Transcontinental Realty Investors, Inc. (NYSE: TCI), a
Dallas-based real estate investment company, today reported results
of operations for the fourth quarter ended December 31, 2016. For
the three months ended December 31, 2016, the Company reported net
income applicable to common shares of $3.2 million or $0.37 per
share compared to a net loss applicable to common shares of $1.5
million or ($0.17) per share for the same period ended 2015.
For the year ending December 31, 2016, we reported net loss
applicable to common shares of $0.9 million or ($0.10) per diluted
earnings per share compared to a net loss applicable to common
shares of $8.5 million or ($0.98) per diluted earnings per share
for the same period ended 2015. The current year net loss
applicable to common shares of $0.9 million includes gain on sales
of income-producing properties of $16.2 million and gain on land
sales of $3.1 million, compared to the prior year net loss
applicable to common shares of $3.2 million, which includes gain on
land sales of $18.9 million, provision on the impairment of real
estate assets of $5.3 million and net income from discontinued
operations of $0.9 million.
The Company continues to demonstrate our unwavering commitment
to fortify our portfolio and streamline operational activity, while
at the same time maintaining our commitment to creating value.
During the past year we made major steps toward our strategic
financing goals allowing for the acquisition and/or development of
several Class A Multifamily assets. We created added value by
taking advantage of the strong market opportunities in the
multifamily arena.
TCI’s revenue increased to over $118 million in 2016, up from
$102 million in 2015. Net Operating Income for 2016 is $17 million,
showing an $8 million NOI increase after all operating expenses.
TCI capped off its stellar 2016 with a Net Income of $37,000 after
2015’s net income loss of $7,000. Several factors attributed to
these successes. Our multifamily portfolio continues to thrive with
occupancies over 95% heading into 2017, and 2016 held several other
notable highlights; such as achieving HUD Major Borrower
Endorsement, acquiring four multifamily assets, beginning
construction on four new multifamily assets, and adding over 1600
units to our existing portfolio.
Rental and other property revenues were $118.5 million for the
year ended December 31, 2016. This represents an increase of $16.3
million, as compared to the prior year revenues of $102.2 million.
The change by segment is an increase in the apartment portfolio of
$13.8 million and an increase in the commercial portfolio of
approximately $2.5 million. The increase in the apartment and
commercial portfolios is mainly due to the acquisition of new
properties. Our apartment portfolio continues to excel in the
current economic conditions with occupancies averaging over 92% and
increasing rental rates. We have been able to surpass expectations
due to the high-quality product offered, strength of our management
team and our commitment to our tenants. The increase in the
commercial segment is also due to an increase in rental rates. We
anticipate that our commercial portfolio will continue to improve
as the Company has been successful in attracting high-quality
tenants and expects to continue to see the benefits of those new
leases in the future.
Property operating expenses were $61.9 million for the year
ended December 31, 2016. This represents an increase of $9.6
million compared to the prior year operating expenses of $52.3
million. The growth in our apartment portfolio resulted in a $6.3
million increase in property operating expenses. We added a net
2,145 apartment units during 2015 and 723 during 2016. In addition,
we had an increase of $2.6 million in property operating expenses
for our commercial portfolio primarily due to the acquisition of an
office building in Houston, Texas late in the second quarter of
2015.
Depreciation and amortization expenses were $23.7 million for
the year ended December 31, 2016. This represents an increase of
$2.4 million as compared to prior year depreciation of $21.3
million. The increase is primarily due to the growth in our
apartment portfolio which had an increase of $2.3 million
year-over-year.
General and administrative expenses remained constant at $5.5
million for the years ended December 31, 2016 and 2015.
There was no provision for impairment of notes receivable,
investment in real estate partnerships and real estate assets for
the year ended December 31, 2016 as compared to the prior year
provision of $5.3 million for our golf course and related assets
located in the U.S. Virgin Islands. This impairment was due to the
decision to sell the development parcels in the U.S. Virgin Islands
which resulted in a decrease in the estimated fair value of the
remaining assets.
Net income fee was $0.3 million for the year ended December 31,
2016. This represents an increase of $0.1 million compared to the
prior year net income fee of $0.2 million. The net income fee paid
to Pillar is calculated at 7.5% of net income.
