Transcontinental Realty Investors (TCI) 10-Q 14 Nov 16 2016 Q3 Quarterly report Financial data

Document and Entity Information

Document and Entity Information - shares	9 Months Ended
	Sep. 30, 2016	Nov. 07, 2016
Document And Entity Information
Entity Registrant Name	TRANSCONTINENTAL REALTY INVESTORS INC
Entity Central Index Key	733,590
Document Type	10-Q
Trading Symbol	TCI
Document Period End Date	Sep. 30, 2016
Amendment Flag	false
Current Fiscal Year End Date	--12-31
Entity a Well-known Seasoned Issuer	No
Entity a Voluntary Filer	No
Entity's Reporting Status Current	Yes
Entity Filer Category	Smaller Reporting Company
Entity Common Stock, Shares Outstanding		8,717,767
Document Fiscal Period Focus	Q3
Document Fiscal Year Focus	2,016

CONSOLIDATED BALANCE SHEETS (un

CONSOLIDATED BALANCE SHEETS (unaudited) - USD ($) $ in Thousands	Sep. 30, 2016	Dec. 31, 2015
Assets
Real estate, at cost	$ 1,007,055	$ 935,635
Real estate subject to sales contracts at cost, net of depreciation	47,192	47,192
Less accumulated depreciation	(154,399)	(138,808)
Total real estate	899,848	844,019
Notes and interest receivable:
Performing (including $70,543 in 2016 and $64,181 in 2015 from related parties)	74,529	71,376
Less allowance for doubtful accounts (including $1,825 in 2016 and 2015 from related parties)	(1,825)	(1,825)
Total notes and interest receivable	72,704	69,551
Cash and cash equivalents	7,339	15,171
Restricted cash	33,488	44,060
Investments in unconsolidated joint ventures and investees	2,469	5,243
Receivable from related party	91,367	90,515
Other assets	44,333	41,645
Total assets	1,151,548	1,110,204
Liabilities:
Notes and interest payable	817,268	772,636
Notes related to real estate held for sale	376	376
Notes related to real estate subject to sales contracts	5,815	6,422
Deferred revenue (including $50,669 in 2016 and $50,645 in 2015 to related parties)	71,054	71,021
Accounts payable and other liabilities (including $6,267 in 2016 and $5,845 in 2015 to related parties)	35,892	34,694
Total liabilities	930,405	885,149
Shareholders' equity:
Preferred stock, Series C: $0.01 par value, authorized 10,000,000 shares; issued and outstanding zero shares in 2016 and 2015. Series D: $0.01 par value, authorized, issued and outstanding 100,000 shares in 2016 and 2015 (liquidation preference $100 per share)	1	1
Common stock, $0.01 par value, authorized 10,000,000 shares; issued 8,717,967 shares in 2016 and 2015; outstanding 8,717,767 shares in 2016 and 2015	87	87
Treasury stock at cost, 200 shares in 2016 and 2015	(2)	(2)
Paid-in capital	270,076	270,749
Retained earnings	(67,515)	(64,087)
Total Transcontinental Realty Investors, Inc. shareholders' equity	202,647	206,748
Non-controlling interest	18,496	18,307
Total shareholders' equity	221,143	225,055
Total liabilities and shareholders' equity	$ 1,151,548	$ 1,110,204

CONSOLIDATED BALANCE SHEETS (u3

CONSOLIDATED BALANCE SHEETS (unaudited) (Parenthetical) - USD ($) $ in Thousands	Sep. 30, 2016	Dec. 31, 2015
Performing	$ 74,529	$ 71,376
Deferred revenue from related parties	71,054	71,021
Allowance for doubtful accounts (in dollars)	$ 1,825	$ 1,825
Common stock, par value (in dollars per share)	$ 0.01	$ 0.01
Common stock, authorized	10,000,000	10,000,000
Common stock, issued	8,717,967	8,717,967
Common stock, outstanding	8,717,767	8,717,767
Treasury stock, shares	200	200
Related Parties [Member]
Performing	$ 70,543	$ 64,181
Deferred revenue from related parties	50,669	50,645
Allowance for doubtful accounts (in dollars)	1,825	1,825
Accounts payable and other liabilities to related parties (in dollars)	$ 6,267	$ 5,845
Series C Preferred Stock [Member]
Preferred stock, par value (in dollars per share)	$ 0.01	$ 0.01
Preferred stock, authorized	10,000,000	10,000,000
Preferred stock, issued	0	0
Preferred stock, outstanding	0	0
Series D Preferred Stock [Member]
Preferred stock, par value (in dollars per share)	$ 0.01	$ 0.01
Preferred stock, authorized	100,000	100,000
Preferred stock, issued	100,000	100,000
Preferred stock, outstanding	100,000	100,000
Preferred stock, liquidation preference per share (in dollars per share)	$ 100	$ 100

CONSOLIDATED STATEMENTS OF OPER

CONSOLIDATED STATEMENTS OF OPERATIONS (unaudited) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2016	Sep. 30, 2015	Sep. 30, 2016	Sep. 30, 2015
Revenues:
Rental and other property revenues (including $174 and $211 for the three months and $521 and $591 for the nine months ended 2016 and 2015, respectively, from related parties)	$ 29,776	$ 27,539	$ 89,200	$ 73,599
Expenses:
Property operating expenses (including $221 and $192 for the three months and $644 and $522 for the nine months ended 2016 and 2015, respectively, from related parties)	15,413	14,195	45,295	35,987
Depreciation and amortization	6,014	6,555	17,665	16,305
General and administrative (including $753 and $727 for the three months and $1,501 and $1,547 for the nine months ended 2016 and 2015, respectively, from related parties)	1,541	1,146	4,754	4,191
Net income fee to related party	67	51	193	142
Advisory fee to related party	2,394	2,666	7,096	6,561
Total operating expenses	25,429	24,613	75,003	63,186
Net operating income	4,347	2,926	14,197	10,413
Other income (expenses):
Interest income (including $4,249 and $2,503 for the three months and $10,269 and $8,861 for the nine months ended 2016 and 2015, respectively, from related parties)	4,251	2,505	11,386	9,260
Other income	8	(77)	1,178	4
Mortgage and loan interest (including $212 and $0 for the three months and $437 and $31 for the nine months ended 2016 and 2015, respectively, from related parties)	(13,568)	(13,550)	(38,826)	(31,953)
Earnings (losses) from unconsolidated joint ventures and investees		(4)	(2)	39
Litigation expense		(85)		(203)
Total other expenses	(9,309)	(11,211)	(26,264)	(22,853)
Loss before gain on sale of income-producing properties, loss on land sales, non-controlling interest, and taxes	(4,962)	(8,285)	(12,067)	(12,440)
Gain on sale of income-producing properties		735	4,925	735
Gain on land sales	555	997	3,925	5,124
Net loss from continuing operations before taxes	(4,407)	(6,553)	(3,217)	(6,581)
Income tax benefit (expense)	(25)	16	(24)	107
Net loss from continuing operations	(4,432)	(6,537)	(3,241)	(6,474)
Discontinued operations:
Net income from discontinued operations		47	3	306
Income tax expense from discontinued operations		(16)	(1)	(107)
Net income from discontinued operations		31	2	199
Net loss	(4,432)	(6,506)	(3,239)	(6,275)
Net income attributable to non-controlling interest	(114)	(95)	(189)	(82)
Net loss attributable to Transcontinental Realty Investors, Inc.	(4,546)	(6,601)	(3,428)	(6,357)
Preferred dividend requirement	(227)	(227)	(673)	(673)
Net loss applicable to common shares	$ (4,773)	$ (6,828)	$ (4,101)	$ (7,030)
Earnings per share - basic
Net loss from continuing operations (in dollars per share)	$ (0.79)	$ (0.79)	$ (0.47)	$ (0.83)
Net income from discontinued operations (in dollars per share)				0.02
Net loss applicable to common shares (in dollars per share)	(0.79)	(0.79)	(0.47)	(0.81)
Earnings per share - diluted
Net loss from continuing operations (in dollars per share)	(0.55)	(0.79)	(0.47)	(0.83)
Net income from discontinued operations (in dollars per share)				0.02
Net loss applicable to common shares (in dollars per share)	$ (0.55)	$ (0.79)	$ (0.47)	$ (0.81)
Weighted average common shares used in computing earnings per share (in shares)	8,717,767	8,717,767	8,717,767	8,717,767
Weighted average common shares used in computing diluted earnings per share (in shares)	8,717,767	8,717,767	8,717,767	8,717,767
Amounts attributable to Transcontinental Realty Investors, Inc.
Net loss from continuing operations	$ (4,546)	$ (6,632)	$ (3,430)	$ (6,556)
Net income from discontinued operations		31	2	199
Net loss	$ (4,546)	$ (6,601)	$ (3,428)	$ (6,357)

CONSOLIDATED STATEMENTS OF OPE5

CONSOLIDATED STATEMENTS OF OPERATIONS (unaudited) (Parenthetical) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2016	Sep. 30, 2015	Sep. 30, 2016	Sep. 30, 2015
Rental and other property revenues	$ 29,776	$ 27,539	$ 89,200	$ 73,599
Property operating expenses	15,413	14,195	45,295	35,987
General and administrative	1,541	1,146	4,754	4,191
Interest income	4,251	2,505	11,386	9,260
Mortgage and loan interest	13,568	13,550	38,826	31,953
Related Parties [Member]
Rental and other property revenues	174	211	521	591
Property operating expenses	221	192	644	522
General and administrative	753	727	1,501	1,547
Interest income	4,249	2,503	10,269	8,861
Mortgage and loan interest	$ 212	$ 0	$ 437	$ 31

CONSOLIDATED STATEMENT OF SHARE

CONSOLIDATED STATEMENT OF SHAREHOLDERS' EQUITY (unaudited) - 9 months ended Sep. 30, 2016 - USD ($) $ in Thousands	Total	Comprehensive Income (Loss) [Member]	Preferred Stock [Member]	Common Stock [Member]	Treasury Stock [Member]	Paid-in Capital [Member]	Retained Earnings [Member]	Noncontrolling Interest [Member]
Balance, at beginning at Dec. 31, 2015	$ 225,055	$ (65,174)	$ 1	$ 87	$ (2)	$ 270,749	$ (64,087)	$ 18,307
Balance, at beginning (in shares) at Dec. 31, 2015				8,717,967
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Series D preferred stock dividends	(673)					(673)
Net income	(3,239)	(3,239)					(3,428)	189
Balance, at the end at Sep. 30, 2016	$ 221,143	$ (68,413)	$ 1	$ 87	$ (2)	$ 270,076	$ (67,515)	$ 18,496
Balance, at the end (in shares) at Sep. 30, 2016				8,717,967

CONSOLIDATED STATEMENT OF SHAR7

CONSOLIDATED STATEMENT OF SHAREHOLDERS' EQUITY (unaudited) (Parenthetical)	9 Months Ended
	Sep. 30, 2016
Statement of Stockholders' Equity [Abstract]
Preferred stock dividend (in percent)	9.00%

CONSOLIDATED STATEMENTS OF COMP

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (unaudited) - USD ($) $ in Thousands	9 Months Ended
	Sep. 30, 2016	Sep. 30, 2015
Statement of Comprehensive Income [Abstract]
Net loss	$ (3,239)	$ (6,275)
Total comprehensive income	(3,239)	(6,275)
Comprehensive (income) loss attributable to non-controlling interest	(189)	(82)
Comprehensive income attributable to Transcontinental Realty Investors, Inc.	$ (3,428)	$ (6,357)

