SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
September 26, 2001
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Date of Report (Date of Earliest Event Reported)
TRANSCONTINENTAL REALTY INVESTORS, INC.
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(Exact Name of Registrant as Specified in its Charter)
Nevada 1-9240 94-6565852
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(State of Incorporation) (Commission (IRS Employer
File No.) Identification No.)
1800 Valley View Lane, Suite 300, Dallas, TX 75234
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(Address of Principal Executive Offices) (Zip Code)
Registrant's Telephone Number, Including Area Code: (469) 522-4200
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ITEM 2. ACQUISITION OR DISPOSITION OF ASSETS
In 2001, Transcontinental Realty Investors, Inc. ("TCI") has sold a significant
amount of its properties as follows:
Gain/ % of
Sale Units/ Sales (Loss) TCI's
Date Property Location Sq.Ft./Acres Price on Sale Assets Purchaser
---- -------- -------- ------------ ----- ------- ------ --------------------
Apartments (dollars in Thousands)
02/21/01 Heritage Tulsa, OK 136 Units $ 2,285 $ 1,575 0.08% 21st Investment Group, LLC
03/01/01 Forest Ridge Denton, TX 56 Units 2,000 1,014 0.10% Investment Property Exchange
Services, LLC
03/08/01 Park at Colonnade San Antonio, TX 211 Units 5,800 1,592 0.52% Colonade-Central Texas, LP
05/18/01 Glenwood Addison, TX 168 Units 3,659 -- 0.50% American Realty Investors,
Inc./(1/)
05/22/01 Fontenelle Hills Bellevue, NE 338 Units 16,500 4,565 1.53% Haley Fontenelle Hills, Ltd.
05/31/01 Bent Tree Gardens Addison, TX 204 Units 9,000 601 1.09% Bent Tree Gardens Partners, LP
06/19/01 McCallum Glen Dallas, TX 275 Units 8,450 1,375 0.70% Texas McCallum Glen Partners,
Ltd.
08/06/01 Park Lane Dallas, TX 97 Units 2,750 1,827 0.10% Investors Park Lane, Ltd.
08/08/01 McCallum Crossing Dallas, TX 322 Units 11,500 4,486 0.86% Texas McCallum Crossing
Partners, Ltd.
08/28/01 Carseka Los Angeles, CA 54 Units 4,000 1,353 0.29% Empire West Group
09/26/01 Sunset Lakes Waukegan, IL 414 Units 15,200 7,316 0.83% Kinzie Realty Corporation
09/28/01 Oak Run Pasadena, TX 160 Units 5,800 2,227 0.44% RHP-Oak Run Manor, LP
Office Buildings
06/08/01 Waterstreet Boulder, CO 106,257 Sq.Ft. 22,250 9,154 1.45% Waterstreet Plaza, LLC, NESC-
Exchange XXIII, LLC
06/27/01 Daley San Diego, CA 64,425 Sq.Ft. 6,211 836 0.67% AG/Touchstone Daley, LLC
07/23/01 Chesapeake Center San Diego, CA 57,493 Sq.Ft. 6,575 204 0.78% KM Phoenix Associates, LLC
Industrial Warehouse
02/21/01 Zodiac Dallas, TX 35,435 Sq.Ft. 762 167 0.07% Zodiac Investments, LP
06/14/01 Tech Trading Center Sterling, VA 197,659 Sq.Ft. 10,775 4,163 0.80% V-Glenn Drive Associates, LLC
Land
02/23/01 McKinney 36 McKinney, TX 1.822 Acres 476 355 0.01% State of Texas
03/29/01 Round Mountain Austin, TX 110 Acres 2,560 1,046 0.18% Renroc Development, LLP
04/20/01 Moss Creek Greensboro, NC 4.79 Acres 15 (71) 0.01% Ted L. and Mary E. Bissette
08/30/01 Eagle Crest Farmers Branch, TX 4.41 Acres 300 (215) 0.07% City of Farmers Branch
--------- -------- ------
$ 136,868 $ 43,570 11.10%
========= ========
____________________________
(1) Glenwood Apartments were exchanged with a related party for two parcels
of land.
