All other schedules are omitted because they are not required, are not applicable or the information required is included in the Financial Statements or the notes thereto.
The accompanying notes are an integral part of these consolidated financial statements.
The accompanying notes are an integral part of these consolidated financial statements.
The accompanying notes are an integral part of these consolidated financial statements.
The accompanying notes are an integral part of these consolidated financial statements.
The accompanying notes are an integral part of these consolidated financial statements.
NOTES TO FINANCIAL STATEMENTS
The accompanying Consolidated Financial Statements of Transcontinental Realty Investors, Inc. (“TCI”) and consolidated entities have been prepared in conformity with accounting principles generally accepted in the United States of America, the most significant of which are described in Note 1. “Summary of Significant Accounting Policies.” The Notes to Consolidated Financial Statements are an integral part of the Consolidated Financial Statements. The data presented in the Notes to Consolidated Financial Statements are as of December 31 of each year and for the year then ended, unless otherwise indicated. Dollar amounts in tables are in thousands, except per share amounts.
Certain balances for 2015 and 2014 have been reclassified to conform to the 2016 presentation.
NOTE 1.
ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Organization and business.
TCI, a Nevada corporation, is headquartered in Dallas, Texas and its common stock trades on the New York Stock Exchange (“NYSE”) under the symbol (“TCI”).
TCI is a “C” corporation for U.S. federal income tax purposes and files an annual consolidated income tax return with American Realty Investors, Inc. (“ARL”), whose common stock is traded on the NYSE under the symbol (“ARL”). Subsidiaries of ARL own approximately 77.6% of the Company’s common stock.
In 2009, the Company acquired an additional 2,518,934 shares of common stock of Income Opportunity Realty Investors, Inc. (“IOT”), and in doing so, increased its ownership from approximately 25% to over 80% of the shares of common stock of IOT outstanding. Upon acquisition of the additional shares in 2009, IOT’s results of operations began consolidating with those of the Company for tax and financial reporting purposes. As of December 31, 2016, TCI owned 81.1% of the outstanding IOT common shares. Shares of IOT are traded on the New York Exchange (“NYSE MKT”) under the symbol (“IOT”).
At the time of the acquisition, the historical accounting value of IOT’s assets was $112 million and liabilities were $43 million. In that the shares of IOT acquired by TCI were from a related party, the values recorded by TCI are IOT’s historical accounting values at the date of transfer. The Company’s fair valuation of IOT’s assets and liabilities at the acquisition date approximated IOT’s book value. The net difference between the purchase price and historical accounting basis of the assets and liabilities acquired was $25.9 million and has been reflected by TCI as deferred income. The deferred income will be recognized upon the sale of the land that IOT held on its books as of the date of sale, to an independent third party.
TCI’s Board of Directors is responsible for directing the overall affairs of TCI and for setting the strategic policies that guide the Company. As of April 30, 2011, the Board of Directors delegated the day-to-day management of the Company to Pillar Income Asset Management, Inc. (“Pillar”), a Nevada corporation under a written Advisory Agreement that is reviewed annually by TCI’s Board of Directors. The directors of TCI are also directors of ARL and IOT. The Chairman of the Board of Directors of TCI also serves as the Chairman of the Board of Directors of ARL and IOT. The officers of TCI also serve as officers of ARL, IOT and Pillar.
Since April 30, 2011, Pillar, the sole shareholder of which is Realty Advisors, LLC, a Nevada limited liability company, the sole member of which is Realty Advisors, Inc. (“RAI”), a Nevada corporation, the sole shareholder of which is May Realty Holdings, Inc. (“MRHI”, formerly known as Realty Advisors Management, Inc. “RAMI”, effective August 7, 2014), a Nevada corporation, the sole shareholder of which is a trust known as the May Trust, became the Company’s external Advisor and Cash Manager. Pillar’s duties include, but are not limited to, locating, evaluating and recommending real estate and real estate-related investment opportunities. Pillar also arranges, for the Company’s benefit, debt and equity financing with third party lenders and investors. Pillar also serves as an Advisor and Cash Manager to ARL and IOT. As the contractual advisor, Pillar is compensated by TCI under an Advisory Agreement that is more fully described in Part III, Item 10. “Directors, Executive Officers and Corporate Governance – The Advisor”. TCI has no employees. Employees of Pillar render services to TCI in accordance with the terms of the Advisory Agreement.
Regis Realty Prime, LLC, dba Regis Property Management, LLC (“Regis”), manages our commercial properties and provides brokerage services. Regis receives property management fees and leasing commissions in accordance with the terms of its property-level management agreement. Regis is also entitled to receive real estate brokerage commissions in accordance with the terms of a non-exclusive brokerage agreement. See Part III, Item 10. “Directors, Executive Officers and Corporate Governance – Property Management and Real Estate Brokerage”. TCI engages third-party companies to lease and manage its apartment properties.
On January 1, 2012, the Company entered into a development agreement with Unified Housing Foundation, Inc. (“UHF”) a non-profit corporation that provides management services for the development of residential apartment projects in the future. This development agreement was terminated December 31, 2013. The Company has also invested in surplus cash notes receivables from UHF and has sold several residential apartment properties to UHF in prior years. Due to this ongoing relationship and the significant investment in the performance of the collateral secured under the notes receivable, UHF has been determined to be a related party.
Our primary business is the acquisition, development and ownership of income-producing residential and commercial real estate properties. In addition, we opportunistically acquire land for future development in in-fill or high-growth suburban markets. From time to time and when we believe it appropriate to do so, we will also sell land and income-producing properties. We generate revenues by leasing apartment units to residents and leasing office, industrial and retail space to various for-profit businesses as well as certain local, state and federal agencies. We also generate revenues from gains on sales of income-producing properties and land. At December 31, 2016, we owned 50 residential apartment communities comprising of 8,226 units, 7 commercial properties comprising an aggregate of approximately 1.7 million rentable square feet, an investment in 3,139 acres of undeveloped and partially developed land, and a golf course comprising of approximately 96.1 acres.
Basis of presentation
.
The Company presents its financial statements in accordance with generally accepted accounting principles in the United States (“GAAP”). The accompanying Consolidated Financial Statements include our accounts, our 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 generally is 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 it is 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 are included in consolidated net income. TCI’s investment in ARL is accounted for under the equity method.
The Company in accordance with the
VIE guidance in ASC 810 “Consolidations” consolidates 50 and 48 multifamily residential properties located
throughout the United States at December 31, 2016 and December 31, 2015, respectively, with total units of 8,226 and 7,983
units, respectively. Assets totaling approximately $442 million and approximately $457 million at December 31, 2016
and 2015, respectively, are consolidated and included in “Real estate, at cost” on the balance sheet
and are all collateral for their respective mortgage notes payable, none of which are recourse to the partnership in
which they are in or to the Company.
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). We continually evaluate the recoverability of the carrying value of its real estate assets using the methodology prescribed in ASC Topic 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 Topic 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.
Properties that are treated as “subject to sales contract” on the Consolidated Balance Sheets and are listed in detail in Schedule III, “Real Estate and Accumulated Depreciation” are those in which we have not recognized the legal sale according to the guidance in ASC 360-20 due to various factors. For sales transactions where the guidance reflects a sale did not occur, the asset involved in the transaction, including the debt, if applicable, and property operations, remain on the books of the Company. We continue to charge depreciation to expense as a period cost for the property until such time as the property has been classified as held for sale in accordance with guidance reflected in ASC 360-10-45 “Impairment or Disposal of Long-Lived Assets.”
Real estate held for sale
.
We classify properties as held for sale when certain criteria are met in accordance with GAAP. At that time, we present the assets and obligations of the property held for sale separately in our consolidated balance sheet and we cease recording depreciation and amortization expense related to that property. Properties held for sale are reported at the lower of their carrying amount or their estimated fair value, less estimated costs to sell. We did not have any real estate assets classified as held for sale at December 31, 2016 or 2015.
Effective as of January 1, 2015, we adopted the revised guidance in Accounting Standards Update No. 2014-08 regarding discontinued operations. For sales of real estate or assets classified as held for sale after January 1, 2015, we will evaluate whether a disposal transaction meets the criteria of a strategic shift and will have a major effect on our operations and financial results to determine if the results of operations and gains on sale of real estate will be presented as part of our continuing operations or as discontinued operations in our consolidated statements of operations. If the disposal represents a strategic shift, it will be classified as discontinued operations for all periods presented; if not, it will be presented in continuing operations.
Any properties that are treated as “subject to sales contract” on the Consolidated Balance Sheets and are listed in detail in Schedule III, “Real Estate and Accumulated Depreciation” are those in which we have not recognized the legal sale according to the guidance in ASC 360-20 due to various factors, disclosed in Item 1 “Significant Real Estate Acquisitions/Dispositions and Financing.” Any sale transaction where the guidance reflects that a sale had not occurred, the asset involved in the transaction, including the debt, if appropriate, and property operations, remained on the books of the Company. We continue to charge depreciation to expense as a period costs for the property until such time as the property has been classified as held for sale in accordance with guidance reflected in ASC 360-10-45 “Impairment or Disposal of Long-Lived Assets.”
Cost capitalization
.
The cost of buildings and improvements includes the purchase price of property, legal fees and other acquisition costs. Costs directly related to planning, developing, initial leasing and constructing a property are capitalized and classified as Real Estate in the Consolidated Balance Sheets. Capitalized development costs include interest, property taxes, insurance, and other direct project costs incurred during the period of development.
A variety of costs are incurred in the acquisition, development and leasing of properties. After determination is made to capitalize a cost, it is allocated to the specific component of a project that is benefited. Determination of when a development project is substantially complete and capitalization must cease involves a degree of judgment. Our capitalization policy on development properties is guided by ASC Topic 835-20 “Interest – Capitalization of Interest” and ASC Topic 970 “Real Estate - General”. The costs of land and buildings under development include specifically identifiable costs. The capitalized costs include pre-construction costs essential to the development of the property, development costs, construction costs, interest costs, real estate taxes, salaries and related costs and other costs incurred during the period of development. We consider a construction project as substantially completed and held available for occupancy upon the receipt of certificates of occupancy, but no later than one year from cessation of major construction activity. We cease capitalization on the portion (1) substantially completed and (2) occupied or held available for occupancy, and we capitalize only those costs associated with the portion under construction.
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.
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.
Recognition of revenue
.
Our revenues, which are composed largely of rental income, include rents reported on a straight-line basis over the lease term. In accordance with ASC 805 “Business Combinations”, we recognize rental revenue of acquired in-place “above-” and “below-market” leases at their fair values over the terms of the respective leases.
Reimbursements of operating costs, as allowed under most of our commercial tenant leases, consist of amounts due from tenants for common area maintenance, real estate taxes and other recoverable costs, and are recognized as revenue in the period in which the recoverable expenses are incurred. We record these reimbursements on a “gross” basis, since we generally are the primary obligor with respect to purchasing goods and services from third-party suppliers; we have discretion in selecting the supplier and have the credit risk with respect to paying the supplier.
Rental income for residential property leases is recorded when due from residents and is recognized monthly as earned, which is not materially different than on a straight-line basis as lease terms are generally for periods of one year or less. An allowance for doubtful accounts is recorded for all past due rents and operating expense reimbursements considered to be uncollectible.
Sales and the associated gains or losses related to real estate assets are recognized in accordance with the provisions of ASC Topic 360-20, “Property, Plant and Equipment—Real Estate Sale.” The specific timing of a sale is measured against various criteria in ASC 360-20 related to the terms of the transaction and any continuing involvement in the form of management or financial assistance associated with the properties. If the sales criteria for the full accrual method are not met, the Company defers some or all of the gain recognition and accounts for the continued operations of the property by applying the finance, leasing, deposit, installment or cost recovery methods, as appropriate, until the sales criteria are met.
Non-performing notes receivable.
We consider a note receivable to be non-performing when the maturity date has passed without principal repayment and the borrower is not making interest payments in accordance with the terms of the agreement.
Interest recognition on notes receivable
.
We record interest income as earned in accordance with the terms of the related loan agreements.
Allowance for estimated losses
.
We assess the collectability of notes receivable on a periodic basis, of which the assessment consists primarily of an evaluation of cash flow projections of the borrower to determine whether estimated cash flows are sufficient to repay principal and interest in accordance with the contractual terms of the note. We recognize impairments on notes receivable when it is probable that principal and interest will not be received in accordance with the contractual terms of the loan. The amount of the impairment to be recognized generally is based on the fair value of the partnership’s real estate that represents the primary source of loan repayment. See Note 3 “Notes and Interest Receivable” for details on our notes receivable.
Cash equivalents.
For purposes of the Consolidated Statements of Cash Flows, all highly liquid investments purchased with an original maturity of three months or less are considered to be cash equivalents. Restricted cash consists of cash reserved primarily for specific uses such as insurance, property taxes and replacement reserves.
Concentration of credit risk.
The Company maintains its cash balances at commercial banks and through investment companies, the deposits of which are insured by the Federal Deposit Insurance Corporation (FDIC). At December 31, 2016 and 2015, the Company maintained balances in excess of the insured amount.
Earnings per share
.
Income (loss) per share is presented in accordance with ASC 620 “Earnings per Share” and is computed based upon the weighted average number of shares of common stock outstanding during each year.
Use of estimates.
In the preparation of Consolidated Financial Statements in conformity with GAAP, it is necessary for management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the Consolidated Financial Statements and the reported amounts of revenues and expense for the year ended. Actual results could differ from those estimates.
Income taxes
.
The Company is a “C” corporation” for U.S. federal income tax purposes. The Company and the rest of the ARL group are included in the MRHI, consolidated group for tax purposes. TCI is a member of a tax sharing agreement that specifies the manner in which the group will share the consolidated tax liability and also how certain tax attributes are to be treated among members of the group.
Recent 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 the adoption of this guidance has 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 new 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 the adoption of this guidance, if any, on its financial position and results of operations.
NOTE 2.
REAL ESTATE
A summary of our real estate owned as of the end of the year is listed below (dollars in thousands):
|
|
2016
|
|
|
2015
|
|
|
|
|
|
|
|
|
Apartments
|
|
$
|
697,732
|
|
|
$
|
626,141
|
|
Apartments under construction
|
|
|
25,288
|
|
|
|
18,229
|
|
Commercial properties
|
|
|
204,384
|
|
|
|
201,567
|
|
Land held for development
|
|
|
71,094
|
|
|
|
89,697
|
|
Real estate subject to sales contract
|
|
|
46,956
|
|
|
|
47,192
|
|
Total real estate, at cost, less impairment
|
|
|
1,045,454
|
|
|
|
982,827
|
|
Less accumulated deprecation
|
|
|
(154,281
|
)
|
|
|
(138,808
|
)
|
Total real estate, net of depreciation
|
|
$
|
891,173
|
|
|
$
|
844,019
|
|
Expenditures for repairs and maintenance are charged to operations as incurred. Significant betterments are capitalized. When assets are sold or retired, their costs and related accumulated depreciation are removed from the accounts with the resulting gains or losses reflected in net income or loss for the period.