CONSOLIDATED STATEMENTS OF CASH

CONSOLIDATED STATEMENTS OF CASH FLOWS (unaudited) - USD ($) $ in Thousands	9 Months Ended
	Sep. 30, 2016	Sep. 30, 2015
Cash Flow From Operating Activities:
Net income	$ (3,239)	$ (6,275)
Adjustments to reconcile net income applicable to common shares to net cash flows from operating activities:
Gain on sale of income-producing properties	(4,925)	(735)
Gain on sale of land	(3,925)	(5,124)
Depreciation and amortization	16,602	16,305
Amortization of deferred borrowing costs	3,164	1,720
Losses (earnings) from unconsolidated joint ventures and investees	2	(39)
Decrease (increase) in assets:
Accrued interest receivable	1,224	2,125
Other assets	(895)	2,469
Prepaid expense	(3,207)	(12,977)
Escrow	11,537	4,841
Earnest money	449	(1,193)
Rent receivables		(1,405)
Related party receivables	(852)	(42,626)
Increase (decrease) in liabilities:
Accrued interest payable	(44)	(637)
Other liabilities	1,233	(868)
Net cash provided by (used in) operating activities	17,124	(44,419)
Cash Flow From Investing Activities:
Proceeds from notes receivable	2,773	23,350
Originations or advances on notes receivable	(7,150)	(7,655)
Acquisition of income-producing properties	(41,750)	(131,220)
Proceeds from sale of income-producing properties	9,377
Proceeds from sale of land	7,152	11,307
Investment in unconsolidated real estate entities	2,770	(596)
Improvement of land held for development	(2,486)	(2,930)
Improvement of income-producing properties	(4,030)	(7,942)
Construction and development of new properties	(31,844)	(5,110)
Net cash used in investing activities	(65,188)	(120,796)
Cash Flow From Financing Activities:
Proceeds from notes payable	115,031	221,450
Recurring amortization of principal on notes payable	(10,480)	(11,630)
Payments on maturing notes payable	(60,977)	(35,344)
Deferred financing costs	(2,669)	(8,842)
Contributions from non-controlling interests		11
Preferred stock dividends - Series D	(673)	(673)
Net cash provided by financing activities	40,232	164,972
Net increase (decrease) in cash and cash equivalents	(7,832)	(243)
Cash and cash equivalents, beginning of period	15,171	12,201
Cash and cash equivalents, end of period	7,339	11,958
Supplemental disclosures of cash flow information:
Cash paid for interest	$ 30,957	$ 16,748

ORGANIZATION AND BASIS OF PRESE

ORGANIZATION AND BASIS OF PRESENTATION	9 Months Ended
	Sep. 30, 2016
Organization, Consolidation and Presentation of Financial Statements [Abstract]
ORGANIZATION AND BASIS OF PRESENTATION	NOTE 1. ORGANIZATION AND BASIS OF PRESENTATION Organization As used herein, the terms “TCI”, “the Company”, “we”, “our” or “us” refer to Transcontinental Realty Investors, Inc., a Nevada corporation which was formed in 1984. 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 American Realty Investors, Inc. (“ARL”) own approximately 80.9% of the Company’s common stock. Accordingly, TCI’s financial results are consolidated with those of ARL’s on Form 10-K and related Consolidated Financial Statements. 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”). Accordingly IOT’s financial results are consolidated with those of TCI and its 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 56 income-producing properties as of September 30, 2016. The properties consisted of: ● Seven commercial properties consisting of five office buildings and two retail centers comprising in aggregate approximately 1.7 million rentable square feet; ● A golf course comprising approximately 96 acres ● 49 apartment communities totaling 8,128 units; excluding apartments being developed; and ● 3,608 acres of developed and undeveloped land. We join with various third-party development companies to construct residential apartment communities. We are in the predevelopment process on several residential apartment communities that have not yet begun construction. At September 30, 2016, we had eight apartment projects in development. The third-party developer typically holds a general partner, as well as a majority limited partner interest in a limited partnership formed for the purpose of building a single property, while we generally take a minority limited partner interest in the limited partnership. We may contribute land to the partnership as part of our equity contribution or we may contribute the necessary funds to the partnership to acquire the land. We are required to fund all necessary equity contributions while the third-party developer is responsible for obtaining construction financing, hiring a general contractor and for the overall management, successful completion and delivery of the project. We generally bear all the economic risks and rewards of ownership in these partnerships and therefore include these partnerships in our Consolidated Financial Statements. The third-party developer is paid a developer fee typically equal to a percentage of the construction costs. When the project reaches stabilized occupancy, we acquire the third-party developer’s partnership interests in exchange for any remaining unpaid developer fees. Basis of Presentation The accompanying unaudited Consolidated Financial Statements have been prepared in accordance with the instructions to Form 10-Q and Article 10 of Regulation S-X. Certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) have been condensed or omitted in accordance with such rules and regulations, although management believes the disclosures are adequate to prevent the information presented from being misleading. In the opinion of management, all adjustments (consisting of normal recurring matters) considered necessary for a fair presentation have been included. The results of operations for the nine months ended September 30, 2016, 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, 2015, was derived from the audited Consolidated Financial Statements at that date, but does not include all of the information and disclosures required by U.S. GAAP for complete financial statements. For further information, refer to the Consolidated Financial Statements and notes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2015. Certain 2015 Consolidated Financial Statement amounts have been reclassified to conform to the 2016 presentation. Principles of Consolidation The accompanying Consolidated Financial Statements include the accounts of the Company, its subsidiaries, generally all of which are wholly-owned, and all entities in which we have a controlling interest. Arrangements that are not controlled through voting or similar rights are accounted for as a Variable Interest Entity (“VIE”), in accordance with the provisions and guidance of ASC Topic 810 “Consolidation”, whereby we have determined that we are a primary beneficiary of the VIE and meet certain criteria of a sole general partner or managing member as identified in accordance with Emerging Issues Task Force (“EITF”) Issue 04-5, Investor’s Accounting for an Investment in a Limited Partnership when the Investor is the Sole General Partner and the Limited Partners have Certain Rights (“EITF 04-5”). VIEs are generally entities that lack sufficient equity to finance their activities without additional financial support from other parties or whose equity holders as a group lack adequate decision making ability, the obligation to absorb expected losses or residual returns of the entity, or have voting rights that are not proportional to their economic interests. The primary beneficiary is generally the entity that provides financial support and bears a majority of the financial risks, authorizes certain capital transactions, or makes operating decisions that materially affect the entity’s financial results. All significant intercompany balances and transactions have been eliminated in consolidation. In determining whether we are the primary beneficiary of a VIE, we consider qualitative and quantitative factors, including, but not limited to: the amount and characteristics of our investment; the obligation or likelihood for us or other investors to provide financial support; our and the other investors’ ability to control or significantly influence key decisions for the VIE; and the similarity with and significance to the business activities of us and the other investors. Significant judgments related to these determinations include estimates about the current future fair values and performance of real estate held by these VIEs and general market conditions. For entities in which we have less than a controlling financial interest or entities where we are not deemed to be the primary beneficiary, the entities are accounted for using the equity method of accounting. Accordingly, our share of the net earnings or losses of these entities is included in consolidated net income. Our investment in 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 (“ASC 360”), “Property, Plant and Equipment”. Factors considered by management in evaluating impairment of its existing real estate assets held for investment include significant declines in property operating profits, annually recurring property operating losses and other significant adverse changes in general market conditions that are considered permanent in nature. Under ASC 360, a real estate asset held for investment is not considered impaired if the undiscounted, estimated future cash flows of an asset (both the annual estimated cash flow from future operations and the estimated cash flow from the theoretical sale of the asset) over its estimated holding period are in excess of the asset’s net book value at the balance sheet date. If any real estate asset held for investment is considered impaired, a loss is provided to reduce the carrying value of the asset to its estimated fair value. Real Estate Held for Sale We periodically classify real estate assets as “held for sale.” An asset is classified as held for sale after the approval of our Board of Directors, after an active program to sell the asset has commenced and if the sale is probable. One of the deciding factors in determining whether a sale is probable is whether the firm purchase commitment is obtained and whether the sale is probable within the year. Upon the classification of a real estate asset as held for sale, the carrying value of the asset is reduced to the lower of its net book value or its estimated fair value, less costs to sell the asset. Subsequent to the classification of assets as held for sale, no further depreciation expense is recorded. Real estate assets held for sale are stated separately on the accompanying Consolidated Balance Sheets. Upon a decision that the sale is no longer probable, the asset is classified as an operating asset and depreciation expense is reinstated. Prior to January 1, 2015, the operating results of real estate assets held for sale and sold are reported as discontinued operations in the accompanying Consolidated Statements of Operations. Income from discontinued operations includes the revenues and expenses, including depreciation and interest expense, associated with the assets. Effective January 1, 2015, Accounting Standards Update 2014-08, “Reporting Discontinued Operations and Disclosures of Disposals of Components of an Entity” (“ASU 2014-08”) substantially changed the criteria for determining whether a disposition qualifies for discontinued operations presentation. Since the Company adopted ASU 2014-08, effective January 1, 2015, we have had no dispositions that met the discontinued operations criteria. Cost Capitalization Costs related to planning, developing, leasing and constructing a property are capitalized and classified as Real Estate in the Consolidated Balance Sheets. We capitalize interest to qualifying assets under development based on average accumulated expenditures outstanding during the period. In capitalizing interest to qualifying assets, we first use the interest incurred on specific project debt, if any, and next use the weighted average interest rate of non-project specific debt. We capitalize interest, real estate taxes and certain operating expenses until building construction is substantially complete and the building is ready for its intended use, but no later than one year from the cessation of major construction activity. We capitalize leasing costs, which include commissions paid to outside brokers, legal costs incurred to negotiate and document a lease agreement and any internal costs that may be applicable. We allocate these costs to individual tenant leases and amortize them over the related lease term. Fair Value Measurement We apply the guidance in ASC Topic 820, “Fair Value Measurements and Disclosures”, to the valuation of real estate assets. These provisions define fair value as the price that would be received to sell an asset or paid to transfer a liability in a transaction between market participants at the measurement date, establish a hierarchy that prioritizes the information used in developing fair value estimates and require disclosure of fair value measurements by level within the fair value hierarchy. The hierarchy gives the highest priority to quoted prices in active markets (Level 1 measurements) and the lowest priority to unobservable data (Level 3 measurements), such as the reporting entity’s own data. The valuation hierarchy is based upon the transparency of inputs to the valuation of an asset or liability as of the measurement date and includes three levels defined as follows: Level 1 – Unadjusted quoted prices for identical and unrestricted assets or liabilities in active markets. Level 2 – Quoted prices for similar assets and liabilities in active markets, and inputs that are observable for the asset or liability, either directly or indirectly, for substantially the full term of the financial instrument. Level 3 – Unobservable inputs that are significant to the fair value measurement. A financial instrument’s categorization within the valuation hierarchy is based upon the lowest level of input that is significant to the fair value measurement. Deferred Costs Costs relating to the financing of properties are deferred and amortized over the life of the related financing agreement. Amortization is reflected as interest expense in the Consolidated Statements of Operations, with remaining terms ranging from 6 months to 40 years. Unamortized financing costs are written off when the financing agreement is extinguished before the maturity date. Related Parties We apply ASC Topic 805, “Business Combinations”, to evaluate business relationships. Related parties are persons or entities who have one or more of the following characteristics, which include entities for which investments in their equity securities would be required, trust for the benefit of persons including principal owners of the entities and members of their immediate families, management personnel of the entity and members of their immediate families and other parties with which the entity may deal if one party controls or can significantly influence the decision making of the other to an extent that one of the transacting parties might be prevented from fully pursuing its own separate interests, or affiliates of the entity. Newly Issued Accounting Pronouncements In April 2014, the Financial Accounting Standards Board (“FASB”) issued ASU 2014-08, “Reporting Discontinued Operations and Disclosures of Disposals of Components of an Entity,” which changed the criteria for determining whether a disposal qualifies as discontinued operations. Under the new guidance, disposals representing a strategic shift, or change in the entity’s strategy, that has, or will have, a major effect on an entity’s operations and financial results will be presented as discontinued operations. This guidance applies to a component of an entity or a group of components of an entity classified as held for sale or disposed of by sale or by means other than a sale, such as abandonment. The Company adopted ASU 2014-08 effective January 1, 2015, and as a result, had no dispositions that met the criteria for discontinued operations during the nine months ending September 30, 2016. See Note 8 below. In May 2014, Accounting Standards Update (“ASU”) No. 2014-09 (“ASU 2014-09”), “Revenue from Contracts with Customers,” was issued. This new guidance established a new single comprehensive revenue recognition model and provides for enhanced disclosures. Under the new policy, the nature, timing and amount of revenue recognized for certain transactions could differ from those recognized under existing accounting guidance. This new standard does not affect revenue recognized under lease contracts. ASU 2014-09 is effective for reporting periods beginning after December 15, 2017. The Company is currently evaluating the impact of the adoption of ASU 2014-09 on its financial position and results of operations, if any. In April 2015, the FASB issued ASU 2015-03, “Simplifying the Presentation of Debt Issuance Costs” (“ASU 2015-03”). ASU 2015-03 requires debt issuance costs to be presented in the balance sheet as a direct deduction from the carrying value of the associated debt liability, consistent with the presentation of a debt discount. Prior to the issuance of the standard, debt issuance costs were required to be presented in the balance sheet as an asset. The Company adopted ASU 2015-03 effective June 30, 2015. In February 2016, Accounting Standards Update No. 2016-02 (“ASU 2016-02”), Leases was issued. This guidance establishes a new model for accounting for leases and provides for enhanced disclosures. ASU 2016-02 is effective for reporting periods beginning after December 15, 2018. The Company is currently evaluating the impact of the adoption of ASU 2016-02 on its financial position and results of operations, if any.