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ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS
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Proforma statements of operations are presented for the year ended December 31,
2000, and the six months ended June 30, 2001. The proforma statement of
operations present TCI's operations as if the transactions described above had
occurred at January 1 of each of the periods presented. A proforma balance sheet
as of June 30, 2001, is also presented. The proforma balance sheet presents the
property sales described above, as if they had occurred at January 1, 2001.
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TRANSCONTINENTAL REALTY INVESTORS, INC.
PROFORMA COMBINED
CONSOLIDATED BALANCE SHEET
JUNE 30, 2001
McCallum
Actual/(1)/ Chesapeake/(2)/ Park Lane/(2)/ Crossing/(2)/ Carseka/(2)/
----------- --------------- ---------------- -------------- -------------
Assets (dollars in thousands)
Real Estate
Real estate held for investment ............... $671,099 $ (5,997) $(1,078) (7,464) $(2,419)
Less - accumulated depreciation ............... (87,945) 192 334 1,064 263
-------- -------- ------- --------- --------
583,154 (5,805) (744) (6,400) (2,156)
Real estate held for sale ..................... 485 -- -- -- --
Notes and interest receivable
Performing ................................ 11,263 -- -- -- --
Less - allowance for losses ............... (537) -- -- -- --
-------- -------- ------- --------- --------
10,726 -- -- -- --
Investments in real estate entities ........... 19,946 -- -- -- --
Cash and cash equivalents ..................... 29,717 (6) (6) (7) (5)
Other assets .................................. 45,926 (91) (47) (629) (52)
-------- -------- ------- --------- --------
$689,954 (5,902) $ (797) $ (7,036) $(2,213)
======== ======== ======= ========= =======
Liabilities and Equity
Notes and interest payable .................... $446,535 $ (2,910) $(1,127) $ (8,216) $(1,487)
Other liabilities ............................. 22,433 (122) (22) (350) (37)
-------- -------- ------- --------- --------
468,968 (3,032) (1,149) (8,566) (1,524)
Commitments and Contingencies
Minority interest ............................. 4,294 -- -- -- --
Redeemable Preferred Stock .................... 1,500 -- -- -- --
Stockholders' Equity
Common stock .................................. 86 -- -- -- --
Paid-in capital ............................... 278,245 -- -- -- --
Accumulated distributions in excess of
accumulated earnings ...................... (60,080) (2,870) 352 1,530 (689)
Unrealized gain on marketable equity .......... (3,059) -- -- -- --
-------- -------- ------- --------- --------
215,192 (2,870) 352 1,530 (689)
-------- -------- ------- --------- --------
$689,954 $ (5,902) $ (797) $ (7,036) $(2,213)
======== ======== ======= ========= ========
Eagle Sunset
Crest/(2)/ Lakes/(2)/ Oak Run/(2)/ Proforma
------------ ---------- ------------ ----------
Assets
Real Estate
Real estate held for investment ............... $ (505) $ (7,703) $(3,648) $ 642,285
Less - accumulated depreciation ............... -- 1,465 352 (84,275)
-------- -------- ------- ---------
(505) (6,238) (3,296) 558,010
Real estate held for sale ..................... -- -- -- 485
Notes and interest receivable
Performing ................................ -- -- -- 11,263
Less - allowance for losses ............... -- -- -- (537)
-------- -------- ------- ---------
-- -- -- 10,726
Investments in real estate entities ........... -- -- -- 19,946
Cash and cash equivalents ..................... -- (7) (4) 29,682
Other assets .................................. -- (331) (231) 44,545
-------- -------- ------- ---------
$ (505) $ (6,576) $(3,531) $ 663,394
======== ======== ======= =========
Liabilities and Equity
Notes and interest payable .................... $ -- $ (7,409) $(4,439) $ 420,947
Other liabilities ............................. (1) (427) (146) 21,328
-------- -------- ------- ---------
(1) (7,836) (4,585) 442,275
Commitments and Contingencies
Minority interest ............................. -- -- -- 4,294
Redeemable Preferred Stock .................... -- -- -- 1,500
Stockholders' Equity
Common stock .................................. -- -- -- 86
Paid-in capital ............................... -- -- -- 278,245
Accumulated distributions in excess of
accumulated earnings ...................... (504) 1,260 1,054 (59,947)
Unrealized gain on marketable equity .......... -- -- -- (3,059)
-------- -------- ------- ---------
(504) 1,260 1,054 215,325
-------- -------- ------- ---------
$ (505) $ (6,576) $(3,531) $ 663,394
======== ======== ======= =========
___________________________
(1) Includes properties sold prior to June 30, 2001
(2) Assumes sale by TCI on January 1, 2001
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TRANSCONTINENTAL REALTY INVESTORS, INC.
