Transcontinental Realty Investors (TCI) 10-Q 14 Nov 17 2017 Q3 Quarterly report Financial data

Document and Entity Information

Document and Entity Information - shares	9 Months Ended
	Sep. 30, 2017	Nov. 14, 2017
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, 2017
Amendment Flag	false
Current Fiscal Year End Date	--12-31
Entity a Well-known Seasoned Issuer	No
Entity a Voluntary Filer	No
Entity's Reporting Status Current	Yes
Entity Filer Category	Smaller Reporting Company
Entity Common Stock, Shares Outstanding		8,717,767
Document Fiscal Period Focus	Q3
Document Fiscal Year Focus	2,017

CONSOLIDATED BALANCE SHEETS (Un

CONSOLIDATED BALANCE SHEETS (Unaudited) - USD ($) $ in Thousands	Sep. 30, 2017	Dec. 31, 2016
Assets
Real estate, at cost	$ 1,054,884	$ 998,498
Real estate subject to sales contracts at cost	46,403	46,956
Less accumulated depreciation	(172,352)	(154,281)
Total real estate	928,935	891,173
Notes and interest receivable:
Performing (including $45,658 in 2017 and $67,921 in 2016 from related parties)	64,523	81,133
Less allowance for doubtful accounts (including $1,825 in 2017 and 2016 from related parties)	(1,825)	(1,825)
Total notes and interest receivable	62,698	79,308
Cash and cash equivalents	57,978	17,506
Restricted cash	42,752	38,227
Investments in unconsolidated joint ventures and investees	2,435	2,446
Receivable from related party	107,696	101,649
Other assets	48,233	55,605
Total assets	1,250,727	1,185,914
Liabilities:
Notes and interest payable	826,050	835,528
Notes related to real estate held for sale	376	376
Notes related to real estate subject to sales contracts	3,939	5,612
Bond and bond interest payable	107,910
Deferred revenue (including $40,877 in 2017 and $50,689 in 2016 to related parties)	60,940	71,065
Accounts payable and other liabilities (including $7,072 in 2017 and $6,487 in 2016 to related parties)	35,796	48,856
Total liabilities	1,035,011	961,437
Shareholders' equity:
Preferred stock, Series C: $0.01 par value, authorized 10,000,000 shares; issued and outstanding zero shares in 2017 and 2016. Series D: $0.01 par value, authorized, issued and outstanding 100,000 shares in 2017 and 2016 (liquidation preference $100 per share)	1	1
Common stock, $0.01 par value, authorized 10,000,000 shares; issued 8,717,967 shares in 2017 and 2016; outstanding 8,717,767 shares in 2017 and 2016	87	87
Treasury stock at cost, 200 shares in 2017 and 2016	(2)	(2)
Paid-in capital	269,179	269,849
Retained earnings	(72,519)	(64,050)
Total Transcontinental Realty Investors, Inc. shareholders' equity	196,746	205,885
Non-controlling interest	18,970	18,592
Total shareholders' equity	215,716	224,477
Total liabilities and shareholders' equity	$ 1,250,727	$ 1,185,914

CONSOLIDATED BALANCE SHEETS (U3

CONSOLIDATED BALANCE SHEETS (Unaudited) (Parenthetical) - USD ($) $ in Thousands	Sep. 30, 2017	Dec. 31, 2016
Performing	$ 64,523	$ 81,133
Allowance for doubtful accounts (in dollars)	1,825	1,825
Deferred revenue from related parties	$ 60,940	$ 71,065
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	$ 45,658	$ 67,912
Allowance for doubtful accounts (in dollars)	1,825	1,825
Deferred revenue from related parties	40,877	50,689
Accounts payable and other liabilities to related parties (in dollars)	$ 7,072	$ 6,487
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, 2017	Sep. 30, 2016	Sep. 30, 2017	Sep. 30, 2016
Revenues:
Rental and other property revenues (including $199 and $174 for the three months and $589 and $521 for the nine months ended 2017 and 2016, respectively, from related parties)	$ 31,491	$ 29,776	$ 94,328	$ 89,200
Expenses:
Property operating expenses (including $236 and $221 for the three months and $696 and $644 for the nine months ended 2017 and 2016, respectively, from related parties)	15,157	15,413	46,256	45,295
Depreciation and amortization	6,326	6,014	19,008	17,665
General and administrative (including $1,018 and $753 for the three months and $2,134 and $1,501 for the nine months ended 2017 and 2016, respectively, from related parties)	1,594	1,541	4,669	4,754
Net income fee to related party	53	67	189	193
Advisory fee to related party	2,595	2,394	7,402	7,096
Total operating expenses	25,725	25,429	77,524	75,003
Net operating income	5,766	4,347	16,804	14,197
Other income (expenses):
Interest income (including $3,041 and $4,249 for the three months and $10,670 and $10,269 for the nine months ended 2017 and 2016, respectively, from related parties)	3,175	4,251	10,305	11,386
Other income	190	8	1,529	1,178
Mortgage and loan interest (including $347 and $212 for the three months and $784 and $437 for the nine months ended 2017 and 2016, respectively, from related parties)	(14,245)	(13,568)	(45,218)	(38,826)
Earnings (losses) from unconsolidated joint ventures and investees	7		(11)	(2)
Foreign currency translation gain (loss)	1,906		(1,841)
Total other expenses	(8,967)	(9,309)	(35,236)	(26,264)
Loss before gain on sale of income-producing properties, gain on land sales, non-controlling interest, and taxes	(3,201)	(4,962)	(18,432)	(12,067)
Gain on sale of income producing properties	9,841		9,841	4,925
Gain on land sales	530	555	500	3,925
Net income (loss) from continuing operations before taxes	7,170	(4,407)	(8,091)	(3,217)
Income tax expense		(25)		(24)
Net income (loss) from continuing operations	7,170	(4,432)	(8,091)	(3,241)
Discontinued operations:
Net income from discontinued operations				3
Income tax expense from discontinued operations				(1)
Net income from discontinued operations				2
Net income (loss)	7,170	(4,432)	(8,091)	(3,239)
Net income attributable to non-controlling interest	(96)	(114)	(378)	(189)
Net income (loss) attributable to Transcontinental Realty Investors, Inc.	7,074	(4,546)	(8,469)	(3,428)
Preferred dividend requirement	(224)	(227)	(670)	(673)
Net income (loss) applicable to common shares	$ 6,850	$ (4,773)	$ (9,139)	$ (4,101)
Earnings per share - basic
Net income (loss) applicable to common shares (in dollars per share)	$ 0.79	$ (0.55)	$ (1.05)	$ (0.47)
Earnings per share - diluted
Net income (loss) applicable to common shares (in dollars per share)	$ 0.79	$ 0.55	$ (1.05)	$ (0.47)
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 income (loss) from continuing operations	$ 7,074	$ (4,546)	$ (8,469)	$ (3,430)
Net income from discontinued operations				2
Net income (loss)	$ 7,074	$ (4,546)	$ (8,469)	$ (3,428)

CONSOLIDATED STATEMENTS OF OPE5

CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited) (Parenthetical) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2017	Sep. 30, 2016	Sep. 30, 2017	Sep. 30, 2016
Rental and other property revenues	$ 31,491	$ 29,776	$ 94,328	$ 89,200
Property operating expenses	15,157	15,413	46,256	45,295
General and administrative	1,594	1,541	4,669	4,754
Interest income	3,175	4,251	10,305	11,386
Mortgage and loan interest	14,245	13,568	45,218	38,826
Related Parties [Member]
Rental and other property revenues	199	174	589	521
Property operating expenses	236	221	696	644
General and administrative	1,018	753	2,134	1,501
Interest income	3,041	4,249	10,670	10,269
Mortgage and loan interest	$ 347	$ 212	$ 784	$ 437

CONSOLIDATED STATEMENT OF SHARE

CONSOLIDATED STATEMENT OF SHAREHOLDERS' EQUITY (Unaudited) - 9 months ended Sep. 30, 2017 - USD ($) $ in Thousands	Total	Comprehensive Income (Loss) [Member]	Preferred Stock [Member]	Common Stock [Member]	Treasury Stock [Member]	Paid-in Capital [Member]	Retained Earnings [Member]	Non-controlling Interest [Member]
Balance, at beginning at Dec. 31, 2016	$ 224,477	$ (64,852)	$ 1	$ 87	$ (2)	$ 269,849	$ (64,050)	$ 18,592
Balance, at beginning (in shares) at Dec. 31, 2016				8,717,967
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Series D preferred stock dividends (9.0% per year)	(670)					(670)
Net income (loss)	(8,091)	(8,091)					(8,469)	378
Balance, at the end at Sep. 30, 2017	$ 215,716	$ (72,943)	$ 1	$ 87	$ (2)	$ 269,179	$ (72,519)	$ 18,970
Balance, at the end (in shares) at Sep. 30, 2017				8,717,967

