Form 10-Q - Quarterly report [Sections 13 or 15(d)]

Table of Contents

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q


☒			QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended September 30, 2023


☐			TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from ________ to________

Commission File Number 001-15663

AMERICAN REALTY INVESTORS, INC.

(Exact Name of Registrant as Specified in Its Charter)


Nevada			75-2847135
(State or Other Jurisdiction of Incorporation or Organization)			(I.R.S. Employer Identification No.)

1603 Lyndon B. Johnson Freeway, Suite 800, Dallas, Texas 75234

(Address of principal executive offices) (Zip Code)

(469) 522-4200

(Registrant’s telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Exchange Act:


Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common Stock	ARL	NYSE

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the Registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. x Yes ¨ No

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). x Yes ¨ No

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company in Rule 12b-2 of the Exchange Act.


Large accelerated filer ☐	Accelerated filer ☐	Non-accelerated filer ☒	Smaller reporting company ☒
Emerging growth Company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ¨

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). ☐ Yes x No.

As of November 9, 2023, there were 16,152,043 shares of common stock outstanding.

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AMERICAN REALTY INVESTORS, INC.

FORM 10-Q

TABLE OF CONTENTS


		PAGE
PART I. FINANCIAL INFORMATION

Item 1.	Financial Statements

	Consolidated Balance Sheets at September 30, 2023 and December 31, 2022	3

	Consolidated Statements of Operations for the three and nine months ended September 30, 2023 and 2022	4

	Consolidated Statements of Equity for the three and nine months ended September 30, 2023 and 2022	5

	Consolidated Statements of Cash Flows for the nine months ended September 30, 2023 and 2022	6

	Notes to Consolidated Financial Statements	7

Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	22

Item 3.	Quantitative and Qualitative Disclosures About Market Risks	30

Item 4.	Controls and Procedures	30

PART II. OTHER INFORMATION

Item 1.	Legal Proceedings	30

Item 1A.	Risk Factors	30

Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	30

Item 3.	Defaults Upon Senior Securities	30

Item 4.	Mine Safety Disclosures	30

Item 5.	Other Information	30

Item 6.	Exhibits	31

Signatures		33

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AMERICAN REALTY INVESTORS, INC.

CONSOLIDATED BALANCE SHEETS

(dollars in thousands, except share and par value amounts)

(Unaudited)


	September 30, 2023		December 31, 2022
Assets
Real estate	$	502,031	$	493,821
Cash and cash equivalents	47,203		113,445
Restricted cash	36,145		108,883
Short-term investments	134,185		119,787
Notes receivable (including $76,935 at September 30, 2023 and December 31, 2022 from related parties)	145,715		139,609
Investment in unconsolidated joint ventures	10,256		28,226
Receivable from related parties, net	92,385		108,184
Other assets (including $3,605 and $4,663 at September 30, 2023 and December 31, 2022, respectively, from related parties)	94,358		85,524
Total assets	$	1,062,278	$	1,197,479
Liabilities and Equity
Liabilities:
Mortgages and other notes payable	$	182,428	$	188,004
Bonds payable	—		129,218
Accounts payable and other liabilities (including $1,025 at September 30, 2023 and $599 at December 31, 2022 from related parties)	46,864		53,100
Accrued interest	2,480		5,198
Deferred revenue	9,791		9,791
Total liabilities	241,563		385,311
Equity
Shareholders' Equity:
Preferred stock, Series A, $2.00 par value, 15,000,000 shares authorized, 1,800,614 shares issued and outstanding	1,801		1,801
Common stock, $0.01 par value, 100,000,000 shares authorized; 16,152,043 shares issued and outstanding	162		162
Additional paid-in capital	62,090		62,090
Retained earnings	555,525		549,434
Total shareholders' equity	619,578		613,487
Noncontrolling interests	201,137		198,681
Total equity	820,715		812,168
Total liabilities and equity	$	1,062,278	$	1,197,479

The accompanying notes are an integral part of these consolidated financial statements.

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AMERICAN REALTY INVESTORS, INC.