Depreciation is computed on a straight line basis over the estimated useful lives of the assets as follows:
Land improvements
|
25 to 40 years
|
|
|
Buildings and improvements
|
10 to 40 years
|
|
|
Tenant improvements
|
Shorter of useful life or terms of related lease
|
|
|
Furniture, fixtures and equipment
|
3 to 7 years
|
Provision for Impairment
During the year ended December 31, 2015, the Company recorded an impairment of $5.3 million for the golf course and related assets located in the U.S. Virgin Islands. This impairment relates to the decision to sell the development parcels in the U.S. Virgin Islands and the resultant decrease in the estimated fair value of the remaining assets. There was no provision for impairment for the years ended December 31, 2016 and 2014.
Fair Value Measurement
The Company applies the guidance in ASC Topic 820, “Fair Value Measurements and Disclosures,” to the valuation of real estate assets. The Company is required to assess the fair value of its consolidated real estate assets with indicators of impairment. The value of impaired real estate assets is determined using widely accepted valuation techniques, including discounted cash flow analyses on the expected cash flow of each asset, as well as the income capitalization approach, which considers prevailing market capitalization rates, analyses of recent comparable sales transactions, information from actual sales negotiations and bona fide purchase offers received from third parties. The methods used to measure fair value may produce an amount that may not be indicative of net realizable value or reflective of future values. Furthermore, although the Company believes its valuation methods are appropriate and consistent with other market participants, the use of different methodologies or assumptions to determine the fair value of certain financial instruments could result in a different fair value measurement at the reporting date.
The fair value measurements used in these evaluations are considered to be Level 2 and 3 valuations within the fair value hierarchy in the accounting rules, as there are significant observable (Level 2) and unobservable inputs (Level 3). Examples of Level 2 inputs the Company utilizes in its fair value calculations are appraisals and bona fide purchase offers from third parties. Examples of Level 3 inputs the Company utilizes in its fair value calculations are discount rates, market capitalization rates, expected lease rental rates, timing of new leases, an estimate of future sales prices and comparable sales prices of similar assets, if available.
|
|
|
|
|
|
Fair Value Measurements Using (dollars in thousands):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
December 31, 2015
|
|
|
Fair Value
|
|
|
Level 1
|
|
|
Level 2
|
|
|
Level 3
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Commercial
|
|
|
$
|
3,000
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
3,000
|
|
During 2015, our golf course, with a carrying value of approximately $8.3 million was written down to its fair value of $3.0 million resulting in an impairment charge of $5.3 million. The method used to determine fair value was an analysis of the discounted cash flow of the asset.
There was no provision for impairment during the years ended December 31, 2016 and 2014.
The highlights of our significant real estate transactions for the year ended December 31, 2016, are discussed below.
Purchases
During the year ended December 31, 2016, the Company acquired four income-producing apartment properties from third parties in the states of Arkansas, Florida, Georgia and Mississippi, increasing the total number of units by 723, for a combined purchase price of $79.7 million. In addition, we acquired three land parcels for future development for a total purchase price of $12.5 million, adding 36.3 acres to the development portfolio.
Sales
For the year ended December 31, 2016, TCI sold a combined 129.7 acres of land located in Forney, Texas, McKinney, Texas, Farmers Branch, Texas and Nashville, Tennessee to independent third parties for a total sales price of $29.1 million. We recorded an aggregate $3.1 million gain from the land sales. In addition, the Company sold one apartment community located in Irving, Texas to an independent third party for a total sales price of $8.1 million and one apartment community located in Topeka, Kansas to an independent third party for a total sales price of $12.3 million. We recorded an aggregate gain of $16.2 million from the sale of these two properties. The Company also sold an industrial warehouse consisting of approximately 177,805 square feet. The sale resulted in a loss of approximately $0.2 million.
As of December 31, 2016, 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 apartment projects. During the year ended December 31, 2016, we have expended $20.3 million related to the construction or predevelopment of various apartment complexes and capitalized $0.9 million of interest costs.
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 personal guarantees of the borrower and, 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 (dollars in thousands).
As of December 31, 2016, the obligors on $67.7 million or 85% of the mortgage notes receivable portfolio were due from related entities. The Company recognized $14.2 million of interest income from these related party notes receivables.
As of December 31, 2016, none of the mortgage notes receivable portfolio were non-performing.
The Company has various notes receivable from Unified Housing foundation, Inc. (“UHF”). UHF is determined to be a related party due to our significant investment in the performance of the collateral secured under the notes receivable. Payments are due from surplus cash flow from operations, sale or refinancing of the underlying properties. These notes are cross collateralized to the extent that any surplus cash available from any of the properties underlying these notes will be used to repay outstanding interest and principal for the remaining notes. Furthermore, any surplus cash available from any of the properties UHF owns, besides the properties underlying these notes, can be used to repay outstanding interest and principal for these notes. The allowance on the notes was a purchase allowance that was netted against the notes when acquired.
Borrower
|
|
Maturity
Date
|
|
|
Interest
Rate
|
|
|
Amount
|
|
|
|
Security
|
|
Performing loans:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
H198, LLC (Las Vegas Land)
|
|
|
01 /20
|
|
|
12.00
|
%
|
|
$
|
5,907
|
|
|
|
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
|
%
|
|
|
6,368
|
|
|
|
Secured
|
|
Unified Housing Foundation, Inc. (Limestone Canyon)
(1)
|
|
|
12 /32
|
|
|
12.00
|
%
|
|
|
4,640
|
|
|
|
Secured
|
|
Unified Housing Foundation, Inc. (Limestone Canyon)
(1)
|
|
|
12 /32
|
|
|
12.00
|
%
|
|
|
2,653
|
|
|
|
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. (Parkside Crossing)
(1)
|
|
|
12 /32
|
|
|
12.00
|
%
|
|
|
1,936
|
|
|
|
Secured
|
|
Unified Housing Foundation, Inc. (Sendero Ridge)
(1)
|
|
|
12 /32
|
|
|
12.00
|
%
|
|
|
4,812
|
|
|
|
Secured
|
|
Unified Housing Foundation, Inc. (Sendero Ridge)
(1)
|
|
|
12 /32
|
|
|
12.00
|
%
|
|
|
4,491
|
|
|
|
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
|
%
|
|
|
7,966
|
|
|
|
Secured
|
|
Unified Housing Foundation, Inc.
(1)
|
|
|
12 /17
|
|
|
12.00
|
%
|
|
|
1,207
|
|
|
|
Unsecured
|
|
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 /19
|
|
|
12.00
|
%
|
|
|
5,400
|
|
|
|
Unsecured
|
|
Other related party notes
(1)
|
|
|
Various
|
|
|
Various
|
|
|
|
1,404
|
|
|
|
Various unsecured interests
|
|
Other non-related party notes
|
|
|
Various
|
|
|
Various
|
|
|
|
796
|
|
|
|
Various secured interests
|
|
Other non-related party notes
|
|
|
Various
|
|
|
Various
|
|
|
|
4,742
|
|
|
|
Various unsecured interests
|
|
Accrued interest
|
|
|
|
|
|
|
|
|
|
|
5,479
|
|
|
|
|
|
Total Performing
|
|
|
|
|
|
|
|
|
|
$
|
81,133
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Allowance for estimated losses
|
|
|
|
|
|
|
|
|
|
|
(1,825
|
)
|
|
|
|
|
Total
|
|
|
|
|
|
|
|
|
|
$
|
79,308
|
|
|
|
|
|
(1) Related Party notes
NOTE 4.
ALLOWANCE FOR ESTIMATED LOSSES
The allowance account was reviewed and remained the same in 2016. The decrease in 2015 was due to a fully reserved note that was written off. The table below shows our allowance for estimated losses (dollars in thousands):
|
|
2016
|
|
|
2015
|
|
|
2014
|
|
|
|
|
|
|
|
|
|
|
|
Balance January 1,
|
|
$
|
1,825
|
|
|
$
|
1,990
|
|
|
$
|
2262
|
|
Decrease in provision
|
|
|
—
|
|
|
|
(165
|
)
|
|
|
(272)
|
|
Balance December 31,
|
|
$
|
1,825
|
|
|
$
|
1,825
|
|
|
$
|
1,990
|
|
NOTE 5.
INVESTMENT IN UNCONSOLIDATED JOINT VENTURES AND INVESTEES
Investments in unconsolidated subsidiaries, jointly owned companies and other investees in which we have a 20% to 50% interest or otherwise exercise significant influence are carried at cost, adjusted for the Company’s proportionate share of their undistributed earnings or losses, via the equity method of accounting. ARL is our parent company and is considered as an unconsolidated joint venture.
Investments accounted for via the equity method consists of the following:
|
|
Percentage ownership as of December 31,
|
|
|
|
2016
|
|
|
2015
|
|
|
2014
|
|
American Realty Investors, Inc.
(1)
|
|
|
0.90
|
%
|
|
|
0.90
|
%
|
|
|
1.00
|
%
|
|
(1)
|
Unconsolidated investment in parent company
|
Our interest in the common stock of ARL in the amount of 0.90% is accounted for under the equity method. Accordingly, the investment is 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 of ARL (dollars in thousands):
|
|
For the Twelve Months Ended December 31,
|
|
Unconsolidated Subsidiaries
|
|
2016
|
|
|
2015
|
|
|
2014
|
|
Real estate, net of accumulated depreciation
|
|
$
|
14,504
|
|
|
$
|
14,232
|
|
|
$
|
15,460
|
|
Notes Receivable
|
|
|
47,257
|
|
|
|
50,692
|
|
|
|
50,909
|
|
Other assets
|
|
|
127,001
|
|
|
|
127,497
|
|
|
|
128,635
|
|
Notes payable
|
|
|
(9,485
|
)
|
|
|
(25,233
|
)
|
|
|
(50,048
|
)
|
Other liabilities
|
|
|
(111,707
|
)
|
|
|
(98,440
|
)
|
|
|
(80,904
|
)
|
Shareholders’ equity/partners’ capital
|
|
|
(67,570
|
)
|
|
|
(68,748
|
)
|
|
|
(64,052
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Rents and interest and other income
|
|
$
|
7,251
|
|
|
$
|
11,990
|
|
|
$
|
12,427
|
|
Depreciation
|
|
|
(175
|
)
|
|
|
(192
|
)
|
|
|
(285
|
)
|
Operating expenses
|
|
|
(3,633
|
)
|
|
|
(4,414
|
)
|
|
|
(6,983
|
)
|
Gain on land sales
|
|
|
—
|
|
|
|
2,737
|
|
|
|
—
|
|
Interest expense
|
|
|
(6,274
|
)
|
|
|
(5,936
|
)
|
|
|
(7,144
|
)
|
Income (loss) from continuing operations
|
|
|
(2,831
|
)
|
|
|
4,185
|
|
|
|
(1,985
|
)
|
Income (loss) from discontinued operations
|
|
|
—
|
|
|
|
1
|
|
|
|
64
|
|
Net income (loss)
|
|
$
|
(2,831
|
)
|
|
$
|
4,186
|
|
|
$
|
(1,921
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Company’s proportionate share of income (loss)
(1)
|
|
$
|
(25
|
)
|
|
$
|
38
|
|
|
$
|
(19
|
)
|
|
(1)
|
Income (loss) represents continued and discontinued operations
|
NOTE 6.
NOTES AND INTEREST PAYABLE
Below is a summary of our notes and interest payable as of December 31, 2016 (dollars in thousands):
|
|
Notes Payable
|
|
|
Accrued Interest
|
|
|
Total Debt
|
|
Apartments
|
|
$
|
553,509
|
|
|
$
|
1,500
|
|
|
$
|
555,009
|
|
Apartments under Construction
|
|
$
|
16,576
|
|
|
|
—
|
|
|
$
|
16,576
|
|
Commercial
|
|
$
|
108,725
|
|
|
$
|
528
|
|
|
$
|
109,253
|
|
Land
|
|
$
|
30,811
|
|
|
$
|
117
|
|
|
$
|
30,928
|
|
Real estate subject to sales contract
|
|
$
|
5,142
|
|
|
$
|
470
|
|
|
$
|
5,612
|
|
Mezzanine financing
|
|
$
|
119,923
|
|
|
|
—
|
|
|
$
|
119,923
|
|
Other
|
|
$
|
23,425
|
|
|
|
—
|
|
|
$
|
23,425
|
|
Total
|
|
|
858,111
|
|
|
|
2,615
|
|
|
|
860,726
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Unamortized deferred borrowing costs
|
|
|
(19,210
|
)
|
|
|
—
|
|
|
|
(19,210
|
)
|
|
|
$
|
838,901
|
|
|
$
|
2,615
|
|
|
$
|
841,516
|
|
The schedule principal payments of our notes payable over the next five years and thereafter are due as follows (dollars in thousands):
Year
|
|
|
Amount
|
|
2017
|
|
|
$
|
130,515
|
|
2018
|
|
|
|
56,255
|
|
2019
|
|
|
|
70,136
|
|
2020
|
|
|
|
51,616
|
|
2021
|
|
|
|
15,831
|
|
Thereafter
|
|
|
|
533,757
|
|
Total
|
|
|
$
|
858,111
|
|
Interest payable at December 31, 2016 was $2.6 million. Our debt has interest rates ranging from 2.5% to 12.0% per annum with maturity dates between 2017 and 2055. The mortgages were collateralized by deeds of trust on real estate having a net carrying value of $891 million.
During the year 2016 the Company refinanced or modified five loans with a total principal balance of $78.9 million. The refinancing resulted in lower interest rates and the extension of the term of the loan. The modifications resulted in lower interest rates. The transactions provide for lower monthly payments over the term of loans.
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.
In conjunction with the development of various apartment projects and other developments, we drew down $13 million in construction loans during the year ended December 31, 2016.
NOTE 7.
RELATED PARTY TRANSACTIONS AND FEES
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.
The Company has historically engaged in and may continue to engage in certain business transactions with related parties, including but not limited to asset acquisition and dispositions. Transactions involving related parties cannot be presumed to be carried out on an arm’s length basis due to the absence of free market forces that naturally exist in business dealings between two or more unrelated entities. Related party transactions may not always be favorable to our business and may include terms, conditions and agreements that are not necessarily beneficial to or in our best interest.
Since April 30, 2011, Pillar, the sole shareholder of which is Realty Advisors, LLC, a Nevada limited liability company, the sole member of which is RAI, a Nevada corporation, the sole shareholder of which is MRHI, a Nevada corporation, the sole shareholder of which is a trust known as the May Trust, became the Company’s external Advisor and Cash Manager. Pillar’s duties include, but are not limited to, locating, evaluating and recommending real estate and real estate-related investment opportunities. Pillar also arranges, for the Company’s benefit, debt and equity financing with third party lenders and investors. Pillar also serves as an Advisor and Cash Manager to TCI and IOT. As the contractual advisor, Pillar is compensated by TCI under an Advisory Agreement that is more fully described in Part III, Item 10. “Directors, Executive Officers and Corporate Governance – The Advisor”. TCI has no employees. Employees of Pillar render services to TCI in accordance with the terms of the Advisory Agreement
Effective January 1, 2011, Regis Realty Prime, LLC, dba Regis Property Management, LLC (“Regis”), the sole member of which is Realty Advisors, LLC, manages our commercial properties and provides brokerage services. Regis receives property management fees, construction management fees and leasing commissions in accordance with the terms of its property-level management agreement. Regis is also entitled to receive real estate brokerage commissions in accordance with the terms of a non-exclusive brokerage agreement. See Part III, Item 10. “Directors, Executive Officers and Corporate Governance – Property Management and Real Estate Brokerage”. TCI engages third-party companies to lease and manage its apartment properties.