CONSOLIDATED STATEMENT OF SHAR7

CONSOLIDATED STATEMENT OF SHAREHOLDERS' EQUITY (Unaudited) (Parenthetical)	9 Months Ended
	Sep. 30, 2017
Series D Preferred Stock [Member]
Preferred stock dividend (in percent)	9.00%

CONSOLIDATED STATEMENTS OF COMP

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) (Unaudited) - USD ($) $ in Thousands	9 Months Ended
	Sep. 30, 2017	Sep. 30, 2016
Statement of Comprehensive Income [Abstract]
Net loss	$ (8,091)	$ (3,239)
Comprehensive income attributable to non-controlling interest	(378)	(189)
Comprehensive loss attributable to Transcontinental Realty Investors, Inc.	$ (8,469)	$ (3,428)

CONSOLIDATED STATEMENTS OF CASH

CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) - USD ($) $ in Thousands	9 Months Ended
	Sep. 30, 2017	Sep. 30, 2016
Cash Flow From Operating Activities:
Net loss	$ (8,091)	$ (3,239)
Adjustments to reconcile net loss applicable to common shares to net cash flows from operating activities:
Gain on sale of income-producing properties	(9,841)	(4,925)
Gain on sale of land	(500)	(3,925)
Depreciation and amortization	19,008	16,602
Amortization of deferred borrowing costs	2,872	3,164
Earnings from unconsolidated joint ventures and investees	11	2
Decrease (increase) in assets:
Accrued interest receivable	1,044	1,224
Other assets	11,798	(895)
Prepaid expense	(5,661)	(3,207)
Escrow	(3,484)	11,537
Earnest money	1,072	449
Rent receivables	544
Related party receivables	(5,357)	(852)
Increase (decrease) in liabilities:
Accrued interest payable	1,508	(44)
Other liabilities	(23,180)	1,233
Net cash provided by operating activities	(18,257)	17,124
Cash Flow From Investing Activities:
Proceeds from notes receivable	26,077	2,773
Originations or advances on notes receivable	(10,665)	(7,150)
Acquisition of land held for development	(11,440)
Acquisition of income-producing properties		(41,750)
Proceeds from sale of income-producing properties		9,377
Proceeds from sale of land	2,446	7,152
Investment in unconsolidated real estate entities	11	2,770
Improvement of land held for development	(908)	(2,486)
Improvement of income-producing properties	(4,462)	(4,030)
Construction and development of new properties	(41,489)	(31,844)
Net cash used in investing activities	(40,430)	(65,188)
Cash Flow From Financing Activities:
Proceeds from Series A bonds payable	106,583
Proceeds from notes payable	54,231	115,031
Recurring amortization of principal on notes payable	(7,279)	(10,480)
Payments on maturing notes payable	(59,068)	(60,977)
Deferred financing costs	(820)	(2,669)
Bond issuance costs	6,182
Preferred stock dividends - Series D	(670)	(673)
Net cash provided by financing activities	(99,159)	40,232
Net increase (decrease) in cash and cash equivalents	40,472	(7,832)
Cash and cash equivalents, beginning of period	17,506	15,171
Cash and cash equivalents, end of period	57,978	7,339
Supplemental disclosures of cash flow information:
Cash paid for interest	$ 36,393	$ 306,957

ORGANIZATION AND BASIS OF PRESE

ORGANIZATION AND BASIS OF PRESENTATION	9 Months Ended
	Sep. 30, 2017
Organization, Consolidation and Presentation of Financial Statements [Abstract]
ORGANIZATION AND BASIS OF PRESENTATION	NOTE 1. ORGANIZATION AND BASIS OF PRESENTATION Organization As used herein, the terms “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. (“IOR”). Accordingly IOR’s financial results are consolidated with those of TCI and its subsidiaries. Shares of IOR are traded on the New York Stock Exchange Euronext (“NYSE MKT”) under the symbol (“IOR”). 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 IOR. 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 58 income-producing properties as of September 30, 2017. 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 96.09 acres; ● 50 apartment communities totaling 8,226 units; excluding apartments being developed; and ● 3,505 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, 2017, we had seven apartment projects in development. The third-party developer typically holds a general partner, as well as a majority limited partner interest in a limited partnership formed for the purpose of building a single property, while we generally take a minority limited partner interest in the limited partnership. We may contribute land to the partnership as part of our equity contribution or we may contribute the necessary funds to the partnership to acquire the land. We are required to fund all necessary equity contributions while the third-party developer is responsible for obtaining construction financing, hiring a general contractor and for the overall management, successful completion and delivery of the project. We generally bear all the economic risks and rewards of ownership in these partnerships and therefore include these partnerships in our Consolidated Financial Statements. The third-party developer is paid a developer fee typically equal to a percentage of the construction costs. When the project reaches stabilized occupancy, we acquire the third-party developer’s partnership interests in exchange for any remaining unpaid developer fees. Basis of Presentation The accompanying unaudited Consolidated Financial Statements have been prepared in accordance with the instructions to Form 10-Q and Article 10 of Regulation S-X. Certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) have been condensed or omitted in accordance with such rules and regulations, although management believes the disclosures are adequate to prevent the information presented from being misleading. In the opinion of management, all adjustments (consisting of normal recurring matters) considered necessary for a fair presentation have been included. The results of operations for the nine months ended September 30, 2017, are not necessarily indicative of the results that may be expected for other interim periods or for the full fiscal year. The year-end Consolidated Balance Sheet at December 31, 2016, was derived from the audited Consolidated Financial Statements at that date, but does not include all of the information and disclosures required by U.S. GAAP for complete financial statements. For further information, refer to the Consolidated Financial Statements and notes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2016. Certain 2016 Consolidated Financial Statement amounts have been reclassified to conform to the 2017 presentation. Principles of Consolidation The accompanying Consolidated Financial Statements include the accounts of the Company, its subsidiaries, generally all of which are wholly-owned, and all entities in which we have a controlling interest. Arrangements that are not controlled through voting or similar rights are accounted for as a Variable Interest Entity (“VIE”), in accordance with the provisions and guidance of ASC Topic 810 “Consolidation”, whereby we have determined that we are a primary beneficiary of the VIE and meet certain criteria of a sole general partner or managing member as identified in accordance with Emerging Issues Task Force (“EITF”) Issue 04-5, Investor’s Accounting for an Investment in a Limited Partnership when the Investor is the Sole General Partner and the Limited Partners have Certain Rights (“EITF 04-5”). VIEs are generally entities that lack sufficient equity to finance their activities without additional financial support from other parties or whose equity holders as a group lack adequate decision making ability, the obligation to absorb expected losses or residual returns of the entity, or have voting rights that are not proportional to their economic interests. The primary beneficiary is generally the entity that provides financial support and bears a majority of the financial risks, authorizes certain capital transactions, or makes operating decisions that materially affect the entity’s financial results. All significant intercompany balances and transactions have been eliminated in consolidation. In determining whether we are the primary beneficiary of a VIE, we consider qualitative and quantitative factors, including, but not limited to: the amount and characteristics of our investment; the obligation or likelihood for us or other investors to provide financial support; our and the other investors’ ability to control or significantly influence key decisions for the VIE; and the similarity with and significance to the business activities of us and the other investors. Significant judgments related to these determinations include estimates about the current future fair values and performance of real estate held by these VIEs and general market conditions. For entities in which we have less than a controlling financial interest or entities where we are not deemed to be the primary beneficiary, the entities are accounted for using the equity method of accounting. Accordingly, our share of the net earnings or losses of these entities is included in consolidated net income. Our investment in 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 upon 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. 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 related 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 May 2014, Accounting Standards Update (“ASU”) No. 2014-09 (“ASU 2014-09”), “Revenue from Contracts with Customers,” was issued. This new guidance established a new single comprehensive revenue recognition model and provides for enhanced disclosures. Under the new policy, the nature, timing and amount of revenue recognized for certain transactions could differ from those recognized under existing accounting guidance. This new standard does not affect revenue recognized under lease contracts. ASU 2014-09 is effective for reporting periods beginning after December 15, 2017. The Company is currently evaluating the impact of the adoption of ASU 2014-09 on its financial position and results of operations, if any. In February 2016, Accounting Standards Update No. 2016-02 (“ASU 2016-02”), Leases was issued. This guidance establishes a new model for accounting for leases and provides for enhanced disclosures. ASU 2016-02 is effective for reporting periods beginning after December 15, 2018. The Company is currently evaluating the impact 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, 2017
Real Estate [Abstract]
REAL ESTATE ACTIVITY	NOTE 2. REAL ESTATE ACTIVITY Below is a summary of the real estate owned as of September 30, 2017 (dollars in thousands): Apartments $ 699,127 Apartments under construction 77,537 Commercial properties 206,982 Land held for development 71,238 Real estate subject to sales contract 46,403 Total real estate $ 1,101,287 Less accumulated depreciation (172,352 ) Total real estate, net of depreciation $ 928,935 The highlights of our significant real estate transactions for the nine months ended September 30, 2017, are discussed below. Purchases During the nine months ended September 30, 2017, we acquired three land parcels for development for a total purchase price of $11.4 million, adding 29.7 acres to the development portfolio. Sales During the nine months ended September 30, 2017, TCI sold a combined 14.16 acres of land located in Texas to independent third parties for a total sales price of $2.4 million. We recorded an aggregate gain of $0.5 million from the land sales. In addition, during the nine months ended September 30, 2017, we recognized deferred gains of $9.8 million related to prior years’ sales of two income-producing properties to a related party. As of September 30, 2017, the Company has approximately 91 acres of land, at various locations that were sold to related parties in multiple transactions. These transactions are treated as “subject to sales contract” on the Consolidated Balance Sheets. Due to the related party nature of the transactions, TCI has deferred the recording of the sales in accordance with ASC 360-20. We continue to invest in the development of multifamily properties. During the nine months ended September 30, 2017, we disbursed $41.4 million related to the construction or predevelopment of various apartment complexes and capitalized $1.6 million of interest costs.