CONSOLIDATED STATEMENTS OF OPERATIONS

(dollars in thousands, except per share amounts)

(Unaudited)


	Three Months Ended September 30,				Nine Months Ended September 30,
	2023		2022		2023		2022
Revenues:
Rental revenues (including $232 and $223 for the three months ended September 30, 2023 and 2022, respectively, and $731 and $702 for the nine months ended September 30, 2023 and 2022, respectively, from related parties)	$	11,838	$	7,570	$	34,236	$	22,310
Other income	688		749		2,217		1,925
Total revenue	12,526		8,319		36,453		24,235
Expenses:
Property operating expenses (including $97 and $110 for the three months ended September 30, 2023 and 2022, respectively, and $296 and $337 for the nine months ended September 30, 2023 and 2022, respectively, from related parties)	7,443		4,701		20,580		12,541
Depreciation and amortization	3,313		2,193		9,615		6,840
General and administrative (including $856 and $1,288 for the three months ended September 30, 2023 and 2022, respectively, and $3,095 and $3,368 for the nine months ended September 30, 2023 and 2022, respectively, from related parties)	1,579		3,042		8,424		7,956
Advisory fee to related party	2,295		1,571		6,883		7,614
Total operating expenses	14,630		11,507		45,502		34,951
Net operating loss	(2,104)		(3,188)		(9,049)		(10,716)
Interest income (including $4,854 and $4,140 for the three months ended September 30, 2023 and 2022, respectively, and $14,165 and $11,134 for the nine months ended September 30, 2023 and 2022, respectively, from related parties)	9,008		7,035		25,201		19,937
Interest expense	(1,954)		(4,044)		(7,574)		(13,301)
Gain on foreign currency transactions	—		1,533		993		19,437
Loss on early extinguishment of debt	—		(1,166)		(1,710)		(2,805)
Equity in income from unconsolidated joint ventures	234		464,143		2,946		471,385
(Loss) gain on sale or write-down of assets, net	(32)		1,539		156		16,580
Income tax provision	(1,127)		(81,548)		(2,416)		(81,616)
Net income	4,025		384,304		8,547		418,901
Net income attributable to noncontrolling interests	(1,037)		(82,015)		(2,456)		(88,986)
Net income attributable to common shares	$	2,988	$	302,289	$	6,091	$	329,915

Earnings per share - basic and diluted	$	0.18	$	18.72	$	0.38	$	20.43
Weighted average common shares used in computing earnings per share	16,152,043		16,152,043		16,152,043		16,152,043

The accompanying notes are an integral part of these consolidated financial statements.

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AMERICAN REALTY INVESTORS, INC.

CONSOLIDATED STATEMENTS OF EQUITY

(dollars in thousands)

(Unaudited)


	Preferred Stock		Common Stock		Paid-in Capital		Retained Earnings		Total Shareholders' Equity		Noncontrolling Interest		Total Equity

Three Months Ended September 30, 2023
Balance, July 1, 2023	$	1,801	$	162	$	62,090	$	552,537	$	616,590	$	200,100	$	816,690

Net income	—		—		—		2,988		2,988		1,037		4,025
Balance, September 30, 2023	$	1,801	$	162	$	62,090	$	555,525	$	619,578	$	201,137	$	820,715
Three Months Ended September 30, 2022
Balance, July 1, 2022	$	1,801	$	162	$	62,090	$	203,711	$	267,764	$	103,684	$	371,448
Net income	—		—		—		302,289		302,289		82,015		384,304
Balance, September 30, 2022	$	1,801	$	162	$	62,090	$	506,000	$	570,053	$	185,699	$	755,752
Nine Months Ended September 30, 2023
Balance, January 1, 2023	$	1,801	$	162	62,090		549,434		$	613,487	$	198,681	$	812,168
Net income	—		—		—		6,091		6,091		2,456		8,547
Balance, September 30, 2023	$	1,801	$	162	$	62,090	$	555,525	$	619,578	$	201,137	$	820,715
Nine Months Ended September 30, 2022
Balance, January 1, 2022	$	1,801	$	162	$	62,090	$	176,085	$	240,138	$	96,713	$	336,851
Net income	—		—		—		329,915		329,915		88,986		418,901

Balance, September 30, 2022	$	1,801	$	162	$	62,090	$	506,000	$	570,053	$	185,699	$	755,752

The accompanying notes are an integral part of these consolidated financial statements.

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AMERICAN REALTY INVESTORS, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

(dollars in thousands)

(Unaudited)


	Nine Months Ended September 30,
	2023		2022
Cash Flow From Operating Activities:
Net income	$	8,547	$	418,901
Adjustments to reconcile net income to net cash provided by (used in) operating activities:
Gain on sale or write down of assets	(156)		(16,580)
Gain on foreign currency transactions	(993)		(19,437)
Loss on early extinguishment of debt	1,710		2,805
Depreciation and amortization	10,518		9,409
Provision (recovery) of bad debts	875		(3,126)
Equity in income from unconsolidated joint ventures	(2,946)		(471,385)
Distribution of income from unconsolidated joint ventures	—		3,700
Changes in assets and liabilities, net of dispositions:
Other assets	(11,336)		(4,925)
Related party receivables	(4,369)		(6,630)
Accrued interest	(1,872)		(4,652)
Accounts payable and other liabilities	7,868		85,046
Net cash provided by (used in) operating activities	7,846		(6,874)
Cash Flow From Investing Activities:
Collection of notes receivable	394		2,726
Originations and advances on notes receivable	(6,500)		(2,118)
Purchase of short-term investments	(89,566)		(99,350)
Redemption of short-term investments	75,168		40,250

