Months Ended | |
In Thousands, except Share data, unless otherwise specified | Mar. 31, 2015 | Mar. 31, 2014 |
Revenues: | ||
Rental and other property revenues (including $170 and $175 for the three months ended 2015 and 2014, respectively, from related parties). | $22,304 | $18,303 |
Property operating expenses (including $153 and $145 for the three months ended 2015 and 2014, respectively, from related parties). | 10,864 | 9,203 |
Depreciation and amortization | 4,644 | 4,280 |
General and administrative (including $820 and $744 for the three months ended 2015 and 2014, respectively, from related parties). | 1,768 | 1,551 |
Net income fee to related party | 45 | 490 |
Advisory fee to related party | 1,943 | 1,352 |
Total operating expenses | 19,264 | 17,376 |
Net operating income (loss) | 3,040 | 927 |
Interest income (including $3,419 and $2,113 for the three months ended 2015 and 2014,respectively, from related parties). | 3,760 | 2,113 |
Other income . | 67 | 153 |
Mortgage and loan interest (including $0 and $31 for the three months ended 2015 and 2014, respectively, from related parties). | -7,744 | -6,487 |
Deferred borrowing costs amortization | -591 | -931 |
Loan charges and prepayment penalties | -1,850 | -1,582 |
Earnings (losses) from unconsolidated joint ventures and investees | 33 | -4 |
Litigation settlement | -73 | 3,839 |
Total other expenses | -6,398 | -2,899 |
Loss before gain (loss) on land sales, non-controlling interest, and taxes | -3,358 | -1,972 |
Gain (loss) on land sales | 2,876 | 753 |
Net loss from continuing operations before taxes | -482 | -1,219 |
Income tax benefit (expense) | 102 | 2,049 |
Net income (loss) from continuing operations | -380 | 830 |
Net income (loss) from discontinued operations | 292 | -199 |
Gain on sale of real estate from discontinued operations | 0 | 6,053 |
Income tax benefit (expense) discontinued operations | -102 | -2,049 |
Net income from discontinued operations | 190 | 3,805 |
Net income (loss) | -190 | 4,635 |
Net loss attributable to non-controlling interest | 295 | -84 |
Net income (loss) attributable to Transcontinental Realty Investors, Inc. | 105 | 4,551 |
Preferred dividend requirement | -222 | -274 |
Net income (loss) applicable to common shares | -117 | 4,277 |
Net income (loss) from continuing operations basic | ($0.04) | ($0.06) |
Net income (loss) from discontinued operations basic | $0.02 | $0.45 |
Net income (loss) applicable to common shares basic (1) | ($0.02) | $0.51 |
Net income (loss) from continuing operations diluted | ($0.04) | $0.05 |
Net income (loss) from discontinued operations diluted | $0.02 | $0.44 |
Net income (loss) applicable to common shares diluted | ($0.02) | $0.49 |
Weighted average common shares used in computing earnings per share | 8,717,767 | 8,413,469 |
Weighted average common shares used in computing diluted earnings per share | 8,717,767 | 8,639,679 |
Net income (loss) from continuing operations. | -85 | 746 |
Net income (loss) from discontinued operations. | 190 | 3,805 |
Net income (loss). | $105 | $4,551 |
CONSOLIDATED_STATEMENTS_OF_OPE1
CONSOLIDATED STATEMENTS OF OPERATIONS PARENTHETICALS (USD $) | 3 Months Ended | |
In Thousands, unless otherwise specified | Mar. 31, 2015 | Mar. 31, 2014 |
Statements Of Operations Parentheticals | ||
Rental and other property revenues, related parties | $170 | $175 |
Property operating expenses, related parties | 153 | 145 |
General and administrative expenses, related parties | 820 | 744 |
Interest income from related parties | 3,419 | 2,113 |
Mortgage and loan interest, related parties | $0 | $31 |
CONSOLIDATED_STATEMENTS_OF_COM
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) (USD $) | 3 Months Ended | |
In Thousands, unless otherwise specified | Mar. 31, 2015 | Mar. 31, 2014 |
Statement of Comprehensive Income (loss) | ||
Net income (loss) | ($190) | $4,635 |
Other comprehensive loss | 0 | 0 |
Total other comprehensive loss | -190 | 4,635 |
Comprehensive income attributable to non-controlling interest | 295 | -84 |
Comprehensive income (loss) attributable to Transcontinental Realty Investors, Inc. | $105 | $4,551 |
CONSOLIDATED_STATEMENTS_OF_SHA
CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY (USD $) | Total Equity | Comprehensive Income (Loss) | Preferred Stock | Common Stock Shares | Common Stock Amount | Treasury Stock | Paid-in Capital | Retained Earnings | Non-Controlling Interest |
In Thousands, except Share data | USD ($) | USD ($) | USD ($) | USD ($) | USD ($) | ||||
Balance, at Dec. 31, 2014 | 233,448 | -57,670 | 1 | 8,717,967 | 87 | -2 | 2,716,490 | -56,451 | 18,164 |
Series D preferred stock dividends (9.0% per year) | ($222) | ($222) | |||||||
Net income (loss) | -190 | -190 | -105 | -295 | |||||
Contributions from non-controlling interests | $11 | $11 | |||||||
Balance, at Mar. 31, 2015 | 233,047 | -57,860 | 1 | 8,717,967 | 87 | -2 | 2,714,270 | -56,346 | 17,880 |
CONSOLIDATED_STATEMENTS_OF_CAS
CONSOLIDATED STATEMENTS OF CASH FLOWS (USD $) | 3 Months Ended | |
In Thousands, unless otherwise specified | Mar. 31, 2015 | Mar. 31, 2014 |
Cash Flow From Operating Activities: | ||
Net income (loss) (2) | ($190) | $4,635 |
Adjustments to reconcile net income (loss) applicable to common shares to net cash used in operating activities: | ||
(Gain) loss on sale of land | -2,876 | -753 |
Gain on sale of income producing properties | 0 | -6,053 |
Depreciation and amortization | 4,644 | 4,609 |
Amortization of deferred borrowing costs | 591 | 1,213 |
losses Earnings from unconsolidated subsidiaries and investees | -33 | 4 |
Decrease(Increase) in assets: | ||
Accrued interest receivable | 1,117 | 10,587 |
Other assets | 1,913 | -13 |
Prepaid expense | -1,112 | -777 |
Escrow | 12,210 | 4,607 |
Earnest money | -1,720 | -65 |
Rent receivables | -491 | -238 |
Related party receivables | 10,885 | -27,759 |
Increase (decrease) in liabilities: | ||
Accrued interest payable | 25 | -62 |
Other liabilities | -2,640 | -13,554 |
Net cash used in operating activities | 22,323 | -23,619 |
Cash Flow From Investing Activities: | ||
Originations or advances on notes receivable | -6,411 | -4,449 |
Acquisition of land held for development | 0 | -93 |
Proceeds from sales of income producing properties | 0 | 22,480 |
Proceeds from sale of land | 6,849 | 1,504 |
Investment in unconsolidated real estate entities | -138 | -131 |
Improvement of land held for development | -984 | -115 |
Improvement of income producing properties | -3,457 | -1,162 |
Construction and development of new properties | -785 | -205 |
Net cash provided by investing activities | -4,926 | 17,829 |
Cash Flow From Financing Activities: | ||
Proceeds from notes payable | 11,488 | 61,212 |
Recurring amortization of principal on notes payable | -4,132 | -4,668 |
Payments on maturing notes payable | -16,849 | -44,486 |
Deferred financing costs | -289 | -3,903 |
Contributions from non-controlling interests | 11 | |
Preferred stock dividends - Series C | -52 | |
Preferred stock dividends - Series D | -222 | -222 |
Net cash used in financing activities | -9,993 | 7,881 |
Net increase in cash and cash equivalents | 7,404 | 2,091 |
Cash and cash equivalents, beginning of period | 12,201 | 16,086 |
Cash and cash equivalents, end of period | 19,605 | 18,177 |
Supplemental disclosures of cash flow information: | ||
Cash paid for interest | $7,744 | $7,151 |
ORGANIZATION_AND_BASIS_OF_PRES
ORGANIZATION AND BASIS OF PRESENTATION | 3 Months Ended | ||
Mar. 31, 2015 | |||
ORGANIZATION AND BASIS OF PRESENTATION: | |||
ORGANIZATION AND BASIS OF PRESENTATION | NOTE 1. ORGANIZATION AND BASIS OF PRESENTATION | ||
Organization | |||
As used herein, the terms “TCI”, “the Company”, “we”, “our” or “us” refer to Transcontinental Realty Investors, Inc., a Nevada corporation. TCI is the successor to a California business trust which was organized on September 6, 1983, and commenced operations on January 31, 1984. Effective March 31, 2003, TCI’s financial results were consolidated in American Realty Investors, Inc. (“ARL”) Form 10-K and related Consolidated Financial Statements. | |||
The Company is headquartered in Dallas, Texas and its common stock trades on the New York Stock Exchange (“NYSE”) under the symbol (“TCI”). Subsidiaries of ARL own approximately 80.9% of the Company’s common stock. ARL’s common stock trades on the New York Stock Exchange under the symbol (“ARL”). We have no employees. | |||
TCI is a “C” corporation for U.S. federal income tax purposes and files an annual consolidated tax return with ARL and its ultimate parent, May Realty Holdings, Inc. (“MRHI”). | |||
TCI owns approximately 81.1% of the common stock of Income Opportunity Realty Investors, Inc. (“IOT”). Effective July 17, 2009, IOT’s financial results were consolidated with those of ARL and TCI and their subsidiaries. Shares of IOT are traded on the New York Stock Exchange Euronext (“NYSE MKT”) under the symbol (“IOT”). | |||
TCI 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 TCI, and for setting the policies which guide it, the day-to-day operations of TCI 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 TCI’s business plan and investment policy. Pillar also serves as an Advisor and Cash Manager to ARL and IOT. | |||
Regis Realty Prime, LLC (“Regis”) manages our commercial properties and provides brokerage services for our real estate portfolio. TCI engages third-party companies to lease and manage its apartment properties. | |||
Properties | |||
We own or had interests in a total property portfolio of 45 income-producing properties as of March 31, 2015. The properties consisted of: | |||
• | Eight commercial properties consisting of four office buildings, two retail centers, one industrial warehouse and a golf course, comprising in aggregate approximately 1.8 million rentable square feet; | ||
• | 37 apartment communities totaling 6,024 units; excluding apartments being developed; and | ||
• | 4,053 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 but have not yet begun construction. At March 31, 2015, we had one apartment project 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 required 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 (“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 three months ended March 31, 2015, are not necessarily indicative of the results that may be expected for other interim periods or for the full fiscal year. | |||