NOTES AND INTEREST RECEIVABLE

NOTES AND INTEREST RECEIVABLE	9 Months Ended
	Sep. 30, 2017
Receivables [Abstract]
NOTES AND INTEREST RECEIVABLE	NOTE 3. NOTES AND INTEREST RECEIVABLE A portion of our assets are invested in mortgage notes receivable, principally secured by real estate. We may originate mortgage loans in conjunction with providing purchase money financing of property sales. Notes receivable are generally collateralized by real estate or interests in real estate and guarantees, unless noted otherwise, are so secured. Management intends to service and hold for investment the mortgage notes in our portfolio. A majority of the notes receivable provide for principal to be paid at maturity. Below is a summary of our notes receivable as of September 30, 2017 (dollars in thousands): Maturity Interest Borrower Date Rate Amount Collateral Performing loans: H198, LLC (Las Vegas Land) 01/20 12.00 % 5,907 Secured H198, LLC (McKinney Ranch land) 09/18 6.00 % 4,402 Secured Spyglass Apartments of Ennis 11/19 5.00 % 3,862 Secured 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 % 6,369 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. (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) 12/18 12.00 % 3,994 Unsecured Unified Housing Foundation, Inc. (1) 12/18 12.00 % 6,407 Unsecured Unified Housing Foundation, Inc. (1) 06/20 12.00 % 5,760 Unsecured Other related party notes (1) Various Various 465 Various unsecured interests Other non-related party notes Various Various 796 Various secured interests Other non-related party notes Various Various 1,231 Various unsecured interests Accrued interest 4,434 Total Performing $ 64,523 Allowance for estimated losses (1,825 ) Total $ 62,698 (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, 2017, we had mortgage loans and accrued interest receivable from related parties, net of allowances, totaling $43.7 million. During the nine months ended September 30, 2017, we recognized interest income of $5.2 million from related party notes receivable. 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, 2017
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, 2017 September 30, 2016 American Realty Investors, Inc. (1) 0.90 % 0.90 % (1) Unconsolidated investment in parent company owning 140,000 shares of ARL Common Stock. Our interest in the common stock of ARL in the amount of 0.90% 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, 2017 2016 Real estate, net of accumulated depreciation $ 14,411 $ 14,550 Notes receivable 39,857 46,371 Other assets 54,703 126,848 Notes payable (6,618 ) (10,426 ) Other liabilities (37,184 ) (111,789 ) Shareholders’ equity (65,169 ) (65,554 ) For the Nine Months Ended September 30, 2017 2016 Rents and interest and other income $ 4,655 $ 5,586 Depreciation (142 ) (113 ) Operating expenses (2,607 ) (2,897 ) Gain on land sales 1,360 — Interest expense (4,641 ) (4,725 ) Net loss $ (1,375 ) $ (2,149 ) Company’s proportionate share of loss $ (12 ) $ (19 )

NOTES PAYABLE

NOTES PAYABLE	9 Months Ended
	Sep. 30, 2017
Debt Disclosure [Abstract]
NOTES PAYABLE	NOTE 5. NOTES PAYABLE Below is a summary of our notes and interest payable as of September 30, 2017 (dollars in thousands): Notes Payable Accrued Interest Total Debt Apartments $ 537,396 $ 1,476 $ 538,872 Apartments under Construction 43,507 — 43,507 Commercial 127,182 602 127,784 Land 24,712 230 24,942 Real estate subject to sales contract 3,450 489 3,939 Mezzanine financing 100,673 — 100,673 Other 9,037 — 9,037 Total $ 845,957 $ 2,797 $ 848,754 Unamortized deferred borrowing costs (18,389 ) — (18,389 ) Total $ 827,568 $ 2,797 $ 830,365 The segment labeled as “Other” consists of unsecured or stock-secured notes payable. There are various land mortgages, secured by the property, that are in the process of a modification or extension to the original note due to expiration of the loan. We are in constant contact with these lenders, working together in order to modify the terms of these loans and we anticipate a timely resolution that is similar to the existing agreement or subsequent modification. During the nine months ended September 30, 2017, we refinanced three loans with a total principal balance of $80.1 million. The transactions provided for lower monthly payments over the term of the loans due to lower interest rates and the extension of maturity dates of the loans. In conjunction with the development of various apartment projects and other developments, we drew down $25.7 million in construction loans during the nine months ended September 30, 2017. The properties that we have sold to a related party and have deferred the recognition of the sale are treated as “subject to sales contract” on the Consolidated Balance Sheets. These properties were sold to a related party in order to help facilitate an appropriate debt or organizational restructure and may or may not be transferred back to the seller upon resolution. These properties have mortgages that are secured by the property and many have corporate guarantees. According to the loan documents, the maker is currently in default on these mortgages primarily due to lack of payment and is actively involved in discussions with every lender in order to settle or cure the default situation. We have reviewed each asset and taken impairment to the extent we feel the value of the property was less than our current basis.

SERIES A BONDS PAYABLE

SERIES A BONDS PAYABLE	9 Months Ended
	Sep. 30, 2017
Notes to Financial Statements
SERIES A BONDS PAYABLE	NOTE 6. SERIES A BONDS PAYABLE On February 13, 2017, Southern Properties Capital LTD, a British Virgin Islands corporation (“Southern”), filed a final prospectus with the Tel Aviv Stock Exchange LTD (the “TASE”) for an offering and sale of nonconvertible Series A Bonds (the “Debentures”), to be issued by Southern, which is an indirect subsidiary of TCI. Southern, in turn, wholly owns interest in other entities, which, in turn, are the principal owners of various residential and commercial properties located in the south and southwestern portions of the United States. The Debentures are unsecured obligations of Southern. On February 14, 2017, Southern commenced the institutional tender of the Debentures and accepted application for 276 million Israeli, new Shekels (approximately $73,651,065 USD, based on the exchange rate of 3.7474 Shekels to the U.S. Dollar effective February 14, 2017) in both institutional and public tenders, at an annual interest rate averaging approximately 7.38%. The Series A Bonds payable have a stated interest rate of 7.3% and an effective yield of 9.25%. On May 16, 2017, Southern issued nonconvertible Series A Bonds for 100.2 million Israelis, new Shekels (approximately $27,769,615 USD, based on the exchange rate of 3.607 Shekels to the U.S. Dollar) at an annual interest rate of 7.3%. On July 12, 2017, Southern sold nonconvertible Series A Bonds for 23.8 million Israeli, new Shekels (approximately $6,668,998 USD, based on the exchange rate of 3.574 Shekels to the U.S. Dollar) in both institutional and public tenders, at an annual interest rate averaging approximately 7.3%. Foreign Currency Gain or Loss Principal and interest will be paid in Israeli Shekels as the bonds mature. Interest payments are due semiannually beginning in July 2017 through July 2023 with ten semiannual principal payments due beginning July 2019 through July 2023. Until such actual principal payments are made, there will not be any significant need to convert US dollars to Israeli shekels. The Company records unrealized gains or losses each quarter based upon the relative exchange values of the US dollar and the Israeli shekel; however, no gain or loss will be realized until a conversion from US dollars to Israeli shekels actually occurs in the future. The recorded unrealized gain or loss is reflected as a separate line item to highlight the fact that it is a non-cash transaction until such time as actual payment of principal and interest on the bonds is made. The Company recorded a foreign currency transaction gain of $1.9 million and a foreign currency transaction loss of $1.8 million for the three and nine months ended September 30, 2017, respectively.