Below is a description of the related party transactions and fees between Pillar and Regis:
Fees, expenses and revenue paid to and/or received from our advisor:
|
|
2016
|
|
|
2015
|
|
|
2014
|
|
|
|
(dollars in thousands)
|
|
Fees:
|
|
|
|
|
|
|
|
|
|
Advisory
|
|
$
|
9,490
|
|
|
$
|
8,368
|
|
|
$
|
7,373
|
|
Mortgage brokerage and equity refinancing
|
|
|
775
|
|
|
|
1,524
|
|
|
|
1,152
|
|
Net income
|
|
|
257
|
|
|
|
187
|
|
|
|
3,669
|
|
Property acquisition
|
|
|
—
|
|
|
|
921
|
|
|
|
145
|
|
|
|
$
|
10,522
|
|
|
$
|
11,000
|
|
|
$
|
12,339
|
|
Other Expense:
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost reimbursements
|
|
$
|
3,228
|
|
|
$
|
2,925
|
|
|
$
|
2,622
|
|
Interest paid (received)
|
|
|
(4,216
|
)
|
|
|
(3,352
|
)
|
|
|
(2,795
|
)
|
|
|
$
|
(988
|
)
|
|
$
|
(427
|
)
|
|
$
|
(173
|
)
|
Revenue:
|
|
|
|
|
|
|
|
|
|
|
|
|
Rental
|
|
$
|
708
|
|
|
$
|
726
|
|
|
$
|
701
|
|
Fees paid to Regis and related parties:
|
|
2016
|
|
|
2015
|
|
|
2014
|
|
|
|
(dollars in thousands)
|
|
Fees:
|
|
|
|
|
|
|
|
|
|
|
|
|
Property acquisition
|
|
$
|
10,776
|
|
|
$
|
1,932
|
|
|
$
|
348
|
|
Property management, construction management and leasing commissions
|
|
|
888
|
|
|
|
682
|
|
|
|
544
|
|
Real estate brokerage
|
|
|
787
|
|
|
|
1,105
|
|
|
|
2,752
|
|
|
|
$
|
12,451
|
|
|
$
|
3,719
|
|
|
$
|
3,644
|
|
The Company received rental revenue of $0.7 million in each of the three years ended December 31, 2016 from Pillar and its related parties for properties owned by the Company.
As of December 31, 2016, the Company had notes and interest receivables, net of allowances, of $62.2 million and $3.9 million, respectively, due from UHF, a related party. During the current period, the Company recognized interest income of $8.6 million, originated $5.4 million, received principal payments of $4.1 million and received interest payments of $9.0 million from these related party notes receivables.
On January 1, 2012, the Company entered into a development agreement with UHF, a non-profit corporation that provides management services for the development of residential apartment projects in the future. This development agreement was terminated December 31, 2013. The Company has also invested in surplus cash notes receivables from UHF and has sold several residential apartment properties to UHF in prior years. Due to this ongoing relationship and the significant investment in the performance of the collateral secured under the notes receivable, UHF has been determined to be a related party.
The Company is the primary guarantor, on a $60.4 million mezzanine loan between UHF and a lender. In addition, ARI, and an officer of the Company are limited recourse guarantors of the loan. As of December 31, 2016 UHF was in compliance with the covenants to the loan agreement.
The Company is part of a tax sharing and compensating agreement with respect to federal income taxes between ARL, TCI and IOT and their subsidiaries that was entered into in July of 2009. That agreement continued until August 31, 2012, at which time a new tax sharing and compensating agreement was entered into by ARL, TCI, IOT and MRHI for the remainder of 2012 and subsequent years. The expense (benefit) in each year was calculated based on the amount of losses absorbed by taxable income multiplied by the maximum statutory tax rate of 35%.
The following table reconciles the beginning and ending balances of accounts receivable from and (accounts payable) to related parties as of December 31, 2016 (dollars in thousands):
|
|
Pillar
|
|
|
ARL
|
|
|
Total
|
|
|
|
|
|
|
|
|
|
|
|
Related party receivable, December 31, 2015
|
|
$
|
—
|
|
|
$
|
90,515
|
|
|
$
|
90,515
|
|
Cash transfers
|
|
|
43,246
|
|
|
|
—
|
|
|
|
43,246
|
|
Advisory fees
|
|
|
(9,490
|
)
|
|
|
—
|
|
|
|
(9,490
|
)
|
Net income fee
|
|
|
(257
|
)
|
|
|
—
|
|
|
|
(257
|
)
|
Fees and commissions
|
|
|
(1,551
|
)
|
|
|
—
|
|
|
|
(1,551
|
)
|
Cost reimbursements
|
|
|
(3,228
|
)
|
|
|
—
|
|
|
|
(3,228
|
)
|
Interest income
|
|
|
—
|
|
|
|
4,216
|
|
|
|
4,216
|
|
Notes receivable purchased
|
|
|
(5,356
|
)
|
|
|
|
|
|
|
(5,356
|
)
|
Expenses paid by advisor
|
|
|
(8,389
|
)
|
|
|
—
|
|
|
|
(8,389
|
)
|
Financing (mortgage payments)
|
|
|
2,719
|
|
|
|
—
|
|
|
|
2,719
|
|
Sales/Purchases transactions
|
|
|
(10,776
|
)
|
|
|
—
|
|
|
|
(10,776
|
)
|
Series K preferred stock acquisition
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
Income tax expense
|
|
|
(1,096
|
)
|
|
|
1,096
|
|
|
|
—
|
|
Purchase of obligations
|
|
|
(12,925
|
)
|
|
|
12,925
|
|
|
|
—
|
|
Related party receivable, December 31, 2016
|
|
$
|
(7,103
|
)
|
|
$
|
108,752
|
|
|
$
|
101,649
|
|
As of December 31, 2016, 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.
NOTE 8.
DIVIDENDS
TCI’s Board of Directors established a policy that dividend declarations on common stock would be determined on an annual basis following the end of each year. In accordance with that policy, no dividends on TCI’s common stock were declared for 2016, 2015, or 2014. Future distributions to common stockholders will be determined by the Board of Directors in light of conditions then existing, including the Company’s financial condition and requirements, future prospects, restrictions in financing agreements, business conditions and other factors deemed relevant by the Board.
NOTE 9.
PREFERRED STOCK
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.
In November 2006, TCI issued 100,000 shares of Series D Preferred Stock with a liquidation preference of $100 per share. The preferred stock is not convertible into any other security and requires dividends payable from the initial rate of 7% annually to the current rate of 9%. The shares can be redeemed at any point after September 30, 2011. Of the 100,000 shares, 89,500 shares are owned by RAI, a related party, and 10,500 shares are owned by Pillar, a related party. RAI’s 89,500 shares have accrued dividends unpaid of approximately $4.0 million. Pillar’s 10,500 shares have accrued dividends unpaid of approximately $0.5 million.
NOTE 10.
STOCK OPTIONS
In October 2000, TCI’s stockholders approved the Director’s Stock Option Plan (the “Director’s Plan”) which provides for options to purchase up to 140,000 shares of TCI’s common stock. Options granted pursuant to the Director’s Plan are immediately exercisable and expire on the earlier of the first anniversary of the date on which a Director ceases to be a Director or 10 years from the date of grant. Effective December 15, 2005 the plan was terminated. At December 31, 2014, there were 5,000 stock options outstanding which were exercisable at $14.25 per share. These options expired unexercised January 1, 2015.
NOTE 11.
TCI INCOME TAXES
For 2016, TCI had taxable loss for federal tax purposes, while it had taxable income for 2015 and a loss for 2014. For 2016, MRHI, ARL, TCI and IOT had a combined net taxable income. For 2015, MRHI, ARL, TCI and IOT had a combined net taxable income and TCI recorded no current tax benefit or expense. For 2014, TCI, with the consolidation of IOT, had a net taxable loss and the remainder of the group had net taxable income resulting in a tax benefit to TCI. The expense benefit in each year was calculated based on the amount of losses absorbed by taxable income multiplied by the maximum statutory rate of 35%.
Current expense (benefit) is attributable to (dollars in thousands):
|
|
2016
|
|
|
2015
|
|
|
2014
|
|
|
|
|
|
|
|
|
|
|
|
Income (loss) from continuing operations
|
|
$
|
24
|
|
|
$
|
517
|
|
|
$
|
(20,390
|
)
|
Income (loss) from discontinued operations
|
|
|
(1)
|
|
|
|
483
|
|
|
|
20,390
|
|
Tax expense (benefit)
|
|
$
|
23
|
|
|
$
|
1,000
|
|
|
$
|
—
|
|
The Federal income tax expense differs from the amount computed by applying the corporate tax rate of 35% to the income before income taxes as follows (dollars in thousands):
|
|
2016
|
|
|
2015
|
|
|
2014
|
|
|
|
|
|
|
|
|
|
|
|
Computed “expected” income tax (benefit) expense
|
|
$
|
121
|
|
|
$
|
2,276
|
|
|
$
|
14,762
|
|
Book to tax differences for partnerships not consolidated for tax purposes
|
|
|
93
|
|
|
|
5,152
|
|
|
|
(23,900
|
)
|
Book to tax differences of depreciation and amortization
|
|
|
(477
|
)
|
|
|
(160
|
)
|
|
|
1,461
|
|
Book to tax differences in gains on sale of property
|
|
|
(2,757
|
)
|
|
|
(4,073
|
)
|
|
|
(2,350
|
)
|
Book provision for loss
|
|
|
—
|
|
|
|
1,855
|
|
|
|
—
|
|
Partial valuation allowance against current net operating loss benefit
|
|
|
(69
|
)
|
|
|
(9,596
|
)
|
|
|
7,069
|
|
Other
|
|
|
3,112
|
|
|
|
5,546
|
|
|
|
2,958
|
|
Total
|
|
$
|
23
|
|
|
$
|
1,000
|
|
|
$
|
—
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Alternative minimum tax
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Deferred income taxes reflect the tax effects of temporary timing differences between carrying amounts of assets and liabilities reflected on the financial statements and the amounts used for income tax purposes. TCI’s tax basis in its net assets differs from the amount at which its net assets are reported for financial statement purposes, principally due to the accounting for gains and losses on property sales and depreciation on owned properties. The tax effects of temporary differences and net operating loss carry forwards that give rise to the deferred tax assets are presented below (amounts in thousands):
|
|
2016
|
|
|
2015
|
|
|
2014
|
|
|
|
|
|
|
|
|
|
|
|
Net operating losses
|
|
$
|
42,585
|
|
|
$
|
46,497
|
|
|
$
|
56,897
|
|
AMT credits
|
|
|
1,591
|
|
|
|
1,900
|
|
|
|
1,374
|
|
Basis difference of:
|
|
|
|
|
|
|
|
|
|
|
|
|
Real estate holdings
|
|
|
(7,580
|
)
|
|
|
(17,912
|
)
|
|
|
876
|
|
Notes receivable
|
|
|
5,432
|
|
|
|
694
|
|
|
|
757
|
|
Investments
|
|
|
(4,328
|
)
|
|
|
(4,709
|
)
|
|
|
(4,693
|
)
|
Notes payable
|
|
|
2,315
|
|
|
|
2,792
|
|
|
|
6,932
|
|
Deferred gains
|
|
|
14,200
|
|
|
|
11,984
|
|
|
|
10,146
|
|
Total
|
|
$
|
54,215
|
|
|
$
|
41,246
|
|
|
$
|
72,289
|
|
Deferred tax valuation allowance
|
|
|
(54,215
|
)
|
|
|
(41,246
|
)
|
|
|
(72,289
|
)
|
Net deferred tax asset
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
There is no assurance that TCI will generate earnings in future years. Therefore, TCI has established a valuation allowance for deferred tax assets of approximately $54.2 million, $41.2 million and $72.3 million as of December 31, 2015, 2014 and 2013, respectively.
TCI has tax net operating loss carryforwards of approximately $122.0 million expiring through the year 2033. The alternative minimum tax credit balance increased in 2016 to approximately $1.59 million. The credit has no expiration date.
NOTE 12.
FUTURE MINIMUM RENTAL INCOME UNDER OPERATING LEASES
TCI’S real estate operations include the leasing of commercial properties (office buildings, industrial warehouses and retail centers). The leases thereon expire at various dates through 2025. The following is a schedule of minimum future rents on non-cancelable operating leases at December 31, 2016 (dollars in thousands):
Year
|
|
|
Amount
|
|
2017
|
|
|
|
24,491
|
|
2018
|
|
|
|
22,696
|
|
2019
|
|
|
|
17,261
|
|
2020
|
|
|
|
13,326
|
|
2021
|
|
|
|
11,364
|
|
Thereafter
|
|
|
|
19,353
|
|
Total
|
|
|
$
|
108,491
|
|
NOTE 13.
OPERATING SEGMENTS
Our segments are based on management’s method of internal reporting which classifies its operations by property type. The segments are commercial, apartments, land and other. 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 expenses. Management evaluates the performance of each of the operating segments and allocates resources to them based on their operating income and cash flow.
Items of income that are not reflected in the segments are interest, other income, equity in partnerships, and gains on sale of real estate. Expenses that are not reflected in the segments are provision for losses, advisory, net income and incentive fees, general and administrative, non-controlling interests and net loss from discontinued operations before gains on sale of real estate.
The segment labeled as “Other” consists of revenue and operating expenses related to the notes receivable and corporate debt.