REAL ESTATE ACTIVITY

REAL ESTATE ACTIVITY	9 Months Ended
	Sep. 30, 2016
Real Estate [Abstract]
REAL ESTATE ACTIVITY	NOTE 2. REAL ESTATE ACTIVITY Below is a summary of the real estate we owned as of September 30, 2016 (dollars in thousands): Apartments $ 664,383 Apartments under construction 52,034 Commercial properties 203,507 Land held for development 87,131 Real estate subject to sales contract 47,192 Total real estate $ 1,054,247 Less accumulated depreciation (154,399 ) Total real estate, net of depreciation $ 899,848 The highlights of our significant real estate transactions for the nine months ended September 30, 2016, are discussed below. Purchases For the nine months ended September 30, 2016, we acquired two income-producing apartment communities for a total purchase price of $40.0 million. In addition, we acquired three land parcels for future development for a total purchase price of $8.9 million, adding 31.04 acres to the development portfolio. Sales For the nine months ended September 30, 2016, TCI sold a combined 57.9 acres of land located in Forney, Texas and McKinney, Texas to independent third parties for a total sales price of $8.1 million. We recorded an aggregate $3.9 million gain from the land sales. In addition, the Company sold one apartment community located in Irving, Texas to an independent third party for a total sales price of $8.1 million. We recorded a gain of $5.2 million from this sale. The Company also sold an industrial warehouse consisting of approximately 177,805 square feet. The sale resulted in a loss of approximately $0.2 million. In November 2015, the Company entered into a sales contract with an unrelated party. The contract was for most of the developable land owned by the Company in the Mercer Crossing Development located in Farmers Branch, Texas. In addition, IOT, ARL and Realty Advisors, Inc. (“RAI”) also sold land in this transaction. Total consideration for the sale was $75 million. The ultimate allocation of sales proceeds to the parties involved is yet to be determined and will be completed when the final use of the land, certain development commitments are completed and the note is collected. The agreement between TCI and the other parties related to this transaction provides for TCI to hold the subordinated note from the buyer in the amount of $50 million. At the closing, the note payable to related parties of $16.1 million was paid off. Due to an inadequate down payment from the buyer and the level of seller financing involved, the transaction is being accounted for under the deposit method. Under the deposit method, no revenue is recognized and the asset sold remains on the books until the criteria for full revenue recognition is met. As of September 30, 2016, the Company has approximately 91 acres of land, at various locations that were sold to related parties in multiple transactions. These transactions are treated as “subject to sales contract” on the Consolidated Balance Sheets. Due to the related party nature of the transactions, TCI has deferred the recording of the sales in accordance with ASC 360-20. We continue to invest in the development of apartment projects. During the nine months ended September 30, 2016, we have expended $18.7 million related to the construction or predevelopment of various apartment complexes and capitalized $0.7 million

NOTES AND INTEREST RECEIVABLE

NOTES AND INTEREST RECEIVABLE	9 Months Ended
	Sep. 30, 2016
Receivables [Abstract]
NOTES AND INTEREST RECEIVABLE	NOTE 3. NOTES AND INTEREST RECEIVABLE A portion of our assets are invested in mortgage notes receivable, principally secured by real estate. We may originate mortgage loans in conjunction with providing purchase money financing of property sales. Notes receivable are generally collateralized by real estate or interests in real estate and guarantees, unless noted otherwise, are so secured. Management intends to service and hold for investment the mortgage notes in our portfolio. A majority of the notes receivable provide for principal to be paid at maturity. Below is a summary of our notes receivable as of September 30, 2016 (dollars in thousands): Maturity Interest Borrower Date Rate Amount Security Performing loans: H198, LLC (Las Vegas Land) 01/20 12.00% 5,907 Unsecured Oulan-Chikh Family Trust 03/21 8.00% 174 Secured Unified Housing Foundation, Inc. (Echo Station) (1) 12/32 12.00% 1,481 Secured Unified Housing Foundation, Inc. (Lakeshore Villas) (1) 12/32 12.00% 2,000 Secured Unified Housing Foundation, Inc. (Lakeshore Villas) (1) 12/32 12.00% 6,368 Secured Unified Housing Foundation, Inc. (Limestone Canyon) (1) 12/32 12.00% 4,640 Secured Unified Housing Foundation, Inc. (Limestone Canyon) (1) 12/32 12.00% 2,653 Secured Unified Housing Foundation, Inc. (Limestone Ranch) (1) 12/32 12.00% 6,000 Secured Unified Housing Foundation, Inc. (Limestone Ranch) (1) 12/32 12.00% 1,953 Secured Unified Housing Foundation, Inc. (Parkside Crossing) (1) 12/32 12.00% 1,936 Secured Unified Housing Foundation, Inc. (Sendero Ridge) (1) 12/32 12.00% 4,812 Secured Unified Housing Foundation, Inc. (Sendero Ridge) (1) 12/32 12.00% 4,491 Secured Unified Housing Foundation, Inc. (Timbers of Terrell) (1) 12/32 12.00% 1,323 Secured Unified Housing Foundation, Inc. (Tivoli) (1) 12/32 12.00% 7,965 Secured Unified Housing Foundation, Inc. (1) 12/17 12.00% 1,207 Unsecured Unified Housing Foundation, Inc. (1) 12/18 12.00% 3,994 Unsecured Unified Housing Foundation, Inc. (1) 12/18 12.00% 6,407 Unsecured Unified Housing Foundation, Inc. (1) 06/19 12.00% 5,400 Unsecured Other related party notes (1) Various Various 1,404 Various unsecured interests Other non-related party notes Various Various 796 Various secured interests Other non-related party notes Various Various 283 Various unsecured interests Accrued interest 3,335 Total Performing $ 74,529 Allowance for estimated losses (1,825) Total $ 72,704 (1) Related Party notes We invest in mortgage loans, secured by mortgages that are subordinate to one or more prior liens either on the fee or a leasehold interest in real estate. Recourse on such loans ordinarily includes the real estate on which the loan is made, other collateral and guarantees. At September 30, 2016, we had mortgage loans and accrued interest receivable from related parties, net of allowances, totaling $68.7 million. During the nine months ended September 30, 2016, we recognized interest income of $6.6 million related to these notes receivables. The Company has various notes receivable from Unified Housing Foundation, Inc. (“UHF”) and Foundation for Better Housing, Inc. (“FBH”). UHF and FBH are determined to be related parties due to our reliance upon the performance of the collateral secured under the notes receivable. Payments are due from surplus cash flow of operations of the properties. A sale or refinance of any of the properties underlying these notes will be used to repay outstanding interest and principal for the remaining notes for the specific borrower. These notes are cross-collateralized for the specific borrower, but to the extent cash is received from a specific UHF or FBH property, it is applied first against any outstanding interest for the related-property note. The allowance on the UHF notes was a purchase allowance that was netted against the notes when acquired.

INVESTMENT IN UNCONSOLIDATED JO

INVESTMENT IN UNCONSOLIDATED JOINT VENTURES AND INVESTEES	9 Months Ended
	Sep. 30, 2016
Equity Method Investments and Joint Ventures [Abstract]
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 September 30, 2016 September 30, 2015 American Realty Investors, Inc. (1) 0.90 % 1.00 % (1) Unconsolidated investment in parent company owning 140,000 shares of ARL Common Stock Our 0.90% interest in the common stock of ARL 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 following is a summary of the financial position and results of operations from our unconsolidated parent (dollars in thousands): As of September 30, 2016 2015 Real estate, net of accumulated depreciation $ 14,550 $ 14,255 Notes receivable 46,371 49,614 Other assets 126,848 127,300 Notes payable (10,426 ) (27,315 ) Other liabilities (111,789 ) (94,479 ) Shareholders’ equity (65,554 ) (69,375 ) For the Nine Months Ended September 30, 2016 2015 Rents and interest and other income $ 5,586 $ 10,121 Depreciation (113 ) (159 ) Operating expenses (2,897 ) (3,727 ) Gain on land sales — 2,737 Interest expense (4,725 ) (4,502 ) Income (loss) from continuing operations (2,149 ) 4,470 Income (loss) from discontinued operations — 1 Net income (loss) $ (2,149 ) $ 4,471 Company’s proportionate share of income (loss) (1) $ (19 ) $ 40 (1) Income (loss) represents continued and discontinued operations

