A net operating loss is when a company’s deductible expenses exceed its taxable income for a period, producing an official tax loss that can be used to reduce future taxable income and lower future cash taxes. For investors it matters because these tax credits are like a savings account of losses the company can “spend” later to boost after‑tax cash flow, which can raise the value of the business—though rules can limit how and when those losses are used.
funds from operationsfinancial
Funds from operations (FFO) measures the cash a real estate-focused company generates from its core property operations by adjusting net income to add back non-cash expenses like building depreciation and removing one-time gains or losses from property sales. Investors use FFO like a household’s monthly take-home pay—it's a clearer view of ongoing cash available to pay dividends, maintain properties and fund growth than raw accounting profit.
Loans a company must repay, including mortgages (debt secured by property) and other notes payable (written promises to pay borrowed money). Think of a mortgage as a home loan with the building as collateral and notes payable as IOUs for other types of borrowing. These obligations matter to investors because they reduce available cash, create interest costs, and affect a company’s financial health and risk profile—higher debt can boost returns but also increase the chance of trouble if income falls.
construction loan facilityfinancial
A construction loan facility is a short-term, staged line of credit that funds the building or major renovation of a property, releasing money as work milestones are reached rather than all at once. For investors, it matters because the lender’s terms, scheduled payouts and completion risk affect the developer’s cash flow and the project’s chance of finishing on time and on budget — similar to a pay-as-you-go loan that only pays the contractor when each part of a house is completed.
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DALLAS--(BUSINESS WIRE)--
American Realty Investors, Inc. (NYSE:ARL) is reporting its results of operations for the three months ended March 31, 2026. For the three months ended March 31, 2026, we reported net loss attributable to common shares of $0.6 million or $0.03 per share, compared to a net income attributable to common shares of $3.0 million or $0.18 per share for the same period in 2025.
Financial Highlights
Total occupancy was 81% at March 31, 2026, which includes 93% at our multifamily properties and 58% at our commercial properties.
Occupancy for our Alera, Bandera Ridge and Merano (collectively, our “Development Properties”) at March 31, 2026 was 47%, 44% and 42%, respectively.
During the three months ended March 31, 2026, we sold 21 lots from our holdings in Windmill Farms for $1.0 million, resulting in a gain on sale of $0.8 million.
Financial Results
Revenues increased $0.3 million from $12.0 million for the three months ended March 31, 2025 to $12.3 million for the three months ended March 31, 2026. The increase in revenue is primarily due to an increase of $0.7 million from our commercial properties offset in part by a decrease of $0.3 million from our multifamily properties. The increase in revenue from our commercial properties is primarily due to an increase in occupancy at Stanford Center.
Net operating loss increased $1.4 million from $0.8 million for the three months ended March 31, 2025 to $2.2 million for the three months ended March 31, 2026. Our increase in net operating loss was primarily due to a $1.4 million increase in operating expenses from the lease-up properties for the three months ended March 31, 2026.
Net income attributable to common shares decreased $3.5 million from net income of $3.0 million for the three months ended March 31, 2025 to a net loss of $0.6 million for the three months ended March 31, 2026. The decrease in net income is primarily attributed to a decrease of $3.5 million from gain on sale or write down of assets, $1.3 million in interest income, net and $1.4 million in net operating loss offset in part by a $1.6 million decrease in tax provision. The decrease in gain on sale of real estate transactions is attributed to the condemnation of a parcel of land at Windmill Farms in 2025.
About American Realty Investors, Inc.
American Realty Investors, Inc., a Dallas-based real estate investment company, holds a diverse portfolio of equity real estate located across the U.S., including office buildings, apartments, shopping centers, and developed and undeveloped land. The Company invests in real estate through direct ownership, leases and partnerships and invests in mortgage loans on real estate. The Company also holds mortgage receivables. The Company’s primary asset and source of its operating results is its investment in Transcontinental Realty Investors, Inc. (NYSE:TCI). For more information, visit the Company’s website at www.americanrealtyinvest.com.
AMERICAN REALTY INVESTORS, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(Dollars in thousands, except per share amounts)
(Unaudited)
Three Months Ended March 31,
2026
2025
Revenues:
Rental revenues
$
11,656
$
11,427
Other income
685
581
Total revenue
12,341
12,008
Expenses:
Property operating expenses
7,333
5,977
Depreciation and amortization
3,630
2,883
General and administrative
1,486
1,492
Advisory fee to related party
2,083
2,469
Total operating expenses
14,532
12,821
Net operating loss
(2,191
)
(813
)
Interest income
3,824
4,010
Interest expense
(2,968
)
(1,820
)
Equity in income from unconsolidated joint ventures
-
(159
)
Gain on real estate transactions
385
3,891
Income tax provision
434
(1,146
)
Net (loss) income
(516
)
3,963
Net income attributable to noncontrolling interest
(35
)
(998
)
Net (loss) income attributable to common shares
$
(551
)
$
2,965
Earnings per share
Basic and diluted
$
(0.03
)
$
0.18
Weighted average common shares used in computing earnings per share