Presented below is the Company’s reportable segments’ operating income including segment assets and expenditures for the years 2016, 2015 and 2014 (dollars in thousands):
For the Year Ended December 31, 2016
|
|
Commercial
Properties
|
|
|
Apartments
|
|
|
Land
|
|
|
Other
|
|
|
Total
|
|
Rental and other property revenues
|
|
$
|
31,864
|
|
|
$
|
86,603
|
|
|
$
|
—
|
|
|
$
|
4
|
|
|
$
|
118,471
|
|
Property operating expenses
|
|
|
(19,476
|
)
|
|
|
(40,786
|
)
|
|
|
(1,634
|
)
|
|
|
(22
|
)
|
|
$
|
(61,918
|
)
|
Depreciation
|
|
|
(8,924
|
)
|
|
|
(14,759
|
)
|
|
|
—
|
|
|
|
—
|
|
|
|
(23,683
|
)
|
Mortgage and loan interest
|
|
|
(7,167
|
)
|
|
|
(25,381
|
)
|
|
|
(1,746
|
)
|
|
|
(18,794
|
)
|
|
|
(53,088
|
)
|
Interest income
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
14,670
|
|
|
|
14,670
|
|
Gain (loss) on sale of income producing properties
|
|
|
(238
|
)
|
|
|
16,445
|
|
|
|
—
|
|
|
|
—
|
|
|
|
16,207
|
|
Gain on land sales
|
|
|
—
|
|
|
|
—
|
|
|
|
3,121
|
|
|
|
—
|
|
|
|
3,121
|
|
Segment operating income (loss)
|
|
$
|
(3,941
|
)
|
|
$
|
22,122
|
|
|
$
|
(259
|
)
|
|
$
|
(4,142
|
)
|
|
$
|
13,780
|
|
Capital expenditures
|
|
$
|
4,577
|
|
|
$
|
863
|
|
|
$
|
269
|
|
|
$
|
—
|
|
|
$
|
5,709
|
|
Assets
|
|
$
|
148,689
|
|
|
$
|
624,433
|
|
|
$
|
118,051
|
|
|
$
|
—
|
|
|
$
|
891,173
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Property Sales
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Sales price
|
|
$
|
1,500
|
|
|
$
|
20,350
|
|
|
$
|
29,128
|
|
|
$
|
—
|
|
|
$
|
50,978
|
|
Less: Cost of sale
|
|
|
(1,738
|
)
|
|
|
(3,905
|
)
|
|
|
(26,007
|
)
|
|
|
—
|
|
|
|
(31,650
|
)
|
Gain (loss) on sale
|
|
$
|
(238
|
)
|
|
$
|
16,445
|
|
|
$
|
3,121
|
|
|
$
|
—
|
|
|
$
|
19,328
|
|
|
|
Commercial
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For the Year Ended December 31, 2015
|
|
Properties
|
|
|
Apartments
|
|
|
Land
|
|
|
Other
|
|
|
Total
|
|
Rental and other property revenues
|
|
$
|
29,308
|
|
|
$
|
72,809
|
|
|
$
|
—
|
|
|
$
|
103
|
|
|
$
|
102,220
|
|
Property operating expenses
|
|
|
(16,838
|
)
|
|
|
(34,437
|
)
|
|
|
(712
|
)
|
|
|
(270
|
)
|
|
|
(52,257
|
)
|
Depreciation
|
|
|
(8,861
|
)
|
|
|
(12,438
|
)
|
|
|
—
|
|
|
|
—
|
|
|
|
(21,299
|
)
|
Mortgage and loan interest
|
|
|
(6,891
|
)
|
|
|
(23,506
|
)
|
|
|
(4,214
|
)
|
|
|
(11,930
|
)
|
|
|
(46,541
|
)
|
Interest income
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
10,687
|
|
|
|
10,687
|
|
Gain on land sales
|
|
|
—
|
|
|
|
—
|
|
|
|
18,911
|
|
|
|
—
|
|
|
|
18,911
|
|
Segment operating income (loss)
|
|
$
|
(3,282
|
)
|
|
$
|
2,428
|
|
|
$
|
13,985
|
|
|
$
|
(1,410
|
)
|
|
$
|
11,721
|
|
Capital expenditures
|
|
$
|
8,118
|
|
|
$
|
1,780
|
|
|
$
|
2,621
|
|
|
$
|
—
|
|
|
$
|
12,519
|
|
Assets
|
|
$
|
153,270
|
|
|
$
|
553,860
|
|
|
$
|
136,889
|
|
|
$
|
—
|
|
|
$
|
844,019
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Property Sales
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Sales price
|
|
$
|
—
|
|
|
$
|
11,129
|
|
|
$
|
102,898
|
|
|
$
|
—
|
|
|
$
|
114,027
|
|
Less: Cost of sale
|
|
|
—
|
|
|
|
(10,394
|
)
|
|
|
(83,987
|
)
|
|
|
—
|
|
|
|
(94,381
|
)
|
Gain on sale
|
|
$
|
—
|
|
|
$
|
735
|
|
|
$
|
18,911
|
|
|
$
|
—
|
|
|
$
|
19,646
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Commercial
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For the Year Ended December 31, 2014
|
|
Properties
|
|
|
Apartments
|
|
|
Land
|
|
|
Other
|
|
|
Total
|
|
Rental and other property revenues
|
|
$
|
19,129
|
|
|
$
|
56,685
|
|
|
$
|
1
|
|
|
$
|
43
|
|
|
$
|
75,858
|
|
Property operating expenses
|
|
|
(12,238
|
)
|
|
|
(26,065
|
)
|
|
|
(1,169
|
)
|
|
|
(12
|
)
|
|
|
(39,484
|
)
|
Depreciation
|
|
|
(7,310
|
)
|
|
|
(10,088
|
)
|
|
|
—
|
|
|
|
—
|
|
|
|
(17,398
|
)
|
Mortgage and loan interest
|
|
|
(5,812
|
)
|
|
|
(18,946
|
)
|
|
|
(4,334
|
)
|
|
|
(4,589
|
)
|
|
|
(33,681
|
)
|
Interest income
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
12,194
|
|
|
|
12,194
|
|
Loss on land sales
|
|
|
—
|
|
|
|
—
|
|
|
|
561
|
|
|
|
—
|
|
|
|
561
|
|
Segment operating income (loss)
|
|
$
|
(6,231
|
)
|
|
$
|
1,586
|
|
|
$
|
(4,941
|
)
|
|
$
|
7,636
|
|
|
$
|
(1,950
|
)
|
Capital expenditures
|
|
$
|
4,418
|
|
|
$
|
320
|
|
|
$
|
2,435
|
|
|
$
|
—
|
|
|
$
|
7,173
|
|
Assets
|
|
$
|
140,131
|
|
|
$
|
391,767
|
|
|
$
|
157,223
|
|
|
$
|
—
|
|
|
$
|
689,121
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Property Sales
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Sales price
|
|
$
|
19,182
|
|
|
$
|
115,273
|
|
|
$
|
8,091
|
|
|
$
|
—
|
|
|
$
|
142,546
|
|
Less: Cost of sale
|
|
|
(9,168
|
)
|
|
|
(63,408
|
)
|
|
|
(7,530
|
)
|
|
|
—
|
|
|
|
(80,106
|
)
|
Gain (loss) on sale
|
|
$
|
10,014
|
|
|
$
|
51,865
|
|
|
$
|
561
|
|
|
$
|
—
|
|
|
$
|
62,440
|
|
The table below reflects the reconciliation of segment information to the corresponding amounts in the Consolidated Statements of Operations (dollars in thousands):
|
|
For the Years Ended December 31,
|
|
|
|
2016
|
|
|
2015
|
|
|
2014
|
|
Segment operating income (loss)
|
|
$
|
13,780
|
|
|
$
|
11,721
|
|
|
$
|
(1,950
|
)
|
Other non-segment items of income (expense)
|
|
|
|
|
|
|
|
|
|
|
|
|
General and administrative
|
|
|
(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
|
)
|
Other income
|
|
|
1,816
|
|
|
|
71
|
|
|
|
403
|
|
Gain (loss) on the sale of investments
|
|
|
—
|
|
|
|
(1
|
)
|
|
|
(92
|
)
|
Loss from unconsolidated joint ventures and investees
|
|
|
(26
|
)
|
|
|
41
|
|
|
|
(28
|
)
|
Litigation settlement
|
|
|
—
|
|
|
|
(352
|
)
|
|
|
3,591
|
|
Income tax benefit (expense)
|
|
|
(24
|
)
|
|
|
(517
|
)
|
|
|
20,390
|
|
Net income (loss) from continuing operations
|
|
$
|
323
|
|
|
$
|
(8,400
|
)
|
|
$
|
4,109
|
|
The table below reflects the reconciliation of segment information to the corresponding amounts in the Consolidated Balance Sheets (dollars in thousands):
|
|
For the Years Ended December 31,
|
|
|
|
2016
|
|
|
2015
|
|
|
2014
|
|
Segment assets
|
|
$
|
891,173
|
|
|
$
|
844,019
|
|
|
$
|
689,121
|
|
Investments in real estate partnerships
|
|
|
2,446
|
|
|
|
5,243
|
|
|
|
1,543
|
|
Notes and interest receivable
|
|
|
79,308
|
|
|
|
69,551
|
|
|
|
83,457
|
|
Other assets
|
|
|
212,987
|
|
|
|
191,391
|
|
|
|
156,284
|
|
Total assets
|
|
$
|
1,185,914
|
|
|
$
|
1,110,204
|
|
|
$
|
930,405
|
|
NOTE 14.
DISCONTINUED OPERATIONS
Prior to January 1, 2015, we applied the provisions of ASC 360, “Property, Plant and Equipment”, which required that long-lived assets that are to be disposed of by sale be measured at the lesser of (1) book value or (2) fair value less cost to sell. In addition, it required that one accounting model be used for long-lived assets to be disposed of by sale and broadened the presentation of discontinued operations to include more disposal transactions.
Effective January 1, 2015, the Company adopted the provisions of ASU 2014-08, which changed the criteria of ASC 360 related to determining which disposals qualify to be accounted for as discontinued operations and modified related reporting and disclosure requirements. Disposals representing a strategic shift in operations that have a major effect on a company’s operations and financial results will be presented as discontinued operations.
There were no sales of income-producing properties during 2016 or 2015 that met the criteria for discontinued operations. Amounts included in discontinued operations represent the residual amounts from sales classified as discontinued operations prior to January 1, 2015. The following table summarizes revenue and expense information for the properties sold that qualified as discontinued operations (dollars in thousands):
|
|
For the Years Ended December 31,
|
|
|
|
2016
|
|
|
2015
|
|
|
2014
|
|
Revenues:
|
|
|
|
|
|
|
|
|
|
Rental and other property revenues
|
|
$
|
—
|
|
|
$
|
355
|
|
|
$
|
5,612
|
|
|
|
|
—
|
|
|
|
355
|
|
|
|
5,612
|
|
Expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|
Property operating expenses
|
|
|
2
|
|
|
|
(345
|
)
|
|
|
2,350
|
|
Depreciation
|
|
|
—
|
|
|
|
—
|
|
|
|
751
|
|
General and administrative
|
|
|
—
|
|
|
|
99
|
|
|
|
515
|
|
Total operating expenses
|
|
|
2
|
|
|
|
(246
|
)
|
|
|
3,616
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other income (expense):
|
|
|
|
|
|
|
|
|
|
|
|
|
Other income (expense)
|
|
|
—
|
|
|
|
45
|
|
|
|
(508
|
)
|
Mortgage and loan interest
|
|
|
—
|
|
|
|
(2
|
)
|
|
|
(3,204
|
)
|
Loan charges and prepayment penalties
|
|
|
—
|
|
|
|
—
|
|
|
|
(1,656
|
)
|
Earnings from unconsolidated subsidiaries and investees
|
|
|
—
|
|
|
|
—
|
|
|
|
1
|
|
Litigation settlement
|
|
|
—
|
|
|
|
—
|
|
|
|
(250
|
)
|
Total other expenses
|
|
|
—
|
|
|
|
43
|
|
|
|
(5,617
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income (loss) from discontinued operations before gain on sale of
|
|
|
|
|
|
|
|
|
|
|
|
|
real estate and taxes
|
|
|
(2
|
)
|
|
|
644
|
|
|
|
(3,621
|
)
|
Gain on sale of real estate from discontinued operations
|
|
|
—
|
|
|
|
735
|
|
|
|
61,879
|
|
Income tax expense
|
|
|
1
|
|
|
|
(483
|
)
|
|
|
(20,390
|
)
|
Income from discontinued operations
|
|
$
|
(1
|
)
|
|
$
|
896
|
|
|
$
|
37,868
|
|
NOTE 15.
