American Realty Investors, Inc. reports Earnings for Quarter Ended December 31, 2022

Rhea-AI Summary

American Realty Investors, Inc. reports net income of $43.4 million for Q4 2022

Positive

• American Realty Investors, Inc. reported net income of $43.4 million or $2.69 per diluted share for Q4 2022, compared to a net loss of $6.8 million or $0.42 per diluted share for the same period in 2021.
• The company collected approximately 96% of its rents for Q4 2022, with 97% from multifamily tenants and 96% from office tenants.
• Total occupancy was 81% at December 31, 2022, with 93% at multifamily properties and 60% at commercial properties.
• The company received a distribution of approximately $204.0 million from the sale of VAA Sale Portfolio and gained control of the seven remaining multifamily properties from the VAA joint venture, resulting in a gain on remeasurement of approximately $73.2 million.

Negative

• None.

DALLAS--(BUSINESS WIRE)-- American Realty Investors, Inc. (NYSE:ARL) is reporting its results of operations for the quarter ended December 31, 2022. For the three months ended December 31, 2022, we reported net income attributable to common shares of $43.4 million or $2.69 per diluted share, compared to net loss attributable to common shares of $6.8 million or $0.42 per diluted share for the same period in 2021.

Financial Highlights

• We collected approximately 96% of our rents for the three months ended December 31, 2022, comprised of approximately 97% from multifamily tenants and approximately 96% from office tenants.
• Total occupancy was 81% at December 31, 2022, which includes 93% at our multifamily properties and 60% at our commercial properties.
• On November 1, 2022, we received a distribution of approximately $204.0 million in connection to the sale of VAA Sale Portfolio earlier in the year.
• On November 1, 2022, we also received the full control and economical rights to the seven remaining multifamily properties from our Victory Abode Apartments, LLC (“VAA”) joint venture (collectively, the “VAA Holdback Portfolio”) with a fair value of $219.5 million, which resulted in gain on remeasurement of approximately $73.2 million. The VAA Holdback Portfolio consisted of Blue Lake Villas, Blue Lake Villas Phase II, Northside on Travis, Parc at Denham Springs, Residences at Holland Lake, Villas of Park West I and Villas of Park West II.
• On October 21, 2022, we paid off the $38.5 million loan on Stanford Center from the cash generated from sale of the VAA Sale Portfolio.
• On January 31, 2023, we paid off our $66.5 million Series C bonds from cash received from sale of the VAA Sale Portfolio.

Financial Results

Rental revenues increased $4.1 million from $7.6 million for the three months ended December 31, 2021 to $11.8 million for the three months ended December 31, 2022. The increase in rental revenue is primarily due to $4.9 million increase at our multifamily properties offset in part by a decrease of $0.7 million from the commercial properties. The increase in revenue from the multifamily properties is primarily due to the acquisition of the VAA Holdback Portfolio in 2022. Net operating income increased $5.1 million from net operating loss of $3.7 million for three months ended December 31, 2021 to net operating income of $1.4 million for the three months ended December 31, 2022. The increase in net operating income is primarily due to the $4.1 million increase in rental revenue as noted above and a decrease of $2.3 million in general administrative and advisory expenses offset in part by an increase of $1.9 million in property operating and depreciation expenses. The decrease in general administrative and advisory expenses is primarily due to a decrease in legal expenses and the increase in property and depreciation expenses is due to the acquisition of the VAA Holdback Portfolio.

Net income attributable to common shares increased $50.2 million from net loss of $6.8 million for the three months ended December 31, 2021 to net income of $43.4 million for the three months ended December 31, 2022. The increase in net income is primarily attributed to $70.2 million increase in gain on sale, remeasurement or write down of assets offset in part by a $16.4 million increase in our tax provision. The increase in gain on our sale or write down of assets and our tax provision is due to the remeasurement of the VAA Holdback Portfolio that was acquired in 2022.

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 December 31,								Nine Months Ended December 31,
		2022				2021				2022				2021
Revenues:
Rental revenues		$	11,770			$	7,625			$	34,080			$	37,808
Other income			1,539				989				3,464				4,231
Total revenue			13,309				8,614				37,544				42,039
Expenses:
Property operating expenses			5,798				4,360				18,339				20,860
Depreciation and amortization			2,846				2,397				9,686				11,870
General and administrative			2,077				3,143				10,033				15,942
Advisory fee to related party			1,139				2,391				8,753				13,985
Total operating expenses			11,860				12,291				46,811				62,657
Net operating income (loss)			1,449				(3,677	)			(9,267	)			(20,618	)
Interest Income			9,543				6,033				35,226				23,421
Interest expense			(7,149	)			(6,604	)			(26,196	)			(29,080	)
Income (loss) on foreign currency transactions			630				(7,360	)			20,067				(6,175	)
Loss on early extinguishment of debt			-				-				(2,805	)			(1,451	)
Equity in (loss) income from unconsolidated joint ventures			(2,117	)			3,183				469,268				14,634
Gain on sale or write-down of assets, net			70,552				382				87,132				24,647
Income tax provision			(16,492	)			(129	)			(98,108	)			1,067
Net income (loss)			56,416				(8,172	)			475,317				6,445
Net income attributable to noncontrolling interest			(12,982	)			1,368				(101,968	)			(3,098	)
Net income (loss) attributable to the common shares		$	43,434			$	(6,804	)		$	373,349			$	3,347
Earnings per share - basic
Basic and diluted		$	2.69			$	(0.42	)		$	23.11			$	0.21
Weighted average common shares used in computing earnings per share
Basic and diluted			16,512,043				16,152,043				16,152,043				16,152,043

 

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American Realty Investors, Inc.

Investor Relations

Erik Johnson, (469) 522-4200

investor.relations@americanrealtyinvest.com

Source: American Realty Investors, Inc.

FAQ

What were the net income and earnings per share for American Realty Investors, Inc. in Q4 2022?

American Realty Investors, Inc. reported net income of $43.4 million or $2.69 per diluted share for Q4 2022.

What percentage of rents did the company collect for Q4 2022?

The company collected approximately 96% of its rents for Q4 2022, with 97% from multifamily tenants and 96% from office tenants.

What was the occupancy rate for American Realty Investors, Inc. at the end of December 2022?

The total occupancy rate was 81% at December 31, 2022, with 93% at multifamily properties and 60% at commercial properties.

What was the gain on remeasurement from the acquisition of the VAA Holdback Portfolio?

The company gained control of the seven remaining multifamily properties from the VAA joint venture, resulting in a gain on remeasurement of approximately $73.2 million.