Development and renovation of real estate	(9,876)		(11,834)
Deferred leasing costs	(290)		(1,163)
Proceeds from sale of assets	188		44,591

Distribution from unconsolidated joint venture	20,916		181,748
Net cash (used in) provided by investing activities	(9,566)		154,850
Cash Flow From Financing Activities:

Payments on mortgages, other notes and bonds payable	(136,809)		(70,170)
Debt extinguishment costs	(435)		(1,354)
Deferred financing costs	(16)		—

Net cash used in financing activities	(137,260)		(71,524)
Net (decrease) increase in cash, cash equivalents and restricted cash	(138,980)		76,452
Cash, cash equivalents and restricted cash, beginning of period	222,328		72,734
Cash, cash equivalents and restricted cash, end of period	$	83,348	$	149,186

The accompanying notes are an integral part of these consolidated financial statements.

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AMERICAN REALTY INVESTORS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(dollars in thousands, except per share amounts)

(Unaudited)

1. Organization

As used herein, the terms “the Company”, “we”, “our” or “us” refer to American Realty Investors, Inc., a Nevada corporation, which was formed in 1999. Our common stock is listed on the New York Stock Exchange (“NYSE”) under the symbol (“ARL”) and over 90% of our stock is owned by related party entities.

Our primary business is the acquisition, development and ownership of income-producing multifamily and commercial 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 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 income from the sale of land.

We own approximately 78.4% of Transcontinental Realty Investors, Inc. ("TCI") and substantially all of our operations are conducted through TCI, whose common stock is traded on the NYSE under the symbol “TCI”. Accordingly, we include TCI’s financial results in our consolidated financial statements. Substantially all of TCI's assets are held by its wholly-owned subsidiary, Southern Properties Capital Ltd. (“SPC”), which was formed for the purpose of raising funds by issuing non-convertible bonds that were listed on the Tel Aviv Stock Exchange ("TASE").

At September 30, 2023, our portfolio of properties consisted of:

● Four office buildings comprising in aggregate of approximately 1,056,793 square feet;

● Fourteen multifamily properties, owned directly by us, comprising of 2,328 units; and

● Approximately 1,858 acres of developed and undeveloped land.

Our day to day operations are managed by Pillar Income Asset Management, Inc. (“Pillar”). Pillar's duties include, but are not limited to, locating, evaluating and recommending real estate and real estate-related investment opportunities and arranging debt and equity financing with third party lenders and investors. We have no employees; all of our services are performed by Pillar employees. Three of our commercial properties are managed by Regis Realty Prime, LLC (“Regis”). Regis provides leasing, construction management and brokerage services. Our multifamily properties and one of our commercial properties are managed by outside management companies. Pillar and Regis are considered to be related parties (See Note 14 – Related Party Transactions).

2. Summary of Significant Accounting Policies

Basis of Presentation

The accompanying unaudited consolidated financial statements have been prepared in accordance with the instructions to Form 10-Q and Article 10 of Regulation S-X. Certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) have been condensed or omitted in accordance with such rules and regulations, although management believes the disclosures are adequate to prevent the information presented from being misleading. In the opinion of management, all adjustments (consisting of normal recurring matters) considered necessary for a fair presentation have been included.

Certain prior year amounts have been reclassified to conform with the current year presentation. These reclassifications had no effect on the reported results of operation. An adjustment has been made to reclassify $2,447 and $5,746 interest expense to related parties for the three and nine months ended September 30, 2022, respectively, from interest expense to interest income on the consolidated statements of operations.

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AMERICAN REALTY INVESTORS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(dollars in thousands, except per share amounts)

(Unaudited)

The consolidated balance sheet at December 31, 2022 was derived from the audited consolidated financial statements at that date, but does not include all of the information and disclosures required by GAAP for complete financial statements. For further information, refer to the consolidated financial statements and notes thereto included in our Annual Report on Form 10-K for the year ended December 31, 2022. Certain 2022 consolidated financial statement amounts have been reclassified to conform to the current presentation.