QUARTERLY RESULTS OF OPERATIONS
The following is a tabulation of TCI’s quarterly results of operations for the years 2016, 2015 and 2014. Quarterly results presented may differ from those previously reported in TCI’s Form 10-Q due to the reclassification of the operations of properties sold or held for sale to discontinued operations in accordance with ASC topic 360:
|
|
For the Three Months Ended 2016
|
|
|
|
March 31,
|
|
|
June 30,
|
|
|
September 30,
|
|
|
December 31,
|
|
|
|
(dollars in thousands, except share and per share amounts)
|
|
2016
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenue and other property revenues
|
|
$
|
28,903
|
|
|
$
|
30,521
|
|
|
$
|
29,776
|
|
|
$
|
29,271
|
|
Total operating expenses
|
|
|
24,823
|
|
|
|
24,751
|
|
|
|
25,429
|
|
|
|
25,821
|
|
Operating income (loss)
|
|
|
4,080
|
|
|
|
5,770
|
|
|
|
4,347
|
|
|
|
3,450
|
|
Other expenses
|
|
|
(9,054
|
)
|
|
|
(7,901
|
)
|
|
|
(9,309
|
)
|
|
|
(10,364
|
)
|
Loss before gain on land sales, non-controlling interest, and taxes
|
|
|
(4,974
|
)
|
|
|
(2,131
|
)
|
|
|
(4,962
|
)
|
|
|
(6,914
|
)
|
Gain (loss) on sale of income-producing properties
|
|
|
(244
|
)
|
|
|
5,168
|
|
|
|
—
|
|
|
|
11,283
|
|
Gain (loss) on land sales
|
|
|
1,652
|
|
|
|
1,719
|
|
|
|
555
|
|
|
|
(805
|
)
|
Income tax benefit
|
|
|
1
|
|
|
|
—
|
|
|
|
(25
|
)
|
|
|
—
|
|
Net income (loss) from continuing operations
|
|
|
(3,565
|
)
|
|
|
4,756
|
|
|
|
(4,432
|
)
|
|
|
3,564
|
|
Net income from discontinued operations
|
|
|
2
|
|
|
|
—
|
|
|
|
—
|
|
|
|
(3
|
)
|
Net income (loss)
|
|
|
(3,563
|
)
|
|
|
4,756
|
|
|
|
(4,432
|
)
|
|
|
3,561
|
|
Net (loss) attributable to non-controlling interest
|
|
|
23
|
|
|
|
(97
|
)
|
|
|
(114
|
)
|
|
|
(97
|
)
|
Preferred dividend requirement
|
|
|
(222
|
)
|
|
|
(224
|
)
|
|
|
(227
|
)
|
|
|
(227
|
)
|
Net income (loss) applicable to common shares
|
|
$
|
(3,762
|
)
|
|
$
|
4,435
|
|
|
$
|
(4,773
|
)
|
|
$
|
3,237
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
PER SHARE DATA
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings per share - basic
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income (loss) from continuing operations
|
|
$
|
(0.43
|
)
|
|
$
|
0.51
|
|
|
$
|
(0.55
|
)
|
|
$
|
0.37
|
|
Loss from discontinued operations
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
Net income (loss) applicable to common shares
|
|
$
|
(0.43
|
)
|
|
$
|
0.51
|
|
|
$
|
(0.55
|
)
|
|
$
|
0.37
|
|
Weighted average common shares used in computing earnings per share
|
|
|
8,717,767
|
|
|
|
8,717,767
|
|
|
|
8,717,767
|
|
|
|
8,717,767
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings per share - diluted
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income (loss) from continuing operations
|
|
$
|
(0.43
|
)
|
|
$
|
0.51
|
|
|
$
|
(0.55
|
)
|
|
$
|
0.37
|
|
Loss from discontinued operations
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
Net income (loss) applicable to common shares
|
|
$
|
(0.43
|
)
|
|
$
|
0.51
|
|
|
$
|
(0.55
|
)
|
|
$
|
0.37
|
|
Weighted average common shares used in computing diluted earnings per share
|
|
|
8,717,767
|
|
|
|
8,717,767
|
|
|
|
8,717,767
|
|
|
|
8,717,767
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For the Three Months Ended 2015
|
|
|
|
March 31,
|
|
|
June 30,
|
|
|
September 30,
|
|
|
December 31,
|
|
|
|
(dollars in thousands, except share and per share amounts)
|
|
2015
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenue and other property revenues
|
|
$
|
22,304
|
|
|
$
|
23,756
|
|
|
$
|
27,539
|
|
|
$
|
28,621
|
|
Total operating expenses
|
|
|
19,264
|
|
|
|
19,310
|
|
|
|
24,613
|
|
|
|
29,732
|
|
Operating income (loss)
|
|
|
3,040
|
|
|
|
4,446
|
|
|
|
2,926
|
|
|
|
(1,111
|
)
|
Other expenses
|
|
|
(6,398
|
)
|
|
|
(5,243
|
)
|
|
|
(11,211
|
)
|
|
|
(13,243
|
)
|
Loss before gain on land sales, non-controlling interest, and taxes
|
|
|
(3,358
|
)
|
|
|
(797
|
)
|
|
|
(8,285
|
)
|
|
|
(14,354
|
)
|
Gain (loss) on land sales
|
|
|
2,876
|
|
|
|
1,250
|
|
|
|
997
|
|
|
|
13,788
|
|
Income tax benefit
|
|
|
102
|
|
|
|
(12
|
)
|
|
|
274
|
|
|
|
(881
|
)
|
Net income (loss) from continuing operations
|
|
|
(380
|
)
|
|
|
441
|
|
|
|
(7,014
|
)
|
|
|
(1,447
|
)
|
Net income from discontinuing operations
|
|
|
190
|
|
|
|
(22
|
)
|
|
|
508
|
|
|
|
220
|
|
Net income (loss)
|
|
|
(190
|
)
|
|
|
419
|
|
|
|
(6,506
|
)
|
|
|
(1,227
|
)
|
Net (loss) attributable to non-controlling interest
|
|
|
295
|
|
|
|
(281
|
)
|
|
|
(95
|
)
|
|
|
(51
|
)
|
Preferred dividend requirement
|
|
|
(222
|
)
|
|
|
(224
|
)
|
|
|
(227
|
)
|
|
|
(227
|
)
|
Net income (loss) applicable to common shares
|
|
$
|
(117
|
)
|
|
$
|
(86
|
)
|
|
$
|
(6,828
|
)
|
|
$
|
(1,505
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
PER SHARE DATA
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings per share - basic
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income (loss) from continuing operations
|
|
$
|
(0.04
|
)
|
|
$
|
(0.01
|
)
|
|
$
|
(0.84
|
)
|
|
$
|
(0.19
|
)
|
Income from discontinued operations
|
|
|
0.02
|
|
|
|
—
|
|
|
|
0.06
|
|
|
|
0.02
|
|
Net income (loss) applicable to common shares
|
|
$
|
(0.02
|
)
|
|
$
|
(0.01
|
)
|
|
$
|
(0.78
|
)
|
|
$
|
(0.17
|
)
|
Weighted average common shares used in computing earnings per share
|
|
|
8,717,767
|
|
|
|
8,717,767
|
|
|
|
8,717,767
|
|
|
|
8,717,767
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings per share - diluted
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income (loss) from continuing operations
|
|
$
|
(0.04
|
)
|
|
$
|
(0.01
|
)
|
|
$
|
(0.84
|
)
|
|
$
|
(0.19
|
)
|
Income from discontinued operations
|
|
|
0.02
|
|
|
|
—
|
|
|
|
0.06
|
|
|
|
0.02
|
|
Net income (loss) applicable to common shares
|
|
$
|
(0.02
|
)
|
|
$
|
(0.01
|
)
|
|
$
|
(0.78
|
)
|
|
$
|
(0.17
|
)
|
Weighted average common shares used in computing diluted earnings per share
|
|
|
8,717,767
|
|
|
|
8,717,767
|
|
|
|
8,717,767
|
|
|
|
8,717,767
|
|
|
|
For the Three Months Ended 2014
|
|
|
|
March 31,
|
|
|
June 30,
|
|
|
September 30,
|
|
|
December 31,
|
|
|
|
(dollars in thousands, except share and per share amounts)
|
|
2014
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenue and other property revenues
|
|
$
|
18,303
|
|
|
$
|
18,511
|
|
|
$
|
18,466
|
|
|
$
|
20,578
|
|
Total operating expenses
|
|
|
17,376
|
|
|
|
18,388
|
|
|
|
17,264
|
|
|
|
22,059
|
|
Operating income (loss)
|
|
|
927
|
|
|
|
123
|
|
|
|
1,202
|
|
|
|
(1,481
|
)
|
Other expenses
|
|
|
(2,899
|
)
|
|
|
(3,718
|
)
|
|
|
(5,754
|
)
|
|
|
(5,242
|
)
|
Loss before gain on land sales, non-controlling interest, and taxes
|
|
|
(1,972
|
)
|
|
|
(3,595
|
)
|
|
|
(4,552
|
)
|
|
|
(6,723
|
)
|
Loss on land sales
|
|
|
753
|
|
|
|
(159
|
)
|
|
|
40
|
|
|
|
(73
|
)
|
Income tax benefit
|
|
|
2,049
|
|
|
|
2,195
|
|
|
|
786
|
|
|
|
15,360
|
|
Net income (loss) from continuing operations
|
|
|
830
|
|
|
|
(1,559
|
)
|
|
|
(3,726
|
)
|
|
|
8,564
|
|
Net income from discontinuing operations
|
|
|
3,805
|
|
|
|
4,076
|
|
|
|
1,461
|
|
|
|
28,526
|
|
Net income (loss)
|
|
|
4,635
|
|
|
|
2,517
|
|
|
|
(2,265
|
)
|
|
|
37,090
|
|
Net loss attributable to non-controlling interest
|
|
|
(84
|
)
|
|
|
(127
|
)
|
|
|
(81
|
)
|
|
|
(107
|
)
|
Preferred dividend requirement
|
|
|
(274
|
)
|
|
|
(277
|
)
|
|
|
(227
|
)
|
|
|
(227
|
)
|
Net income (loss) applicable to common shares
|
|
$
|
4,277
|
|
|
$
|
2,113
|
|
|
$
|
(2,573
|
)
|
|
$
|
36,756
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
PER SHARE DATA
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings per share - basic
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income (loss) from continuing operations
|
|
$
|
0.06
|
|
|
$
|
(0.23
|
)
|
|
$
|
(0.46
|
)
|
|
$
|
0.94
|
|
Income from discontinued operations
|
|
|
0.45
|
|
|
|
0.48
|
|
|
|
0.17
|
|
|
|
3.27
|
|
Net income (loss) applicable to common shares
|
|
$
|
0.51
|
|
|
$
|
0.25
|
|
|
$
|
(0.29
|
)
|
|
$
|
4.21
|
|
Weighted average common shares used in computing earnings per share
|
|
|
8,413,469
|
|
|
|
8,413,469
|
|
|
|
8,688,018
|
|
|
|
8,717,767
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings per share - diluted
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income (loss) from continuing operations
|
|
$
|
0.05
|
|
|
$
|
(0.23
|
)
|
|
$
|
(0.46
|
)
|
|
$
|
0.94
|
|
Income from discontinued operations
|
|
|
0.44
|
|
|
|
0.48
|
|
|
|
0.17
|
|
|
|
3.27
|
|
Net income (loss) applicable to common shares
|
|
$
|
0.49
|
|
|
$
|
0.25
|
|
|
$
|
(0.29
|
)
|
|
$
|
4.21
|
|
Weighted average common shares used in computing diluted earnings per share
|
|
|
8,639,679
|
|
|
|
8,413,469
|
|
|
|
8,688,018
|
|
|
|
8,717,767
|
|
NOTE 16.
COMMITMENTS AND CONTINGENCIES AND LIQUIDITY
Liquidity.
Management believes that TCI will generate excess cash from property operations in 2017; such excess, however, will not be sufficient to discharge all of TCI’s obligations as they become due. Management intends to sell income-producing assets, refinance real estate and obtain additional borrowings primarily secured by real estate to meet its liquidity requirements.
Partnership Buyouts
. TCI is the limited partner in various partnerships related the construction of residential properties. As permitted in the respective partnership agreements, TCI intends to purchase the interests of the general and any other limited partners in these partnerships subsequent to the completion of these projects. The amounts paid to buy out the nonaffiliated partners are limited to development fees earned by the non-affiliated partners, and are set forth in the respective partnership agreements.
Dynex Capital, Inc.
On July 20, 2015, the 68
th
Judicial District Court in Dallas County, Texas issued its Final Judgment in Cause No. DC-03-00675, styled Basic Capital Management, Inc., American Realty Trust, Inc., Transcontinental Realty Investors, Inc., Continental Poydras Corp., Continental Common, Inc. and Continental Baronne, Inc. v. Dynex Commercial, Inc. The case, which was litigated for more than a decade, had its origin with Dynex Commercial making loans to Continental Poydras Corp., Continental Common, Inc. and Continental Baronne, Inc. (subsidiaries of Continental Mortgage & Equity Trust (“CMET”), an entity which merged into TCI in 1999 after the original suit was filed). Under the original loan commitment, $160 million in loans were to be made to the entities. The loans were conditioned on the execution of a commitment between Dynex Commercial and Basic Capital Management, Inc. (“Basic”).
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.
The Company is working with counsel to identify assets and collect on the Final Judgment against Dynex Commercial, Inc., as well as explore possible additional claims, if any, against Dynex Capital, Inc.
Litigation.
The ownership of property and provision of services to the public as tenants entails an inherent risk of liability. Although the Company and its subsidiaries are involved in various items of litigation incidental to and in the ordinary course of its business, in the opinion of management, the outcome of such litigation will not have a material adverse impact upon the Company’s financial condition, results of operation or liquidity.
Guarantees.
The Company is the primary guarantor on a $60.4 million mezzanine loan between UHF and a lender. In addition, ARI and an officer of the Company are limited recourse guarantors of the loan. As of December 31, 2016, UHF was in compliance with the covenants to the loan agreement.
NOTE 17.
EARNINGS PER SHARE
Earnings per share.
Earnings per share (“EPS”) have been computed pursuant to the provisions of ASC 260 “Earnings per Share.” 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 December 31, 2016, there are no preferred stock or stock options that are required to be included in the calculation of EPS.