The year-end Consolidated Balance Sheet at December 31, 2014, was derived from the audited Consolidated Financial Statements at that date, but does not include all of the information and disclosures required by GAAP for complete financial statements. For further information, refer to the Consolidated Financial Statements and notes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2014. Certain 2014 Consolidated Financial Statement amounts have been reclassified to conform to the 2015 presentation, including any adjustments for discontinued operations. | |||
Principles of Consolidation | |||
The accompanying Consolidated Financial Statements include the accounts of the Company, its subsidiaries, generally all of which are wholly-owned, and all entities in which we have a controlling interest. Arrangements that are not controlled through voting or similar rights are accounted for as a Variable Interest Entity (VIE), in accordance with the provisions and guidance of ASC Topic 810 “Consolidation”, whereby we have determined that we are a primary beneficiary of the VIE and meet certain criteria of a sole general partner or managing member as identified in accordance with Emerging Issues Task Force (“EITF”) Issue 04-5, Investor’s Accounting for an Investment in a Limited Partnership when the Investor is the Sole General Partner and the Limited Partners have Certain Rights (“EITF 04-5”). VIEs are generally entities that lack sufficient equity to finance their activities without additional financial support from other parties or whose equity holders as a group lack adequate decision making ability, the obligation to absorb expected losses or residual returns of the entity, or have voting rights that are not proportional to their economic interests. The primary beneficiary generally is the entity that provides financial support and bears a majority of the financial risks, authorizes certain capital transactions, or makes operating decisions that materially affect the entity’s financial results. All significant intercompany balances and transactions have been eliminated in consolidation. | |||
In determining whether we are the primary beneficiary of a VIE, we consider qualitative and quantitative factors, including, but not limited to: the amount and characteristics of our investment; the obligation or likelihood for us or other investors to provide financial support; our and the other investors’ ability to control or significantly influence key decisions for the VIE; and the similarity with and significance to the business activities of us and the other investors. Significant judgments related to these determinations include estimates about the current future fair values and performance of real estate held by these VIEs and general market conditions. | |||
For entities in which we have less than a controlling financial interest or entities where we are not deemed to be the primary beneficiary, the entities are accounted for using the equity method of accounting. Accordingly, our share of the net earnings or losses of these entities is included in consolidated net income. Our investment in ARL 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, “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 Topic 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. 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. This classification of operating results as discontinued operations applies retroactively for all periods presented. Additionally, gains and losses on assets designated as held for sale are classified as part of discontinued operations. | |||
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: | |||
Unadjusted quoted prices for identical and unrestricted assets or liabilities in active markets. | |||
Level 1 – | |||
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. | |||
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 Pronouncements | |||
We have considered all other newly issued accounting guidance that is applicable to our operations and the preparation of our Consolidated Financial Statements, including that which we have not yet adopted. We do not believe that any such guidance will have a material effect on our financial position or results of operations. |
REAL_ESTATE_ACTIVITY
REAL ESTATE ACTIVITY | 3 Months Ended | ||||
Mar. 31, 2015 | |||||
REAL ESTATE ACTIVITY | |||||
REAL ESTATE ACTIVITY | NOTE 2. REAL ESTATE ACTIVITY | ||||
Below is a summary of the real estate owned as of March 31, 2015 (dollars in thousands): | |||||
Apartments | $ | 452,888 | |||
Apartments under construction | 1,514 | ||||
Commercial properties | 182,371 | ||||
Land held for development | 146,165 | ||||
Real estate subject to sales contract | 22,804 | ||||
Total real estate | $ | 805,742 | |||
Less accumulated depreciation | (119,721 | ) | |||
Total real estate, net of depreciation | $ | 686,021 | |||
The highlights of our significant real estate transactions for the three months ended March 31, 2015, are listed below: | |||||
On March 19, 2015, the Company sold 15.515 acres of land known as McKinney Ranch land, located in McKinney, Texas, to an independent third party, for a sales price of $3.4 million. TCI paid $3.2 million on the existing mortgage to satisfy a portion of the multi-tract collateral debt of $5.1 million, secured by various land parcels located in McKinney, Texas. A gain of $1.3 million was recorded on the sale. | |||||
On March 31, 2015, the Company sold 17.872 acres of land known as McKinney Ranch land, located in McKinney, Texas, to an independent third party, for a sales price of $3.9 million. TCI paid $1.9 million to pay off the remaining balance of the multi-tract collateral debt, secured by various land parcels located in McKinney, Texas. A gain of $1.6 million was recorded on the sale. | |||||
As of March 31, 2015, there is one apartment complex, one commercial building and 110 acres of land that we have sold to a related party and have deferred the recognition of the sale. These are treated as “subject to sales contract” on the Consolidated Balance Sheets. These properties were sold to a related party in order to help facilitate an appropriate debt or organizational restructure and may or may not be transferred back to the seller upon resolution. These properties have mortgages that are secured by the property and many have corporate guarantees. According to the loan documents, the maker is currently in default on these mortgages primarily due to lack of payment and is actively involved in discussions with every lender in order to settle or cure the default situation. We have reviewed each asset and taken impairment to the extent we feel the value of the property was less than our current basis. The Company did not recognize or record the sale in accordance with ASC 360-20 due to our continuing involvement, which included the potential payment of cash shortfalls, future obligations under the existing mortgage and guaranty, the buyer’s inadequate initial investment and the Company’s questionable recovery of investment cost. The Company determined that no sale had occurred for financial reporting purposes and therefore the asset remained on the books and continued to record operating expenses and depreciation as a period cost until a sale occurred that met the requirements of ASC 360-20. The buyers received no compensation for the facilitation of the bankruptcy or debt restructuring process. | |||||
We continue to invest in the development of apartment projects. During the three months ended March 31, 2015, we have expended $0.8 million related to the construction or predevelopment of various apartment complexes. |
NOTES_AND_INTEREST_RECEIVABLE
NOTES AND INTEREST RECEIVABLE | 3 Months Ended | |||||||||
Mar. 31, 2015 | ||||||||||
NOTES AND INTEREST RECEIVABLE | ||||||||||
NOTES AND INTEREST RECEIVABLE | NOTE 3. NOTES AND INTEREST RECEIVABLE | |||||||||
A portion of our assets are invested in mortgage notes receivable, principally secured by real estate. We may originate mortgage loans in conjunction with providing purchase money financing of property sales. Notes receivable are generally collateralized by real estate or interests in real estate and personal guarantees of the borrower and, unless noted otherwise, are so secured. Management intends to service and hold for investment the mortgage notes in our portfolio. A majority of the notes receivable provide for principal to be paid at maturity. Our mortgage notes receivable consist of first, wraparound and junior mortgage loans (dollars in thousands): | ||||||||||
Maturity | Interest | |||||||||
Borrower | Date | Rate | Amount | Security | ||||||
Performing loans: | ||||||||||
Foundation for Better Housing, Inc. (Holland Lake) (1) | 19-Dec | 12.00% | 4,698 | Secured | ||||||
Foundation for Better Housing, Inc. (Holland Lake) (1) | 17-Dec | 12.00% | 1,674 | Secured | ||||||
Foundation for Better Housing, Inc. (Overlook at Allensville) (1) | 19-Nov | 12.00% | 2,472 | Secured | ||||||
Foundation for Better Housing, Inc. (Overlook at Allensville) (1) | 17-Dec | 12.00% | 1,408 | Secured | ||||||
Foundation for Better Housing, Inc. (Preserve at Prairie Pointe) (1) | 19-Mar | 12.00% | 1,810 | Secured | ||||||
Foundation for Better Housing, Inc. (Preserve at Prairie Pointe) (1) | 17-Mar | 12.00% | 1,156 | Secured | ||||||
Foundation for Better Housing, Inc. (Vista Ridge) (1) | 19-Apr | 12.00% | 3,923 | Secured | ||||||
Foundation for Better Housing, Inc. (Vista Ridge) (1) | 17-Jun | 12.00% | 1,492 | Secured | ||||||
H198, LLC (Las Vegas Land) | 20-Jan | 12.00% | 5,907 | Secured | ||||||
HGH Residential, Inc. (Tradewinds Development) | 19-Jul | 12.00% | 6,131 | Secured | ||||||
Unified Housing Foundation, Inc. (Echo Station) (1) | 17-Sep | 12.00% | 1,481 | 100% Interest in Unified Housing of Temple, LLC | ||||||
Unified Housing Foundation, Inc. (Lakeshore Villas) (1) | Dec-32 | 12.00% | 2,000 | Unsecured | ||||||