NOTES PAYABLE

NOTES PAYABLE	9 Months Ended
	Sep. 30, 2016
Debt Disclosure [Abstract]
NOTES PAYABLE	NOTE 5. NOTES PAYABLE Below is a summary of our notes and interest payable as of September 30, 2016 (dollars in thousands): Notes Payable Accrued Interest Total Debt Apartments $ 549,744 $ 1,530 $ 551,274 Commercial 109,139 499 109,638 Land 30,938 117 31,055 Real estate held for sale 376 — 376 Real estate subject to sales contract 5,345 470 5,815 Mezzanine financing 136,400 (66 ) 136,334 Other 8,477 — 8,477 Total $ 840,419 $ 2,550 $ 842,969 Unamortized deferred borrowing costs (19,510 ) — (19,510 ) Total $ 820,909 $ 2,550 $ 823,459 The segment labeled as “Other” consists of unsecured or stock-secured notes payable. There are various land mortgages, secured by the property, that are in the process of a modification or extension to the original note due to expiration of the loan. We are in constant contact with these lenders, working together in order to modify the terms of these loans and we anticipate a timely resolution that is similar to the existing agreement or subsequent modification. In conjunction with the development of various apartment projects and other developments, we drew down $16.5 million in construction loans during the nine months ended September 30, 2016. 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	9 Months Ended
	Sep. 30, 2016
Related Party Transactions [Abstract]
RELATED PARTY TRANSACTIONS	NOTE 6. RELATED PARTY TRANSACTIONS The following table reflects the activity in our net receivable from related party for the nine months ended September 30, 2016 (dollars in thousands): Pillar ARL Total Related party receivable, December 31, 2014 $ — $ 90,515 $ 90,515 Cash transfers 26,928 — 26,928 Advisory fees (7,095 ) — (7,095 ) Net income fee (127 ) — (127 ) Fees and commissions (1,729 ) — (1,729 ) Cost reimbursements (2,495 ) — (2,495 ) Interest income — 3,208 3,208 Notes receivable purchased (5,356 ) (5,356 ) Expenses paid by advisor (6,079 ) — (6,079 ) Financing (mortgage payments) 8,690 — 8,690 Sales/purchases transactions (15,093 ) — (15,093 ) Purchase of obligations 2,356 (2,356 ) — Related party receivable, September 30, 2015 $ — $ 91,367 $ 91,367 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	9 Months Ended
	Sep. 30, 2016
Segment Reporting [Abstract]
OPERATING SEGMENTS	NOTE 7. OPERATING SEGMENTS Our segments are based on our method of internal reporting, which classifies our operations by property type. Our property types are grouped into commercial, apartments, land and other operating segments. Significant differences among the accounting policies of the operating segments as compared to the Consolidated Financial Statements principally involve the calculation and allocation of administrative and other expenses. Management evaluates the performance of each of the operating segments and allocates resources to them based on their net operating income and cash flow. Items of income that are not reflected in the segments are interest, other income, gain on debt extinguishment, gain on condemnation award, equity in partnerships, and gains on sale of real estate. Expenses that are not reflected in the segments are provision for losses, advisory 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 September 30, 2016 and 2015, including capital expenditures and segment assets (dollars in thousands): Commercial For the Three Months Ended September 30, 2016 Properties Apartments Land Other Total Rental and other property revenues $ 7,368 $ 22,408 $ — $ — $ 29,776 Property operating expenses (4,500 ) (10,696 ) (209 ) (8 ) (15,413 ) Depreciation and amortization (2,207 ) (3,807 ) — — (6,014 ) Mortgage and loan interest (1,700 ) (6,424 ) (420 ) (5,024 ) (13,568 ) Interest income — — — 4,251 4,251 Gain on sale of income producing properties — — — — Gain on land sales — — 555 — 555 Segment operating income (loss) $ (1,039 ) $ 1,481 $ (74 ) $ (781 ) $ (413 ) Balance Sheet Data as of September 30, 2016 Capital expenditures $ 3,700 $ (146 ) $ 1,873 $ — $ 5,427 Real estate assets $ 149,705 $ 615,822 $ 134,321 $ — $ 899,848 Property Sales Sales price $ — $ — $ 805 $ — $ 805 Cost of sale — — (250 ) (250 ) Gain on sale $ — $ — $ 555 $ — $ 555 Commercial For the Three Months Ended September 30, 2015 Properties Apartments Land Other Total Rental and other property revenues $ 7,820 $ 19,672 $ — $ 47 $ 27,539 Property operating expenses (4,202 ) (9,374 ) (349 ) (270 ) (14,195 ) Depreciation and amortization (2,326 ) (4,229 ) — — (6,555 ) Mortgage and loan interest (1,865 ) (6,299 ) (1,242 ) (4,144 ) (13,550 ) Interest income — — — 2,505 2,505 Gain on sale of income producing properties — 735 — — 735 Gain on land sales — — 997 — 997 Segment operating income (loss) $ (573 ) $ 505 $ (594 ) $ (1,862 ) $ (2,524 ) Balance Sheet Data as of September 30, 2015 Capital expenditures $ 1,404 $ (43 ) $ 1,461 $ — $ 2,822 Real estate assets $ 159,976 $ 501,932 $ 153,811 $ — $ 815,719 Property Sales Sales price $ — $ 11,129 $ 2,851 $ — $ 13,980 Cost of sale — (10,394 ) (1,854 ) — (12,248 ) Gain on sale $ — $ 735 $ 997 $ — $ 1,732 The table below reflects the reconciliation of segment information to the corresponding amounts in the Consolidated Statements of Operations for the three months ended September 30, 2016 and 2015 (dollars in thousands): Three Months Ended September 30, 2016 2015 Segment operating income $ (413 ) $ (2,524 ) Other non-segment items of income (expense) General and administrative (1,541 ) (1,146 ) Net income fee to related party (67 ) (51 ) Advisory fee to related party (2,394 ) (2,666 ) Other income 8 (77 ) Earnings from unconsolidated joint ventures and investees — (4 ) Litigation settlement — (85 ) Income tax expense (25 ) 16 Net loss from continuing operations $ (4,432 ) $ (6,537 ) Presented below is our reportable segments’ operating income for the nine months ended September 30, 2016 and 2015, including capital expenditures and segment assets (dollars in thousands): Commercial For the Nine Months Ended September 30, 2016 Properties Apartments Land Other Total Rental and other property revenues $ 23,620 $ 65,578 $ — $ 2 $ 89,200 Property operating expenses (13,953 ) (30,258 ) (1,079 ) (5 ) (45,295 ) Depreciation and amortization (6,707 ) (10,958 ) — — (17,665 ) Mortgage and loan interest (5,347 ) (18,689 ) (1,335 ) (13,455 ) (38,826 ) Interest income — — — 11,386 11,386 Gain on sale of income-producing properties (243 ) 5,168 — 4,925 Gain on land sales — — 3,925 — 3,925 Segment operating income (loss) $ (2,630 ) $ 10,841 $ 1,511 $ (2,072 ) $ 7,650 Balance Sheet as of September 30, 2016 Capital expenditures $ 3,700 $ (146 ) $ 1,873 $ — $ 5,427 Real estate assets $ 149,705 $ 615,822 $ 134,321 $ — $ 899,848 Property Sales Sales price $ 1,500 $ 8,100 $ 8,139 $ — $ 17,739 Cost of sale (1,743 ) (2,932 ) (4,214 ) — (8,889 ) Gain (loss) on sale $ (243 ) $ 5,168 $ 3,925 $ — $ 8,850 Commercial For the Nine Months Ended September 30, 2015 Properties Apartments Land Other Tot Rental and other property revenues $ 21,284 $ 52,215 $ — $ 100 $ 73,599 Property operating expenses (11,350 ) (23,725 ) (659 ) (253 ) (35,987 ) Depreciation and amortization (6,417 ) (9,888 ) — — (16,305 ) Mortgage and loan interest (5,110 ) (15,664 ) (3,439 ) (7,740 ) (31,953 ) Interest income — — — 9,260 9,260 Gain on sale of income producing properties — 735 — — 735 Gain on land sales — — 5,124 — 5,124 Segment operating income (loss) $ (1,593 ) $ 3,673 $ 1,026 $ 1,367 $ 4,473 Balance Sheet as of September 30, 2015 Capital expenditures $ 7,536 $ 1,712 $ 2,772 $ — $ 12,020 Real estate assets $ 159,976 $ 501,932 $ 153,811 $ — $ 815,719 Property Sales Sales price $ — $ 11,129 $ 11,987 $ — $ 23,116 Cost of sale — (10,394 ) (6,863 ) — (17,257 ) Gain on sale $ — $ 735 $ 5,124 $ — $ 5,859 The table below reflects the reconciliation of segment information to the corresponding amounts in the Consolidated Statements of Operations for the nine months ended September 30, 2016 and 2015 (dollars in thousands): Nine Months Ended September 30, 2016 2015 Segment operating income $ 7,650 $ 4,473 Other non-segment items of income (expense) General and administrative (4,754 ) (4,191 ) Net income fee to related party (193 ) (142 ) Advisory fee to related party (7,096 ) (6,561 ) Other income 1,178 4 Earnings (loss) from unconsolidated joint ventures and investees (2 ) 39 Litigation settlement — (203 ) Income tax benefit (24 ) 107 Net loss from continuing operations $ (3,241 ) $ (6,474 ) The table below reflects the reconciliation of segment information to the corresponding amounts in the Consolidated Balance Sheets (dollars in thousands): As of September 30, 2016 2015 Segment assets $ 899,848 $ 815,719 Investments in real estate partnerships 2,469 2,178 Notes and interest receivable 72,704 65,801 Other assets 176,527 192,879 Total assets $ 1,151,548 $ 1,076,577

DISCONTINUED OPERATIONS

DISCONTINUED OPERATIONS	9 Months Ended
	Sep. 30, 2016
Discontinued Operations and Disposal Groups [Abstract]
DISCONTINUED OPERATIONS	NOTE 8. DISCONTINUED OPERATIONS Prior to January 1, 2015, we applied the provisions of ASC 360, “Property, Plant and Equipment”, which required that long-lived assets that are to be disposed of by sale be measured at the lesser of (1) book value or (2) fair value less cost to sell. In addition, it requires that one accounting model be used for long-lived assets to be disposed of by sale and broadens the presentation of discontinued operations to include more disposal transactions. Effective January 1, 2015, the Company adopted the provisions of ASU 2014-08, which changed the criteria of ASC 360 related to determining which disposals qualify to be accounted for as discontinued operations and modified related reporting and disclosure requirements. Disposals representing a strategic shift in operations that have a major effect on a company’s operations and financial results will be presented as discontinued operations. There were no sales of income-producing properties in the first nine months of 2016 that met the criteria for discontinued operations. Amounts included in discontinued operations represent the residual amounts from sales classified as discontinued operations prior to January 1, 2015. The following table summarizes revenue and expense information for the properties sold and held for sale (dollars in thousands): For the Three Months Ended For the Nine Months Ended 2016 2015 2016 2015 Revenues: Rental and other property revenues $ — $ — $ — $ 15 — — — 15 Expenses: Property operating expenses — 2 (3 ) (346 ) General and administrative — (4 ) — 99 Total operating expenses — (2 ) (3 ) (247 ) Other income (expense): Other income — 45 — 45 Mortgage and loan interest — — — (1 ) Total other expenses — 45 — 44 Gain from discontinued operations before tax — 47 3 306 Income tax benefit (expense) — (16 ) (1 ) (107 ) Income from discontinued operations $ — $ 31 $ 2 $ 199 Our application of ASC 360 results in the presentation of the net operating results of these qualifying properties sold or held for sale during 2015 as income from discontinued operations. This does not have an impact on net income available to common shareholders and only impacts the presentation of these properties within the Consolidated Statements of Operations.

COMMITMENTS AND CONTINGENCIES A

COMMITMENTS AND CONTINGENCIES AND LIQUIDITY	9 Months Ended
	Sep. 30, 2016
Commitments and Contingencies Disclosure [Abstract]
COMMITMENTS AND CONTINGENCIES AND LIQUIDITY	NOTE 9. COMMITMENTS AND CONTINGENCIES AND LIQUIDITY Dynex Capital, Inc. On July 20, 2015, the 68 th An original trial in 2004, which also included Dynex Capital, Inc. as a defendant, resulted in a jury awarding damages in favor of Basic for “lost opportunity,” as well as damages in favor of ART and in favor of TCI and its subsidiaries for “increased costs” and “lost opportunity.” The original Trial Court judge ignored the jury’s findings, however, and entered a “Judgment Notwithstanding the Verdict” (“JNOV”) in favor of the Dynex entities (the judge held the Plaintiffs were not entitled to any damages from the Dynex entities). After numerous appeals by all parties, Dynex Capital, Inc. was ultimately dismissed from the case and the remaining claims against Dynex Commercial were remanded to the Trial Court for a new judgment consistent with the jury’s findings. The Court entered the new Final Judgment against Dynex Commercial, Inc. on July 20, 2015. The Final Judgment entered against Dynex Commercial, Inc. on July 20, 2015 awarded Basic $0.256 million in damages, plus pre-judgment interest of $0.192 million for a total amount of $0.448 million. The Judgment awarded ART $14.2 million in damages, plus pre-judgment interest of $10.6 million for a total amount of $24.8 million. The Judgment awarded TCI $11.1 million, plus pre-judgment interest of $8.4 million for a total amount of $19.5 million. The Judgment also awarded Basic, ART, and TCI post-judgment interest at the rate of 5% per annum from April 25, 2014 until the date their respective damages are paid. Lastly, the Judgement awarded Basic, ART, and TCI $1.6 million collectively in attorneys’ fees from Dynex Commercial, Inc. The Company is working with counsel to identify assets and collect on the Final Judgment against Dynex Commercial, Inc., as well as explore possible additional claims, if any, against Dynex Capital, Inc. 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. Partnership Buyouts Litigation. 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. Guarantees.

EARNINGS PER SHARE

EARNINGS PER SHARE	9 Months Ended
	Sep. 30, 2016
Earnings Per Share [Abstract]
EARNINGS PER SHARE	NOTE 10. EARNINGS PER SHARE Earnings per Share (“EPS”) have been computed pursuant to the provisions of ASC Topic 260 “Earnings per Share”. The computation of basic EPS is calculated by dividing 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. In November 2006, TCI issued 100,000 shares of Series D Preferred Stock with a liquidation preference of $100 per share. The preferred stock is not convertible into any other security and requires dividends payable from the initial rate of 7% annually to the current rate of 9%. The shares can be redeemed at any point after September 30, 2011. Of the 100,000 shares, 89,500 shares are owned by RAI, a related party, and 10,500 shares are owned by Pillar, a related party. RAI’s 89,500 shares have accrued dividends unpaid of approximately $4.6 million. Pillar’s 10,500 shares have accrued dividends unpaid of approximately $0.5 million.

SUBSEQUENT EVENTS

SUBSEQUENT EVENTS	9 Months Ended
	Sep. 30, 2016
Subsequent Events [Abstract]
SUBSEQUENT EVENTS	NOTE 11. SUBSEQUENT EVENTS The date to which events occurring after September 30, 2016, the date of the most recent balance sheet, have been evaluated for possible adjustment to the Consolidated Financial Statements or disclosure is November 14, 2016, which is the date on which the Consolidated Financial Statements were available to be issued. The Company has determined that there are no subsequent events to be reported.