NOTE 18.
SUBSEQUENT EVENTS
The date to which events occurring after December 31, 2016, the date of the most recent balance sheet, have been evaluated for possible adjustment to the financial statements or disclosure is March 31, 2017, which is the date on which the financial statements were available to be issued. There are no subsequent events that would require an adjustment to the financial statements.
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 has 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%.
|
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|
|
|
|
|
|
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|
|
|
|
|
|
Schedule III
|
TRANSCONTINENTAL REALTY INVESTORS, INC.
|
REAL ESTATE AND ACCUMULATED DEPRECIATION
|
December 31, 2016
|
|
|
|
|
|
|
|
|
|
|
|
Cost Capitalized
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Subsequent to
|
|
|
Asset
|
|
|
Gross Amounts of Which
|
|
|
|
|
|
|
|
|
|
|
|
Life on Which
|
|
|
|
|
|
Initial Cost
|
|
|
Acquisition
|
|
|
Impairment
|
|
|
Carried at End of Year
|
|
|
|
|
|
|
|
|
|
|
|
Depreciation
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
In Latest
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Statement
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Asset
|
|
|
|
|
|
Building &
|
|
|
|
|
|
Accumulated
|
|
|
Date of
|
|
|
Date
|
|
|
of Operation
|
Property/Location
|
|
Encumbrances
|
|
|
Land
|
|
|
Buildings
|
|
|
Improvements
|
|
|
Impairment
|
|
|
Land
|
|
|
Improvements
|
|
|
Total
|
|
|
Depreciation
|
|
|
Construction
|
|
|
Acquired
|
|
|
is Computed
|
|
|
(dollars in thousands)
|
|
|
|
|
|
|
|
|
|
Properties Held for Investment
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Apartments
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Anderson Estates, Oxford, MS
|
|
|
796
|
|
|
|
378
|
|
|
|
2,683
|
|
|
|
313
|
|
|
|
—
|
|
|
|
378
|
|
|
|
2,996
|
|
|
|
3,373
|
|
|
|
732
|
|
|
|
2003
|
|
|
|
01
|
/06
|
|
40 years
|
Blue Lake Villas I, Waxahachie, TX
|
|
|
10,589
|
|
|
|
526
|
|
|
|
11,057
|
|
|
|
19
|
|
|
|
—
|
|
|
|
526
|
|
|
|
11,076
|
|
|
|
11,602
|
|
|
|
3,809
|
|
|
|
2003
|
|
|
|
01
|
/02
|
|
40 years
|
Blue Lake Villas II, Waxahachie, TX
|
|
|
3,832
|
|
|
|
287
|
|
|
|
4,451
|
|
|
|
45
|
|
|
|
—
|
|
|
|
287
|
|
|
|
4,496
|
|
|
|
4,783
|
|
|
|
1,023
|
|
|
|
2004
|
|
|
|
01
|
/04
|
|
40 years
|
Breakwater Bay, Beaumont, TX
|
|
|
9,271
|
|
|
|
740
|
|
|
|
10,435
|
|
|
|
63
|
|
|
|
—
|
|
|
|
740
|
|
|
|
10,498
|
|
|
|
11,238
|
|
|
|
3,123
|
|
|
|
2004
|
|
|
|
05
|
/03
|
|
40 years
|
Bridgewood Ranch, Kaufman, TX
|
|
|
6,340
|
|
|
|
762
|
|
|
|
6,856
|
|
|
|
57
|
|
|
|
—
|
|
|
|
762
|
|
|
|
6,913
|
|
|
|
7,675
|
|
|
|
1,553
|
|
|
|
2007
|
|
|
|
04
|
/08
|
|
40 years
|
Capitol Hill, Little Rock, AR
|
|
|
8,893
|
|
|
|
1,860
|
|
|
|
7,948
|
|
|
|
55
|
|
|
|
—
|
|
|
|
1,860
|
|
|
|
8,003
|
|
|
|
9,862
|
|
|
|
2,506
|
|
|
|
2003
|
|
|
|
03
|
/03
|
|
40 years
|
Centennial, Oak Ridge, TN
|
|
|
20,794
|
|
|
|
2,570
|
|
|
|
22,589
|
|
|
|
—
|
|
|
|
—
|
|
|
|
2,570
|
|
|
|
22,589
|
|
|
|
25,159
|
|
|
|
800
|
|
|
|
2011
|
|
|
|
07
|
/14
|
|
40 years
|
Curtis Moore Estates, Greenwood, MS
|
|
|
1,444
|
|
|
|
847
|
|
|
|
5,733
|
|
|
|
285
|
|
|
|
—
|
|
|
|
847
|
|
|
|
6,018
|
|
|
|
6,864
|
|
|
|
1,772
|
|
|
|
2003
|
|
|
|
01
|
/06
|
|
40 years
|
Crossing at Opelika, Opelika, AL
|
|
|
14,700
|
|
|
|
1,590
|
|
|
|
14,314
|
|
|
|
—
|
|
|
|
—
|
|
|
|
1,590
|
|
|
|
14,314
|
|
|
|
15,904
|
|
|
|
267
|
|
|
|
2015
|
|
|
|
12
|
/15
|
|
40 years
|
Dakota Arms, Lubbock, TX
|
|
|
12,356
|
|
|
|
921
|
|
|
|
12,644
|
|
|
|
358
|
|
|
|
—
|
|
|
|
921
|
|
|
|
13,002
|
|
|
|
13,923
|
|
|
|
3,860
|
|
|
|
2004
|
|
|
|
01
|
/04
|
|
40 years
|
David Jordan Phase II, Greenwood, MS
|
|
|
563
|
|
|
|
277
|
|
|
|
1,521
|
|
|
|
70
|
|
|
|
—
|
|
|
|
277
|
|
|
|
1,591
|
|
|
|
1,868
|
|
|
|
461
|
|
|
|
1999
|
|
|
|
01
|
/06
|
|
40 years
|
David Jordan Phase III, Greenwood, MS
|
|
|
573
|
|
|
|
439
|
|
|
|
2,115
|
|
|
|
64
|
|
|
|
—
|
|
|
|
439
|
|
|
|
2,179
|
|
|
|
2,618
|
|
|
|
590
|
|
|
|
2003
|
|
|
|
01
|
/06
|
|
40 years
|
Desoto Ranch, DeSoto, TX
|
|
|
15,119
|
|
|
|
1,472
|
|
|
|
17,854
|
|
|
|
65
|
|
|
|
—
|
|
|
|
1,472
|
|
|
|
17,919
|
|
|
|
19,391
|
|
|
|
5,772
|
|
|
|
2002
|
|
|
|
05
|
/02
|
|
40 years
|
Falcon Lakes, Arlington, TX
|
|
|
13,530
|
|
|
|
1,437
|
|
|
|
15,095
|
|
|
|
449
|
|
|
|
—
|
|
|
|
1,437
|
|
|
|
15,544
|
|
|
|
16,981
|
|
|
|
5,566
|
|
|
|
2001
|
|
|
|
10
|
/01
|
|
40 years
|
Heather Creek, Mesquite, TX
|
|
|
11,162
|
|
|
|
1,345
|
|
|
|
12,015
|
|
|
|
50
|
|
|
|
—
|
|
|
|
1,345
|
|
|
|
12,065
|
|
|
|
13,410
|
|
|
|
3,626
|
|
|
|
2003
|
|
|
|
03
|
/03
|
|
40 years
|
Holland Lake, Weatherford, TX
|
|
|
11,669
|
|
|
|
1,450
|
|
|
|
14,611
|
|
|
|
—
|
|
|
|
—
|
|
|
|
1,450
|
|
|
|
14,611
|
|
|
|
16,061
|
|
|
|
609
|
|
|
|
2004
|
|
|
|
05
|
/14
|
|
40 years
|
Lake Forest, Houston, TX
|
|
|
12,007
|
|
|
|
927
|
|
|
|
12,267
|
|
|
|
1,023
|
|
|
|
—
|
|
|
|
927
|
|
|
|
13,290
|
|
|
|
14,217
|
|
|
|
3,919
|
|
|
|
2004
|
|
|
|
01
|
/04
|
|
40 years
|
Legacy at Pleasant Grove, Texarkana, TX
|
|
|
14,757
|
|
|
|
2,005
|
|
|
|
17,892
|
|
|
|
—
|
|
|
|
—
|
|
|
|
2,005
|
|
|
|
17,892
|
|
|
|
19,897
|
|
|
|
932
|
|
|
|
2006
|
|
|
|
12
|
/14
|
|
40 years
|
Lodge at Pecan Creek, Denton, TX
|
|
|
16,174
|
|
|
|
1,349
|
|
|
|
16,180
|
|
|
|
—
|
|
|
|
—
|
|
|
|
1,349
|
|
|
|
16,180
|
|
|
|
17,529
|
|
|
|
2,090
|
|
|
|
2011
|
|
|
|
10
|
/05
|
|
40 years
|
Mansions of Mansfield, Mansfield, TX
|
|
|
15,347
|
|
|
|
977
|
|
|
|
17,799
|
|
|
|
75
|
|
|
|
—
|
|
|
|
977
|
|
|
|
17,874
|
|
|
|
18,851
|
|
|
|
3,465
|
|
|
|
2009
|
|
|
|
09
|
/05
|
|
40 years
|
Metropolitan Apartments, North Little Rock, AR
|
|
|
24,303
|
|
|
|
3,229
|
|
|
|
29,004
|
|
|
|
—
|
|
|
|
—
|
|
|
|
3,229
|
|
|
|
29,004
|
|
|
|
32,233
|
|
|
|
363
|
|
|
|
2010
|
|
|
|
06
|
/16
|
|
40 years
|
Mission Oaks, San Antonio, TX
|
|
|
14,670
|
|
|
|
1,266
|
|
|
|
16,627
|
|
|
|
212
|
|
|
|
—
|
|
|
|
1,266
|
|
|
|
16,839
|
|
|
|
18,105
|
|
|
|
4,077
|
|
|
|
2005
|
|
|
|
05
|
/05
|
|
40 years
|
Monticello Estate, Monticello, AR
|
|
|
445
|
|
|
|
285
|
|
|
|
1,493
|
|
|
|
15
|
|
|
|
—
|
|
|
|
285
|
|
|
|
1,508
|
|
|
|
1,793
|
|
|
|
422
|
|
|
|
2001
|
|
|
|
01
|
/06
|
|
40 years
|
Northside on Travis, Sherman, TX
|
|
|
13,099
|
|
|
|
1,300
|
|
|
|
14,560
|
|
|
|
27
|
|
|
|
—
|
|
|
|
1,300
|
|
|
|
14,587
|
|
|
|
15,887
|
|
|
|
2,671
|
|
|
|
2009
|
|
|
|
10
|
/07
|
|
40 years
|
Oak Hollow, Sequin, TX
|
|
|
11,832
|
|
|
|
1,435
|
|
|
|
12,406
|
|
|
|
—
|
|
|
|
—
|
|
|
|
1,435
|
|
|
|
12,406
|
|
|
|
13,841
|
|
|
|
465
|
|
|
|
2011
|
|
|
|
07
|
/14
|
|
40 years
|
Oceanaire Apartments, Biloxi, MS
|
|
|
11,374
|
|
|
|
1,397
|
|
|
|
12,575
|
|
|
|
—
|
|
|
|
—
|
|
|
|
1,397
|
|
|
|
12,575
|
|
|
|
13,972
|
|
|
|
567
|
|
|
|
2009
|
|
|
|
12
|
/16
|
|
40 years
|
Overlook at Allensville, Sevierville, TN
|
|
|
13,607
|
|
|
|
1,228
|
|
|
|
12,296
|
|
|
|
—
|
|
|
|
—
|
|
|
|
1,228
|
|
|
|
12,296
|
|
|
|
13,524
|
|
|
|
—
|
|
|
|
2012
|
|
|
|
10
|
/15
|
|
40 years
|
Parc at Clarksville, Clarksville, TN
|
|
|
12,658
|
|
|
|
587
|
|
|
|
14,300
|
|
|
|
103
|
|
|
|
—
|
|
|
|
587
|
|
|
|
14,403
|
|
|
|
14,990
|
|
|
|
3,022
|
|
|
|
2007
|
|
|
|
06
|
/02
|
|
40 years
|
Parc at Denham Springs, Denham Springs, LA
|
|
|
18,520
|
|
|
|
1,022
|
|
|
|
20,188
|
|
|
|
8
|
|
|
|
—
|
|
|
|
1,022
|
|
|
|
20,196
|
|
|
|
21,218
|
|
|
|
3,012
|
|
|
|
2011
|
|
|
|
07
|
/07
|
|
40 years
|
Parc at Maumelle, Little Rock, AR
|
|
|
15,694
|
|
|
|
1,710
|
|
|
|
17,688
|
|
|
|
218
|
|
|
|
—
|
|
|
|
1,710
|
|
|
|
17,906
|
|
|
|
19,617
|
|
|
|
4,759
|
|
|
|
2006
|
|
|
|
12
|
/04
|
|
40 years
|
Parc at Metro Center, Nashville, TN
|
|
|
10,316
|
|
|
|
1,044
|
|
|
|
12,226
|
|
|
|
476
|
|
|
|
—
|
|
|
|
1,044
|
|
|
|
12,702
|
|
|
|
13,746
|
|
|
|
3,359
|
|
|
|
2006
|
|
|
|
05
|
/05
|
|
40 years
|
Parc at Rogers, Rogers, AR
|
|
|
20,382
|
|
|
|
1,482
|
|
|
|
22,995
|
|
|
|
449
|
|
|
|
(3,180
|
)
|
|
|
1,482
|
|
|
|
20,264
|
|
|
|
21,746
|
|
|
|
4,321
|
|
|
|
2007
|
|
|
|
04
|
/04
|
|
40 years
|
Preserve at Pecan Creek, Denton, TX
|
|
|
14,251
|
|
|
|
902
|
|
|
|
16,626
|
|
|
|
42
|
|
|
|
—
|
|
|
|
902
|
|
|
|
16,668
|
|
|
|
17,570
|
|
|
|
3,473
|
|
|
|
2008
|
|
|
|
10
|
/05
|
|
40 years
|
Preserve at Prairie Pointe, Lubbock, TX
|
|
|
10,057
|
|
|
|
1,074
|
|
|
|
10,604
|
|
|
|
178
|
|
|
|
—
|
|
|
|
1,074
|
|
|
|
10,782
|
|
|
|
11,856
|
|
|
|
462
|
|
|
|
2005
|
|
|
|
04
|
/15
|
|
40 years
|
Riverwalk Phase I, Greenville, MS
|
|
|
282
|
|
|
|
198
|
|
|
|
1,537
|
|
|
|
5
|
|
|
|
—
|
|
|
|
198
|
|
|
|
1,542
|
|
|
|
1,740
|
|
|
|
464
|
|
|
|
2003
|
|
|
|
01
|
/06
|
|
40 years
|
Riverwalk Phase II, Greenville, MS
|
|
|
1,089
|
|
|
|
297
|
|
|
|
4,007
|
|
|
|
163
|
|
|
|
—
|
|
|
|
297
|
|
|
|
4,170
|
|
|
|
4,467
|
|
|
|
1,467
|
|
|
|
2003
|
|
|
|
01
|
/06
|
|
40 years
|
Sawgrass Creek, New Port Richey, FL
|
|
|
—
|
|
|
|
784
|
|
|
|
7,056
|
|
|
|
—
|
|
|
|
—
|
|
|
|
784
|
|
|
|
7,056
|
|
|
|
7,840
|
|
|
|
73
|
|
|
|
2008
|
|
|
|
08
|
/16
|
|
40 years
|
Sonoma Court, Rockwall, TX
|
|
|
10,616
|
|
|
|
941
|
|
|
|
11,072
|
|
|
|
1
|
|
|
|
—
|
|
|
|
941
|
|
|
|
11,073
|
|
|
|
12,014
|
|
|
|
1,500
|
|
|
|
2011
|
|
|
|
07
|
/10
|
|
40 years
|
Sugar Mill, Baton Rouge, LA
|
|
|
11,216
|
|
|
|
1,437
|
|
|
|
13,367
|
|
|
|
204
|
|
|
|
—
|
|
|
|
1,437
|
|
|
|
13,571
|
|
|
|
15,008
|
|
|
|
2,500
|
|
|
|
2009
|
|
|
|
08
|
/08
|
|
40 years
|
Tattersall Village, Hinesville, GA
|
|
|
26,121
|
|
|
|
2,691
|
|
|
|
23,961
|
|
|
|
—
|
|
|
|
—
|
|
|
|
2,691
|
|
|
|
23,961
|
|
|
|
26,652
|
|
|
|
—
|
|
|
|
2010
|
|
|
|
12
|
/16
|
|
40 years
|
Toulon, Gautier, MS
|
|
|
20,356
|
|
|
|
1,993
|
|
|
|
20,107
|
|
|
|
—
|
|
|
|
—
|
|
|
|
1,993
|
|
|
|
20,107
|
|
|
|
22,100
|
|
|
|
2,765
|
|
|
|
2011
|
|
|
|
09
|
/09
|
|
40 years
|
Tradewinds, Midland, TX
|
|
|
14,477
|
|
|
|
3,300
|
|
|
|
20,073
|
|
|
|
—
|
|
|
|
—
|
|
|
|
3,300
|
|
|
|
20,073
|
|
|
|
23,373
|
|
|
|
748
|
|
|
|
2015
|
|
|
|
06
|
/15
|
|
40 years
|
Villager, Ft. Walton, FL
|
|
|
733
|
|
|
|
141
|
|
|
|
1,268
|
|
|
|
—
|
|
|
|
—
|
|
|
|
141
|
|
|
|
1,268
|
|
|
|
1,409
|
|
|
|
53
|
|
|
|
1972
|
|
|
|
06
|
/15
|
|
40 years
|
Villas at Park West I, Pueblo, CO
|
|
|
10,410
|
|
|
|
1,171
|
|
|
|
10,453
|
|
|
|
—
|
|
|
|
—
|
|
|
|
1,171
|
|
|
|
10,453
|
|
|
|
11,624
|
|
|
|
544
|
|
|
|
2005
|
|
|
|
12
|
/14
|
|
40 years
|
Villas at Park West II, Pueblo, CO
|
|
|
9,418
|
|
|
|
1,463
|
|
|
|
13,060
|
|
|
|
—
|
|
|
|
—
|
|
|
|
1,463
|
|
|
|
13,060
|
|
|
|
14,523
|
|
|
|
680
|
|
|
|
2010
|
|
|
|
12
|
/14
|
|
40 years
|
Vista Ridge, Tupelo, MS
|
|
|
10,661
|
|
|
|
1,339
|
|
|
|
13,398
|
|
|
|
—
|
|
|
|
—
|
|
|
|
1,339
|
|
|
|
13,398
|
|
|
|
14,737
|
|
|
|
848
|
|
|
|
2009
|
|
|
|
10
|
/15
|
|
40 years
|
Vistas of Vance Jackson, San Antonio, TX
|
|
|
15,076
|
|
|
|
1,327
|
|
|
|
16,539
|
|
|
|
127
|
|
|
|
—
|
|
|
|
1,327
|
|
|
|
16,666
|
|
|
|
17,993
|
|
|
|
4,728
|
|
|
|
2004
|
|
|
|
01
|
/04
|
|
40 years
|
Waterford, Roseberg, TX
|
|
|
17,167
|
|
|
|
2,341
|
|
|
|
20,880
|
|
|
|
0
|
|
|
|
—
|
|
|
|
2,341
|
|
|
|
20,880
|
|
|
|
23,221
|
|
|
|
783
|
|
|
|
2013
|
|
|
|
06
|
/14
|
|
40 years
|
Westwood, Mary Ester, FL
|
|
|
4,167
|
|
|
|
692
|
|
|
|
6,650
|
|
|
|
0
|
|
|
|
—
|
|
|
|
692
|
|
|
|
6,650
|
|
|
|
7,342
|
|
|
|
263
|
|
|
|
1972
|
|
|
|
06
|
/15
|
|
40 years
|
Windsong, Fort Worth, TX
|
|
|
10,599
|
|
|
|
790
|
|
|
|
11,526
|
|
|
|
69
|
|
|
|
—
|
|
|
|
790
|
|
|
|
11,596
|
|
|
|
12,386
|
|
|
|
3,724
|
|
|
|
2002
|
|
|
|
07
|
/03
|
|
40 years
|
Total Apartments Held for Investment
|
|
$
|
553,512
|
|
|
$
|
61,025
|
|
|
$
|
634,601
|
|
|
$
|
5,288
|
|
|
$
|
(3,180
|
)
|
|
$
|
61,025
|
|
|
$
|
636,709
|
|
|
$
|
697,733
|
|
|
$
|
98,588
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Schedule III
|
(Continued)
|
TRANSCONTINENTAL REALTY INVESTORS, INC.
