Transcontinental Realty Investors (TCI) 8-K Transcontinental Realty Reports 2004 Third Quarter Results

Exhibit 99.1

Transcontinental Realty Reports 2004 Third Quarter Results

DALLAS (Nov. 15, 2004) — Transcontinental Realty Investors, Inc. (NYSE: TCI), a Dallas-based real estate investment company, today reported a net loss of $10.6 million and $11.6 million, or $(1.30) and $(1.42) per share for the three and nine months ended September 30, 2004, compared to a net loss of $853,000 and $6.1 million, or $(.10) and $(.74) per share for the same periods in 2003.

Income items for the three and nine months ended September 30, 2004, compared to the same period in 2003, included:

• Rental income of $26.4 and $75.9 million, compared to $23.1 and $62.3 million in 2003, the three and nine month increases due to the completion of thirteen apartment complexes in 2004 and 2003 and higher hotel revenues in 2004.

• Land sales, cost of sales and deferred gains and gain on land sales of $2.6 million, $2.6 million and $747,000 and $32.6 million, $29.7 million and $2.9 million for the three and nine months ending September 2004, compared to $2.6 million, $2.0 million and $617,000 and $4.6 million, $3.6 million and $1.0 million in the three and nine months ending September 30, 2003. The gain for the three months ending September 2004 was from the recognition of previously deferred gains from a land sale in the first quarter of 2004.

• Interest income of $921,000 and $2.2 million, compared to $486,000 and $2.0 million in 2003. The three month increase is primarily due to new notes receivables added in the second half of 2003 and during 2004.

• A gain on foreign currency transaction of $543,000 and $1.8 million for the three and nine months ending 2004, compared to a loss of $966,000 for the three and nine months ending 2003. The gain is due to a strengthening of the Polish Zloty against the Euro for Hotel Akademia during 2004, while the loss was due to the weakening of the Polish Zloty against the Euro for Hotel Akademia during 2003.

Expenses for the three and nine months ended September 30, 2004, compared to the same period in 2003, included:

• Operating expenses of $17.6 and $49.4 million, compared to $16.2 and $43.5 million in 2003. The three and nine month increases are primarily due to the completion of thirteen apartment complexes in 2004 and 2003.

• Interest expense of $8.5 and $24.7 million, compared to $7.1 and $18.0 million in 2003. The three and nine month increases are primarily due to the completion of thirteen apartment complexes in 2003 and 2004 and higher land interest, which was offset by lower commercial interest due to sales and refinancings with lower rates in 2003 and 2004

• Depreciation expense of $4.4 and $13.1 million, compared to $3.7 and $10.8 million in 2003. The increases are primarily due to the completion of thirteen apartment complexes in 2004 and 2003.

• Asset impairment of $4.5 million for the three and nine months ending September 2004. The asset impairment was recorded to write-down the value of two commercial properties under contract to sell. There was no asset impairment in 2003.

• General and administrative expenses of $1.6 and $5.6 million, compared to $3.4 and $6.4 million in 2003. The three and nine months ending in 2004 were primarily lower due to higher legal fees incurred in the three and nine months in 2003.

Results of property sales in the three and nine months ended September 30, 2004, compared to the same period in 2003, included:

• Loss from operations of $902,000 and $1.8 million, compared to losses of $2.2 million and $5.0 million in 2003.

• Equity in investees gains on sale of real estate of $222,000 and $1.7 million in 2004, compared to $1.2 million and $3.0 million in 2003.

• Gain on sale of operations of $127,000 and $10.7 million for the three and nine month period September 30, 2004 compared to $10.0 and $18.0 million in 2003.

About Transcontinental Realty Investors, Inc.,

Transcontinental Realty Investors, Inc., a Dallas-based real estate investment company, invests in real estate through direct equity ownership and partnerships nationwide. For more information, go to the web site at www.transconrealty-invest.com.

TRANSCONTINENTAL REALTY INVESTORS, INC.

CONSOLIDATED STATEMENTS OF OPERATIONS

(Dollars in thousands, except per share)

	For the Three Months Ended September 30,						For the Nine Months Ended September 30,
	2004			2003			2004			2003
				As Restated						As Restated
Property revenue:
Rents	$	26,375		$	23,113		$	75,851		$	62,299
Property operations		17,643			16,191			49,361			43,499
Operating income		8,732			6,922			26,490			18,800
Land Operations:
Sales		2,600			2,600			32,550			4,599
Cost of Sales		2,546			1,983			24,828			3,598
Deferred Gain on Sale		54			—			4,869			—
Recognition of previously deferred gains		747			—			—			—
Gain on Sales		747			617			2,853			1,001
Other income (loss):
Interest		921			486			2,180			1,994
Gain (loss) on foreign currency transaction		543			(966	)		1,791			(966	)
Equity in loss of equity investees		(197	)		(1,174	)		(1,707	)		(2,766	)
		1,267			(1,654	)		2,264			(1,738	)
Other expense:
Interest		8,490			7,058			24,734			18,025
Depreciation		4,357			3,725			13,118			10,783
Provision for asset impairment		4,477			—			4,477			—
Advisory fee to affiliates		1,700			1,743			4,943			5,067
General and administrative		1,592			3,371			5,551			6,357
Discount on sale of note receivable		—			—			—			104
Minority interest		155			(232	)		867			(332	)
		20,771			15,665			53,690			40,004
Net loss from continuing operations		(10,025	)		(9,780	)		(22,083	)		(21,941	)
Discontinued operations:
Income (loss) from operations		(902	)		(2,193	)		(1,813	)		(4,983	)
Gain on sale of operations		127			9,948			10,708			18,025
Equity in investees gain on sale of real estate		222			1,217			1,686			2,970
		(553	)		8,972			10,581			16,012
Net income (loss)		(10,578	)		(808	)		(11,502	)		(5,929	)
Preferred dividend requirement		(53	)		(45	)		(158	)		(135	)
Net income (loss) applicable to common shares	$	(10,631	)	$	(853	)	$	(11,660	)	$	(6,064	)
Basic and Diluted Earnings Per Share:
Net loss from continuing operations (before prior period adjustment)	$	(1.23	)	$	(1.28	)	$	(2.72	)	$	(2.88	)
Correction of accounting error in prior period		—			07			—			16
Discontinued Operations		(.07	)		1.11			1.30			1.98
Net income (loss) applicable to commons shares	$	(1.30	)	$	(.10	)	$	(1.42	)	$	(.74	)
Weighted average common shares used to compute earnings per share		8,113,669			8,072,594			8,113,669			8,072,594