ORGANIZATION AND BASIS OF PRE21

ORGANIZATION AND BASIS OF PRESENTATION (Policies)	9 Months Ended
	Sep. 30, 2016
Organization, Consolidation and Presentation of Financial Statements [Abstract]
Properties	Properties We own or had interests in a total property portfolio of 56 income-producing properties as of September 30, 2016. The properties consisted of: ● Seven commercial properties consisting of five office buildings and two retail centers comprising in aggregate approximately 1.7 million rentable square feet; ● A golf course comprising approximately 96 acres ● 49 apartment communities totaling 8,128 units; excluding apartments being developed; and ● 3,608 acres of developed and undeveloped land. We join with various third-party development companies to construct residential apartment communities. We are in the predevelopment process on several residential apartment communities that have not yet begun construction. At September 30, 2016, we had eight apartment projects in development. The third-party developer typically holds a general partner, as well as a majority limited partner interest in a limited partnership formed for the purpose of building a single property, while we generally take a minority limited partner interest in the limited partnership. We may contribute land to the partnership as part of our equity contribution or we may contribute the necessary funds to the partnership to acquire the land. We are required to fund all necessary equity contributions while the third-party developer is responsible for obtaining construction financing, hiring a general contractor and for the overall management, successful completion and delivery of the project. We generally bear all the economic risks and rewards of ownership in these partnerships and therefore include these partnerships in our Consolidated Financial Statements. The third-party developer is paid a developer fee typically equal to a percentage of the construction costs. When the project reaches stabilized occupancy, we acquire the third-party developer’s partnership interests in exchange for any remaining unpaid developer fees.
Basis of Presentation	Basis of Presentation The accompanying unaudited Consolidated Financial Statements have been prepared in accordance with the instructions to Form 10-Q and Article 10 of Regulation S-X. Certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) have been condensed or omitted in accordance with such rules and regulations, although management believes the disclosures are adequate to prevent the information presented from being misleading. In the opinion of management, all adjustments (consisting of normal recurring matters) considered necessary for a fair presentation have been included. The results of operations for the nine months ended September 30, 2016, 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, 2015, was derived from the audited Consolidated Financial Statements at that date, but does not include all of the information and disclosures required by U.S. GAAP for complete financial statements. For further information, refer to the Consolidated Financial Statements and notes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2015. Certain 2015 Consolidated Financial Statement amounts have been reclassified to conform to the 2016 presentation.
Principles of Consolidation	Principles of Consolidation The accompanying Consolidated Financial Statements include the accounts of the Company, its subsidiaries, generally all of which are wholly-owned, and all entities in which we have a controlling interest. Arrangements that are not controlled through voting or similar rights are accounted for as a Variable Interest Entity (“VIE”), in accordance with the provisions and guidance of ASC Topic 810 “Consolidation”, whereby we have determined that we are a primary beneficiary of the VIE and meet certain criteria of a sole general partner or managing member as identified in accordance with Emerging Issues Task Force (“EITF”) Issue 04-5, Investor’s Accounting for an Investment in a Limited Partnership when the Investor is the Sole General Partner and the Limited Partners have Certain Rights (“EITF 04-5”). VIEs are generally entities that lack sufficient equity to finance their activities without additional financial support from other parties or whose equity holders as a group lack adequate decision making ability, the obligation to absorb expected losses or residual returns of the entity, or have voting rights that are not proportional to their economic interests. The primary beneficiary is generally the entity that provides financial support and bears a majority of the financial risks, authorizes certain capital transactions, or makes operating decisions that materially affect the entity’s financial results. All significant intercompany balances and transactions have been eliminated in consolidation. In determining whether we are the primary beneficiary of a VIE, we consider qualitative and quantitative factors, including, but not limited to: the amount and characteristics of our investment; the obligation or likelihood for us or other investors to provide financial support; our and the other investors’ ability to control or significantly influence key decisions for the VIE; and the similarity with and significance to the business activities of us and the other investors. Significant judgments related to these determinations include estimates about the current future fair values and performance of real estate held by these VIEs and general market conditions. For entities in which we have less than a controlling financial interest or entities where we are not deemed to be the primary beneficiary, the entities are accounted for using the equity method of accounting. Accordingly, our share of the net earnings or losses of these entities is included in consolidated net income. Our investment in 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 (“ASC 360”), “Property, Plant and Equipment”. Factors considered by management in evaluating impairment of its existing real estate assets held for investment include significant declines in property operating profits, annually recurring property operating losses and other significant adverse changes in general market conditions that are considered permanent in nature. Under ASC 360, a real estate asset held for investment is not considered impaired if the undiscounted, estimated future cash flows of an asset (both the annual estimated cash flow from future operations and the estimated cash flow from the theoretical sale of the asset) over its estimated holding period are in excess of the asset’s net book value at the balance sheet date. If any real estate asset held for investment is considered impaired, a loss is provided to reduce the carrying value of the asset to its estimated fair value.
Real estate held for sale	Real Estate Held for Sale We periodically classify real estate assets as “held for sale.” An asset is classified as held for sale after the approval of our Board of Directors, after an active program to sell the asset has commenced and if the sale is probable. One of the deciding factors in determining whether a sale is probable is whether the firm purchase commitment is obtained and whether the sale is probable within the year. Upon the classification of a real estate asset as held for sale, the carrying value of the asset is reduced to the lower of its net book value or its estimated fair value, less costs to sell the asset. Subsequent to the classification of assets as held for sale, no further depreciation expense is recorded. Real estate assets held for sale are stated separately on the accompanying Consolidated Balance Sheets. Upon a decision that the sale is no longer probable, the asset is classified as an operating asset and depreciation expense is reinstated. Prior to January 1, 2015, the operating results of real estate assets held for sale and sold are reported as discontinued operations in the accompanying Consolidated Statements of Operations. Income from discontinued operations includes the revenues and expenses, including depreciation and interest expense, associated with the assets. Effective January 1, 2015, Accounting Standards Update 2014-08, “Reporting Discontinued Operations and Disclosures of Disposals of Components of an Entity” (“ASU 2014-08”) substantially changed the criteria for determining whether a disposition qualifies for discontinued operations presentation. Since the Company adopted ASU 2014-08, effective January 1, 2015, we have had no dispositions that met the discontinued operations criteria.
Cost capitalization	Cost Capitalization Costs related to planning, developing, leasing and constructing a property are capitalized and classified as Real Estate in the Consolidated Balance Sheets. We capitalize interest to qualifying assets under development based on average accumulated expenditures outstanding during the period. In capitalizing interest to qualifying assets, we first use the interest incurred on specific project debt, if any, and next use the weighted average interest rate of non-project specific debt. We capitalize interest, real estate taxes and certain operating expenses until building construction is substantially complete and the building is ready for its intended use, but no later than one year from the cessation of major construction activity. We capitalize leasing costs, which include commissions paid to outside brokers, legal costs incurred to negotiate and document a lease agreement and any internal costs that may be applicable. We allocate these costs to individual tenant leases and amortize them over the related lease term.
Fair value measurement	Fair Value Measurement We apply the guidance in ASC Topic 820, “Fair Value Measurements and Disclosures”, to the valuation of real estate assets. These provisions define fair value as the price that would be received to sell an asset or paid to transfer a liability in a transaction between market participants at the measurement date, establish a hierarchy that prioritizes the information used in developing fair value estimates and require disclosure of fair value measurements by level within the fair value hierarchy. The hierarchy gives the highest priority to quoted prices in active markets (Level 1 measurements) and the lowest priority to unobservable data (Level 3 measurements), such as the reporting entity’s own data. The valuation hierarchy is based upon the transparency of inputs to the valuation of an asset or liability as of the measurement date and includes three levels defined as follows: Level 1 – Unadjusted quoted prices for identical and unrestricted assets or liabilities in active markets. Level 2 – Quoted prices for similar assets and liabilities in active markets, and inputs that are observable for the asset or liability, either directly or indirectly, for substantially the full term of the financial instrument. Level 3 – Unobservable inputs that are significant to the fair value measurement. A financial instrument’s categorization within the valuation hierarchy is based upon the lowest level of input that is significant to the fair value measurement.
Deferred Costs	Deferred Costs Costs relating to the financing of properties are deferred and amortized over the life of the related financing agreement. Amortization is reflected as interest expense in the Consolidated Statements of Operations, with remaining terms ranging from 6 months to 40 years. Unamortized financing costs are written off when the financing agreement is extinguished before the maturity date.
Related parties	Related Parties We apply ASC Topic 805, “Business Combinations”, to evaluate business relationships. Related parties are persons or entities who have one or more of the following characteristics, which include entities for which investments in their equity securities would be required, trust for the benefit of persons including principal owners of the entities and members of their immediate families, management personnel of the entity and members of their immediate families and other parties with which the entity may deal if one party controls or can significantly influence the decision making of the other to an extent that one of the transacting parties might be prevented from fully pursuing its own separate interests, or affiliates of the entity.
Newly Issued Accounting Pronouncements	Newly Issued Accounting Pronouncements In April 2014, the Financial Accounting Standards Board (“FASB”) issued ASU 2014-08, “Reporting Discontinued Operations and Disclosures of Disposals of Components of an Entity,” which changed the criteria for determining whether a disposal qualifies as discontinued operations. Under the new guidance, disposals representing a strategic shift, or change in the entity’s strategy, that has, or will have, a major effect on an entity’s operations and financial results will be presented as discontinued operations. This guidance applies to a component of an entity or a group of components of an entity classified as held for sale or disposed of by sale or by means other than a sale, such as abandonment. The Company adopted ASU 2014-08 effective January 1, 2015, and as a result, had no dispositions that met the criteria for discontinued operations during the nine months ending September 30, 2016. See Note 8 below. In May 2014, Accounting Standards Update (“ASU”) No. 2014-09 (“ASU 2014-09”), “Revenue from Contracts with Customers,” was issued. This new guidance established a new single comprehensive revenue recognition model and provides for enhanced disclosures. Under the new policy, the nature, timing and amount of revenue recognized for certain transactions could differ from those recognized under existing accounting guidance. This new standard does not affect revenue recognized under lease contracts. ASU 2014-09 is effective for reporting periods beginning after December 15, 2017. The Company is currently evaluating the impact of the adoption of ASU 2014-09 on its financial position and results of operations, if any. In April 2015, the FASB issued ASU 2015-03, “Simplifying the Presentation of Debt Issuance Costs” (“ASU 2015-03”). ASU 2015-03 requires debt issuance costs to be presented in the balance sheet as a direct deduction from the carrying value of the associated debt liability, consistent with the presentation of a debt discount. Prior to the issuance of the standard, debt issuance costs were required to be presented in the balance sheet as an asset. The Company adopted ASU 2015-03 effective June 30, 2015. In February 2016, Accounting Standards Update No. 2016-02 (“ASU 2016-02”), Leases was issued. This guidance establishes a new model for accounting for leases and provides for enhanced disclosures. ASU 2016-02 is effective for reporting periods beginning after December 15, 2018. The Company is currently evaluating the impact of the adoption of ASU 2016-02 on its financial position and results of operations, if any.

REAL ESTATE ACTIVITY (Tables)

REAL ESTATE ACTIVITY (Tables)	9 Months Ended
	Sep. 30, 2016
Real Estate [Abstract]
Schedule of the real estate owned	Below is a summary of the real estate we owned as of September 30, 2016 (dollars in thousands): Apartments $ 664,383 Apartments under construction 52,034 Commercial properties 203,507 Land held for development 87,131 Real estate subject to sales contract 47,192 Total real estate $ 1,054,247 Less accumulated depreciation (154,399 ) Total real estate, net of depreciation $ 899,848

NOTES AND INTEREST RECEIVABLE (

NOTES AND INTEREST RECEIVABLE (Tables)	9 Months Ended
	Sep. 30, 2016
Receivables [Abstract]
Schedule of notes receivable	A majority of the notes receivable provide for principal to be paid at maturity. Below is a summary of our notes receivable as of September 30, 2016 (dollars in thousands): Maturity Interest Borrower Date Rate Amount Security Performing loans: H198, LLC (Las Vegas Land) 01/20 12.00% 5,907 Unsecured Oulan-Chikh Family Trust 03/21 8.00% 174 Secured Unified Housing Foundation, Inc. (Echo Station) (1) 12/32 12.00% 1,481 Secured Unified Housing Foundation, Inc. (Lakeshore Villas) (1) 12/32 12.00% 2,000 Secured Unified Housing Foundation, Inc. (Lakeshore Villas) (1) 12/32 12.00% 6,368 Secured Unified Housing Foundation, Inc. (Limestone Canyon) (1) 12/32 12.00% 4,640 Secured Unified Housing Foundation, Inc. (Limestone Canyon) (1) 12/32 12.00% 2,653 Secured Unified Housing Foundation, Inc. (Limestone Ranch) (1) 12/32 12.00% 6,000 Secured Unified Housing Foundation, Inc. (Limestone Ranch) (1) 12/32 12.00% 1,953 Secured Unified Housing Foundation, Inc. (Parkside Crossing) (1) 12/32 12.00% 1,936 Secured Unified Housing Foundation, Inc. (Sendero Ridge) (1) 12/32 12.00% 4,812 Secured Unified Housing Foundation, Inc. (Sendero Ridge) (1) 12/32 12.00% 4,491 Secured Unified Housing Foundation, Inc. (Timbers of Terrell) (1) 12/32 12.00% 1,323 Secured Unified Housing Foundation, Inc. (Tivoli) (1) 12/32 12.00% 7,965 Secured Unified Housing Foundation, Inc. (1) 12/17 12.00% 1,207 Unsecured Unified Housing Foundation, Inc. (1) 12/18 12.00% 3,994 Unsecured Unified Housing Foundation, Inc. (1) 12/18 12.00% 6,407 Unsecured Unified Housing Foundation, Inc. (1) 06/19 12.00% 5,400 Unsecured Other related party notes (1) Various Various 1,404 Various unsecured interests Other non-related party notes Various Various 796 Various secured interests Other non-related party notes Various Various 283 Various unsecured interests Accrued interest 3,335 Total Performing $ 74,529 Allowance for estimated losses (1,825) Total $ 72,704 (1) Related Party notes