RELATED PARTY TRANSACTIONS

RELATED PARTY TRANSACTIONS	9 Months Ended
	Sep. 30, 2017
Related Party Transactions [Abstract]
RELATED PARTY TRANSACTIONS	NOTE 7. RELATED PARTY TRANSACTIONS The following table reflects the reconciliation of the beginning and ending balances of accounts receivable from and (accounts payable) to related parties as of September 30, 2017 (dollars in thousands): Pillar ARL Total Related party receivable, December 31, 2016 $ (7,103 ) $ 108,752 $ 101,649 Cash transfers 31,933 — 31,933 Advisory fees (7,402 ) — (7,402 ) Net income fee (189 ) — (189 ) Fees and commissions (1,658 ) — (1,658 ) Cost reimbursements (1,954 ) — (1,954 ) Interest income — 3,462 3,462 Notes receivable purchased (447 ) (447 ) Expenses paid by advisor (3,913 ) — (3,913 ) Financing (mortgage payments) (4,656 ) — (4,656 ) Sales/Purchases transactions (9,129 ) — (9,129 ) Purchase of obligations 5,208 (5,208 ) — Related party receivable, Sept 30, 2017 $ 690 $ 107,006 $ 107,696 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 are shown on the face of the Consolidated Financial Statements.

OPERATING SEGMENTS

OPERATING SEGMENTS	9 Months Ended
	Sep. 30, 2017
Segment Reporting [Abstract]
OPERATING SEGMENTS	NOTE 8. OPERATING SEGMENTS Our segments are based on our method of internal reporting, which classifies our operations by property type. Our property types are grouped into commercial, 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 other income and equity in partnerships. Expenses that are not reflected in the segments are provision for losses, advisory and net income fees, general and administrative and non-controlling interests. 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, 2017 and 2016, including capital expenditures and segment assets (dollars in thousands): For the Three Months Ended September 30, 2017 Commercial Properties Apartments Land Other Total Rental and other property revenues $ 8,170 $ 23,231 $ 86 $ 4 $ 31,491 Property operating expenses (4,252 ) (10,659 ) (115 ) (131 ) (15,157 ) Depreciation and amortization (2,298 ) (4,028 ) — — (6,326 ) Mortgage and loan interest (1,902 ) (5,168 ) (387 ) (6,788 ) (14,245 ) Interest income — — — 3,175 3,175 Recognition of deferred gain on sale of income-producing properties — 9,841 — — 9,841 Gain on land sales — — 530 — 530 Segment operating income (loss) $ (282 ) $ 13,217 $ 114 $ (3,740 ) $ 9,309 Balance Sheet Data as of September 30, 2017 Capital expenditures $ 689 $ 543 $ 55 $ — $ 1,287 Real estate assets $ 145,321 $ 665,972 $ 117,642 $ — $ 928,935 Property Sales Sales price $ — $ — $ 850 $ — $ 850 Cost of sale — — (320 ) — (320 ) Recognized prior deferred gain — 9,841 — — 9,841 Gain on sale $ — $ 9,841 $ 530 $ — $ 10,371 For the Three Months Ended September 30, 2016 Commercial 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 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 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, 2017 and 2016 (dollars in thousands): Three Months Ended September 30, 2017 2016 Segment operating income (loss) $ 9,309 $ (413 ) Other non-segment items of income (expense): General and administrative (1,594 ) (1,541 ) Net income fee to related party (53 ) (67 ) Advisory fee to related party (2,595 ) (2,394 ) Other income 2,096 8 Earnings from unconsolidated joint ventures and investees 7 — Income tax expense — (25 ) Net income (loss) from continuing operations $ 7,170 $ (4,432 ) Presented below is our reportable segments’ operating income for the nine months ended September 30, 2017 and 2016, including capital expenditures and segment assets (dollars in thousands): For the Nine Months Ended September 30, 2017 Commercial Properties Apartments Land Other Total Rental and other property revenues $ 25,308 $ 68,922 $ 87 $ 11 $ 94,328 Property operating expenses (13,629 ) (31,615 ) (429 ) (583 ) (46,256 ) Depreciation and amortization (6,903 ) (12,105 ) — — (19,008 ) Mortgage and loan interest (5,629 ) (16,955 ) (1,248 ) (21,386 ) (45,218 ) Interest income — — — 10,305 10,305 Recognition of deferred gain on sale of income-producing properties — 9,841 — — 9,841 Gain on land sales — — 500 — 500 Segment operating income (loss) $ (853 ) $ 18,088 $ (1,090 ) $ (11,653 ) $ 4,492 Balance Sheet as of September 30, 2017 Capital expenditures $ 2,586 $ 543 $ 641 $ — $ 3,770 Real estate assets $ 145,321 $ 665,972 $ 117,642 $ — $ 928,935 Property Sales Sales price $ — $ — $ 2,446 $ — $ 2,446 Cost of sale — — (1,946 ) — (1,946 ) Recognized prior deferred gain — 9,841 — — 9,841 Gain on sale $ — $ 9,841 $ 500 $ — $ 10,341 For the Nine Months Ended September 30, 2016 Commercial 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 on sale $ (243 ) $ 5,168 $ 3,925 $ — $ 8,850 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, 2017 and 2016 (dollars in thousands): Nine Months Ended September 30, 2017 2016 Segment operating income $ 4,492 $ 7,650 Other non-segment items of income (expense) General and administrative (4,669 ) (4,754 ) Net income fee to related party (189 ) (193 ) Advisory fee to related party (7,402 ) (7,096 ) Other income (312 ) 1,178 Loss from unconsolidated joint ventures and investees (11 ) (2 ) Income tax expense — (24 ) Net loss from continuing operations $ (8,091 ) $ (3,241 ) 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, 2017 2016 Segment assets $ 928,935 $ 899,848 Investments in real estate partnerships 2,435 2,469 Notes and interest receivable 62,698 72,704 Other assets 256,659 176,527 Total assets $ 1,250,727 $ 1,151,548

COMMITMENTS AND CONTINGENCIES A

COMMITMENTS AND CONTINGENCIES AND LIQUIDITY	9 Months Ended
	Sep. 30, 2017
Commitments and Contingencies Disclosure [Abstract]
COMMITMENTS AND CONTINGENCIES AND LIQUIDITY	NOTE 9. COMMITMENTS AND CONTINGENCIES AND LIQUIDITY Liquidity. Partnership Buyouts Dynex Capital, Inc. On July 20, 2015, the 68 th An original trial in 2004, which also included Dynex Capital, Inc. as a defendant, resulted in a jury awarding damages in favor of Basic for “lost opportunity,” as well as damages in favor of ART and in favor of TCI and its subsidiaries for “increased costs” and “lost opportunity.” The original Trial Court judge ignored the jury’s findings, however, and entered a “Judgment Notwithstanding the Verdict” (“JNOV”) in favor of the Dynex entities (the judge held the Plaintiffs were not entitled to any damages from the Dynex entities). After numerous appeals by all parties, Dynex Capital, Inc. was ultimately dismissed from the case and the remaining claims against Dynex Commercial were remanded to the Trial Court for a new judgment consistent with the jury’s findings. The Court entered the new Final Judgment against Dynex Commercial, Inc. on July 20, 2015. The Final Judgment entered against Dynex Commercial, Inc. on July 20, 2015 awarded Basic $0.256 million in damages, plus pre-judgment interest of $0.192 million for a total amount of $0.448 million. The Judgment awarded ART $14.2 million in damages, plus pre-judgment interest of $10.6 million for a total amount of $24.8 million. The Judgment awarded TCI $11.1 million, plus pre-judgment interest of $8.4 million for a total amount of $19.5 million. The Judgment also awarded Basic, ART, and TCI post-judgment interest at the rate of 5% per annum from April 25, 2014 until the date their respective damages are paid. Lastly, the Judgement awarded Basic, ART, and TCI $1.6 million collectively in attorneys’ fees from Dynex Commercial, Inc. In April 2017, the plaintiffs filed a lawsuit against Dynex Capital, Inc. and Dynex Commercial, Inc. for $50 million alleging, among other things, fraudulent transfer and alter ego. Litigation. Guarantees.