PROFORMA COMBINED
STATEMENT OF OPERATIONS /(1)(2)/
SIX MONTHS ENDED JUNE 30, 2001
Office Industrial
Actual Apartments/(3)/ Building/(4)/ Warehouse/(5)/ Land/(6)/ Proforma
------ ------------- ----------- -------------- ------- --------
Revenue (dollars in thousands)
Rents ..................................... $ 71,041 $ (7,193) $ (2,004) $ (700) $ (14) $ 61,130
Property operations ....................... 40,441 (4,199) (1,004) (228) (89) 34,921
--------- -------- -------- ------- ------ ---------
30,600 (2,994) (1,000) (472) 75 26,209
Other income
Interest and other ........................ 1,258 -- -- -- -- 1,258
Equity (loss) in equity investees ......... (2,366) -- -- -- -- (2,366)
Gain on sale of real estate ............... 28,749 17,209 204 -- (215) 45,947
--------- -------- ------- ------- ------ ---------
27,641 17,209 204 -- (215) 44,839
Other expense
Interest .................................. 21,953 (2,018) (901) (267) (1) 18,766
Depreciation .............................. 10,049 (557) (377) (122) -- 8,993
Advisory fees ............................. 2,941 (326) (142) (43) (13) 2,417
Net income fee ............................ 1,129 1,029 47 (3) (9) 2,193
Incentive fees ............................ 1,577 1,191 (11) -- (17) 2,740
General and administrative ................ 5,923 -- -- -- -- 5,923
Minority interest ......................... 22 -- -- -- -- 22
--------- -------- -------- ------- ------ ---------
43,594 (681) (1,384) (435) (40) 41,054
Net income (loss) ............................ 14,647 14,896 588 (37) (100) 29,994
Preferred dividend requirement ............... (15) -- -- -- -- (15)
--------- -------- -------- ------- ------ --------
Net income (loss) ............................ $ 14,632 $ 14,896 $ 588 $ (37) $ (100) $ 29,979
========= ======== ======== ======= ====== =========
Basic and diluted earnings per share
Net income applicable to Common shares $ 1.68 $ 3.45
====== =========
Weighted average Common shares used in
computing earnings per share 8,686,091 8,686,091
========= =========
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TRANSCONTINENTAL REALTY INVESTORS, INC.
NOTES TO PROFORMA COMBINED
STATEMENT OF OPERATIONS
SIX MONTHS ENDED JUNE 30, 2001
(1) The Proforma Combined Statement of Operations assumes that each property
was sold by TCI on January 1, 2001.
(2) Operating results for sold properties are their actual operating results
from January 1 to their respective date of sale.
(3) Includes the Heritage Apartments sold in February 2001, the Forest Ridge
and Park at Colonade Apartments sold in March 2001, the Glenwood,
Fontenelle Hills and Bent Tree Apartments sold in May 2001, the McCallum
Glen Apartments sold in June 2001, the Park Lane, McCallum Crossing and
Carseka Apartments sold in August 2001 and the Sunset Lakes and Oak Run
Apartments sold in September 2001.
(4) Includes the Daley and Waterstreet Office Buildings sold in June 2001, and
the Chesapeake Center Office Building sold in July 2001.
(5) Includes the Zodiac Warehouse sold in February 2001, and the Technology
Trading Center sold in June 2001.