INVESTMENT IN UNCONSOLIDATED 24

INVESTMENT IN UNCONSOLIDATED JOINT VENTURES AND INVESTEES (Tables)	9 Months Ended
	Sep. 30, 2016
Equity Method Investments and Joint Ventures [Abstract]
Schedule of investments in unconsolidated joint ventures	Investments in unconsolidated joint ventures and investees consist of the following: Percentage ownership as of September 30, 2016 September 30, 2015 American Realty Investors, Inc. (1) 0.90 % 1.00 % (1) Unconsolidated investment in parent company owning 140,000 shares of ARL Common Stock
Schedule of the financial position and results of operations - unconsolidated parent	The following is a summary of the financial position and results of operations from our unconsolidated parent (dollars in thousands): As of September 30, 2016 2015 Real estate, net of accumulated depreciation $ 14,550 $ 14,255 Notes receivable 46,371 49,614 Other assets 126,848 127,300 Notes payable (10,426 ) (27,315 ) Other liabilities (111,789 ) (94,479 ) Shareholders’ equity (65,554 ) (69,375 ) For the Nine Months Ended September 30, 2016 2015 Rents and interest and other income $ 5,586 $ 10,121 Depreciation (113 ) (159 ) Operating expenses (2,897 ) (3,727 ) Gain on land sales — 2,737 Interest expense (4,725 ) (4,502 ) Income (loss) from continuing operations (2,149 ) 4,470 Income (loss) from discontinued operations — 1 Net income (loss) $ (2,149 ) $ 4,471 Company’s proportionate share of income (loss) (1) $ (19 ) $ 40 (1) Income (loss) represents continued and discontinued operations

NOTES PAYABLE (Tables)

NOTES PAYABLE (Tables)	9 Months Ended
	Sep. 30, 2016
Debt Disclosure [Abstract]
Schedule of notes and interest payable	Below is a summary of our notes and interest payable as of September 30, 2016 (dollars in thousands): Notes Payable Accrued Interest Total Debt Apartments $ 549,744 $ 1,530 $ 551,274 Commercial 109,139 499 109,638 Land 30,938 117 31,055 Real estate held for sale 376 — 376 Real estate subject to sales contract 5,345 470 5,815 Mezzanine financing 136,400 (66 ) 136,334 Other 8,477 — 8,477 Total $ 840,419 $ 2,550 $ 842,969 Unamortized deferred borrowing costs (19,510 ) — (19,510 ) Total $ 820,909 $ 2,550 $ 823,459

RELATED PARTY TRANSACTIONS (Tab

RELATED PARTY TRANSACTIONS (Tables)	9 Months Ended
	Sep. 30, 2016
Related Party Transactions [Abstract]
Schedule of accounts receivable from and (accounts payable) to related parties	The following table reflects the activity in our net receivable from related party for the nine months ended September 30, 2016 (dollars in thousands): Pillar ARL Total Related party receivable, December 31, 2014 $ — $ 90,515 $ 90,515 Cash transfers 26,928 — 26,928 Advisory fees (7,095 ) — (7,095 ) Net income fee (127 ) — (127 ) Fees and commissions (1,729 ) — (1,729 ) Cost reimbursements (2,495 ) — (2,495 ) Interest income — 3,208 3,208 Notes receivable purchased (5,356 ) (5,356 ) Expenses paid by advisor (6,079 ) — (6,079 ) Financing (mortgage payments) 8,690 — 8,690 Sales/purchases transactions (15,093 ) — (15,093 ) Purchase of obligations 2,356 (2,356 ) — Related party receivable, September 30, 2015 $ — $ 91,367 $ 91,367

OPERATING SEGMENTS (Tables)

OPERATING SEGMENTS (Tables)	9 Months Ended
	Sep. 30, 2016
Segment Reporting [Abstract]
Schedule of operating segment, including segment assets and expenditures	Presented below is our reportable segments’ operating income for the three months ended September 30, 2016 and 2015, including capital expenditures and segment assets (dollars in thousands): Commercial For the Three Months Ended September 30, 2016 Properties Apartments Land Other Total Rental and other property revenues $ 7,368 $ 22,408 $ — $ — $ 29,776 Property operating expenses (4,500 ) (10,696 ) (209 ) (8 ) (15,413 ) Depreciation and amortization (2,207 ) (3,807 ) — — (6,014 ) Mortgage and loan interest (1,700 ) (6,424 ) (420 ) (5,024 ) (13,568 ) Interest income — — — 4,251 4,251 Gain on sale of income producing properties — — — — Gain on land sales — — 555 — 555 Segment operating income (loss) $ (1,039 ) $ 1,481 $ (74 ) $ (781 ) $ (413 ) Balance Sheet Data as of September 30, 2016 Capital expenditures $ 3,700 $ (146 ) $ 1,873 $ — $ 5,427 Real estate assets $ 149,705 $ 615,822 $ 134,321 $ — $ 899,848 Property Sales Sales price $ — $ — $ 805 $ — $ 805 Cost of sale — — (250 ) (250 ) Gain on sale $ — $ — $ 555 $ — $ 555 Commercial For the Three Months Ended September 30, 2015 Properties Apartments Land Other Total Rental and other property revenues $ 7,820 $ 19,672 $ — $ 47 $ 27,539 Property operating expenses (4,202 ) (9,374 ) (349 ) (270 ) (14,195 ) Depreciation and amortization (2,326 ) (4,229 ) — — (6,555 ) Mortgage and loan interest (1,865 ) (6,299 ) (1,242 ) (4,144 ) (13,550 ) Interest income — — — 2,505 2,505 Gain on sale of income producing properties — 735 — — 735 Gain on land sales — — 997 — 997 Segment operating income (loss) $ (573 ) $ 505 $ (594 ) $ (1,862 ) $ (2,524 ) Balance Sheet Data as of September 30, 2015 Capital expenditures $ 1,404 $ (43 ) $ 1,461 $ — $ 2,822 Real estate assets $ 159,976 $ 501,932 $ 153,811 $ — $ 815,719 Property Sales Sales price $ — $ 11,129 $ 2,851 $ — $ 13,980 Cost of sale — (10,394 ) (1,854 ) — (12,248 ) Gain on sale $ — $ 735 $ 997 $ — $ 1,732 Presented below is our reportable segments’ operating income for the nine months ended September 30, 2016 and 2015, including capital expenditures and segment assets (dollars in thousands): Commercial For the Nine Months Ended September 30, 2016 Properties Apartments Land Other Total Rental and other property revenues $ 23,620 $ 65,578 $ — $ 2 $ 89,200 Property operating expenses (13,953 ) (30,258 ) (1,079 ) (5 ) (45,295 ) Depreciation and amortization (6,707 ) (10,958 ) — — (17,665 ) Mortgage and loan interest (5,347 ) (18,689 ) (1,335 ) (13,455 ) (38,826 ) Interest income — — — 11,386 11,386 Gain on sale of income-producing properties (243 ) 5,168 — 4,925 Gain on land sales — — 3,925 — 3,925 Segment operating income (loss) $ (2,630 ) $ 10,841 $ 1,511 $ (2,072 ) $ 7,650 Balance Sheet as of September 30, 2016 Capital expenditures $ 3,700 $ (146 ) $ 1,873 $ — $ 5,427 Real estate assets $ 149,705 $ 615,822 $ 134,321 $ — $ 899,848 Property Sales Sales price $ 1,500 $ 8,100 $ 8,139 $ — $ 17,739 Cost of sale (1,743 ) (2,932 ) (4,214 ) — (8,889 ) Gain (loss) on sale $ (243 ) $ 5,168 $ 3,925 $ — $ 8,850 Commercial For the Nine Months Ended September 30, 2015 Properties Apartments Land Other Tot Rental and other property revenues $ 21,284 $ 52,215 $ — $ 100 $ 73,599 Property operating expenses (11,350 ) (23,725 ) (659 ) (253 ) (35,987 ) Depreciation and amortization (6,417 ) (9,888 ) — — (16,305 ) Mortgage and loan interest (5,110 ) (15,664 ) (3,439 ) (7,740 ) (31,953 ) Interest income — — — 9,260 9,260 Gain on sale of income producing properties — 735 — — 735 Gain on land sales — — 5,124 — 5,124 Segment operating income (loss) $ (1,593 ) $ 3,673 $ 1,026 $ 1,367 $ 4,473 Balance Sheet as of September 30, 2015 Capital expenditures $ 7,536 $ 1,712 $ 2,772 $ — $ 12,020 Real estate assets $ 159,976 $ 501,932 $ 153,811 $ — $ 815,719 Property Sales Sales price $ — $ 11,129 $ 11,987 $ — $ 23,116 Cost of sale — (10,394 ) (6,863 ) — (17,257 ) Gain on sale $ — $ 735 $ 5,124 $ — $ 5,859
Schedule of reconciliaton of segment information to consolidated statements of operations	The table below reflects the reconciliation of segment information to the corresponding amounts in the Consolidated Statements of Operations for the three months ended September 30, 2016 and 2015 (dollars in thousands): Three Months Ended September 30, 2016 2015 Segment operating income $ (413 ) $ (2,524 ) Other non-segment items of income (expense) General and administrative (1,541 ) (1,146 ) Net income fee to related party (67 ) (51 ) Advisory fee to related party (2,394 ) (2,666 ) Other income 8 (77 ) Earnings from unconsolidated joint ventures and investees — (4 ) Litigation settlement — (85 ) Income tax expense (25 ) 16 Net loss from continuing operations $ (4,432 ) $ (6,537 ) The table below reflects the reconciliation of segment information to the corresponding amounts in the Consolidated Statements of Operations for the nine months ended September 30, 2016 and 2015 (dollars in thousands): Nine Months Ended September 30, 2016 2015 Segment operating income $ 7,650 $ 4,473 Other non-segment items of income (expense) General and administrative (4,754 ) (4,191 ) Net income fee to related party (193 ) (142 ) Advisory fee to related party (7,096 ) (6,561 ) Other income 1,178 4 Earnings (loss) from unconsolidated joint ventures and investees (2 ) 39 Litigation settlement — (203 ) Income tax benefit (24 ) 107 Net loss from continuing operations $ (3,241 ) $ (6,474 )
Schedule of reconciliaton segment information to consolidated balance sheets	The table below reflects the reconciliation of segment information to the corresponding amounts in the Consolidated Balance Sheets (dollars in thousands): As of September 30, 2016 2015 Segment assets $ 899,848 $ 815,719 Investments in real estate partnerships 2,469 2,178 Notes and interest receivable 72,704 65,801 Other assets 176,527 192,879 Total assets $ 1,151,548 $ 1,076,577

DISCONTINUED OPERATIONS (Tables

DISCONTINUED OPERATIONS (Tables)	9 Months Ended
	Sep. 30, 2016
Discontinued Operations and Disposal Groups [Abstract]
Schedule of summarizes revenue and expense information for the properties sold and held for sale	The following table summarizes revenue and expense information for the properties sold and held for sale (dollars in thousands): For the Three Months Ended For the Nine Months Ended 2016 2015 2016 2015 Revenues: Rental and other property revenues $ — $ — $ — $ 15 — — — 15 Expenses: Property operating expenses — 2 (3 ) (346 ) General and administrative — (4 ) — 99 Total operating expenses — (2 ) (3 ) (247 ) Other income (expense): Other income — 45 — 45 Mortgage and loan interest — — — (1 ) Total other expenses — 45 — 44 Gain from discontinued operations before tax — 47 3 306 Income tax benefit (expense) — (16 ) (1 ) (107 ) Income from discontinued operations $ — $ 31 $ 2 $ 199