EARNINGS PER SHARE

EARNINGS PER SHARE	9 Months Ended
	Sep. 30, 2017
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 260 “Earnings per Share”. The computation of basic EPS is calculated by dividing income available to common shareholders by the weighted-average number of common shares outstanding during the period. Shares issued during the period shall be weighted for the portion of the period that they were outstanding. Prior to July 9, 2014, TCI had 30,000 shares of Series C cumulative convertible preferred stock issued and outstanding. These 30,000 shares were owned by RAI, a related party, and had accrued dividends unpaid of $0.9 million. The stock had a liquidation preference of $100.00 per share and could be converted into common stock at 90% of the daily average closing price of the common stock for the prior five trading days. On July 9, 2014, RAI converted all 30,000 shares into the requisite number of shares of common stock. The conversion resulted in the issuance of 304,298 new shares of common stock. The effects of the Series C Cumulative Convertible Preferred Stock are no longer included in the dilutive earnings per share calculation for the current period, but are considered in the calculation for the prior periods if applying the if-converted method is dilutive. As of September 30, 2017, the Company has no preferred stock or stock options that are required to be included in the calculation of EPS.

SUBSEQUENT EVENTS

SUBSEQUENT EVENTS	9 Months Ended
	Sep. 30, 2017
Subsequent Events [Abstract]
SUBSEQUENT EVENTS	NOTE 11. SUBSEQUENT EVENTS The date to which events occurring after September 30, 2017, the date of the most recent balance sheet, have been evaluated for possible adjustment to the Consolidated Financial Statements or disclosure is November 14, 2017, 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, 2017
Organization, Consolidation and Presentation of Financial Statements [Abstract]
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, 2017, are not necessarily indicative of the results that may be expected for other interim periods or for the full fiscal year. The year-end Consolidated Balance Sheet at December 31, 2016, was derived from the audited Consolidated Financial Statements at that date, but does not include all of the information and disclosures required by U.S. GAAP for complete financial statements. For further information, refer to the Consolidated Financial Statements and notes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2016. Certain 2016 Consolidated Financial Statement amounts have been reclassified to conform to the 2017 presentation.
Principles of Consolidation	Principles of Consolidation The accompanying Consolidated Financial Statements include the accounts of the Company, its subsidiaries, generally all of which are wholly-owned, and all entities in which we have a controlling interest. Arrangements that are not controlled through voting or similar rights are accounted for as a Variable Interest Entity (“VIE”), in accordance with the provisions and guidance of ASC Topic 810 “Consolidation”, whereby we have determined that we are a primary beneficiary of the VIE and meet certain criteria of a sole general partner or managing member as identified in accordance with Emerging Issues Task Force (“EITF”) Issue 04-5, Investor’s Accounting for an Investment in a Limited Partnership when the Investor is the Sole General Partner and the Limited Partners have Certain Rights (“EITF 04-5”). VIEs are generally entities that lack sufficient equity to finance their activities without additional financial support from other parties or whose equity holders as a group lack adequate decision making ability, the obligation to absorb expected losses or residual returns of the entity, or have voting rights that are not proportional to their economic interests. The primary beneficiary is generally the entity that provides financial support and bears a majority of the financial risks, authorizes certain capital transactions, or makes operating decisions that materially affect the entity’s financial results. All significant intercompany balances and transactions have been eliminated in consolidation. In determining whether we are the primary beneficiary of a VIE, we consider qualitative and quantitative factors, including, but not limited to: the amount and characteristics of our investment; the obligation or likelihood for us or other investors to provide financial support; our and the other investors’ ability to control or significantly influence key decisions for the VIE; and the similarity with and significance to the business activities of us and the other investors. Significant judgments related to these determinations include estimates about the current future fair values and performance of real estate held by these VIEs and general market conditions. For entities in which we have less than a controlling financial interest or entities where we are not deemed to be the primary beneficiary, the entities are accounted for using the equity method of accounting. Accordingly, our share of the net earnings or losses of these entities is included in consolidated net income. Our investment in ARL is accounted for under the equity method.
Real Estate, Depreciation and Impairmentt	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 upon 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.
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 related 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 May 2014, Accounting Standards Update (“ASU”) No. 2014-09 (“ASU 2014-09”), “Revenue from Contracts with Customers,” was issued. This new guidance established a new single comprehensive revenue recognition model and provides for enhanced disclosures. Under the new policy, the nature, timing and amount of revenue recognized for certain transactions could differ from those recognized under existing accounting guidance. This new standard does not affect revenue recognized under lease contracts. ASU 2014-09 is effective for reporting periods beginning after December 15, 2017. The Company is currently evaluating the impact of the adoption of ASU 2014-09 on its financial position and results of operations, if any. In February 2016, Accounting Standards Update No. 2016-02 (“ASU 2016-02”), Leases was issued. This guidance establishes a new model for accounting for leases and provides for enhanced disclosures. ASU 2016-02 is effective for reporting periods beginning after December 15, 2018. The Company is currently evaluating the impact 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, 2017
Real Estate [Abstract]
Schedule of the real estate owned	Below is a summary of the real estate owned as of September 30, 2017 (dollars in thousands): Apartments $ 699,127 Apartments under construction 77,537 Commercial properties 206,982 Land held for development 71,238 Real estate subject to sales contract 46,403 Total real estate $ 1,101,287 Less accumulated depreciation (172,352 ) Total real estate, net of depreciation $ 928,935

NOTES AND INTEREST RECEIVABLE (

NOTES AND INTEREST RECEIVABLE (Tables)	9 Months Ended
	Sep. 30, 2017
Receivables [Abstract]
Schedule of notes receivable	Below is a summary of our notes receivable as of September 30, 2017 (dollars in thousands): Maturity Interest Borrower Date Rate Amount Collateral Performing loans: H198, LLC (Las Vegas Land) 01/20 12.00 % 5,907 Secured H198, LLC (McKinney Ranch land) 09/18 6.00 % 4,402 Secured Spyglass Apartments of Ennis 11/19 5.00 % 3,862 Secured 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 % 6,369 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. (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) 12/18 12.00 % 3,994 Unsecured Unified Housing Foundation, Inc. (1) 12/18 12.00 % 6,407 Unsecured Unified Housing Foundation, Inc. (1) 06/20 12.00 % 5,760 Unsecured Other related party notes (1) Various Various 465 Various unsecured interests Other non-related party notes Various Various 796 Various secured interests Other non-related party notes Various Various 1,231 Various unsecured interests Accrued interest 4,434 Total Performing $ 64,523 Allowance for estimated losses (1,825 ) Total $ 62,698 (1) Related party notes.

INVESTMENT IN UNCONSOLIDATED 24

INVESTMENT IN UNCONSOLIDATED JOINT VENTURES AND INVESTEES (Tables)	9 Months Ended
	Sep. 30, 2017
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, 2017 September 30, 2016 American Realty Investors, Inc. (1) 0.90 % 0.90 % (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, 2017 2016 Real estate, net of accumulated depreciation $ 14,411 $ 14,550 Notes receivable 39,857 46,371 Other assets 54,703 126,848 Notes payable (6,618 ) (10,426 ) Other liabilities (37,184 ) (111,789 ) Shareholders’ equity (65,169 ) (65,554 ) For the Nine Months Ended September 30, 2017 2016 Rents and interest and other income $ 4,655 $ 5,586 Depreciation (142 ) (113 ) Operating expenses (2,607 ) (2,897 ) Gain on land sales 1,360 — Interest expense (4,641 ) (4,725 ) Net loss $ (1,375 ) $ (2,149 ) Company’s proportionate share of loss $ (12 ) $ (19 )

NOTES PAYABLE (Tables)

NOTES PAYABLE (Tables)	9 Months Ended
	Sep. 30, 2017
Debt Disclosure [Abstract]
Schedule of notes and interest payable	Below is a summary of our notes and interest payable as of September 30, 2017 (dollars in thousands): Notes Payable Accrued Interest Total Debt Apartments $ 537,396 $ 1,476 $ 538,872 Apartments under Construction 43,507 — 43,507 Commercial 127,182 602 127,784 Land 24,712 230 24,942 Real estate subject to sales contract 3,450 489 3,939 Mezzanine financing 100,673 — 100,673 Other 9,037 — 9,037 Total $ 845,957 $ 2,797 $ 848,754 Unamortized deferred borrowing costs (18,389 ) — (18,389 ) Total $ 827,568 $ 2,797 $ 830,365