(6) Includes the partial sale of the McKinney 36 land parcel in February 2001,
the partial sale of the Round Mountain land parcel in March 2001, the Moss
Creek land parcel sold in April 2001, and the partial sale of the Eagle
Crest land parcel in August 2001.
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TRANSCONTINENTAL REALTY INVESTORS, INC.
PROFORMA COMBINED
STATEMENT OF OPERATIONS /(1)(2)/
YEAR ENDED DECEMBER 31, 2000
Office Industrial
Actual Apartments/(3)/ Building/(4)/ Warehouse/(5)/ Land/(6)/ Proforma
---------- ----------------- ------------- ---------------- ---------- ----------
(dollars in thousands)
Revenue
Rents ..................................... $ 139,662 $ (16,674) $ (4,146) $ (1,597) $ (10) $ 117,235
Property operations ....................... 78,170 (8,570) (1,731) (505) (17) 67,187
---------- ----------- --------- --------- ------- ----------
61,492 (8,104) (2,415) (1,092) 167 50,048
Other income
Interest and other ........................ 2,371 -- -- -- -- 2,371
Equity (loss) in equity investees ......... (556) -- -- -- -- (556)
Gain on sale of real estate ............... 50,550 27,931 10,194 4,330 1,115 94,120
---------- ----------- --------- --------- ------- ----------
52,365 27,931 10,194 4,330 1,115 95,935
Other expense
Interest .................................. 48,114 (4,566) (1,694) (544) (5) 41,305
Depreciation .............................. 19,749 (1,519) (718) (296) -- 17,216
Advisory fees ............................. 5,258 (330) (143) (42) (13) 4,730
Net income fee ............................ 2,415 1,801 774 309 97 5,396
General and administrative ................ 8,506 -- -- -- -- 8,506
Minority interest ......................... 33 -- -- -- -- 33
---------- ----------- --------- --------- ------- ----------
84,075 (4,614) (1,781) (573) 79 77,186
Net income ................................... 29,782 24,441 9,560 3,811 1,203 68,797
Preferred dividend requirement ............... (22) -- -- -- -- (22)
---------- ----------- --------- --------- ------- ----------
Net income ................................... $ 29,760 $ 24,441 $ 9,560 $ 3,811 $ 1,203 $ 68,775
========== =========== ========= ========= ======= ==========
Basic and diluted earnings per share
Net income applicable to Common shares .... $ 3.45 $ 7.97
========== ==========
Weighted average Common shares used in
computing earnings per share .............. 8,631,621 8,631,621
========== ==========
______________________________
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TRANSCONTINENTAL REALTY INVESTORS, INC.
NOTES TO PROFORMA COMBINED
STATEMENT OF OPERATIONS
YEAR ENDED DECEMBER 31, 2000
(1) The Proforma Combined Statement of Operations assumes that each property
was sold by TCI on January 1, 2000.
(2) Operating results for sold properties are their actual operating results
for the year ended December 31, 2000.
(3) Includes the Heritage Apartments sold in February 2001, the Forest Ridge
and Park at Colonade Apartments sold in March 2001, the Glenwood,
Fontenelle Hills and Bent Tree Gardens Apartments sold in May 2001, the
McCallum Glen Apartments sold in June 2001, the Park Lane, McCallum
Crossing and Carseka Apartments sold in August 2001, and the Sunset Lakes
and Oak Run Apartments sold in September 2001.
(4) Includes the Daley and Waterstreet Office Buildings sold in June 2001, and
the Chesapeake Center Office Building sold in July 2001.
(5) Includes the Zodiac Warehouse sold in February 2001, and the Technology
Trading Center sold in June 2001.
(6) Includes the partial sale of the McKinney 36 land parcel in February 2001,
the partial sale of the Round Mountain land parcel in March 2001, the Moss
Creek land parcel sold in April 2001, and the partial sale of the Eagle
Crest land parcel in August 2001.
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SIGNATURE
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Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned hereto duly authorized.
TRANSCONTINENTAL REALTY INVESTORS, INC.
Date: October 10, 2001 By: /s/ Brent Horak
------------------------ -----------------------------------
Brent Horak
Vice President and
Chief Financial Officer
(Principal Financial Officer)
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