ORGANIZATION AND BASIS OF PRE29

ORGANIZATION AND BASIS OF PRESENTATION (Details Narrative)	9 Months Ended
	Sep. 30, 2016ft²aNumber	Dec. 31, 2015
Number of apartment units	8,128
Number of apartment communities	49
Number of properties	56
Rentable square feet | ft²	1,700,000
Acres of land | a	3,608
Area of land comprising golf course | a	96
Minimum [Member]
Percentage of ownership		20.00%
Period of amortization financing costs	6 months
Maximum [Member]
Percentage of ownership		50.00%
Period of amortization financing costs	40 years
Commercial Properties [Member]
Number of properties	7
Office Buildings [Member]
Number of properties	5
Retail Centers [Member]
Number of properties	2
Apartment Projects in Development [Member]
Number of properties	8
Buildings and Improvements [Member] | Minimum [Member]
Useful life of property, plant and equipment	10 years
Buildings and Improvements [Member] | Maximum [Member]
Useful life of property, plant and equipment	40 years
Fixtures and Equipment [Member] | Minimum [Member]
Useful life of property, plant and equipment	5 years
Fixtures and Equipment [Member] | Maximum [Member]
Useful life of property, plant and equipment	10 years
ARI Subsidiaries [Member]
Percentage of ownership	80.90%
Income Opportunities Realty Investors, Inc. [Member]
Percentage of ownership	81.10%

REAL ESTATE ACTIVITY (Details)

REAL ESTATE ACTIVITY (Details) - USD ($) $ in Thousands	Sep. 30, 2016	Dec. 31, 2015
Real Estate [Abstract]
Apartments	$ 664,383
Apartments under construction	52,034
Commercial properties	203,507
Land held for development	87,131
Real estate subject to sales contract	47,192
Total real estate	1,054,247
Less accumulated depreciation	(154,399)
Total real estate	$ 899,848	$ 844,019

REAL ESTATE ACTIVITY (Details N

REAL ESTATE ACTIVITY (Details Narrative) $ in Thousands	1 Months Ended	3 Months Ended		9 Months Ended
	Nov. 30, 2015USD ($)	Sep. 30, 2016USD ($)ft²aNumber	Sep. 30, 2015USD ($)	Sep. 30, 2016USD ($)ft²aNumber	Sep. 30, 2015USD ($)
Number of properties | Number		56		56
Acquisition of income-producing properties				$ 41,750	$ 131,220
Acres of land | a		3,608		3,608
Gain on land sales		$ 555	$ 997	$ 3,925	$ 5,124
Proceeds from sales of income-producing properties				9,377
Payment for construction or predevelopment of various apartment complexes				18,700
Capitalized interest costs		$ 700		$ 700
Related Parties [Member]
Area of land sold | a		91		91
Apartment Community Acquired [Member]
Number of properties | Number		2		2
Acquisition of income-producing properties				$ 40,000
Land Parcel Acquired [Member]
Number of properties | Number		3		3
Acquisition of income-producing properties				$ 8,900
Acres of land | a		31.04		31.04
Land [Member] | TEXAS
Area of land sold | a		57.9		57.9
Land sales - total consideration	$ 75,000			$ 8,100
Gain on land sales				$ 3,900
Notes receivable - land sales	50,000
Payment for note payable related party	$ 16,100
Apartment Community Sold [Member]
Number of properties | Number		1		1
Gain (loss) on sale of real estate				$ 5,200
Proceeds from sales of income-producing properties				$ 8,100
Industrial Warehouse [Member]
Area of real estate property sold | ft²		177,805		177,805
Gain (loss) on sale of real estate				$ (200)

NOTES AND INTEREST RECEIVABLE32

NOTES AND INTEREST RECEIVABLE (Details) $ in Thousands	9 Months Ended
	Sep. 30, 2016USD ($)
Allowance for estimated losses	$ (1,825)
Performing Loans [Member]
Performing loans, total	74,529
Accrued interest	3,335
Total notes and interest receivable	$ 72,704
Performing Loans [Member] | H198, LLC (Las Vegas Land) [Member]
Maturity Date	Jan. 31, 2020
Description of property	Las Vegas Land
Interest Rate	12.00%
Performing loans, total	$ 5,907
Description of Security	Unsecured
Performing Loans [Member] | Oulan-Chikh Family Trust [Member]
Maturity Date	Mar. 31, 2021
Interest Rate	8.00%
Performing loans, total	$ 174
Description of Security	Secured
Performing Loans [Member] | Unified Housing Foundation, Inc. (Echo Station) [Member]
Maturity Date	Dec. 31, 2032	[1]
Description of property	Echo Station	[1]
Interest Rate	12.00%	[1]
Performing loans, total	$ 1,481	[1]
Description of Security	Secured	[1]
Performing Loans [Member] | Unified Housing Foundation, Inc. (Lakeshore Villas) [Member]
Maturity Date	Dec. 31, 2032	[1]
Description of property	Lakeshore Villas	[1]
Interest Rate	12.00%	[1]
Performing loans, total	$ 2,000	[1]
Description of Security	Secured	[1]
Performing Loans [Member] | Unified Housing Foundation, Inc. (Lakeshore Villas) [Member]
Maturity Date	Dec. 31, 2032	[1]
Description of property	Lakeshore Villas	[1]
Interest Rate	12.00%	[1]
Performing loans, total	$ 6,368	[1]
Description of Security	Secured	[1]
Performing Loans [Member] | Unified Housing Foundation, Inc. (Limestone Canyon) [Member]
Maturity Date	Dec. 31, 2032	[1]
Description of property	Limestone Canyon	[1]
Interest Rate	12.00%	[1]
Performing loans, total	$ 4,640	[1]
Description of Security	Secured	[1]
Performing Loans [Member] | Unified Housing Foundation, Inc. (Limestone Canyon) [Member]
Maturity Date	Dec. 31, 2032	[1]
Description of property	Limestone Canyon	[1]
Interest Rate	12.00%	[1]
Performing loans, total	$ 2,653	[1]
Description of Security	Secured	[1]
Performing Loans [Member] | Unified Housing Foundation, Inc. (Limestone Ranch) [Member]
Maturity Date	Dec. 31, 2032	[1]
Description of property	Limestone Ranch	[1]
Interest Rate	12.00%	[1]
Performing loans, total	$ 6,000	[1]
Description of Security	Secured	[1]
Performing Loans [Member] | Unified Housing Foundation, Inc. (Limestone Ranch) [Member]
Maturity Date	Dec. 31, 2032	[1]
Description of property	Limestone Ranch	[1]
Interest Rate	12.00%	[1]
Performing loans, total	$ 1,953	[1]
Description of Security	Secured	[1]
Performing Loans [Member] | Unified Housing Foundation, Inc. (Parkside Crossing) [Member]
Maturity Date	Dec. 31, 2032	[1]
Description of property	Parkside Crossing	[1]
Interest Rate	12.00%	[1]
Performing loans, total	$ 1,936	[1]
Description of Security	Secured	[1]
Performing Loans [Member] | Unified Housing Foundation, Inc. (Sendero Ridge) [Member]
Maturity Date	Dec. 31, 2032	[1]
Description of property	Sendero Ridge	[1]
Interest Rate	12.00%	[1]
Performing loans, total	$ 4,812	[1]
Description of Security	Secured	[1]
Performing Loans [Member] | Unified Housing Foundation, Inc. (Sendero Ridge) [Member]
Maturity Date	Dec. 31, 2032	[1]
Description of property	Sendero Ridge	[1]
Interest Rate	12.00%	[1]
Performing loans, total	$ 4,491	[1]
Description of Security	Secured	[1]
Performing Loans [Member] | Unified Housing Foundation, Inc. (Timbers of Terrell) [Member]
Maturity Date	Dec. 31, 2032	[1]
Description of property	Timbers of Terrell	[1]
Interest Rate	12.00%	[1]
Performing loans, total	$ 1,323	[1]
Description of Security	Secured	[1]
Performing Loans [Member] | Unified Housing Foundation, Inc. (Tivoli) [Member]
Maturity Date	Dec. 31, 2032	[1]
Description of property	Tivoli	[1]
Interest Rate	12.00%	[1]
Performing loans, total	$ 7,965	[1]
Description of Security	Secured	[1]
Performing Loans [Member] | Unified Housing Foundation, Inc. [Member]
Maturity Date	Dec. 31, 2017	[1]
Interest Rate	12.00%	[1]
Performing loans, total	$ 1,207	[1]
Description of Security	Unsecured	[1]
Performing Loans [Member] | Unified Housing Foundation, Inc. #2 [Member]
Maturity Date	Dec. 31, 2018	[1]
Interest Rate	12.00%	[1]
Performing loans, total	$ 3,994	[1]
Description of Security	Unsecured	[1]
Performing Loans [Member] | Unified Housing Foundation, Inc. #3 [Member]
Maturity Date	Dec. 31, 2018	[1]
Interest Rate	12.00%	[1]
Performing loans, total	$ 6,407	[1]
Description of Security	Unsecured	[1]
Performing Loans [Member] | Unified Housing Foundation, Inc. #4 [Member]
Maturity Date	Jun. 30, 2019	[1]
Interest Rate	12.00%	[1]
Performing loans, total	$ 5,400	[1]
Description of Security	Unsecured	[1]
Performing Loans [Member] | Other Related Party Notes [Member]
Description of Interest Rate	Various	[1]
Performing loans, total	$ 1,404	[1]
Description of Security	Various unsecured interests	[1]
Performing Loans [Member] | Other Non-Related Party Notes [Member]
Description of Interest Rate	Various
Performing loans, total	$ 796
Description of Security	Various secured interests
Performing Loans [Member] | Other Non-Related Party Notes [Member]
Description of Interest Rate	Various
Performing loans, total	$ 283
Description of Security	Various unsecured interests
[1]	Related Party notes

NOTES AND INTEREST RECEIVABLE33

NOTES AND INTEREST RECEIVABLE (Details Narrative) $ in Thousands	9 Months Ended
	Sep. 30, 2016USD ($)
Interest income	$ 3,208
Mortgage Loans [Member] | Related Parties [Member]
Total notes and interest receivable	68,700
Interest income	$ 6,600

INVESTMENT IN UNCONSOLIDATED 34

INVESTMENT IN UNCONSOLIDATED JOINT VENTURES AND INVESTEES (Details)		Sep. 30, 2016	Sep. 30, 2015
American Realty Investors, Inc. [Member]
Percentage of ownership	[1]	0.90%	1.00%
[1]	Unconsolidated investment in parent company owning 140,000 shares of ARL Common Stock

INVESTMENT IN UNCONSOLIDATED 35

INVESTMENT IN UNCONSOLIDATED JOINT VENTURES AND INVESTEES (Details 1) - USD ($) $ in Thousands		3 Months Ended		9 Months Ended
		Sep. 30, 2016	Sep. 30, 2015	Sep. 30, 2016	Sep. 30, 2015	Dec. 31, 2015
Financial Position
Real estate, net of accumulated depreciation		$ 899,848		$ 899,848		$ 844,019
Other assets		44,333		44,333		41,645
Notes payable		(817,268)		(817,268)		(772,636)
Shareholders' equity		(202,647)		(202,647)		$ (206,748)
Results of Operations
Rents and interest and other income		29,776	$ 27,539	89,200	$ 73,599
Depreciation		(6,014)	(6,555)	(17,665)	(16,305)
Operating expenses		25,429	24,613	75,003	63,186
Income (loss) from discontinued operations			31	2	199
Net income (loss)		(4,432)	(6,506)	(3,239)	(6,275)
Company's proportionate share of income (loss)			(4)	(2)	39
American Realty Investors, Inc. [Member]
Financial Position
Real estate, net of accumulated depreciation		14,550	14,255	14,550	14,255
Notes receivable		46,371	49,614	46,371	49,614
Other assets		126,848	127,300	126,848	127,300
Notes payable		(10,426)	(27,315)	(10,426)	(27,315)
Other liabilities		(111,789)	(94,479)	(111,789)	(94,479)
Shareholders' equity		$ (65,554)	$ (69,375)	(65,554)	(69,375)
Results of Operations
Rents and interest and other income				5,586	10,121
Depreciation				(113)	(159)
Operating expenses				(2,897)	(3,727)
Gain on land sales					2,737
Interest expense				(4,725)	(4,502)
Income (loss) from continuing operations				(2,149)	4,470
Income (loss) from discontinued operations					1
Net income (loss)				(2,149)	4,471
Company's proportionate share of income (loss)	[1]			$ (19)	$ 40
[1]	Income (loss) represents continued and discontinued operations