Unified Housing Foundation, Inc. (Lakeshore Villas) (1) | Dec-32 | 12.00% | 6,363 | Membership interest in Housing for Seniors of Humble, LLC | ||||||
Unified Housing Foundation, Inc. (Limestone Canyon) (1) | Dec-32 | 12.00% | 4,663 | 100% Interest in Unified Housing of Austin, LLC | ||||||
Unified Housing Foundation, Inc. (Limestone Canyon) (1) | Dec-32 | 12.00% | 3,057 | 100% Interest in Unified Housing of Austin, LLC | ||||||
Unified Housing Foundation, Inc. (Limestone Ranch) (1) | Dec-32 | 12.00% | 6,000 | 100% Interest in Unified Housing of Vista Ridge, LLC | ||||||
Unified Housing Foundation, Inc. (Limestone Ranch) (1) | Dec-32 | 12.00% | 2,250 | 100% Interest in Unified Housing of Vista Ridge, LLC | ||||||
Unified Housing Foundation, Inc. (Parkside Crossing) (1) | Dec-32 | 12.00% | 1,936 | 100% Interest in Unified Housing of Parkside Crossing, LLC | ||||||
Unified Housing Foundation, Inc. (Sendero Ridge) (1) | Dec-32 | 12.00% | 4,812 | 100% Interest in Unified Housing of Sendero Ridge, LLC | ||||||
Unified Housing Foundation, Inc. (Sendero Ridge) (1) | Dec-32 | 12.00% | 5,174 | 100% Interest in Unified Housing of Sendero Ridge, LLC | ||||||
Unified Housing Foundation, Inc. (Timbers of Terrell) (1) | Dec-32 | 12.00% | 1,323 | 100% Interest in Unified Housing of Terrell, LLC | ||||||
Unified Housing Foundation, Inc. (Tivoli) (1) | Dec-32 | 12.00% | 7,966 | 100% Interest in Unified Housing of Tivoli, LLC | ||||||
Unified Housing Foundation, Inc. (1) | 17-Jun | 12.00% | 1,261 | Unsecured | ||||||
Unified Housing Foundation, Inc. (1) | 17-Dec | 12.00% | 1,207 | Unsecured | ||||||
Other related party notes (1) | Various | Various | 768 | Various secured interests | ||||||
Other related party notes (1) | Various | Various | 4,276 | Various unsecured interests | ||||||
Other non-related party notes | Various | Various | 496 | Various secured interests | ||||||
Other non-related party notes | Various | Various | 503 | Various unsecured interests | ||||||
Accrued interest | 3,940 | |||||||||
Total Performing | $ 90,147 | |||||||||
Non-Performing loans: | ||||||||||
Other non-related party notes | Various | Various | 507 | Secured | ||||||
Accrued interest | 87 | |||||||||
Total Non-Performing | $ 594 | |||||||||
Allowance for doubtful accounts | (1,990) | |||||||||
Total | $ 88,751 | |||||||||
(1) Related party notes | ||||||||||
Junior Mortgage Loans. We may invest in junior 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 personal guarantees by the borrower. | ||||||||||
At March 31, 2015, we had junior mortgage loans and accrued interest receivable from related parties, net of allowances, totaling $74.6 million. We recognized interest income of $2.8 million related to these notes receivables. | ||||||||||
The Company has various notes receivable from Unified Housing Foundation, Inc. (“UHF”) and Foundation for Better Housing, Inc. (“FBH”). UHF and FBH are determined to be related parties due to our significant investment in the performance of the collateral secured under the notes receivable. Payments are due from surplus cash flow of operations of the properties. A sale or refinance of any of the properties underlying these notes will be used to repay outstanding interest and principal for the remaining notes for the specific borrower. These notes are cross-collateralized for the specific borrower, but to the extent cash is received from a specific UHF or FBH property, it is applied first against any outstanding interest for the related-property note. The allowance on the UHF notes was a purchase allowance that was netted against the notes when acquired. |
INVESTMENT_IN_UNCONSOLIDATED_J
INVESTMENT IN UNCONSOLIDATED JOINT VENTURES AND INVESTEES | 3 Months Ended | |||||||||
Mar. 31, 2015 | ||||||||||
INVESTMENT IN UNCONSOLIDATED JOINT VENTURES AND INVESTEES | ||||||||||
INVESTMENT IN UNCONSOLIDATED JOINT-VENTURES AND INVESTEES | NOTE 4. INVESTMENT IN UNCONSOLIDATED JOINT VENTURES AND INVESTEES | |||||||||
Investments in unconsolidated joint ventures and other 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. ARL is our parent company and is considered as an unconsolidated joint venture. | ||||||||||
Investments in unconsolidated joint ventures and investees consist of the following: | ||||||||||
Percentage ownership as of | ||||||||||
31-Mar-15 | 31-Mar-14 | |||||||||
American Realty Investors, Inc.(1) | 1 | % | 1.99 | % | ||||||
__________________ | ||||||||||
(1) Unconsolidated investment in parent company owning 140,000 shares of ARL Common Stock | ||||||||||
Our interest in the common stock of ARL in the amount of 1.00% is accounted for under the equity method because we exercise significant influence over the operations and financial activities. Accordingly, the investments are carried at cost, adjusted for the Company’s proportionate share of earnings or losses. | ||||||||||
The Company acquired 135,000 shares of ARL Series K preferred stock on May 7, 2013. It was pledged as collateral on a $5.0 million promissory note relating to the Amoco Building settlement agreement. This note has been paid in full and the stock was released. The par value per share was $2 and the liquidation preference was $22 per share. It was convertible to common stock at a rate of 5 to 1. The Series K preferred stock was cancelled May 7, 2014. | ||||||||||
The following is a summary of the financial position and results of operations from our unconsolidated parent (dollars in thousands): | ||||||||||
As of March 31, | 2015 | 2014 | ||||||||
Real estate, net of accumulated depreciation | $ | 15,384 | $ | 15,212 | ||||||
Notes receivable | 49,412 | 67,450 | ||||||||
Other assets | 128,103 | 128,291 | ||||||||
Notes payable | (41,714 | ) | (51,138 | ) | ||||||
Other liabilities | (84,822 | ) | (98,220 | ) | ||||||
Shareholders' equity | (66,363 | ) | (61,595 | ) | ||||||
For the Three Months Ended March 31, | 2015 | 2014 | ||||||||
Rents and interest and other income | $ | 6,359 | $ | 2,881 | ||||||
Depreciation | (78 | ) | (68 | ) | ||||||
Operating expenses | (1,810 | ) | (1,486 | ) | ||||||
Interest expense | (1,448 | ) | (1,633 | ) | ||||||
Income (loss) from continuing operations | 3,023 | (306 | ) | |||||||
Income (loss) from discontinued operations | - | - | ||||||||
Net income (loss) | $ | 3,023 | $ | (306 | ) | |||||
Company's proportionate share of income (loss) (1) | $ | 30 | $ | (6 | ) | |||||
(1) Income (loss) represents continued and discontinued operations | ||||||||||
NOTES_PAYABLE
NOTES PAYABLE | 3 Months Ended | ||||||||||||
Mar. 31, 2015 | |||||||||||||
NOTES AND PAYABLE | |||||||||||||
NOTES AND PAYABLE | NOTE 5. NOTES PAYABLE | ||||||||||||
Below is a summary of our notes and interest payable as of March 31, 2015 (dollars in thousands): | |||||||||||||
Notes Payable | Accrued Interest | Total Debt | |||||||||||
Apartments | $ | 409,817 | $ | 1,072 | $ | 410,889 | |||||||
Commercial | 104,292 | 461 | 104,753 | ||||||||||
Land | 59,386 | 117 | 59,503 | ||||||||||
Real estate held for sale | 1,227 | - | 1,227 | ||||||||||
Real estate subject to sales contract | 16,754 | 1,680 | 18,434 | ||||||||||
Other | 4,643 | - | 4,643 | ||||||||||
Total | $ | 596,119 | $ | 3,330 | $ | 599,449 | |||||||
The segment labeled as “Other” consists of unsecured or stock-secured notes payable. | |||||||||||||
With respect to the additional notes payable due to the acquisition of properties or refinancing of existing mortgages, a summary of some of the more significant transactions is discussed below: | |||||||||||||
On January 28, 2015, the Company refinanced the existing mortgage on Heather Creek apartments, a 200-unit complex located in Mesquite, Texas, for a new mortgage of $11.5 million. We paid off the existing mortgage of $11.5 million and $0.3 million in closing costs. The note accrues interest at 3.24% and payments of interest and principal are due monthly, maturing August 1, 2050. | |||||||||||||
On January 28, 2015, the Company modified the existing mortgage on Toulon apartments, a 240-unit complex located in Gautier, Mississippi, to reduce the interest rate. The new term accrues interest at 3.24% and payments of interest and principal are due monthly, maturing August 1, 2050. | |||||||||||||
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. | |||||||||||||
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. |
RELATED_PARTY_TRANSACTIONS
RELATED PARTY TRANSACTIONS | 3 Months Ended | ||||||||||||
Mar. 31, 2015 | |||||||||||||
RELATED PARTY TRANSACTIONS | |||||||||||||
RELATED PARTY TRANSACTIONS | NOTE 6. RELATED PARTY TRANSACTIONS | ||||||||||||
The following table reconciles the beginning and ending balances of accounts receivable from and (accounts payable) to related parties as of March 31, 2015 (dollars in thousands): | |||||||||||||
Pillar | ARL | Total | |||||||||||
Related party receivable, December 31, 2014 | $ | - | $ | 58,404 | $ | 58,404 | |||||||
Cash transfers | (6,624 | ) | - | (6,624 | ) | ||||||||
Advisory fees | (1,943 | ) | - | (1,943 | ) | ||||||||
Net income fee | (45 | ) | - | (45 | ) | ||||||||
Fees and commissions | (353 | ) | - | (353 | ) | ||||||||
Cost reimbursements | (776 | ) | - | (776 | ) | ||||||||
Interest income | - | 634 | 634 | ||||||||||
Expenses paid by advisor | (1,159 | ) | - | (1,159 | ) | ||||||||
Financing (mortgage payments) | (619 | ) | - | (619 | ) | ||||||||
Purchase of obligations | 11,519 | (11,519 | ) | - | |||||||||
Related party receivable, March 31, 2015 | $ | - | $ | 47,519 | $ | 47,519 | |||||||
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/paid are shown on the face of the Consolidated Financial Statements. | |||||||||||||
OPERATING_SEGMENTS
OPERATING SEGMENTS | 3 Months Ended | ||||||||||||||||||||
Mar. 31, 2015 | |||||||||||||||||||||
OPERATING SEGMENTS | |||||||||||||||||||||
OPERATING SEGMENTS | NOTE 7. OPERATING SEGMENTS | ||||||||||||||||||||
Our segments are based on our method of internal reporting, which classifies our operations by property type. Our property types are grouped into commercial, apartments, land and other operating segments. Significant differences between and 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 fees, 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 March 31, 2015 and 2014, including segment assets and expenditures (dollars in thousands): | |||||||||||||||||||||