RELATED PARTY TRANSACTIONS (Tab

RELATED PARTY TRANSACTIONS (Tables)	9 Months Ended
	Sep. 30, 2017
Related Party Transactions [Abstract]
Schedule of accounts receivable from and (accounts payable) to related parties	The following table reflects the reconciliation of the beginning and ending balances of accounts receivable from and (accounts payable) to related parties as of September 30, 2017 (dollars in thousands): Pillar ARL Total Related party receivable, December 31, 2016 $ (7,103 ) $ 108,752 $ 101,649 Cash transfers 31,933 — 31,933 Advisory fees (7,402 ) — (7,402 ) Net income fee (189 ) — (189 ) Fees and commissions (1,658 ) — (1,658 ) Cost reimbursements (1,954 ) — (1,954 ) Interest income — 3,462 3,462 Notes receivable purchased (447 ) (447 ) Expenses paid by advisor (3,913 ) — (3,913 ) Financing (mortgage payments) (4,656 ) — (4,656 ) Sales/Purchases transactions (9,129 ) — (9,129 ) Purchase of obligations 5,208 (5,208 ) — Related party receivable, Sept 30, 2017 $ 690 $ 107,006 $ 107,696

OPERATING SEGMENTS (Tables)

OPERATING SEGMENTS (Tables)	9 Months Ended
	Sep. 30, 2017
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, 2017 and 2016, including capital expenditures and segment assets (dollars in thousands): For the Three Months Ended September 30, 2017 Commercial Properties Apartments Land Other Total Rental and other property revenues $ 8,170 $ 23,231 $ 86 $ 4 $ 31,491 Property operating expenses (4,252 ) (10,659 ) (115 ) (131 ) (15,157 ) Depreciation and amortization (2,298 ) (4,028 ) — — (6,326 ) Mortgage and loan interest (1,902 ) (5,168 ) (387 ) (6,788 ) (14,245 ) Interest income — — — 3,175 3,175 Recognition of deferred gain on sale of income-producing properties — 9,841 — — 9,841 Gain on land sales — — 530 — 530 Segment operating income (loss) $ (282 ) $ 13,217 $ 114 $ (3,740 ) $ 9,309 Balance Sheet Data as of September 30, 2017 Capital expenditures $ 689 $ 543 $ 55 $ — $ 1,287 Real estate assets $ 145,321 $ 665,972 $ 117,642 $ — $ 928,935 Property Sales Sales price $ — $ — $ 850 $ — $ 850 Cost of sale — — (320 ) — (320 ) Recognized prior deferred gain — 9,841 — — 9,841 Gain on sale $ — $ 9,841 $ 530 $ — $ 10,371 For the Three Months Ended September 30, 2016 Commercial 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 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 Presented below is our reportable segments’ operating income for the nine months ended September 30, 2017 and 2016, including capital expenditures and segment assets (dollars in thousands): For the Nine Months Ended September 30, 2017 Commercial Properties Apartments Land Other Total Rental and other property revenues $ 25,308 $ 68,922 $ 87 $ 11 $ 94,328 Property operating expenses (13,629 ) (31,615 ) (429 ) (583 ) (46,256 ) Depreciation and amortization (6,903 ) (12,105 ) — — (19,008 ) Mortgage and loan interest (5,629 ) (16,955 ) (1,248 ) (21,386 ) (45,218 ) Interest income — — — 10,305 10,305 Recognition of deferred gain on sale of income-producing properties — 9,841 — — 9,841 Gain on land sales — — 500 — 500 Segment operating income (loss) $ (853 ) $ 18,088 $ (1,090 ) $ (11,653 ) $ 4,492 Balance Sheet as of September 30, 2017 Capital expenditures $ 2,586 $ 543 $ 641 $ — $ 3,770 Real estate assets $ 145,321 $ 665,972 $ 117,642 $ — $ 928,935 Property Sales Sales price $ — $ — $ 2,446 $ — $ 2,446 Cost of sale — — (1,946 ) — (1,946 ) Recognized prior deferred gain — 9,841 — — 9,841 Gain on sale $ — $ 9,841 $ 500 $ — $ 10,341 For the Nine Months Ended September 30, 2016 Commercial 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 on sale $ (243 ) $ 5,168 $ 3,925 $ — $ 8,850
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, 2017 and 2016 (dollars in thousands): Three Months Ended September 30, 2017 2016 Segment operating income (loss) $ 9,309 $ (413 ) Other non-segment items of income (expense): General and administrative (1,594 ) (1,541 ) Net income fee to related party (53 ) (67 ) Advisory fee to related party (2,595 ) (2,394 ) Other income 2,096 8 Earnings from unconsolidated joint ventures and investees 7 — Income tax expense — (25 ) Net income (loss) from continuing operations $ 7,170 $ (4,432 ) 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, 2017 and 2016 (dollars in thousands): Nine Months Ended September 30, 2017 2016 Segment operating income $ 4,492 $ 7,650 Other non-segment items of income (expense) General and administrative (4,669 ) (4,754 ) Net income fee to related party (189 ) (193 ) Advisory fee to related party (7,402 ) (7,096 ) Other income (312 ) 1,178 Loss from unconsolidated joint ventures and investees (11 ) (2 ) Income tax expense — (24 ) Net loss from continuing operations $ (8,091 ) $ (3,241 )
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, 2017 2016 Segment assets $ 928,935 $ 899,848 Investments in real estate partnerships 2,435 2,469 Notes and interest receivable 62,698 72,704 Other assets 256,659 176,527 Total assets $ 1,250,727 $ 1,151,548

ORGANIZATION AND BASIS OF PRE28

ORGANIZATION AND BASIS OF PRESENTATION (Details Narrative)	9 Months Ended
	Sep. 30, 2017ft²aNumber
Number of apartment units	8,226
Number of apartment communities	50
Number of properties	58
Rentable square feet | ft²	1,700,000
Acres of land | ft²	3,505
Area of land comprising golf course | a	96.09
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	7
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
Income Opportunities Realty Investors, Inc. [Member]
Percentage of ownership	81.10%
American Realty Investors, Inc [Member]
Percentage of ownership in the company	80.90%
Percentage of ownership	0.90%

REAL ESTATE ACTIVITY (Details)

REAL ESTATE ACTIVITY (Details) - USD ($) $ in Thousands	Sep. 30, 2017	Dec. 31, 2016
Real Estate [Abstract]
Apartments	$ 699,127
Apartments under construction	77,537
Commercial properties	206,982
Land held for development	71,238
Real estate subject to sales contract	46,403
Total real estate	1,101,287
Less accumulated depreciation	(172,352)
Total real estate	$ 928,935	$ 891,173

REAL ESTATE ACTIVITY (Details N

REAL ESTATE ACTIVITY (Details Narrative) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2017USD ($)ft²aNumber	Sep. 30, 2016USD ($)	Sep. 30, 2017USD ($)ft²aNumber	Sep. 30, 2016USD ($)	Dec. 31, 2016Number
Number of properties | Number	58		58
Acres of land | ft²	3,505		3,505
Gain on land sales	$ 530	$ 555	$ 500	$ 3,925
Gain on sale of income producing properties	9,841		9,841	$ 4,925
Payment for construction or predevelopment of various apartment complexes			41,400
Capitalized interest costs	$ 1,600		$ 1,600
Related Parties [Member]
Number of properties | Number					2
Area of land sold | a	91		91
Gain on sale of income producing properties			$ 9,841
Land Parcel Acquired [Member]
Number of properties | Number	3		3
Acquisition of income-producing properties			$ 11,400
Acres of land | a	29.7		29.7
Land [Member] | TEXAS
Area of land sold | a	14.16		14.16
Land sales - total consideration			$ 2,400
Gain on land sales			$ 500