Advisory fees were $9.5 million for the year ended December 31,
2016. This represents an increase of $1.1 million compared to the
prior year advisory fees of $8.4 million. Advisory fees are
computed based on a gross asset fee of 0.0625% per month (0.75% per
annum) of the average of the gross asset value.
Interest income was $14.7 million for the year ended December
31, 2016 compared to $10.7 million for the year ended December 31,
2015 for an increase of $4.0 million. This increase was primarily
due to an increase in amount receivable owed from our Advisor.
Mortgage and loan interest expense was $53.1 million for the
year ended December 31, 2016. This represents an increase of $6.6
million compared to the prior year expense of $46.5 million. The
change by segment is an increase in the other portfolio of $6.9
million, an increase in the apartment portfolio of $1.9 million and
an increase in the commercial portfolio of $0.3 million, partially
offset by a decrease in the land portfolio of $2.5 million. Within
the other portfolio, the increase is due to incurring two new
mezzanine debt obligations during 2015. Within the apartment
portfolio, the majority of the increase is due to the acquisition
of new properties, partially offset by loan refinancing at lower
rates.
Gain on sale of income-producing properties was $16.2 million
for the year ended December 31, 2016. During 2016, we sold two
apartment communities for a total sales price of $20.4 million and
recorded an aggregate gain of $16.4 million from the sale of these
two properties. We also sold an industrial warehouse that resulted
in a loss of $0.2 million.
Gain on land sales was $3.1 million and $18.9 million for the
years ended December 31, 2016 and 2015, respectively. During 2016,
we sold a combined 129.7 acres of land for a total sales price of
$29.1 million and recorded an aggregate gain of $3.1 million.
During 2015, we sold approximately 595 acres of land for a total
sales price of $107.3 million and recorded a gain of $18.9
million.
About Transcontinental Realty Investors, Inc.
Transcontinental Realty Investors, Inc., a Dallas-based real
estate investment company, holds a diverse portfolio of equity real
estate located across the U.S., including apartments, office
buildings, 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. For
more information, visit the Company’s website at
www.transconrealty-invest.com.
TRANSCONTINENTAL REALTY INVESTORS, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
For the Years Ended December 31, 2016
2015
2014 (dollars in thousands, except per share
amounts) Revenues: Rental and other property revenues
(including $708, $726 and $701 for the year ended 2016, 2015 and
2014, respectively, from related parties) $ 118,471 $ 102,220 $
75,858
Expenses: Property operating expenses
(including $865, $740 and $606 for the year ended 2016, 2015 and
2014, respectively, from related parties) 61,918 52,257 39,484
Depreciation and amortization 23,683 21,299 17,398 General and
administrative (including $3,574, $3,105 and $2,802 for the year
ended 2016, 2015 and 2014, respectively, from related parties)
5,476 5,508 7,163 Provision on impairment of real estate assets -
5,300 - Net income fee to related party 257 187 3,669 Advisory fee
to related party 9,490 8,368
7,373 Total operating expenses 100,824
92,919 75,087 Net operating income 17,647
9,301 771
Other income (expense): Interest income (including
$14,155, $10,071 and $11,469 for the year ended 2016, 2015 and
2014, respectively, from related parties) 14,670 10,687 12,194
Other income 1,816 71 403 Mortgage and loan interest (including
$568, $0, and $31 for the year ended 2016, 2015 and 2014,
respectively, from related parties) (53,088 ) (46,541 ) (33,681 )
Loss on the sale of investments - (1 ) (92 ) Income (loss) from
unconsolidated joint ventures and investees (26 ) 41 (28 )
Litigation settlement - (352 ) 3,591
Total other expenses (36,628 ) (36,095 )
(17,613 ) Loss before gain on sales, non-controlling
interest and taxes (18,981 ) (26,794 ) (16,842 ) Gain on sale of
income-producing properties 16,207 - - Gain on land sales
3,121 18,911 561 Net income
(loss) from continuing operations before taxes 347 (7,883 ) (16,281