Commercial | |||||||||||||||||||||
For the Three Months Ended March 31, 2015 | Properties | Apartments | Land | Other | Total | ||||||||||||||||
Rental and other property revenues | $ | 6,786 | $ | 15,473 | $ | - | $ | 45 | $ | 22,304 | |||||||||||
Property operating expenses | (4,013 | ) | (6,660 | ) | (181 | ) | (10 | ) | (10,864 | ) | |||||||||||
Depreciation | (1,895 | ) | (2,749 | ) | - | - | (4,644 | ) | |||||||||||||
Mortgage and loan interest | (1,509 | ) | (3,963 | ) | (954 | ) | (1,318 | ) | (7,744 | ) | |||||||||||
Deferred borrowing costs amortization | (97 | ) | (258 | ) | (50 | ) | (186 | ) | (591 | ) | |||||||||||
Loan charges and prepayment penalties | - | (1,850 | ) | - | - | (1,850 | ) | ||||||||||||||
Interest income | - | - | - | 3,760 | 3,760 | ||||||||||||||||
Gain on land sales | - | - | 2,876 | - | 2,876 | ||||||||||||||||
Segment operating income (loss) | $ | (728 | ) | $ | (7 | ) | $ | 1,691 | $ | 2,291 | $ | 3,247 | |||||||||
Capital expenditures | 3,192 | 257 | 826 | - | 4,275 | ||||||||||||||||
Real estate assets | 141,728 | 389,276 | 155,017 | - | 686,021 | ||||||||||||||||
Property Sales | |||||||||||||||||||||
Sales price | $ | - | $ | - | $ | 7,257 | $ | - | $ | 7,257 | |||||||||||
Cost of sale | - | - | (4,381 | ) | - | (4,381 | ) | ||||||||||||||
Gain on sale | $ | - | $ | - | $ | 2,876 | $ | - | $ | 2,876 | |||||||||||
Commercial | |||||||||||||||||||||
For the Three Months Ended March 31, 2014 | Properties | Apartments | Land | Other | Total | ||||||||||||||||
Rental and other property revenues | $ | 4,449 | $ | 13,846 | $ | - | $ | 8 | $ | 18,303 | |||||||||||
Property operating expenses | (2,878 | ) | (6,132 | ) | (188 | ) | (5 | ) | (9,203 | ) | |||||||||||
Depreciation | (1,792 | ) | (2,488 | ) | - | - | (4,280 | ) | |||||||||||||
Mortgage and loan interest | (1,408 | ) | (3,738 | ) | (1,109 | ) | (232 | ) | (6,487 | ) | |||||||||||
Deferred borrowing costs amortization | (13 | ) | (884 | ) | (31 | ) | (3 | ) | (931 | ) | |||||||||||
Loan charges and prepayment penalties | (9 | ) | (1,573 | ) | - | - | (1,582 | ) | |||||||||||||
Interest income | - | - | - | 2,113 | 2,113 | ||||||||||||||||
Gain on land sales | - | - | 753 | - | 753 | ||||||||||||||||
Segment operating income (loss) | $ | (1,651 | ) | $ | (969 | ) | $ | (575 | ) | $ | 1,881 | $ | (1,314 | ) | |||||||
Capital expenditures | 1,130 | - | 85 | - | 1,215 | ||||||||||||||||
Real estate assets | 128,617 | 351,547 | 158,022 | - | 638,186 | ||||||||||||||||
Property Sales | |||||||||||||||||||||
Sales price | $ | - | $ | 23,131 | $ | 1,565 | $ | - | $ | 24,696 | |||||||||||
Cost of sale | - | (17,078 | ) | (812 | ) | - | (17,890 | ) | |||||||||||||
Gain on sale | $ | - | $ | 6,053 | $ | 753 | $ | - | $ | 6,806 | |||||||||||
The table below reconciles the segment information to the corresponding amounts in the Consolidated Statements of Operations (dollars in thousands): | |||||||||||||||||||||
For the Three Months Ended | |||||||||||||||||||||
March 31, | |||||||||||||||||||||
2015 | 2014 | ||||||||||||||||||||
Segment operating income (loss) | $ | 3,247 | $ | (1,314 | ) | ||||||||||||||||
Other non-segment items of income (expense) | |||||||||||||||||||||
General and administrative | (1,768 | ) | (1,551 | ) | |||||||||||||||||
Net income fee to related party | (45 | ) | (490 | ) | |||||||||||||||||
Advisory fee to related party | (1,943 | ) | (1,852 | ) | |||||||||||||||||
Other income | 67 | 153 | |||||||||||||||||||
Earnings (loss) from unconsolidated joint ventures and investees | 33 | (4 | ) | ||||||||||||||||||
Litigation settlement | (73 | ) | 3,839 | ||||||||||||||||||
Income tax benefit | 102 | 2,049 | |||||||||||||||||||
Net income (loss) from continuing operations | $ | (380 | ) | $ | 830 | ||||||||||||||||
The table below reconciles the segment information to the corresponding amounts in the Consolidated Balance Sheets (dollars in thousands): | |||||||||||||||||||||
March 31, | |||||||||||||||||||||
2015 | 2014 | ||||||||||||||||||||
Segment assets | $ | 686,021 | $ | 638,186 | |||||||||||||||||
Assets held or sale | - | 37,632 | |||||||||||||||||||
Investments in real estate partnerships | 1,714 | 1,824 | |||||||||||||||||||
Notes and interest receivable | 88,751 | 61,769 | |||||||||||||||||||
Other assets | 141,350 | 160,993 | |||||||||||||||||||
Total assets | $ | 917,836 | $ | 900,404 | |||||||||||||||||
DISCONTINUED_OPERATIONS
DISCONTINUED OPERATIONS | 3 Months Ended | ||||||||
Mar. 31, 2015 | |||||||||
DISCONTINUED OPERATIONS | |||||||||
DISCONTINUED OPERATIONS | NOTE 8. DISCONTINUED OPERATIONS | ||||||||
We apply the provisions of ASC Topic 360 “Property, Plant and Equipment”. ASC Topic 360 requires 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. | |||||||||
Discontinued operations relates to properties that were either sold or held for sale as of the period ended March 31, 2015. Included in discontinued operations are a total of zero and four properties for 2015 and 2014, respectively. Properties sold in 2015 have been reclassified to discontinued operations for current and prior year reporting periods, if any. There were no sales of income-producing properties in the first quarter of 2015. In 2014, we sold two apartment complexes (Blue Ridge and Pecan Pointe), and two commercial properties (1010 Common and Sesame Square). The gain on sale of the properties is also included in discontinued operations for those years. The following table summarizes revenue and expense information for the properties sold and held for sale (dollars in thousands): | |||||||||
For the Three Months Ended | |||||||||
March 31, | |||||||||
2015 | 2014 | ||||||||
Revenues: | |||||||||
Rental and other property revenues | $ | 15 | $ | 2,571 | |||||
15 | 2,571 | ||||||||
Expenses: | |||||||||
Property operating expenses | (375 | ) | 1,318 | ||||||
Depreciation | - | 329 | |||||||
General and administrative | 97 | 174 | |||||||
Total operating expenses | (278 | ) | 1,821 | ||||||
Other income (expense): | |||||||||
Other income | - | 42 | |||||||
Mortgage and loan interest | (1 | ) | (664 | ) | |||||
Deferred borrowing costs amortization | - | (282 | ) | ||||||
Litigation settlement | - | (45 | ) | ||||||
Total other expenses | (1 | ) | (949 | ) | |||||
Gain (loss) from discontinued operations before gain on sale of real estate and tax | 292 | (199 | ) | ||||||
Gain on sale of real estate from discontinued operations | - | 6,053 | |||||||
Income tax expense | (102 | ) | (2,049 | ) | |||||
Income from discontinued operations | $ | 190 | $ | 3,805 | |||||
Our application of ASC Topic 360 results in the presentation of the net operating results of these qualifying properties sold or held for sale during 2015 as income from discontinued operations. This does not have an impact on net income available to common shareholders and only impacts the presentation of these properties within the Consolidated Statements of Operations. |
COMMITMENTS_AND_CONTINGENCIES_
COMMITMENTS AND CONTINGENCIES AND LIQUIDITY | 3 Months Ended |
Mar. 31, 2015 | |
COMMITMENTS AND CONTINGENCIES AND LIQUIDITY | |
COMMITMENTS AND CONTINGENCIES AND LIQUIDITY | NOTE 9. COMMITMENTS AND CONTINGENCIES AND LIQUIDITY |
Dynex Capital, Inc. | |
On February 13, 2013, the Court of Appeals, Fifth District of Texas at Dallas (the “Fifth Court of Appeals”) rendered an opinion involving Transcontinental Realty Investors, Inc. (the “Issuer” or “TCI”) in Case No. 05-04-01358-CV styled Basic Capital Management, Inc., American Realty Trust, Inc., Transcontinental Realty Investors, Inc., Continental Poydras Corp., Continental Common, Inc. and Continental Baronne, Inc. v. Dynex Commercial, Inc. and Dynex Capital, Inc. The case was on appeal from the 68th Judicial District Court of Dallas County, Texas, had previously been appealed to the Fifth Court of Appeals and further appealed to the Supreme Court of the State of Texas which had remanded the instant case back to the Fifth Court of Appeals to address certain issues. The case had its origin with Dynex Commercial making loans to Continental Poydras Corp., Continental Common, Inc. and Continental Baronne, Inc. (subsidiaries of Continental Mortgage & Equity Trust (“CMET”), an entity which merged into TCI in 1999 after the original suit was filed). Under the original loan commitment, $160,000,000 in loans were to be made to the entities. The loans were conditioned on the execution of a commitment between Dynex Commercial and Basic. | |
An original trial to a jury resulted in the jury awarding significant damages to Basic for “lost opportunity,” awarding damages in “increased costs” and “lost opportunity” damages to American Realty Trust, Inc. (“ART”) and damages of $960,646 in “increased costs” and $11,161,520 for “lost opportunity” damages in favor of TCI and its subsidiaries (a total of $12,122,166). The original Trial Court ignored the jury’s findings and entered a “Judgment Notwithstanding the Verdict” (“JNOV”) in Dynex’s favor; the Fifth Court of Appeals has now ruled that the JNOV was improper because there was sufficient evidence to support the jury’s findings. As a result, the Fifth Court of Appeals ordered the Trial Court to enter a new judgment consistent with the jury’s original findings. | |
The Fifth Court of Appeals also determined that TCI was entitled to damages for “lost opportunities” relating to tenant improvements and awarded TCI an additional $252,577. Issues relating to attorney’s fees were also addressed with the Fifth Court of Appeals ordering the Trial Court to “re-try” the issue of attorney’s fees to determine the amount of fees to which TCI would be entitled on a “breach of commitment” claim. In addition, as a result of the changes in amounts awarded and passage of time, the Fifth Court of Appeals also ordered the Trial Court to recalculate the correct amounts of pre and post-judgment interest owed to Appellants. | |
While the fifteen year old controversy is not yet fully resolved, the Fifth Court of Appeals opinion is favorable to TCI, but TCI expects continued challenges by Dynex to the Fifth Court of Appeals opinion and any ultimate award of damages by the Trial Court. | |