INVESTMENT IN UNCONSOLIDATED 36

INVESTMENT IN UNCONSOLIDATED JOINT VENTURES AND INVESTEES (Details Narrative) - shares	Sep. 30, 2016	Dec. 31, 2015
American Realty Investors, Inc [Member]
Ownership of parent company shares	140,000
Minimum [Member]
Percentage of ownership		20.00%
Maximum [Member]
Percentage of ownership		50.00%

NOTES PAYABLE (Details)

NOTES PAYABLE (Details) $ in Thousands	Sep. 30, 2016USD ($)
Notes Payable	$ 820,909
Accrued Interest	2,550
Total Debt	823,459
Unamortized deferred borrowing costs	(19,510)
Apartments [Member]
Notes Payable	549,744
Accrued Interest	1,530
Total Debt	551,274
Commercial [Member]
Notes Payable	109,139
Accrued Interest	499
Total Debt	109,638
Land [Member]
Notes Payable	30,938
Accrued Interest	117
Total Debt	31,055
Real Estate Held for Sale [Member]
Notes Payable	376
Total Debt	376
Real Estate Subject To Sales Contract [Member]
Notes Payable	5,345
Accrued Interest	470
Total Debt	5,815
Mezzanine Financing [Member]
Notes Payable	136,400
Accrued Interest	(66)
Total Debt	136,334
Other [Member]
Notes Payable	8,477
Total Debt	8,477
Total Notes Payable [Member]
Notes Payable	840,419
Accrued Interest	2,550
Total Debt	842,969
Unamortized deferred borrowing costs	$ (19,510)

NOTES PAYABLE (Details Narrativ

NOTES PAYABLE (Details Narrative) $ in Thousands	9 Months Ended
	Sep. 30, 2016USD ($)
Construction Loans [Member]
Proceeds from draw on loan facility	$ 16,500

RELATED PARTY TRANSACTIONS (Det

RELATED PARTY TRANSACTIONS (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2016	Sep. 30, 2015	Sep. 30, 2016	Sep. 30, 2015
Related party receivable			$ 90,515
Cash transfers			26,928
Advisory fees	$ (2,394)	$ (2,666)	(7,096)	$ (6,561)
Net income fee	(67)	$ (51)	(193)	$ (142)
Fees and commissions			(1,729)
Cost reimbursements			(2,495)
Interest income			3,208
Notes receivable purchased			(5,356)
Expenses paid by Advisor			(6,079)
Financing (mortgage payments)			8,690
Sales/purchases transactions			(15,093)
Related party receivable	91,367		91,367
Pillar Income Asset Management, Inc [Member]
Cash transfers			26,928
Advisory fees			(7,095)
Net income fee			(127)
Fees and commissions			(1,729)
Cost reimbursements			(2,495)
Notes receivable purchased			(5,356)
Expenses paid by Advisor			(6,079)
Financing (mortgage payments)			8,690
Sales/purchases transactions			(15,093)
Purchase of obligations			2,356
American Realty Investors, Inc [Member]
Related party receivable			90,515
Interest income			3,208
Purchase of obligations			(2,356)
Related party receivable	$ 91,367		$ 91,367

OPERATING SEGMENTS (Details)

OPERATING SEGMENTS (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2016	Sep. 30, 2015	Sep. 30, 2016	Sep. 30, 2015
Segment Reporting Information [Line Items]
Rental and other property revenues	$ 29,776	$ 27,539	$ 89,200	$ 73,599
Property operating expenses	(15,413)	(14,195)	(45,295)	(35,987)
Depreciation and amortization	(6,014)	(6,555)	(17,665)	(16,305)
Gain on the sale of income producing properties		735	4,925	735
Gain on land sales	555	997	3,925	5,124
Segment operating income (loss)	4,347	2,926	14,197	10,413
Real estate assets	899,848		899,848
Commercial Properties [Member]
Segment Reporting Information [Line Items]
Rental and other property revenues	7,368	7,820	23,620	21,284
Property operating expenses	(4,500)	(4,202)	(13,953)	(11,350)
Depreciation and amortization	(2,207)	(2,326)	(6,707)	(6,417)
Mortgage and loan interest	(1,700)	(1,865)	(5,347)	(5,110)
Gain on the sale of income producing properties			(243)
Segment operating income (loss)	(1,039)	(573)	(2,630)	(1,593)
Capital expenditures	3,700	1,404	3,700	7,536
Real estate assets	149,705	159,976	149,705	159,976
Property Sales
Sales price			1,500
Cost of sale			(1,743)
Gain (loss) on sale			(243)
Apartments [Member]
Segment Reporting Information [Line Items]
Rental and other property revenues	22,408	19,672	65,578	52,215
Property operating expenses	(10,696)	(9,374)	(30,258)	(23,725)
Depreciation and amortization	(3,807)	(4,229)	(10,958)	(9,888)
Mortgage and loan interest	(6,424)	(6,299)	(18,689)	(15,664)
Gain on the sale of income producing properties		735	5,168	735
Segment operating income (loss)	1,481	505	10,841	3,673
Capital expenditures	(146)	(43)	(146)	1,712
Real estate assets	615,822	501,932	615,822	501,932
Property Sales
Sales price		11,129	8,100	11,129
Cost of sale		(10,394)	(2,932)	(10,394)
Gain (loss) on sale		735	5,168	735
Land [Member]
Segment Reporting Information [Line Items]
Property operating expenses	(209)	(349)	(1,079)	(659)
Mortgage and loan interest	(420)	(1,242)	(1,335)	(3,439)
Gain on land sales	555	997	3,925	5,124
Segment operating income (loss)	(74)	(594)	1,511	1,026
Capital expenditures	1,873	1,461	1,873	2,772
Real estate assets	134,321	153,811	134,321	153,811
Property Sales
Sales price	805	2,851	8,139	11,987
Cost of sale	(250)	(1,854)	(4,214)	(6,863)
Gain (loss) on sale	555	997	3,925	5,124
Other [Member]
Segment Reporting Information [Line Items]
Rental and other property revenues		47	2	100
Property operating expenses	(8)	(270)	(5)	(253)
Mortgage and loan interest	(5,024)	(4,144)	(13,455)	(7,740)
Interest income	4,251	2,505	11,386	9,260
Segment operating income (loss)	(781)	(1,862)	(2,072)	1,367
Total Segments [Member]
Segment Reporting Information [Line Items]
Rental and other property revenues	29,776	27,539	89,200	73,599
Property operating expenses	(15,413)	(14,195)	(45,295)	(35,987)
Depreciation and amortization	(6,014)	(6,555)	(17,665)	(16,305)
Mortgage and loan interest	(13,568)	(13,550)	(38,826)	(31,953)
Interest income	4,251	2,505	11,386	9,260
Gain on the sale of income producing properties		735	4,925	735
Gain on land sales	555	997	3,925	5,124
Segment operating income (loss)	(413)	(2,524)	7,650	4,473
Capital expenditures	5,427	2,822	5,427	12,020
Real estate assets	899,848	815,719	899,848	815,719
Property Sales
Sales price	805	13,980	17,739	23,116
Cost of sale	(250)	(12,248)	(8,889)	(17,257)
Gain (loss) on sale	$ 555	$ 1,732	$ 8,850	$ 5,859

OPERATING SEGMENTS (Details 1)

OPERATING SEGMENTS (Details 1) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2016	Sep. 30, 2015	Sep. 30, 2016	Sep. 30, 2015
Segment operating income	$ 4,347	$ 2,926	$ 14,197	$ 10,413
Other non-segment items of income (expense)
General and administrative	(1,541)	(1,146)	(4,754)	(4,191)
Net income fee to related party	(67)	(51)	(193)	(142)
Advisory fee to related party	(2,394)	(2,666)	(7,096)	(6,561)
Other income	8	(77)	1,178	4
Earnings (loss) from unconsolidated joint ventures and investees		(4)	(2)	39
Income tax (expense) benefit	(25)	16	(24)	107
Net loss from continuing operations	(4,432)	(6,537)	(3,241)	(6,474)
Total Segments [Member]
Segment operating income	(413)	(2,524)	7,650	4,473
Other non-segment items of income (expense)
General and administrative	(1,541)	(1,146)	(4,754)	(4,191)
Net income fee to related party	(67)	(51)	(193)	(142)
Advisory fee to related party	(2,394)	(2,666)	(7,096)	(6,561)
Other income	8	(77)	1,178	4
Earnings (loss) from unconsolidated joint ventures and investees		(4)	(2)	39
Litigation settlement		(85)		(203)
Income tax (expense) benefit	(25)	16	(24)	107
Net loss from continuing operations	$ (4,432)	$ (6,537)	$ (3,241)	$ (6,474)

OPERATING SEGMENTS (Details 2)

OPERATING SEGMENTS (Details 2) - USD ($) $ in Thousands	Sep. 30, 2016	Dec. 31, 2015	Sep. 30, 2015
Segment assets	$ 899,848	$ 844,019
Investments in real estate partnerships	2,469	5,243
Other assets	44,333	41,645
Total assets	1,151,548	$ 1,110,204
Total Segments [Member]
Segment assets	899,848		$ 815,719
Investments in real estate partnerships	2,469		2,178
Notes and interest receivable	72,704		65,801
Other assets	176,527		192,879
Total assets	$ 1,151,548		$ 1,076,577

DISCONTINUED OPERATIONS (Detail

DISCONTINUED OPERATIONS (Details) - USD ($) $ in Thousands	3 Months Ended	9 Months Ended
	Sep. 30, 2015	Sep. 30, 2016	Sep. 30, 2015
Revenues:
Rental and other property revenues			$ 15
Revenues			15
Expenses:
Property operating expenses	$ 2	$ (3)	(346)
General and administrative	(4)		99
Total operating expenses	(2)	(3)	(247)
Other income (expense):
Other income	45		45
Mortgage and loan interest			(1)
Total other expenses	45		44
Gain from discontinued operations before tax	47	3	306
Income tax benefit (expense)	(16)	(1)	(107)
Income from discontinued operations	$ 31	$ 2	$ 199

COMMITMENTS, CONTINGENCIES, AND

COMMITMENTS, CONTINGENCIES, AND LIQUIDITY (Details Narrative) - USD ($) $ in Thousands	1 Months Ended	9 Months Ended
	Jul. 20, 2015	Sep. 30, 2016
Related Parties [Member] | Mezzanine Financing [Member]
Guarantor - notes payable		$ 60,350
Dynex Capital, Inc. [Member]
Description of plaintiff	ART and TCI
Description of defendant	Dynex Capital Inc.
Description of action taken by court	On July 20, 2015, the 68 th
Damages - awarded amount	$ 256
Damages - pre-judgement interest	192
Damages - total	448
Awarded attorney fees	$ 1,600
Post-judgment interest rate	5.00%
Dynex Capital, Inc. [Member] | Transcontinential Realty Investors [Member]
Damages - awarded amount	$ 11,100
Damages - pre-judgement interest	8,400
Damages - total	19,500
Dynex Capital, Inc. [Member] | American Reality Trust, Inc. [Member]
Damages - awarded amount	14,200
Damages - pre-judgement interest	10,600
Damages - total	$ 24,800
Pending Litigation [Member]
Description of allegation		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.
Maximum loss exposure		$ 20,000

EARNINGS PER SHARE (Details Nar

EARNINGS PER SHARE (Details Narrative) - USD ($) $ / shares in Units, $ in Thousands	1 Months Ended	9 Months Ended
	Nov. 30, 2006	Sep. 30, 2016	Dec. 31, 2015
Dividend rate		9.00%
Series D Preferred Stock [Member]
Stock issued	100,000
Dividend rate	7.00%	9.00%
Preferred stock, liquidation preference per share	$ 100	$ 100	$ 100
Series D Preferred Stock [Member] | RAI [Member]
Accrued dividends unpaid	$ 4,600
Stock held by related parties (shares)	89,500
Series D Preferred Stock [Member] | Pillar Income Asset Management, Inc [Member]
Accrued dividends unpaid	$ 500
Stock held by related parties (shares)	10,500