NOTES AND INTEREST RECEIVABLE31

NOTES AND INTEREST RECEIVABLE (Details) - Performing Loans [Member] $ in Thousands	9 Months Ended
	Sep. 30, 2017USD ($)
Performing loans, total	$ 64,523
Accrued interest	4,434
Allowance for estimated losses	(1,825)
Total notes and interest receivable	$ 62,698
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	Secured
H198, LLC (McKinney Ranch Land) [Member]
Maturity Date	Sep. 30, 2018
Description of property	McKinney Ranch Land
Interest Rate	6.00%
Performing loans, total	$ 4,402
Description of Security	Secured
Spyglass Apartments of Ennis [Member]
Maturity Date	Nov. 30, 2019
Description of property	Spyglass Apartments of Ennis
Interest Rate	5.00%
Performing loans, total	$ 3,862
Description of Security	Secured
Oulan-Chikh Family Trust [Member]
Maturity Date	Mar. 31, 2021
Interest Rate	8.00%
Performing loans, total	$ 174
Description of Security	Secured
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]
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]
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	$ 6,369	[1]
Description of Security	Secured	[1]
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]
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	$ 1,952	[1]
Description of Security	Secured	[1]
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]
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]
Unified Housing Foundation, Inc. [Member]
Maturity Date	Dec. 31, 2018	[1]
Interest Rate	12.00%	[1]
Performing loans, total	$ 3,994	[1]
Description of Security	Unsecured	[1]
Unified Housing Foundation, Inc. #2 [Member]
Maturity Date	Dec. 31, 2018	[1]
Interest Rate	12.00%	[1]
Performing loans, total	$ 6,407	[1]
Description of Security	Unsecured	[1]
Unified Housing Foundation, Inc. #3 [Member]
Maturity Date	Jun. 30, 2020	[1]
Interest Rate	12.00%	[1]
Performing loans, total	$ 5,760	[1]
Description of Security	Unsecured	[1]
Other Related Party Notes [Member]
Description of maturity date	Various	[1]
Description of Interest Rate	Various	[1]
Performing loans, total	$ 465	[1]
Description of Security	Various unsecured interests	[1]
Other Non-Related Party Notes [Member]
Description of maturity date	Various
Description of Interest Rate	Various
Performing loans, total	$ 796
Description of Security	Various secured interests
Other Non-Related Party Notes [Member]
Description of maturity date	Various
Description of Interest Rate	Various
Performing loans, total	$ 1,231
Description of Security	Various unsecured interests
[1]	Related party notes

NOTES AND INTEREST RECEIVABLE32

NOTES AND INTEREST RECEIVABLE (Details Narrative) $ in Thousands	9 Months Ended
	Sep. 30, 2017USD ($)
Interest income	$ 3,462
Mortgage Loans [Member] | Related Parties [Member]
Total notes and interest receivable	43,700
Interest income	$ 5,200

INVESTMENT IN UNCONSOLIDATED 33

INVESTMENT IN UNCONSOLIDATED JOINT VENTURES AND INVESTEES (Details)		Sep. 30, 2017	Sep. 30, 2016
American Realty Investors, Inc. [Member]
Percentage of ownership	[1]	0.90%	0.90%
[1]	Unconsolidated investment in parent company owning 140,000 shares of ARL Common Stock.

INVESTMENT IN UNCONSOLIDATED 34

INVESTMENT IN UNCONSOLIDATED JOINT VENTURES AND INVESTEES (Details 1) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2017	Sep. 30, 2016	Sep. 30, 2017	Sep. 30, 2016	Dec. 31, 2016
Real estate, net of accumulated depreciation	$ 928,935		$ 928,935		$ 891,173
Other assets	48,233		48,233		55,605
Notes payable	(826,050)		(826,050)		(835,528)
Shareholders' equity	(196,746)		(196,746)		$ (205,885)
Rents and interest and other income	31,491	$ 29,776	94,328	$ 89,200
Depreciation	(6,326)	(6,014)	(19,008)	(17,665)
Operating expenses	25,725	25,429	77,524	75,003
Gain on land sales	530	555	500	3,925
Net income (loss) from continuing operations	7,170	(4,432)	(8,091)	(3,241)
Income (loss) from discontinued operations				2
Net loss	7,170	(4,432)	(8,091)	(3,239)
Company's proportionate share of loss	7		(11)	(2)
American Realty Investors, Inc. [Member]
Real estate, net of accumulated depreciation	14,411	14,550	14,411	14,550
Notes receivable	39,857	46,371	39,857	46,371
Other assets	54,703	126,848	54,703	126,848
Notes payable	(6,618)	(10,426)	(6,618)	(10,426)
Other liabilities	(37,184)	(111,789)	(37,184)	(111,789)
Shareholders' equity	$ (65,169)	$ (65,554)	(65,169)	(65,554)
Rents and interest and other income			4,655	5,586
Depreciation			(142)	(113)
Operating expenses			(2,607)	(2,897)
Gain on land sales			1,360
Interest expense			(4,641)	(4,725)
Net loss			(1,375)	(2,149)
Company's proportionate share of loss			$ (12)	$ (19)

INVESTMENT IN UNCONSOLIDATED 35

INVESTMENT IN UNCONSOLIDATED JOINT VENTURES AND INVESTEES (Details Narrative)	Sep. 30, 2017shares
American Realty Investors, Inc [Member]
Percentage of ownership	0.90%
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, 2017USD ($)
Notes Payable	$ 827,568
Accrued Interest	2,797
Total Debt	830,365
Unamortized deferred borrowing costs	(18,389)
Apartments [Member]
Notes Payable	537,396
Accrued Interest	1,476
Total Debt	538,872
Apartments Under Construction [Member]
Notes Payable	43,507
Total Debt	43,507
Commercial [Member]
Notes Payable	127,182
Accrued Interest	602
Total Debt	127,784
Land [Member]
Notes Payable	24,712
Accrued Interest	230
Total Debt	24,942
Real Estate Subject To Sales Contract [Member]
Notes Payable	3,450
Accrued Interest	489
Total Debt	3,939
Mezzanine Financing [Member]
Notes Payable	100,673
Total Debt	100,673
Other [Member]
Notes Payable	9,037
Total Debt	9,037
Total Notes Payable [Member]
Notes Payable	845,957
Accrued Interest	2,797
Total Debt	848,754
Unamortized deferred borrowing costs	$ (18,389)

NOTES PAYABLE (Details Narrativ

NOTES PAYABLE (Details Narrative) - Construction Loans [Member] $ in Thousands	9 Months Ended
	Sep. 30, 2017USD ($)Number
Number of loans refinanced or modified | Number	3
Notes payable	$ 80,100
Proceeds from draw on loan facility	$ 25,700

SERIES A BONDS PAYABLE (Details

SERIES A BONDS PAYABLE (Details Narrative)	Jul. 12, 2017USD ($)	Jul. 12, 2017ILS (₪)	May 16, 2017USD ($)	May 16, 2017ILS (₪)	Sep. 30, 2017USD ($)	Sep. 30, 2017USD ($)	Feb. 14, 2017USD ($)	Feb. 14, 2017ILS (₪)
Net gain (loss) on foreign currency transaction					$ 1,900,000	$ (1,800,000)
Issuance of bonds						$ 106,583,000
Southern Properties Capital LTD [Member] | Nonconvertible Series A Bonds [Member]
Debentures offering amount							$ 73,651,065
Interest rate	7.30%	7.30%	7.30%	7.30%	7.30%	7.30%	7.38%	7.38%
Effective yield							9.25%	9.25%
Issuance of bonds	$ 6,668,998		$ 27,769,615
Southern Properties Capital LTD [Member] | Nonconvertible Series A Bonds [Member] | Israel Shekel [Member]
Debentures offering amount | ₪								₪ 276,000,000
Exchange rate	3.574	3.574	3.607	3.607			3.7474	3.7474
Issuance of bonds | ₪		₪ 23,800,000		₪ 100,200,000

RELATED PARTY TRANSACTIONS (Det

RELATED PARTY TRANSACTIONS (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2017	Sep. 30, 2016	Sep. 30, 2017	Sep. 30, 2016
Due from Related Parties [RollForward]
Related party receivable, beginning			$ 101,649
Cash transfers			31,933
Advisory fees	$ (2,595)	$ (2,394)	(7,402)	$ (7,096)
Net income fee	(53)	$ (67)	(189)	$ (193)
Fees and commissions			(1,658)
Cost reimbursements			(1,954)
Interest income			3,462
Notes receivable purchased			(447)
Expenses paid by Advisor			(3,913)
Financing (mortgage payments)			(4,656)
Sales/purchases transactions			(9,129)
Related party receivable, ending	107,696		107,696
Pillar Income Asset Management, Inc [Member]
Due from Related Parties [RollForward]
Related party receivable, beginning			(7,103)
Cash transfers			31,933
Advisory fees			(7,402)
Net income fee			(189)
Fees and commissions			(1,658)
Cost reimbursements			(1,954)
Notes receivable purchased			(447)
Expenses paid by Advisor			(3,913)
Financing (mortgage payments)			(4,656)
Sales/purchases transactions			(9,129)
Related party receivable, ending	690		690
American Realty Investors, Inc [Member]
Due from Related Parties [RollForward]
Related party receivable, beginning			108,752
Interest income			3,462
Related party receivable, ending	$ 107,006		$ 107,006

OPERATING SEGMENTS (Details)