ART and ART Midwest, Inc. | |
In August 2014, David M. Clapper and two entities related to Mr. Clapper (all, collectively, the “Clapper Parties”) filed a complaint in the U. S. District Court against the Company, its directors and certain of its officers alleging purported transactions to the detriment of the Clapper Parties and others by transferring assets, cash and diverting property. Management of the Company believes that there is no basis for this action against the Company and its officers and directors and intends to vigorously defend itself. The August 2014 complaint does not allege any facts relating to the Company, except that the named directors and officers are directors and officers of the Company and that the Company is a Nevada corporation, with its headquarters/principal place of business in Dallas, Texas. | |
The case arises over other litigation, commenced in 1999, among the Clapper Parties and American Realty Trust, Inc. (“ART”) and its former subsidiary, ART Midwest, Inc., originally arising out of a transaction in 1998, in which ART and the Clapper Parties were to form a partnership to own eight residential apartment complexes. Over the ensuing years, a number of rulings, both for and against ART and ART Midwest, Inc., were issued, resulting in a ruling in October 2011, under which the Clapper Parties were awarded an initial judgment for approximately $74 million, including $26 million in actual damages and $48 million in interest. The 2011 ruling was only 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 the matter. ART and ART Midwest, Inc. are not and have never been subsidiaries of the Company. | |
TCI is also involved in various other lawsuits arising in the ordinary course of business. Management is of the opinion that the outcome of these lawsuits will have no material impact on TCI’s financial condition, results of operations or liquidity. | |
Liquidity. Management believes that TCI will generate excess cash from property operations in 2015; such excess, however, will not be sufficient to discharge all of TCI’s obligations as they become due. Management intends to sell land and income-producing real estate, refinance real estate and obtain additional borrowings primarily secured by real estate to meet its liquidity requirements. | |
Partnership Buyouts. TCI is the limited partner in various partnerships related to the construction of residential properties. As permitted in the respective partnership agreements, TCI intends to purchase the interests of the general and any other limited partners in these partnerships subsequent to the completion of these projects. The amounts paid to buy out the non-affiliated partners are limited to development fees earned by the non-affiliated partners and are set forth in the respective partnership agreements. | |
Litigation. The ownership of property and provision of services to the public as tenants entails an inherent risk of liability. Although the Company and its subsidiaries are involved in various items of litigation incidental to and in the ordinary course of its business, in the opinion of management, the outcome of such litigation will not have a material adverse impact upon the Company’s financial condition, results of operation or liquidity. | |
The Company is involved in and vigorously defending against, a number of deficiency claims with respect to assets that have been foreclosed by various lenders. Such claims are generally against a consolidated subsidiary as the borrower or the Company as a guarantor of indebtedness or performance. Some of these proceedings may ultimately result in an unfavorable determination for the Company and/or one of its consolidated subsidiaries. While we cannot predict the final result of such proceedings, management believes that the maximum exposure to the Company and its consolidated subsidiaries, if any, will not exceed approximately $20.0 million in the aggregate and will occur, if at all, in future years. | |
During the first quarter of the fiscal year covered by this Report, no proceeding previously reported was terminated. |
EARNINGS_PER_SHARE
EARNINGS PER SHARE | 3 Months Ended |
Mar. 31, 2015 | |
EARNINGS PER SHARE | |
EARNINGS PER SHARE | NOTE 10. EARNINGS PER SHARE |
Earnings per share (“EPS”) have been computed pursuant to the provisions of ASC Topic 260 “Earnings Per Share”. The computation of basic EPS is calculated by dividing 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. | |
Prior to July 9, 2014, we had 30,000 shares of Series C cumulative convertible preferred stock issued and outstanding. These 30,000 shares were owned by RAI, a related party, and had accrued dividends unpaid of $0.9 million. The stock had a liquidation preference of $100 per share and could be converted into common stock at 90% of the daily average closing price of the common stock for the prior five trading days. On July 9, 2014, RAI converted all 30,000 shares into the requisite number of shares of common stock. The conversion resulted in the issuance of 304,298 new shares of common stock. The effects of the Series C Cumulative Convertible Preferred Stock are no longer included in the dilutive earnings per share calculation for the current period, but are considered in the calculation for the prior period if applying the if-converted method is dilutive. | |
Prior to January 1, 2015, the Company had 5,000 shares of stock options outstanding. These options expired unexercised January 1, 2015. The options are no longer included in the dilutive earnings per share calculation for the current period, but are considered in the computation for the prior periods if applying the “treasury stock” method is dilutive. | |
In the prior period, the preferred stock and stock options were dilutive and thus included in the EPS calculation. |
SUBSEQUENT_EVENTS
SUBSEQUENT EVENTS | 3 Months Ended |
Mar. 31, 2015 | |
SUBSEQUENT EVENTS | |
SUBSEQUENT EVENTS | NOTE 11. SUBSEQUENT EVENTS |
The date to which events occurring after March 31, 2015, the date of the most recent balance sheet, have been evaluated for possible adjustment to the Consolidated Financial Statements or disclosure is May 13, 2015, which is the date on which the Consolidated Financial Statements were available to be issued. | |
On April 30, 2015, the Company purchased a 99% limited partner interest in Garden Whispering Pines, LP, which is the owner of Whispering Pines Apartments, from EQK Holdings, LLC, a wholly owned subsidiary of ARL, for $1.1 million plus the assumption of $8.8 million of debt. |
ORGANIZATION_AND_BASIS_OF_PRES1
ORGANIZATION AND BASIS OF PRESENTATION (Policies) | 3 Months Ended | ||
Mar. 31, 2015 | |||
ORGANIZATION AND BASIS OF PRESENTATION (Policies) | |||
Organization | Organization | ||
As used herein, the terms “TCI”, “the Company”, “we”, “our” or “us” refer to Transcontinental Realty Investors, Inc., a Nevada corporation. TCI is the successor to a California business trust which was organized on September 6, 1983, and commenced operations on January 31, 1984. Effective March 31, 2003, TCI’s financial results were consolidated in American Realty Investors, Inc. (“ARL”) Form 10-K and related Consolidated Financial Statements. | |||
The Company is headquartered in Dallas, Texas and its common stock trades on the New York Stock Exchange (“NYSE”) under the symbol (“TCI”). Subsidiaries of ARL own approximately 80.9% of the Company’s common stock. ARL’s common stock trades on the New York Stock Exchange under the symbol (“ARL”). We have no employees. | |||
TCI is a “C” corporation for U.S. federal income tax purposes and files an annual consolidated tax return with ARL and its ultimate parent, May Realty Holdings, Inc. (“MRHI”). | |||
TCI owns approximately 81.1% of the common stock of Income Opportunity Realty Investors, Inc. (“IOT”). Effective July 17, 2009, IOT’s financial results were consolidated with those of ARL and TCI and their subsidiaries. Shares of IOT are traded on the New York Stock Exchange Euronext (“NYSE MKT”) under the symbol (“IOT”). | |||
TCI 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 TCI, and for setting the policies which guide it, the day-to-day operations of TCI 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 TCI’s business plan and investment policy. Pillar also serves as an Advisor and Cash Manager to ARL and IOT. | |||
Regis Realty Prime, LLC (“Regis”) manages our commercial properties and provides brokerage services for our real estate portfolio. TCI engages third-party companies to lease and manage its apartment properties. | |||
Properties | Properties | ||
We own or had interests in a total property portfolio of 45 income-producing properties as of March 31, 2015. The properties consisted of: | |||
• | Eight commercial properties consisting of four office buildings, two retail centers, one industrial warehouse and a golf course, comprising in aggregate approximately 1.8 million rentable square feet; | ||
• | 37 apartment communities totaling 6,024 units; excluding apartments being developed; and | ||
• | 4,053 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 but have not yet begun construction. At March 31, 2015, we had one apartment project 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 required 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 (“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 three months ended March 31, 2015, are not necessarily indicative of the results that may be expected for other interim periods or for the full fiscal year. | |||
The year-end Consolidated Balance Sheet at December 31, 2014, was derived from the audited Consolidated Financial Statements at that date, but does not include all of the information and disclosures required by GAAP for complete financial statements. For further information, refer to the Consolidated Financial Statements and notes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2014. Certain 2014 Consolidated Financial Statement amounts have been reclassified to conform to the 2015 presentation, including any adjustments for discontinued operations. | |||
Principles of Consolidation | Principles of Consolidation | ||