REAL ESTATE AND ACCUMULATED DEPRECIATION
|
December 31, 2016
|
|
|
|
|
|
|
|
|
|
|
|
Cost Capitalized
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Subsequent to
|
|
|
Asset
|
|
|
Gross Amounts of Which
|
|
|
|
|
|
|
|
|
|
|
|
Life on Which
|
|
|
|
|
|
|
Initial Cost
|
|
|
Acquisition
|
|
|
Impairment
|
|
|
Carried at End of Year
|
|
|
|
|
|
|
|
|
|
|
|
Depreciation
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
In Latest
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Statement
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Asset
|
|
|
|
|
|
|
|
Building &
|
|
|
|
|
|
|
|
Accumulated
|
|
|
|
Date of
|
|
|
|
Date
|
|
|
of Operation
|
|
Property/Location
|
|
|
Encumbrances
|
|
|
|
Land
|
|
|
|
Buildings
|
|
|
|
Improvements
|
|
|
|
Impairment
|
|
|
|
Land
|
|
|
|
Improvements
|
|
|
|
Total
|
|
|
|
Depreciation
|
|
|
|
Construction
|
|
|
|
Acquired
|
|
|
is Computed
|
|
(dollars in thousands)
|
|
Apartments Under Construction
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Lakeside Lofts, Farmers Branch, TX
|
|
|
0
|
|
|
|
0
|
|
|
|
—
|
|
|
|
1,744
|
|
|
|
—
|
|
|
|
—
|
|
|
|
1,744
|
|
|
|
1,744
|
|
|
|
—
|
|
|
|
—
|
|
|
|
12
|
/14
|
|
|
—
|
|
Terra Lago, Rowlett, TX
|
|
|
13,005
|
|
|
|
6,023
|
|
|
|
—
|
|
|
|
15,406
|
|
|
|
—
|
|
|
|
6,024
|
|
|
|
15,406
|
|
|
|
21,430
|
|
|
|
—
|
|
|
|
—
|
|
|
|
11
|
/15
|
|
|
—
|
|
Overlook at Allensville Square II, Sevierville, TN
|
|
|
0
|
|
|
|
1,843
|
|
|
|
—
|
|
|
|
271
|
|
|
|
—
|
|
|
|
1,843
|
|
|
|
271
|
|
|
|
2,114
|
|
|
|
—
|
|
|
|
—
|
|
|
|
11
|
/15
|
|
|
—
|
|
Total Apartments Under Construction
|
|
$
|
13,005
|
|
|
$
|
7,866
|
|
|
$
|
—
|
|
|
$
|
17,421
|
|
|
$
|
—
|
|
|
$
|
7,867
|
|
|
$
|
17,421
|
|
|
$
|
25,288
|
|
|
$
|
—
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Commercial
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
600 Las Colinas, Las Colinas, TX
|
|
|
39,237
|
|
|
|
5,751
|
|
|
|
51,759
|
|
|
|
16,941
|
|
|
|
—
|
|
|
|
5,751
|
|
|
|
68,700
|
|
|
|
74,451
|
|
|
|
23,728
|
|
|
|
1984
|
|
|
|
08
|
/05
|
|
|
40 years
|
|
770 South Post Oak, Houston, TX
|
|
|
12,700
|
|
|
|
1,763
|
|
|
|
15,834
|
|
|
|
165
|
|
|
|
|
|
|
|
1,763
|
|
|
|
15,999
|
|
|
|
17,762
|
|
|
|
660
|
|
|
|
1970
|
|
|
|
07
|
/15
|
|
|
40 years
|
|
Bridgeview Plaza, LaCrosse, WI
|
|
|
5,218
|
|
|
|
—
|
|
|
|
—
|
|
|
|
1,008
|
|
|
|
—
|
|
|
|
—
|
|
|
|
1,008
|
|
|
|
1,008
|
|
|
|
521
|
|
|
|
1979
|
|
|
|
03
|
/03
|
|
|
40 years
|
|
Browning Place (Park West I), Farmers Branch, TX
|
|
|
23,193
|
|
|
|
5,096
|
|
|
|
45,868
|
|
|
|
14,355
|
|
|
|
—
|
|
|
|
5,096
|
|
|
|
60,223
|
|
|
|
65,319
|
|
|
|
21,301
|
|
|
|
1984
|
|
|
|
04
|
/05
|
|
|
40 years
|
|
Mahogany Run Golf Course, US Virgin Islands
|
|
|
—
|
|
|
|
7,168
|
|
|
|
6,031
|
|
|
|
142
|
|
|
|
(5,300
|
)
|
|
|
7,168
|
|
|
|
873
|
|
|
|
8,041
|
|
|
|
323
|
|
|
|
1981
|
|
|
|
11
|
/14
|
|
|
40 years
|
|
Fruitland Plaza, Fruitland Park, FL
|
|
|
—
|
|
|
|
23
|
|
|
|
—
|
|
|
|
83
|
|
|
|
—
|
|
|
|
23
|
|
|
|
83
|
|
|
|
106
|
|
|
|
46
|
|
|
|
—
|
|
|
|
05
|
/92
|
|
|
40 years
|
|
Senlac VHP, Farmers Branch, TX
|
|
|
—
|
|
|
|
622
|
|
|
|
—
|
|
|
|
142
|
|
|
|
—
|
|
|
|
622
|
|
|
|
142
|
|
|
|
764
|
|
|
|
134
|
|
|
|
—
|
|
|
|
08
|
/05
|
|
|
40 years
|
|
Stanford Center, Dallas, TX
|
|
|
28,000
|
|
|
|
3,878
|
|
|
|
34,862
|
|
|
|
7,793
|
|
|
|
(9,600
|
)
|
|
|
3,878
|
|
|
|
33,055
|
|
|
|
36,933
|
|
|
|
8,980
|
|
|
|
—
|
|
|
|
06
|
/08
|
|
|
40 years
|
|
Total Commercial Held for Investment
|
|
$
|
108,348
|
|
|
$
|
24,301
|
|
|
$
|
154,354
|
|
|
$
|
40,629
|
|
|
$
|
(14,900
|
)
|
|
$
|
24,301
|
|
|
$
|
180,083
|
|
|
$
|
204,384
|
|
|
$
|
55,693
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Land
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Dominion Mercer, Farmers Branch, TX
|
|
|
3,572
|
|
|
|
3,688
|
|
|
$
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
3,688
|
|
|
|
—
|
|
|
|
3,688
|
|
|
|
—
|
|
|
|
—
|
|
|
|
10
|
/16
|
|
|
—
|
|
2427 Valley View Ln, Farmers Branch, TX
|
|
|
—
|
|
|
|
76
|
|
|
|
|
|
|
|
—
|
|
|
|
—
|
|
|
|
76
|
|
|
|
—
|
|
|
|
76
|
|
|
|
—
|
|
|
|
—
|
|
|
|
07
|
/12
|
|
|
—
|
|
Audubon, Adams County, MS
|
|
|
—
|
|
|
|
519
|
|
|
|
—
|
|
|
|
297
|
|
|
|
—
|
|
|
|
816
|
|
|
|
—
|
|
|
|
816
|
|
|
|
—
|
|
|
|
—
|
|
|
|
03
|
/07
|
|
|
—
|
|
Bonneau Land, Farmers Branch, TX
|
|
|
—
|
|
|
|
1,309
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
1,309
|
|
|
|
—
|
|
|
|
1,309
|
|
|
|
—
|
|
|
|
—
|
|
|
|
12
|
/14
|
|
|
—
|
|
Cooks Lane, Fort Worth, TX
|
|
|
394
|
|
|
|
1,094
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
1,094
|
|
|
|
—
|
|
|
|
1,094
|
|
|
|
—
|
|
|
|
—
|
|
|
|
06
|
/04
|
|
|
—
|
|
Dedeaux, Gulfport, MS
|
|
|
—
|
|
|
|
1,612
|
|
|
|
—
|
|
|
|
46
|
|
|
|
(38
|
)
|
|
|
1,620
|
|
|
|
—
|
|
|
|
1,620
|
|
|
|
—
|
|
|
|
—
|
|
|
|
10
|
/06
|
|
|
—
|
|
Denham Springs, Denham Springs, LA
|
|
|
153
|
|
|
|
714
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
714
|
|
|
|
—
|
|
|
|
714
|
|
|
|
—
|
|
|
|
—
|
|
|
|
08
|
/08
|
|
|
—
|
|
Gautier Land, Gautier, MS
|
|
|
—
|
|
|
|
202
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
202
|
|
|
|
—
|
|
|
|
202
|
|
|
|
—
|
|
|
|
—
|
|
|
|
07
|
/98
|
|
|
—
|
|
Hollywood Casino Tract II, Farmers Branch, TX
|
|
|
2,645
|
|
|
|
6,940
|
|
|
|
—
|
|
|
|
1,292
|
|
|
|
(3,747
|
)
|
|
|
4,485
|
|
|
$
|
—
|
|
|
|
4,485
|
|
|
|
—
|
|
|
|
—
|
|
|
|
06
|
/02
|
|
|
—
|
|
Lacy Longhorn Land, Farmers Branch, TX
|
|
|
—
|
|
|
|
1,169
|
|
|
|
—
|
|
|
|
—
|
|
|
|
(760
|
)
|
|
|
409
|
|
|
|
—
|
|
|
|
409
|
|
|
|
—
|
|
|
|
—
|
|
|
|
06
|
/04
|
|
|
—
|
|
Lake Shore Villas, Humble, TX
|
|
|
—
|
|
|
|
81
|
|
|
|
—
|
|
|
|
3
|
|
|
|
—
|
|
|
|
84
|
|
|
|
—
|
|
|
|
84
|
|
|
|
—
|
|
|
|
—
|
|
|
|
03
|
/02
|
|
|
—
|
|
Lubbock Land, Lubbock, TX
|
|
|
—
|
|
|
|
234
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
234
|
|
|
|
—
|
|
|
|
234
|
|
|
|
—
|
|
|
|
—
|
|
|
|
01
|
/04
|
|
|
—
|
|
Luna Ventures, Farmers Branch TX
|
|
|
—
|
|
|
|
2,934
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
2,934
|
|
|
|
—
|
|
|
|
2,934
|
|
|
|
—
|
|
|
|
—
|
|
|
|
04
|
/08
|
|
|
—
|
|
Mandahl Bay Land
|
|
|
—
|
|
|
|
667
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
667
|
|
|
|
—
|
|
|
|
667
|
|
|
|
—
|
|
|
|
—
|
|
|
|
01
|
/05
|
|
|
—
|
|
McKinney 36, Collin County, TX
|
|
|
1,415
|
|
|
|
647
|
|
|
|
—
|
|
|
|
164
|
|
|
|
(19
|
)
|
|
|
792
|
|
|
|
—
|
|
|
|
792
|
|
|
|
—
|
|
|
|
—
|
|
|
|
01
|
/98
|
|
|
—
|
|
Minivest Land, Dallas, TX
|
|
|
—
|
|
|
|
7
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
7
|
|
|
|
—
|
|
|
|
7
|
|
|
|
—
|
|
|
|
—
|
|
|
|
04
|
/13
|
|
|
—
|
|
Mira Lago, Farmers Branch, TX
|
|
|
—
|
|
|
|
59
|
|
|
|
—
|
|
|
|
15
|
|
|
|
—
|
|
|
|
74
|
|
|
|
—
|
|
|
|
74
|
|
|
|
—
|
|
|
|
—
|
|
|
|
05
|
/01
|
|
|
—
|
|
Nakash, Malden, MO
|
|
|
—
|
|
|
|
114
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
114
|
|
|
|
—
|
|
|
|
114
|
|
|
|
—
|
|
|
|
—
|
|
|
|
01
|
/93
|
|
|
—
|
|
Nashville, Nashville, TN
|
|
|
—
|
|
|
|
662
|
|
|
|
—
|
|
|
|
61
|
|
|
|
—
|
|
|
|
723
|
|
|
|
—
|
|
|
|
723
|
|
|
|
—
|
|
|
|
—
|
|
|
|
06
|
/02
|
|
|
—
|
|
Nicholson Croslin, Dallas, TX
|
|
|
—
|
|
|
|
184
|
|
|
|
—
|
|
|
|
—
|
|
|
|
(118
|
)
|
|
|
66
|
|
|
|
—
|
|
|
|
66
|
|
|
|
—
|
|
|
|
—
|
|
|
|
10
|
/98
|
|
|
—
|
|
Nicholson Mendoza, Dallas, TX
|
|
|
—
|
|
|
|
80
|
|
|
|
—
|
|
|
|
—
|
|
|
|
(51
|
)
|
|
|
29
|
|
|
|
—
|
|
|
|
29
|
|
|
|
—
|
|
|
|
—
|
|
|
|
10
|
/98
|
|
|
—
|
|
Ocean Estates, Gulfport, MS
|
|
|
—
|
|
|
|
1,418
|
|
|
|
—
|
|
|
|
390
|
|
|
|
—
|
|
|
|
1,808
|
|
|
|
—
|
|
|
|
1,808
|
|
|
|
—
|
|
|
|
—
|
|
|
|
10
|
/07
|
|
|
—
|
|
Senlac Land Tract II, Farmers Branch, TX
|
|
|
—
|
|
|
|
656
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
656
|
|
|
|
—
|
|
|
|
656
|
|
|
|
—
|
|
|
|
—
|
|
|
|
08
|
/05
|
|
|
—
|
|
Sugar Mill Land, Baton Rouge, LA
|
|
|
116
|
|
|
|
445
|
|
|
|
—
|
|
|
|
242
|
|
|
|
—
|
|
|
|
687
|
|
|
|
—
|
|
|
|
687
|
|
|
|
—
|
|
|
|
—
|
|
|
|
08
|
/13
|
|
|
—
|
|
Texas Plaza Land, Irving, TX
|
|
|
—
|
|
|
|
1,738
|
|
|
|
—
|
|
|
|
—
|
|
|
|
(238
|
)
|
|
|
1,500
|
|
|
|
—
|
|
|
|
1,500
|
|
|
|
—
|
|
|
|
—
|
|
|
|
12
|
/06
|
|
|
—
|
|
Travis Ranch Land, Kaufman County, TX
|
|
|
757
|
|
|
|
1,030
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
1,030
|
|
|
|
—
|
|
|
|
1,030
|
|
|
|
—
|
|
|
|
—
|
|
|
|
08
|
/08
|
|
|
—
|
|
Travis Ranch Retail, Kaufman City, TX
|
|
|
—
|
|
|
|
1,517
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
1,517
|
|
|
|
—
|
|
|
|
1,517
|
|
|
|
—
|
|
|
|
—
|
|
|
|
08
|
/08
|
|
|
—
|
|
Union Pacific Railroad Land, Dallas, TX
|
|
|
—
|
|
|
|
130
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
130
|
|
|
|
—
|
|
|
|
130
|
|
|
|
—
|
|
|
|
—
|
|
|
|
03
|
/04
|
|
|
—
|
|
Valley View 34 (Mercer Crossing), Farmers Branch, TX
|
|
|
—
|
|
|
|
1,173
|
|
|
|
—
|
|
|
|
—
|
|
|
|
(945
|
)
|
|
|
228
|
|
|
|
—
|
|
|
|
228
|
|
|
|
—
|
|
|
|
—
|
|
|
|
08
|
/08
|
|
|
—
|
|
Willowick Land, Pensacola, FL
|
|
|
—
|
|
|
|
137
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
137
|
|
|
|
—
|
|
|
|
137
|
|
|
|
—
|
|
|
|
—
|
|
|
|
01
|
/95
|
|
|
—
|
|
Windmill Farms Land, Kaufman County, TX
|
|
|
25,332
|
|
|
|
48,822
|
|
|
|
—
|
|
|
|
15,007
|
|
|
|
(20,564
|
)
|
|
|
43,265
|
|
|
|
—
|
|
|
|
43,265
|
|
|
|
—
|
|
|
|
—
|
|
|
|
11
|
/11
|
|
|
—
|
|
Total Land Held for Investment
|
|
$
|
34,384
|
|
|
$
|
80,058
|
|
|
$
|
—
|
|
|
$
|
17,517
|
|
|
$
|
(26,480
|
)
|
|
$
|
71,095
|
|
|
$
|
—
|
|
|
$
|
71,095
|
|
|
$
|
—
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Schedule III
|
|
(Continued)
|
TRANSCONTINENTAL REALTY INVESTORS, INC.