OPERATING SEGMENTS (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2017	Sep. 30, 2016	Sep. 30, 2017	Sep. 30, 2016
Segment Reporting Information [Line Items]
Rental and other property revenues	$ 31,491	$ 29,776	$ 94,328	$ 89,200
Property operating expenses	(15,157)	(15,413)	(46,256)	(45,295)
Depreciation and amortization	(6,326)	(6,014)	(19,008)	(17,665)
Gain on sale of income producing properties	9,841		9,841	4,925
Gain on land sales	530	555	500	3,925
Segment operating income (loss)	5,766	4,347	16,804	14,197
Total real estate	928,935		928,935
Property Sales
Gain on sale			9,841	4,925
Commercial Properties [Member]
Segment Reporting Information [Line Items]
Rental and other property revenues	8,170	7,368	25,308	23,620
Property operating expenses	(4,252)	(4,500)	(13,629)	(13,953)
Depreciation and amortization	(2,298)	(2,207)	(6,903)	(6,707)
Mortgage and loan interest	(1,902)	(1,700)	(5,629)	(5,347)
Gain on sale of income producing properties				(243)
Segment operating income (loss)	(282)	(1,039)	(853)	(2,630)
Capital expenditures	689	3,700	2,586	3,700
Total real estate	145,321	149,705	145,321	149,705
Property Sales
Sales price				1,500
Cost of sale				(1,743)
Gain on sale				(243)
Apartments [Member]
Segment Reporting Information [Line Items]
Rental and other property revenues	23,231	22,408	68,922	65,578
Property operating expenses	(10,659)	(10,696)	(31,615)	(30,258)
Depreciation and amortization	(4,028)	(3,807)	(12,105)	(10,958)
Mortgage and loan interest	(5,168)	(6,424)	(16,955)	(18,689)
Gain on sale of income producing properties	9,841		9,841	5,168
Segment operating income (loss)	13,217	1,481	18,088	10,841
Capital expenditures	543	(146)	543	(146)
Total real estate	665,972	615,822	665,972	615,822
Property Sales
Sales price				8,100
Cost of sale				(2,932)
Recognized prior deferred gain	9,841		9,841
Gain on sale	9,841		9,841	5,168
Land [Member]
Segment Reporting Information [Line Items]
Rental and other property revenues	86		87
Property operating expenses	(115)	(209)	(429)	(1,079)
Mortgage and loan interest	(387)	(420)	(1,248)	(1,335)
Gain on land sales	530	555	500	3,925
Segment operating income (loss)	114	(74)	(1,090)	1,511
Capital expenditures	55	1,873	641	1,873
Total real estate	117,642	134,321	117,642	134,321
Property Sales
Sales price	850	805	2,446	8,139
Cost of sale	(320)	(250)	(1,946)	(4,214)
Gain on sale	530	555	500	3,925
Other [Member]
Segment Reporting Information [Line Items]
Rental and other property revenues	4		11	2
Property operating expenses	(131)	(8)	(583)	(5)
Mortgage and loan interest	(6,788)	(5,024)	(21,386)	(13,455)
Interest income	3,175	4,251	10,305	11,386
Segment operating income (loss)	(3,740)	(781)	(11,653)	(2,072)
Total Segments [Member]
Segment Reporting Information [Line Items]
Rental and other property revenues	31,491	29,776	94,328	89,200
Property operating expenses	(15,157)	(15,413)	(46,256)	(45,295)
Depreciation and amortization	(6,326)	(6,014)	(19,008)	(17,665)
Mortgage and loan interest	(14,245)	(13,568)	(45,218)	(38,826)
Interest income	3,175	4,251	10,305	11,386
Gain on sale of income producing properties	9,841		9,841	4,925
Gain on land sales	530	555	500	3,925
Segment operating income (loss)	9,309	(413)	4,492	7,650
Capital expenditures	1,287	5,427	3,770	5,427
Total real estate	928,935	899,848	928,935	899,848
Property Sales
Sales price	850	805	2,446	17,739
Cost of sale	(320)	(250)	(1,946)	(8,889)
Recognized prior deferred gain	9,841		9,841
Gain on sale	$ 10,371	$ 555	$ 10,341	$ 8,850

OPERATING SEGMENTS (Details 1)

OPERATING SEGMENTS (Details 1) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2017	Sep. 30, 2016	Sep. 30, 2017	Sep. 30, 2016
Segment operating income (loss)	$ 5,766	$ 4,347	$ 16,804	$ 14,197
Other non-segment items of income (expense)
General and administrative	(1,594)	(1,541)	(4,669)	(4,754)
Net income fee to related party	(53)	(67)	(189)	(193)
Advisory fee to related party	(2,595)	(2,394)	(7,402)	(7,096)
Other income	190	8	1,529	1,178
Earnings (loss) from unconsolidated joint ventures and investees	7		(11)	(2)
Income tax expense		(25)		(24)
Net income (loss) from continuing operations	7,170	(4,432)	(8,091)	(3,241)
Total Segments [Member]
Segment operating income (loss)	9,309	(413)	4,492	7,650
Other non-segment items of income (expense)
General and administrative	(1,594)	(1,541)	(4,669)	(4,754)
Net income fee to related party	(53)	(67)	(189)	(193)
Advisory fee to related party	(2,595)	(2,394)	(7,402)	(7,096)
Other income	2,096	8	(312)	1,178
Earnings (loss) from unconsolidated joint ventures and investees	7		(11)	(2)
Income tax expense		(25)		(24)
Net income (loss) from continuing operations	$ 7,170	$ (4,432)	$ (8,091)	$ (3,241)

OPERATING SEGMENTS (Details 2)

OPERATING SEGMENTS (Details 2) - USD ($) $ in Thousands	Sep. 30, 2017	Dec. 31, 2016	Sep. 30, 2016
Segment assets	$ 928,935	$ 891,173
Investments in real estate partnerships	2,435	2,446
Other assets	48,233	55,605
Total assets	1,250,727	$ 1,185,914
Total Segments [Member]
Segment assets	928,935		$ 899,848
Investments in real estate partnerships	2,435		2,469
Notes and interest receivable	62,698		72,704
Other assets	256,659		176,527
Total assets	$ 1,250,727		$ 1,151,548

COMMITMENTS AND CONTINGENCIES43

COMMITMENTS AND CONTINGENCIES AND LIQUIDITY (Details Narrative) - USD ($) $ in Thousands	Jul. 20, 2015	Sep. 30, 2017
Related Party [Member] | Mezzanine Financing [Member]
Guarantor - notes payable		$ 60,400
Dynex Litigation [Member]
Description of plaintiff	Basic Capital Management, Inc., American Realty Trust, Inc., Transcontinental Realty Investors, Inc., Continental Poydras Corp., Continental Common, Inc. and Continental Baronne, Inc.
Description of defendant	Dynex Commercial, Inc.
Domicile of Litigation	68th Judicial District Court in Dallas County, Texas
Description of action taken by court	The Final Judgment entered against Dynex Commercial, Inc. on July 20, 2015 awarded Basic $0.256 million in damages, plus pre-judgment interest of $0.192 million for a total amount of $0.448 million. The Judgment awarded ART $14.2 million in damages, plus pre-judgment interest of $10.6 million for a total amount of $24.8 million. The Judgment awarded TCI $11.1 million, plus pre-judgment interest of $8.4 million for a total amount of $19.5 million. The Judgment also awarded Basic, ART, and TCI post-judgment interest at the rate of 5% per annum from April 25, 2014 until the date their respective damages are paid. Lastly, the Judgement awarded Basic, ART, and TCI $1.6 million collectively in attorneys’ fees from Dynex Commercial, Inc.
Awarded attorney fees	$ 1,600
Post-judgment interest rate	5.00%
Actions by plantiff	In April 2017, the plaintiffs filed a lawsuit against Dynex Capital, Inc. and Dynex Commercial, Inc. for $50 million alleging, among other things, fraudulent transfer and alter ego.
Damages sought	$ 50,000
Unfunded loan commitment	160,000
Dynex Litigation [Member] | Southern Properties Capital LTD [Member]
Damages - awarded amount	11,100
Damages - pre-judgement interest	8,400
Damages - total	19,500
Dynex Litigation [Member] | American Reality Trust, Inc. [Member]
Damages - awarded amount	14,200
Damages - pre-judgement interest	10,600
Damages - total	24,800
Dynex Litigation [Member] | Basic Capital Management, Inc. [Member]
Damages - awarded amount	256
Damages - pre-judgement interest	192
Damages - total	$ 448

EARNINGS PER SHARE (Details Nar

EARNINGS PER SHARE (Details Narrative) - RAI [Member] $ / shares in Units, $ in Thousands	Jul. 09, 2014USD ($)$ / sharesshares
Shares issued upon conversion	304,298
Series C Cumulative Convertible Preferred Stock [Member]
Preferred stock, shares issued	30,000
Preferred stock, shares outstanding	30,000
Shares issued upon conversion	(30,000)
Accrued Dividends | $	$ 900
Preferred stock, liquidation preference per share | $ / shares	$ 100