) Income tax benefit (expense) (24 ) (517 )
20,390 Net income (loss) from continuing operations
323 (8,400 ) 4,109 Discontinued
operations: Net income (loss) from discontinued operations (2 ) 644
(3,621 ) Gain on sale of real estate from discontinued operations -
735 61,879 Income tax expense from discontinued operations 1
(483 ) (20,390 ) Net income from
discontinued operations (1 ) 896 37,868 Net income (loss) 322
(7,504 ) 41,977 Net income attributable to non-controlling interest
(285 ) (132 ) (399 ) Net income (loss)
attributable to Transcontinental Realty Investors, Inc. 37 (7,636 )
41,578 Preferred dividend requirement (900 ) (900 )
(1,005 ) Net income (loss) applicable to common shares $
(863 ) $ (8,536 ) $ 40,573
Earnings per share -
basic Net income (loss) from continuing operations $ (0.10 ) $
(1.08 ) $ 0.32 Net income from discontinued operations -
0.10 4.42 Net income (loss)
applicable to common shares $ (0.10 ) $ (0.98 ) $ 4.74
Earnings per share - diluted Net income (loss) from
continuing operations $ (0.10 ) $ (1.08 ) $ 0.32 Net income from
discontinued operations - 0.10
4.42 Net income (loss) applicable to common shares $ (0.10 )
$ (0.98 ) $ 4.74 Weighted average common shares used
in computing earnings per share 8,717,767 8,717,767 8,559,370
Weighted average common shares used in computing diluted earnings
per share 8,717,767 8,717,767 8,559,370
Amounts
attributable to Transcontinental Realty Investors, Inc. Net
income (loss) from continuing operations $ 38 $ (8,532 ) $ 3,710
Net income (loss) from discontinued operations (1 )
896 37,868 Net income (loss) $ 37 $
(7,636 ) $ 41,578
TRANSCONTINENTAL REALTY
INVESTORS, INC. CONSOLIDATED BALANCE SHEETS
December 31, December 31,
2016 2015 (dollars in
thousands, except share and par value amounts) Assets
Real estate, at cost $ 998,498 $ 935,635 Real estate subject to
sales contracts at cost, net of depreciation ($0 in 2016 and $0 in
2015) 46,956 47,192 Less accumulated depreciation (154,281 )
(138,808 ) Total real estate 891,173 844,019 Notes and
interest receivable Performing (including $67,912 in 2016 and
$64,181 in 2015 from related parties) 81,133 71,376 Less allowance
for estimated losses (including $1,825 in 2016 and $1,825 in 2015
from related parties) (1,825 ) (1,825 ) Total notes
and interest receivable 79,308 69,551 Cash and cash equivalents
17,506 15,171 Restricted cash 38,227 44,060 Investments in
unconsolidated subsidiaries and investees 2,446 5,243 Receivable
from related party 101,649 90,515 Other assets 55,605
41,645 Total assets $ 1,185,914 $ 1,110,204
Liabilities and Shareholders’ Equity
Liabilities: Notes and interest payable $ 835,528 $ 772,636 Notes
related to assets held for sale 376 376 Notes related to subject to
sales contracts 5,612 6,422 Deferred revenue (including $50,689 in
2016 and $50,645 in 2015 from related parties) 71,065 71,021
Accounts payable and other liabilities (including $6,487 in 2016
and $3,060 in 2015 from related parties) 48,856
34,694 961,437 885,149 Shareholders’ equity:
Preferred stock, Series C: $0.01 par value, authorized 10,000,000
shares, issued and outstanding zero shares in 2016 and 2015
(liquidation preference $100 per share). Series D: $0.01 par value,
authorized, issued and outstanding 100,000 shares in 2016 and 2015
(liquidation preference $100 per share) 1 1 Common Stock, $0.01 par
value, authorized 10,000,000 shares, issued 8,717,967 shares in
2016 and 2015 and outstanding 8,717,767 in 2016 and 2015 87 87
Treasury stock at cost, 200 shares in 2016 and 2015 (2 ) (2 )
Paid-in capital 269,849 270,749 Retained earnings (64,050 )
(64,087 ) Total Transcontinental Realty Investors, Inc.
shareholders' equity 205,885 206,748 Non-controlling interest
18,592 18,307 Total shareholders'
equity 224,477 225,055 Total
liabilities and shareholders' equity $ 1,185,914 $ 1,110,204
View source
version on businesswire.com: http://www.businesswire.com/news/home/20170403006561/en/
Transcontinental Realty Investors, Inc.Gene Bertcher,
800-400-6407investor.relations@transconrealty-invest.com
Transcontinental Realty ... (NYSE:TCI)
Historical Stock Chart
From Aug 2024 to Sep 2024
Transcontinental Realty ... (NYSE:TCI)
Historical Stock Chart
From Sep 2023 to Sep 2024