REAL ESTATE AND ACCUMULATED DEPRECIATION
|
December 31, 2016
|
|
|
|
|
|
|
|
|
|
|
|
Cost Capitalized
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Subsequent to
|
|
|
Asset
|
|
|
Gross Amounts of Which
|
|
|
|
|
|
|
|
|
|
|
|
Life on Which
|
|
|
|
|
|
|
Initial Cost
|
|
|
Acquisition
|
|
|
Impairment
|
|
|
Carried at End of Year
|
|
|
|
|
|
|
|
|
|
|
|
Depreciation
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
In Latest
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Statement
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Asset
|
|
|
|
|
|
|
|
Building &
|
|
|
|
|
|
|
|
Accumulated
|
|
|
|
Date of
|
|
|
|
Date
|
|
|
of Operation
|
|
Property/Location
|
|
|
Encumbrances
|
|
|
|
Land
|
|
|
|
Buildings
|
|
|
|
Improvements
|
|
|
|
Impairment
|
|
|
|
Land
|
|
|
|
Improvements
|
|
|
|
Total
|
|
|
|
Depreciation
|
|
|
|
Construction
|
|
|
|
Acquired
|
|
|
is Computed
|
|
(dollars in thousands)
|
|
Corporate Departments/Investments/Misc.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
TCI - Corporate
|
|
|
162,232
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Corporate Departments/Investments/Misc.
|
|
$
|
162,232
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Properties Held for Investment
|
|
$
|
871,481
|
|
|
$
|
173,247
|
|
|
$
|
788,954
|
|
|
$
|
80,855
|
|
|
$
|
(44,561
|
)
|
|
$
|
164,285
|
|
|
$
|
834,213
|
|
|
$
|
998,498
|
|
|
$
|
154,281
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Properties Held for Sale
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Commercial
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Dunes Plaza, Michigan City, IN
|
|
|
376
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
1978
|
|
|
|
03
|
/92
|
|
|
40 years
|
|
Total Commercial Held for Sale
|
|
$
|
376
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Properties Held for Sale
|
|
$
|
376
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Properties Subject to Sales Contract
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Apartments
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Aparments Subject to Sales Contract
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Commercial
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
—
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Commercial Subject to Sales Contract
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Land
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Dominion Tract, Dallas, TX
|
|
$
|
3,360
|
|
|
$
|
3,931
|
|
|
$
|
—
|
|
|
$
|
53
|
|
|
|
(1,624
|
)
|
|
|
2,360
|
|
|
$
|
—
|
|
|
|
2,360
|
|
|
$
|
—
|
|
|
|
—
|
|
|
|
03
|
/99
|
|
|
—
|
|
Hollywood Casino Land Tract I, Farmers Branch, TX
|
|
|
1,410
|
|
|
|
8,470
|
|
|
|
—
|
|
|
|
147
|
|
|
|
(5,297
|
)
|
|
|
3,320
|
|
|
|
—
|
|
|
|
3,320
|
|
|
|
—
|
|
|
|
—
|
|
|
|
03
|
/08
|
|
|
—
|
|
LaDue Land, Farmers Branch, TX
|
|
|
—
|
|
|
|
1,900
|
|
|
|
—
|
|
|
|
—
|
|
|
|
(55
|
)
|
|
|
1,845
|
|
|
$
|
—
|
|
|
|
1,845
|
|
|
|
—
|
|
|
|
—
|
|
|
|
07
|
/98
|
|
|
—
|
|
Three Hickory Land, Farmers Branch, TX
|
|
|
—
|
|
|
|
1,202
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
1,202
|
|
|
$
|
—
|
|
|
|
1,202
|
|
|
|
—
|
|
|
|
—
|
|
|
|
03
|
/14
|
|
|
—
|
|
Travelers Land, Farmers Branch, TX
|
|
|
—
|
|
|
|
21,511
|
|
|
|
—
|
|
|
|
4
|
|
|
|
—
|
|
|
|
21,515
|
|
|
$
|
—
|
|
|
|
21,515
|
|
|
|
—
|
|
|
|
—
|
|
|
|
11
|
/06
|
|
|
—
|
|
Travelers Land, Farmers Branch, TX
|
|
|
—
|
|
|
|
6,891
|
|
|
|
—
|
|
|
|
—
|
|
|
|
(4,978
|
)
|
|
|
1,913
|
|
|
$
|
—
|
|
|
|
1,913
|
|
|
|
—
|
|
|
|
—
|
|
|
|
11
|
/06
|
|
|
—
|
|
Walker Land, Dallas County, TX
|
|
|
—
|
|
|
|
19,728
|
|
|
|
—
|
|
|
|
71
|
|
|
|
(6,624
|
)
|
|
|
13,175
|
|
|
$
|
—
|
|
|
|
13,175
|
|
|
|
—
|
|
|
|
—
|
|
|
|
09
|
/06
|
|
|
—
|
|
Whorton Land, Bentonville, AR
|
|
|
372
|
|
|
|
3,510
|
|
|
|
—
|
|
|
|
567
|
|
|
|
(2,451
|
)
|
|
|
1,626
|
|
|
$
|
—
|
|
|
|
1,626
|
|
|
|
—
|
|
|
|
—
|
|
|
|
06
|
/05
|
|
|
—
|
|
Total Land Subject to Sales Contract
|
|
$
|
5,142
|
|
|
$
|
67,143
|
|
|
$
|
—
|
|
|
$
|
842
|
|
|
$
|
(21,029
|
)
|
|
$
|
46,956
|
|
|
$
|
—
|
|
|
$
|
46,956
|
|
|
$
|
—
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Properties Subject to Sales Contract
|
|
$
|
5,142
|
|
|
$
|
67,143
|
|
|
$
|
—
|
|
|
$
|
842
|
|
|
$
|
(21,029
|
)
|
|
$
|
46,956
|
|
|
$
|
—
|
|
|
$
|
46,956
|
|
|
$
|
—
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Land Sold
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Land Sold
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
TOTAL: Real Estate
|
|
$
|
876,999
|
|
|
$
|
240,390
|
|
|
$
|
788,954
|
|
|
$
|
81,697
|
|
|
$
|
(65,590
|
)
|
|
$
|
211,241
|
|
|
$
|
834,213
|
|
|
$
|
1,045,454
|
|
|
$
|
154,281
|
|
|
|
|
|
|
|
|
|
|
|
|
|
REAL ESTATE AND ACCUMULATED DEPRECIATION
As of December 31, 2016
SCHEDULE III
(Continued)
|
|
2016
|
|
|
2015
|
|
|
2014
|
|
|
|
(dollars in thousands)
|
|
Reconciliation of Real Estate
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance at January 1,
|
|
$
|
982,827
|
|
|
$
|
804,489
|
|
|
$
|
828,093
|
|
Additions
|
|
|
|
|
|
|
|
|
|
|
|
|
Acquisitions, improvements and construction
|
|
|
112,763
|
|
|
|
222,423
|
|
|
|
71,423
|
|
Deductions
|
|
|
|
|
|
|
|
|
|
|
|
|
Sale of real estate
|
|
|
(50,136)
|
|
|
|
(38,785
|
)
|
|
|
(95,027
|
)
|
Asset impairments
|
|
|
—
|
|
|
|
(5,300
|
)
|
|
|
—
|
|
Balance at December 31,
|
|
|
1,045,454
|
|
|
$
|
982,827
|
|
|
$
|
804,489
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reconciliation of Accumulated Depreciation
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance at January 1,
|
|
$
|
138,808
|
|
|
$
|
115,368
|
|
|
$
|
132,291
|
|
Additions
|
|
|
|
|
|
|
|
|
|
|
|
|
Depreciation
|
|
|
22,180
|
|
|
|
25,565
|
|
|
|
17,145
|
|
Deductions
|
|
|
|
|
|
|
|
|
|
|
|
|
Sale of real estate
|
|
|
(6,707)
|
|
|
|
(2,125
|
)
|
|
|
(34,068
|
)
|
Balance at December 31,
|
|
$
|
154,281
|
|
|
$
|
138,808
|
|
|
$
|
115,368
|
|
SCHEDULE IV
TRANSCONTINENTAL REALTY INVESTORS, INC.
MORTGAGE LOANS
December 31, 2016
Description
|
|
Interest Rate
|
|
Final Maturity Date
|
|
Periodic Payment Terms
|
|
Prior Liens
|
|
Face Amount of
Mortgate
|
|
Carrying Amount of Mortgage
|
|
Principal Amounts of Loans Subject To Delinquent Principal or Interest
|
|
|
|
|
|
|
|
|
|
|
(dollars in thousands)
|
|
|
H198, LLC
|
|
12.00%
|
|
01/20
|
|
|
|
—
|
|
5,907
|
|
5,907
|
|
—
|
Las Vegas Land
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Oulan-Chikh Family Trust
|
|
8.00%
|
|
3/21
|
|
Excess cash flow
|
|
—
|
|
174
|
|
174
|
|
—
|
Unified Housing Foundation, Inc. (Echo Station)
|
|
12.00%
|
|
12/32
|
|
Excess cash flow
|
|
9,719
|
|
1,809
|
|
1,481
|
|
—
|
100% Interest in UH of Temple, LLC
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Unified Housing Foundation, Inc. (Lakeshore Villas/HFS of Humble,LLC) (31.5% of cash flow)
|
|
12.00%
|
|
12/32
|
|
Excess cash flow
|
|
15,756
|
|
8,836
|
|
6,368
|
|
—
|
Interest in Unified Housing Foundation Inc.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Unified Housing Foundation, Inc. (Limestone Canyon)
|
|
12.00%
|
|
12/32
|
|
Excess cash flow
|
|
13,621
|
|
9,216
|
|
7,293
|
|
—
|
100% Interest in UH of Austin, LLC
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Unified Housing Foundation, Inc. (Limestone Ranch)
|
|
12.00%
|
|
12/32
|
|
Excess cash flow
|
|
18,641
|
|
12,335
|
|
7,953
|
|
—
|
100% Interest in UH of Vista Ridge, LLC
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Unified Housing Foundation, Inc. (Parkside Crossing)
|
|
12.00%
|
|
12/32
|
|
Excess cash flow
|
|
11,544
|
|
2,409
|
|
1,936
|
|
—
|
100% Interest in UH of Parkside Crossing, LLC
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Unified Housing Foundation, Inc. (Sendero Ridge)
|
|
12.00%
|
|
12/32
|
|
Excess cash flow
|
|
22,984
|
|
12,663
|
|
9,303
|
|
—
|
100% Interest in UH of Sendero Ridge, LLC
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Unified Housing Foundation, Inc. (Timbers of Terrell)
|
|
12.00%
|
|
12/32
|
|
Excess cash flow
|
|
7,294
|
|
1,702
|
|
1,323
|
|
—
|
100% Interest in UH of Terrell, LLC
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Unified Housing Foundation, Inc. (Tivoli)
|
|
12.00%
|
|
12/32
|
|
Excess cash flow
|
|
10,398
|
|
12,761
|
|
7,966
|
|
—
|
100% Interest in UH of Tivoli, LLC
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Various non-related party notes
|
|
various
|
|
various
|
|
|
|
—
|
|
496
|
|
796
|
|
—
|
Unified Housing Foundation, Inc. (Lakeshore Villas/HFS of Humble,LLC) (68.5% of cash flow)
|
|
12.00%
|
|
12/32
|
|
Excess cash flow
|
|
15,756
|
|
2,189
|
|
2,000
|
|
—
|
Unified Housing Foundation, Inc (2016 Advisory Fee)
|
|
12.00%
|
|
06/19
|
|
Excess cash flow
|
|
—
|
|
1,261
|
|
5,400
|
|
—
|
Unified Housing Foundation, Inc.
|
|
12.00%
|
|
12/17
|
|
Excess cash flow
|
|
—
|
|
1,207
|
|
1,207
|
|
—
|
Unified Housing Foundation, Inc.
|
|
12.00%
|
|
12/18
|
|
Excess cash flow
|
|
—
|
|
3,994
|
|
3,994
|
|
—
|
Unified Housing Foundation, Inc.
|
|
12.00%
|
|
12/18
|
|
Excess cash flow
|
|
—
|
|
6,407
|
|
6,407
|
|
—
|
Various related party notes
|
|
various
|
|
various
|
|
Excess cash flow
|
|
—
|
|
1,420
|
|
1,404
|
|
—
|
Various non-related party notes
|
|
various
|
|
various
|
|
|
|
—
|
|
4,742
|
|
4,742
|
|
—
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
75,654
|
|
|
|
|
|
|
|
|
|
|
|
|
Accrued interest
|
|
5,479
|
|
|
|
|
|
|
|
|
|
|
Allowance for estimated losses
|
|
(1,825
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
79,308
|
|
|
SCHEDULE IV
(Continued)
TRANSCONTINENTAL REALTY INVESTORS, INC.
MORTGAGE LOANS
As of December 31,
|
|
2016
|
|
|
2015
|
|
|
2014
|
|
|
|
(dollars in thousands)
|
|
|
|
|
|
|
|
|
|
|
|
Balance at January 1,
|
|
$
|
71,376
|
|
|
$
|
85,447
|
|
|
$
|
70,169
|
|
Additions
|
|
|
|
|
|
|
|
|
|
|
|
|
New mortgage loans
|
|
|
11,703
|
|
|
|
18,055
|
|
|
|
32,380
|
|
Funding of existing loans
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
Increase (decrease) of interest receivable on mortgage loans
|
|
|
9,878
|
|
|
|
6,994
|
|
|
|
(7,650
|
)
|
Deductions
|
|
|
|
|
|
|
|
|
|
|
|
|
Amounts received
|
|
|
(11,824
|
)
|
|
|
(12,475
|
)
|
|
|
(9,180
|
)
|
Non-cash reduction
|
|
|
—
|
|
|
|
(26,645
|
)
|
|
|
(272
|
)
|
Cost of mortgages sold
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
Balance at December 31,
|
|
$
|
81,133
|
|
|
$
|
71,376
|
|
|
$
|
85,447
|
|