The accompanying Consolidated Financial Statements include the accounts of the Company, its subsidiaries, generally all of which are wholly-owned, and all entities in which we have a controlling interest. Arrangements that are not controlled through voting or similar rights are accounted for as a Variable Interest Entity (VIE), in accordance with the provisions and guidance of ASC Topic 810 “Consolidation”, whereby we have determined that we are a primary beneficiary of the VIE and meet certain criteria of a sole general partner or managing member as identified in accordance with Emerging Issues Task Force (“EITF”) Issue 04-5, Investor’s Accounting for an Investment in a Limited Partnership when the Investor is the Sole General Partner and the Limited Partners have Certain Rights (“EITF 04-5”). VIEs are generally entities that lack sufficient equity to finance their activities without additional financial support from other parties or whose equity holders as a group lack adequate decision making ability, the obligation to absorb expected losses or residual returns of the entity, or have voting rights that are not proportional to their economic interests. The primary beneficiary generally is the entity that provides financial support and bears a majority of the financial risks, authorizes certain capital transactions, or makes operating decisions that materially affect the entity’s financial results. All significant intercompany balances and transactions have been eliminated in consolidation. | |||
In determining whether we are the primary beneficiary of a VIE, we consider qualitative and quantitative factors, including, but not limited to: the amount and characteristics of our investment; the obligation or likelihood for us or other investors to provide financial support; our and the other investors’ ability to control or significantly influence key decisions for the VIE; and the similarity with and significance to the business activities of us and the other investors. Significant judgments related to these determinations include estimates about the current future fair values and performance of real estate held by these VIEs and general market conditions. | |||
For entities in which we have less than a controlling financial interest or entities where we are not deemed to be the primary beneficiary, the entities are accounted for using the equity method of accounting. Accordingly, our share of the net earnings or losses of these entities is included in consolidated net income. Our investment in ARL 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, “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 Topic 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 sales | 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. 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. This classification of operating results as discontinued operations applies retroactively for all periods presented. Additionally, gains and losses on assets designated as held for sale are classified as part of discontinued operations. | |||
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: | |||
Unadjusted quoted prices for identical and unrestricted assets or liabilities in active markets. | |||
Level 1 – | |||
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. | |||
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 Pronouncements | Newly Issued Accounting Pronouncements | ||
We have considered all other newly issued accounting guidance that is applicable to our operations and the preparation of our Consolidated Financial Statements, including that which we have not yet adopted. We do not believe that any such guidance will have a material effect on our financial position or results of operations. |
REAL_ESTATE_Tables
REAL ESTATE (Tables) | 3 Months Ended | ||||
Mar. 31, 2015 | |||||
REAL ESTATE (Tables) | |||||
Real estate owned | Below is a summary of the real estate owned as of March 31, 2015 (dollars in thousands): | ||||
Apartments | $ | 452,888 | |||
Apartments under construction | 1,514 | ||||
Commercial properties | 182,371 | ||||
Land held for development | 146,165 | ||||
Real estate subject to sales contract | 22,804 | ||||
Total real estate | $ | 805,742 | |||
Less accumulated depreciation | (119,721 | ) | |||
Total real estate, net of depreciation | $ | 686,021 |
NOTES_AND_INTEREST_RECEIVABLE_
NOTES AND INTEREST RECEIVABLE (Tables) | 3 Months Ended | |||||||||
Mar. 31, 2015 | ||||||||||
NOTES AND INTEREST RECEIVABLE (Tables) | ||||||||||
Mortgage notes receivable consist of first, wraparound and junior mortgage loans | ||||||||||
Maturity | Interest | |||||||||
Borrower | Date | Rate | Amount | Security | ||||||
Performing loans: | ||||||||||
Foundation for Better Housing, Inc. (Holland Lake) (1) | 19-Dec | 12.00% | 4,698 | Secured | ||||||
Foundation for Better Housing, Inc. (Holland Lake) (1) | 17-Dec | 12.00% | 1,674 | Secured | ||||||
Foundation for Better Housing, Inc. (Overlook at Allensville) (1) | 19-Nov | 12.00% | 2,472 | Secured | ||||||
Foundation for Better Housing, Inc. (Overlook at Allensville) (1) | 17-Dec | 12.00% | 1,408 | Secured | ||||||
Foundation for Better Housing, Inc. (Preserve at Prairie Pointe) (1) | 19-Mar | 12.00% | 1,810 | Secured | ||||||
Foundation for Better Housing, Inc. (Preserve at Prairie Pointe) (1) | 17-Mar | 12.00% | 1,156 | Secured | ||||||
Foundation for Better Housing, Inc. (Vista Ridge) (1) | 19-Apr | 12.00% | 3,923 | Secured | ||||||
Foundation for Better Housing, Inc. (Vista Ridge) (1) | 17-Jun | 12.00% | 1,492 | Secured | ||||||
H198, LLC (Las Vegas Land) | 20-Jan | 12.00% | 5,907 | Secured | ||||||
HGH Residential, Inc. (Tradewinds Development) | 19-Jul | 12.00% | 6,131 | Secured | ||||||
Unified Housing Foundation, Inc. (Echo Station) (1) | 17-Sep | 12.00% | 1,481 | 100% Interest in Unified Housing of Temple, LLC | ||||||
Unified Housing Foundation, Inc. (Lakeshore Villas) (1) | Dec-32 | 12.00% | 2,000 | Unsecured | ||||||
Unified Housing Foundation, Inc. (Lakeshore Villas) (1) | Dec-32 | 12.00% | 6,363 | Membership interest in Housing for Seniors of Humble, LLC | ||||||
Unified Housing Foundation, Inc. (Limestone Canyon) (1) | Dec-32 | 12.00% | 4,663 | 100% Interest in Unified Housing of Austin, LLC | ||||||
Unified Housing Foundation, Inc. (Limestone Canyon) (1) | Dec-32 | 12.00% | 3,057 | 100% Interest in Unified Housing of Austin, LLC | ||||||
Unified Housing Foundation, Inc. (Limestone Ranch) (1) | Dec-32 | 12.00% | 6,000 | 100% Interest in Unified Housing of Vista Ridge, LLC | ||||||
Unified Housing Foundation, Inc. (Limestone Ranch) (1) | Dec-32 | 12.00% | 2,250 | 100% Interest in Unified Housing of Vista Ridge, LLC | ||||||
Unified Housing Foundation, Inc. (Parkside Crossing) (1) | Dec-32 | 12.00% | 1,936 | 100% Interest in Unified Housing of Parkside Crossing, LLC | ||||||
Unified Housing Foundation, Inc. (Sendero Ridge) (1) | Dec-32 | 12.00% | 4,812 | 100% Interest in Unified Housing of Sendero Ridge, LLC | ||||||
Unified Housing Foundation, Inc. (Sendero Ridge) (1) | Dec-32 | 12.00% | 5,174 | 100% Interest in Unified Housing of Sendero Ridge, LLC | ||||||
Unified Housing Foundation, Inc. (Timbers of Terrell) (1) | Dec-32 | 12.00% | 1,323 | 100% Interest in Unified Housing of Terrell, LLC | ||||||
Unified Housing Foundation, Inc. (Tivoli) (1) | Dec-32 | 12.00% | 7,966 | 100% Interest in Unified Housing of Tivoli, LLC | ||||||
Unified Housing Foundation, Inc. (1) | 17-Jun | 12.00% | 1,261 | Unsecured | ||||||
Unified Housing Foundation, Inc. (1) | 17-Dec | 12.00% | 1,207 | Unsecured | ||||||
Other related party notes (1) | Various | Various | 768 | Various secured interests | ||||||
Other related party notes (1) | Various | Various | 4,276 | Various unsecured interests | ||||||
Other non-related party notes | Various | Various | 496 | Various secured interests | ||||||
Other non-related party notes | Various | Various | 503 | Various unsecured interests | ||||||
Accrued interest | 3,940 | |||||||||
Total Performing | $ 90,147 | |||||||||
Non-Performing loans: | ||||||||||
Other non-related party notes | Various | Various | 507 | Secured | ||||||
Accrued interest | 87 | |||||||||
Total Non-Performing | $ 594 | |||||||||
Allowance for doubtful accounts | (1,990) | |||||||||
Total | $ 88,751 |
INVESTMENT_IN_UNCONSOLIDATED_J1
INVESTMENT IN UNCONSOLIDATED JOINT VENTURES AND INVESTEES (Tables) | 3 Months Ended | |||||||||
Mar. 31, 2015 | ||||||||||
INVESTMENT IN UNCONSOLIDATED JOINT VENTURES AND INVESTEES (Tables) | ||||||||||
Investments accounted for via the equity method | Investments in unconsolidated joint ventures and investees consist of the following: | |||||||||
Percentage ownership as of | ||||||||||
31-Mar-15 | 31-Mar-14 | |||||||||
American Realty Investors, Inc.(1) | 1 | % | 1.99 | % | ||||||
__________________ | ||||||||||
Summary of the financial position and results of operations from unconsolidated joint ventures and other investees | The following is a summary of the financial position and results of operations from our unconsolidated parent (dollars in thousands): | |||||||||
As of March 31, | 2015 | 2014 | ||||||||
Real estate, net of accumulated depreciation | $ | 15,384 | $ | 15,212 | ||||||
Notes receivable | 49,412 | 67,450 | ||||||||
Other assets | 128,103 | 128,291 | ||||||||
Notes payable | (41,714 | ) | (51,138 | ) | ||||||
Other liabilities | (84,822 | ) | (98,220 | ) | ||||||
Shareholders' equity | (66,363 | ) | (61,595 | ) | ||||||
For the Three Months Ended March 31, | 2015 | 2014 | ||||||||
Rents and interest and other income | $ | 6,359 | $ | 2,881 | ||||||
Depreciation | (78 | ) | (68 | ) | ||||||
Operating expenses | (1,810 | ) | (1,486 | ) | ||||||
Interest expense | (1,448 | ) | (1,633 | ) | ||||||
Income (loss) from continuing operations | 3,023 | (306 | ) | |||||||
Income (loss) from discontinued operations | - | - | ||||||||
Net income (loss) | $ | 3,023 | $ | (306 | ) | |||||
Company's proportionate share of income (loss) (1) | $ | 30 | $ | (6 | ) |
Summary_of_our_notes_and_inter
Summary of our notes and interest payable as of March 31, 2015(TABLE) | 3 Months Ended | ||||||||||||
Mar. 31, 2015 | |||||||||||||
Summary of our notes and interest payable as of March 31, 2015(TABLE): | |||||||||||||
Summary of our notes and interest payable as of March 31, 2015(TABLE) | Below is a summary of our notes and interest payable as of March 31, 2015 (dollars in thousands): | ||||||||||||
Notes Payable | Accrued Interest | Total Debt | |||||||||||
Apartments | $ | 409,817 | $ | 1,072 | $ | 410,889 | |||||||
Commercial | 104,292 | 461 | 104,753 | ||||||||||
Land | 59,386 | 117 | 59,503 | ||||||||||
Real estate held for sale | 1,227 | - | 1,227 | ||||||||||
Real estate subject to sales contract | 16,754 | 1,680 | 18,434 | ||||||||||
Other | 4,643 | - | 4,643 | ||||||||||
Total | $ | 596,119 | $ | 3,330 | $ | 599,449 |
RELATED_PARTY_TRANSACTIONS_Tab
RELATED PARTY TRANSACTIONS (Tables) | 3 Months Ended | ||||||||||||
Mar. 31, 2015 | |||||||||||||
RELATED PARTY TRANSACTIONS (Tables) | |||||||||||||
Reconciliation of accounts receivable and accounts payable to related parties | |||||||||||||
Pillar | ARL | Total | |||||||||||
Related party receivable, December 31, 2014 | $ | - | $ | 58,404 | $ | 58,404 | |||||||
Cash transfers | (6,624 | ) | - | (6,624 | ) | ||||||||
Advisory fees | (1,943 | ) | - | (1,943 | ) | ||||||||
Net income fee | (45 | ) | - | (45 | ) | ||||||||
Fees and commissions | (353 | ) | - | (353 | ) | ||||||||
Cost reimbursements | (776 | ) | - | (776 | ) | ||||||||
Interest income | - | 634 | 634 | ||||||||||
Expenses paid by advisor | (1,159 | ) | - | (1,159 | ) | ||||||||
Financing (mortgage payments) | (619 | ) | - | (619 | ) | ||||||||
Purchase of obligations | 11,519 | (11,519 | ) | - | |||||||||
Related party receivable, March 31, 2015 | $ | - | $ | 47,519 | $ | 47,519 | |||||||
OPERATING_SEGMENTS_Tables
OPERATING SEGMENTS (Tables) | 3 Months Ended | ||||||||||||||||||||
Mar. 31, 2015 | |||||||||||||||||||||
OPERATING SEGMENTS (Tables) | |||||||||||||||||||||
Segments operating income including segment assets and expenditures | |||||||||||||||||||||
Commercial | |||||||||||||||||||||
For the Three Months Ended March 31, 2015 | Properties | Apartments | Land | Other | Total | ||||||||||||||||
Rental and other property revenues | $ | 6,786 | $ | 15,473 | $ | - | $ | 45 | $ | 22,304 | |||||||||||
Property operating expenses | (4,013 | ) | (6,660 | ) | (181 | ) | (10 | ) | (10,864 | ) | |||||||||||
Depreciation | (1,895 | ) | (2,749 | ) | - | - | (4,644 | ) | |||||||||||||
Mortgage and loan interest | (1,509 | ) | (3,963 | ) | (954 | ) | (1,318 | ) | (7,744 | ) | |||||||||||
Deferred borrowing costs amortization | (97 | ) | (258 | ) | (50 | ) | (186 | ) | (591 | ) | |||||||||||
Loan charges and prepayment penalties | - | (1,850 | ) | - | - | (1,850 | ) | ||||||||||||||
Interest income | - | - | - | 3,760 | 3,760 | ||||||||||||||||
Gain on land sales | - | - | 2,876 | - | 2,876 | ||||||||||||||||
Segment operating income (loss) | $ | (728 | ) | $ | (7 | ) | $ | 1,691 | $ | 2,291 | $ | 3,247 | |||||||||
Capital expenditures | 3,192 | 257 | 826 | - | 4,275 | ||||||||||||||||
Real estate assets | 141,728 | 389,276 | 155,017 | - | 686,021 | ||||||||||||||||
Property Sales | |||||||||||||||||||||
Sales price | $ | - | $ | - | $ | 7,257 | $ | - | $ | 7,257 | |||||||||||
Cost of sale | - | - | (4,381 | ) | - | (4,381 | ) | ||||||||||||||
Gain on sale | $ | - | $ | - | $ | 2,876 | $ | - | $ | 2,876 | |||||||||||
Commercial | |||||||||||||||||||||
For the Three Months Ended March 31, 2014 | Properties | Apartments | Land | Other | Total | ||||||||||||||||
Rental and other property revenues | $ | 4,449 | $ | 13,846 | $ | - | $ | 8 | $ | 18,303 | |||||||||||
Property operating expenses | (2,878 | ) | (6,132 | ) | (188 | ) | (5 | ) | (9,203 | ) | |||||||||||
Depreciation | (1,792 | ) | (2,488 | ) | - | - | (4,280 | ) | |||||||||||||
Mortgage and loan interest | (1,408 | ) | (3,738 | ) | (1,109 | ) | (232 | ) | (6,487 | ) | |||||||||||
Deferred borrowing costs amortization | (13 | ) | (884 | ) | (31 | ) | (3 | ) | (931 | ) | |||||||||||
Loan charges and prepayment penalties | (9 | ) | (1,573 | ) | - | - | (1,582 | ) | |||||||||||||
Interest income | - | - | - | 2,113 | 2,113 | ||||||||||||||||
Gain on land sales | - | - | 753 | - | 753 | ||||||||||||||||
Segment operating income (loss) | $ | (1,651 | ) | $ | (969 | ) | $ | (575 | ) | $ | 1,881 | $ | (1,314 | ) | |||||||
Capital expenditures | 1,130 | - | 85 | - | 1,215 | ||||||||||||||||
Real estate assets | 128,617 | 351,547 | 158,022 | - | 638,186 | ||||||||||||||||
Property Sales | |||||||||||||||||||||
Sales price | $ | - | $ | 23,131 | $ | 1,565 | $ | - | $ | 24,696 | |||||||||||
Cost of sale | - | (17,078 | ) | (812 | ) | - | (17,890 | ) | |||||||||||||
Gain on sale | $ | - | $ | 6,053 | $ | 753 | $ | - | $ | 6,806 | |||||||||||
Segment information to the corresponding amounts in Statements of Operations | The table below reconciles the segment information to the corresponding amounts in the Consolidated Statements of Operations (dollars in thousands): | ||||||||||||||||||||
For the Three Months Ended | |||||||||||||||||||||
March 31, | |||||||||||||||||||||
2015 | 2014 | ||||||||||||||||||||
Segment operating income (loss) | $ | 3,247 | $ | (1,314 | ) | ||||||||||||||||
Other non-segment items of income (expense) | |||||||||||||||||||||
General and administrative | (1,768 | ) | (1,551 | ) | |||||||||||||||||
Net income fee to related party | (45 | ) | (490 | ) | |||||||||||||||||
Advisory fee to related party | (1,943 | ) | (1,852 | ) | |||||||||||||||||
Other income | 67 | 153 | |||||||||||||||||||
Earnings (loss) from unconsolidated joint ventures and investees | 33 | (4 | ) | ||||||||||||||||||
Litigation settlement | (73 | ) | 3,839 | ||||||||||||||||||
Income tax benefit | 102 | 2,049 | |||||||||||||||||||
Net income (loss) from continuing operations | $ | (380 | ) | $ | 830 | ||||||||||||||||
Segment information to amounts in the Balance Sheets | The table below reconciles the segment information to the corresponding amounts in the Consolidated Balance Sheets (dollars in thousands): | ||||||||||||||||||||
March 31, | |||||||||||||||||||||
2015 | 2014 | ||||||||||||||||||||
Segment assets | $ | 686,021 | $ | 638,186 | |||||||||||||||||
Assets held or sale | - | 37,632 | |||||||||||||||||||
Investments in real estate partnerships | 1,714 | 1,824 | |||||||||||||||||||
Notes and interest receivable | 88,751 | 61,769 | |||||||||||||||||||
Other assets | 141,350 | 160,993 | |||||||||||||||||||
Total assets | $ | 917,836 | $ | 900,404 | |||||||||||||||||
DISCONTINUED_OPERATIONS_Tables
DISCONTINUED OPERATIONS (Tables) | 3 Months Ended | ||||||||
Mar. 31, 2015 | |||||||||
DISCONTINUED OPERATIONS (Tables) | |||||||||
Summary 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 Three Months Ended | |||||||||
March 31, | |||||||||
2015 | 2014 | ||||||||
Revenues: | |||||||||
Rental and other property revenues | $ | 15 | $ | 2,571 | |||||
15 | 2,571 | ||||||||
Expenses: | |||||||||
Property operating expenses | (375 | ) | 1,318 | ||||||
Depreciation | - | 329 | |||||||
General and administrative | 97 | 174 | |||||||
Total operating expenses | (278 | ) | 1,821 | ||||||
Other income (expense): | |||||||||
Other income | - | 42 | |||||||
Mortgage and loan interest | (1 | ) | (664 | ) | |||||
Deferred borrowing costs amortization | - | (282 | ) | ||||||
Litigation settlement | - | (45 | ) | ||||||
Total other expenses | (1 | ) | (949 | ) | |||||
Gain (loss) from discontinued operations before gain on sale of real estate and tax | 292 | (199 | ) | ||||||
Gain on sale of real estate from discontinued operations | - | 6,053 | |||||||
Income tax expense | (102 | ) | (2,049 | ) | |||||
Income from discontinued operations | $ | 190 | $ | 3,805 |
Organization_And_Significant_P
Organization And Significant Policies (Details) (USD $) | Mar. 31, 2015 | Jul. 17, 2009 |
In Thousands, unless otherwise specified | ||
Organization and significant policies | ||
Percentage of common stock by subsidiaries of ARL | 80.90% | |
Stock of Income Opportunity Realty Investors, owns approximately over shares of common stock IOT | 81.10% | |
Company owned residential apartment communities | 37 | |
Number of units for residential apartments | 6,024 | |
Company owned commercial properties | 45 | |
Commercial properties comprising an aggregate of approximate square feet | $1,800,000 | |
Investment in acres of undeveloped and partially developed land. | 4,053 |
Summary_Of_Real_Estate_Owned_A
Summary Of Real Estate Owned As Of The End Of The Year (Details) (USD $) | Mar. 31, 2015 |
In Thousands, unless otherwise specified | |
Summary of real estate owned | |
Apartments | $452,888 |
Apartments under construction | 1,514 |
Commercial properties | 182,371 |
Land held for development | 146,165 |
Real estate subject to sales contract | 22,804 |
Total real estate | 805,742 |
Less accumulated depreciation | -119,721 |
Total real estate, net of depreciation | $686,021 |
Real_estate_Transactions_Detai
Real estate Transactions (Details) (USD $) | Mar. 31, 2015 | Mar. 19, 2015 |
Real estate Transactions Details | ||
Company sold Apatment in Texas no of units | 17.872 | 15.515 |
Apartment and acres of land sold by the company in Texas ,sales price | $3,900,000 | $3,400,000 |
Gain on the sale recorded | 1,600,000 | 1,300,000 |
Company paid for existing mortgage | 3,200,000 | |
Multi collateral debt of the company | $1,900,000 | $5,100,000 |
Company sold acres of land | 110 |
Real_Estate_Construction_Detai
Real Estate Construction (Details) (USD $) | Mar. 31, 2015 |
In Thousands, unless otherwise specified | |
Construction Details | |
Related to Construction or predevelopment expended amount | $800,000 |
Notes_And_Interest_Receivables
Notes And Interest Receivables (Details) (USD $) | Mar. 31, 2015 |
In Thousands, unless otherwise specified | |
Performing loans: | |
Foundation for Better Housing, Inc. (Holland Lake) (1) | $4,698 |
Foundation for Better Housing, Inc. (Holland Lake) (1) | 1,674 |
Foundation for Better Housing, Inc. (Overlook at Allensville) | 2,472 |
Foundation for Better Housing, Inc. (Overlook at Allensville) | 1,408 |
Foundation for Better Housing, Inc. (Preserve at Prairie Pointe) | 1,810 |
Foundation for Better Housing, Inc. (Preserve at Prairie Pointe) (1) | 1,156 |
Foundation for Better Housing, Inc. (Vista Ridge) (1) | 3,923 |
Foundation for Better Housing, Inc. (Vista Ridge) (1) | 1,492 |
H198, LLC (Las Vegas Land) | 5,907 |
HGH Residential, Inc. (Tradewinds Development) | 6,131 |
Unified Housing Foundation, Inc. (Echo Station) (1) | 1,481 |
Unified Housing Foundation, Inc. (Lakeshore Villas) (1) | 2,000 |
Unified Housing Foundation, Inc. (Lakeshore Villas) (1) | 6,363 |
Unified Housing Foundation, Inc. (Limestone Canyon) (1) | 4,663 |
Unified Housing Foundation, Inc. (Limestone Canyon) (1) | 3,057 |
Unified Housing Foundation, Inc. (Limestone Ranch) (1) | 6,000 |
Unified Housing Foundation, Inc. (Limestone Ranch) (1) | 2,250 |
Unified Housing Foundation, Inc. (Parkside Crossing) (1) | 1,936 |
Unified Housing Foundation, Inc. (Sendero Ridge) (1) | 4,812 |
Unified Housing Foundation, Inc. (Sendero Ridge) (1) | 5,174 |
Unified Housing Foundation, Inc. (Timbers of Terrell) | 1,323 |
Unified Housing Foundation, Inc. (Tivoli) (1) | 7,966 |
Unified Housing Foundation, Inc. (1) | 1,261 |
Unified Housing Foundation, Inc.(1) | 1,207 |
Other related party notes (1) | 768 |
Other related party notes (1) | 4,276 |
Other non-related party notes | 496 |
Other non-related party notes | 503 |
Accrued interest | 3,940 |
Total Performing | 90,147 |
Non-Performing loans: | |
Other non-related party notes | 507 |
Accrued interest | 87 |
Total Non-Performing | 594 |
Allowance for doubtful accounts | -1,990 |
Total | $88,751 |
Junior_Mortgage_Loans_Details
Junior Mortgage Loans (Details) (USD $) | Mar. 31, 2015 |
In Thousands, unless otherwise specified | |
Junior Mortgage loans | |
Accrued interest receivable from related parties, net of allowances, total | $74,600,000 |
Interest income of related to these notes receivables. | $2,800,000 |
Investments_In_Unconsolidated_
Investments In Unconsolidated Joint Ventures (Details) (USD $) | Mar. 31, 2015 | Mar. 31, 2014 | 7-May-13 |
In Thousands, except Share data, unless otherwise specified | |||
Investments in unconsolidated joint ventures Details | |||
American Realty Investors, Inc.(1) | 1.00% | 1.99% | |
Interest in the common stock of ARL | 1.00% | ||
Company acquired shares of ARL Series K preferred stock | 135,000 | ||
Collateral on promissory note | $5,000,000 | ||
Par value of ARL Series K preferred stock | $2 | ||
Per share value of liquidation preference | $22 | ||
Convertible to common stock at a rate of 5 to | 1 |
Financial_Position_And_Results
Financial Position And Results Of Operations (Details) (USD $) | 3 Months Ended | |
Mar. 31, 2015 | Mar. 31, 2014 | |
Financial position and results of operations | ||
Rents and interest and other income | $6,359 | $2,881 |
Depreciation | -78 | -68 |
Operating expenses | -1,810 | -1,486 |
Interest expense | -1,448 | -1,633 |
Income (loss) from continuing operations | 3,023 | -306 |
Income (loss) from discontinued operations | 0 | |
Net income (loss) | 3,023 | -306 |
Company's proportionate share of income (loss) (1) | $30 | ($6) |
Summary_Of_The_Financial_Posit
Summary Of The Financial Position And Results Of Operations (Details) (USD $) | Mar. 31, 2015 | Mar. 31, 2014 |
In Thousands, unless otherwise specified | ||
Summary of the financial position and results of operations | ||
Real estate, net of accumulated depreciation | $15,384 | $15,212 |
Notes receivable | 49,412 | 67,450 |
Other assets | 128,103 | 128,291 |
Notes payable | -41,714 | -51,138 |
Other liabilities | -84,822 | -98,220 |
Shareholders' equity | ($66,363) | ($61,595) |
Summary_Of_Notes_And_Interest_
Summary Of Notes And Interest Payable (Details) (USD $) | Mar. 31, 2015 |
In Thousands, unless otherwise specified | |
Apartments | |
Notes Payable | $409,817 |
Accrued Interest | 1,072 |
Total Debt | 410,889 |
Commercial | |
Notes Payable | 104,292 |
Accrued Interest | 461 |
Total Debt | 104,753 |
Land | |
Notes Payable | 59,386 |
Accrued Interest | 117 |
Total Debt | 59,503 |
Real estate held for sale | |
Notes Payable | 1,227 |
Accrued Interest | 0 |
Total Debt | 1,227 |
Real estate subject to sales contract | |
Notes Payable | 16,754 |
Accrued Interest | 1,680 |
Total Debt | 18,434 |
Other | |
Notes Payable | 4,643 |
Accrued Interest | 0 |
Total Debt | 4,643 |
Total | |
Notes Payable | 596,119 |
Accrued Interest | 3,330 |
Total Debt | $599,449 |
Mortgage_Details
Mortgage (Details) (USD $) | Jan. 28, 2015 |
In Thousands, unless otherwise specified | |
Mortgage | |
Company refinanced the existing mortgage on Heather Creek apartments, a -unit complex located in Mesquite | 200 |
New mortgage | $11,500,000 |
Paid off the existing mortgage | 11,500,000 |
Closing costs | $300,000 |
Note accrues interest | 3.24% |
Company modified the existing mortgage on Toulon apartments, a -unit complex located in Gautier, Mississippi | 240 |
New term accrues interest | 3.24% |
Related_Party_Transactions_Det
Related Party Transactions (Details) (USD $) | Pillar | ARL | Total. |
In Thousands | |||
Related party receivable, at Dec. 31, 2014 | $58,404 | $58,404 | |
Cash transfers | -6,624 | -6,624 | |
Advisory fees | -1,943 | -1,943 | |
Net income fee | -45 | -45 | |
Fees and commissions | -353 | -353 | |
Cost reimbursements | -776 | -776 | |
Interest income | 634 | 634 | |
Expenses paid by advisor | -1,159 | -1,159 | |
Financing (mortgage payments) | -619 | -619 | |
Purchase of obligations | 11,519 | -11,519 | |
Related party receivable, at Mar. 31, 2015 | $47,519 | $47,519 |
Summary_Of_Discontinued_Operat
Summary Of Discontinued Operations (Details) (USD $) | 3 Months Ended | |
In Thousands, unless otherwise specified | Mar. 31, 2015 | Mar. 31, 2014 |
Revenue from discontinued operations | ||
Rental and other property revenues discontinued operations | $15 | $2,571 |
Total revenue discontinued operations | 15 | 2,571 |
Property operating expenses discontinued operations | -375 | 1,318 |
Depreciation discontinued operations | 329 | |
General and administrative discontinued operations | 97 | 174 |
Total operating expenses discontinued operations | -278 | 1,821 |
Other income (expense) discontinued operations | 42 | |
Mortgage and loan interest discontinued operations | -1 | -664 |
Deferred borrowing costs amortization discontinued operations | -282 | |
Litigation settlement discontinued operations | -45 | |
Total other expenses discontinued operations | -1 | -949 |
Gain Loss from discontinued operations before gain on sale of real estate and taxes. | 292 | -199 |
Gain on sale of real estate from discontinued operations. | 6,053 | |
Income tax benefit (expense) discontinued operations | -102 | -2,049 |
Income (loss) from discontinued operations. | $190 | $3,805 |
Recovered_Sheet1
Commitments And Contingencies (Details) (USD $) | Mar. 31, 2015 | Feb. 13, 2013 |
In Thousands, unless otherwise specified | ||
Dynex Commercial, Inc. and Dynex Capital, Inc | ||
Loans were to be made to the entities Under the original loan commitment | $160,000,000 | |
Jury awarded "increased costs" damages to American Realty Trust, Inc | 960,646 | |
Jury awarded "lost opportunity" damages to American Realty Trust, Inc | 11,161,520 | |
Total damages in favor of TCI and its subsidiaries | 12,122,166 | |
TCI was entitled to damages for "lost opportunities" relating to tenant improvements and awarded TCI an additional amount | 252,577 | |
Clapper Parties were awarded an initial judgment for approximately | 74,000,000 | |
Actual damages included in initial judgement | 26,000,000 | |
Interest amount included in initial judgement | 48,000,000 | |
Other deficiency claims with respect to assets that have been foreclosed by various lenders may result to a maximum amount | $20,000,000 |
Computation_Of_Earnings_Per_Sh
Computation Of Earnings Per Share (Details) (USD $) | Mar. 31, 2015 | Jul. 09, 2014 |
In Thousands, unless otherwise specified | ||
Computation of Earnings per share | ||
Series C Cumulative Convertible Preferred Stock issued and outstanding shares | 30,000 | |
Shares were owned by RAI, a related party | 30,000 | |
Accrued dividends unpaid in millions | $900,000 | |
The stock has a liquidation preference per share | $100 | |
The stock may be converted into common stock at a percentage of daily average closing price of the common stock for the prior five trading days | 90.00% | |
Shares be converted into the requisite number of common stocks | 30,000 | |
Conversion resulted in new shares of common stock | 304,298 | |
Shares of stock options outstanding as on balance sheet date | 5,000 |
Suubsequent_Transactions_Detai
Suubsequent Transactions (Details) (USD $) | Apr. 30, 2015 |
In Thousands, unless otherwise specified | |
Suubsequent Transactions | |
Company purchased a limited partner interest | 99.00% |
Owned subsidiary of ARL | $1,100,000 |
The assumption of debt | $8,800,000 |
Operating_Segments_Information
Operating Segments Information Reconciliation With Consolidated Balance Sheets (Details) (USD $) | 3 Months Ended | |
In Thousands, unless otherwise specified | Mar. 31, 2015 | Mar. 31, 2014 |
Operating Segments information reconciliation with Consolidated Balance Sheets | ||
Segment assets | $686,021 | $638,186 |
Assets held for sale. | 37,632 | |
Investments in real estate partnerships | 1,714 | 1,824 |
Notes and interest receivables | 88,751 | 61,769 |
Other assets. | 141,350 | 160,993 |
Total assets | $917,836 | $900,404 |
Reconcilation_Of_The_Segment_I
Reconcilation Of The Segment Information To The Corresponding Amounts In The Consolidated Statements Of Operations (Details) (USD $) | 3 Months Ended | |
In Thousands, unless otherwise specified | Mar. 31, 2015 | Mar. 31, 2014 |
Reconcilation of the segment information to the corresponding amounts in the Consolidated Statements of Operations | ||
Segment operating income (loss) | $3,247 | ($1,314) |
Other non-segment items of income (expense) | ||
Segment General and administrative | -1,768 | -1,551 |
Segment Net income fee to related party | -45 | -490 |
Segment Advisory fee to related party | -1,943 | -1,852 |
Segment Other income | 67 | 153 |
Segment loss from unconsolidated joint ventures and investees | 33 | -4 |
Segment Litigation settlement | -73 | 3,839 |
Segment Income tax benefit (expense) | 102 | 2,049 |
Segment Gain (loss) from continuing operations | ($380) | $830 |