We consolidate entities in which we are considered to be the primary beneficiary of a variable interest entity (“VIE”) or have a majority of the voting interest of the entity. We have determined that we are a primary beneficiary of the VIE when we have (i) the power to direct the activities of a VIE that most significantly impacts its economic performance, and (ii) the obligations to absorb losses or the right to receive benefits that could potentially be significant to the VIE. In determining whether we are the primary beneficiary, we consider qualitative and quantitative factors, including ownership interest, management representation, ability to control decision and other contractual rights.

We account for entities in which we have less than a controlling financial interest or entities where we are not deemed to be the primary beneficiary under the equity method of accounting. Accordingly, we include our share of the net earnings or losses of these entities in our results of operations.

3. Earnings Per Share

Earnings Per Share (“EPS”) is computed by dividing net income available to common shares by the weighted-average number of common shares outstanding during the period. Shares issued during the period are weighted for the portion of the period that they were outstanding.

The following table details our basic and diluted earnings per common share calculation:


	Three Months Ended September 30,				Nine Months Ended September 30,
	2023		2022		2023		2022
Net income	$	4,025	$	384,304	$	8,547	$	418,901
Net income attributable to noncontrolling interests	(1,037)		(82,015)		(2,456)		(88,986)
Net income attributable to common shares	$	2,988	$	302,289	$	6,091	$	329,915

Weighted-average common shares outstanding — basic and diluted	16,152,043		16,152,043		16,152,043		16,152,043

EPS - attributable to common shares — basic and diluted	$	0.18	$	18.72	$	0.38	$	20.43

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AMERICAN REALTY INVESTORS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(dollars in thousands, except per share amounts)

(Unaudited)

4. Supplemental Cash Flow Information

The following presents the schedule of interest paid and other supplemental cash flow information:


	Nine Months Ended September 30,
	2023		2022
Cash paid for interest	$	9,432	$	22,211
Cash - beginning of period
Cash and cash equivalents	$	113,445	$	50,748
Restricted cash	108,883		21,986
	$	222,328	$	72,734
Cash - end of period
Cash and cash equivalents	$	47,203	$	131,236
Restricted cash	36,145		17,950
	$	83,348	$	149,186




Payments on mortgages, other notes and bonds payable
Payments on mortgages and other notes payable	$	5,633	$	26,411
Payments on bonds payable	131,176		43,759
	$	136,809	$	70,170

The following is a schedule of noncash investing and financing activities:


	Nine Months Ended September 30,
	2023		2022


Property acquired in exchange for reduction in related party receivable	$	6,064	$	—

Distribution from joint venture applied to Earn Out Obligation	$	—	$	34,159

5. Operating Segments

Our segments are based on the internal reporting that we review for operational decision-making purposes. We operate in two reportable segments: (i) the acquisition, development, ownership and management of multifamily properties and (ii) the acquisition, ownership and management of commercial properties. The services for our multifamily segment include rental of apartments and other tenant services, including parking and storage space rental. Asset information by segment is not reported because we do not use this measure to assess performance or make decisions to allocate resources. Therefore, depreciation and amortization expense is not allocated among segments. General and administrative expenses, advisory fees, interest income and interest expense are not included in segment profit as our internal reporting addresses these items on a corporate level.

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AMERICAN REALTY INVESTORS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(dollars in thousands, except per share amounts)

(Unaudited)

The following table presents our reportable segments for the three and nine months ended September 30, 2023 and 2022:


	Three Months Ended September 30,				Nine Months Ended September 30,
	2023		2022		2023		2022
Multifamily Segment
Revenues	$	7,899	$	2,850	$	22,930	$	9,024
Operating expenses	(4,811)		(1,966)		(12,997)		(5,395)
Profit from segment	3,088		884		9,933		3,629
Commercial Segment
Revenues	3,939		4,720		11,306		13,286
Operating expenses	(2,632)		(2,735)		(7,583)		(7,146)
Profit from segment	1,307		1,985		3,723		6,140
Total profit from segments	$	4,395	$	2,869	$	13,656	$	9,769

The table below reflects the reconciliation of total profit from segments to net income for the three and nine months ended September 30, 2023 and 2022:


	Three Months Ended September 30,				Nine Months Ended September 30,
	2023		2022		2023		2022
Total profit from segments	$	4,395	$	2,869	$	13,656	$	9,769
Other non-segment items of income (expense)
Depreciation and amortization	(3,313)		(2,193)		(9,615)		(6,840)
General and administrative	(1,579)		(3,042)		(8,424)		(7,956)
Advisory fee to related party	(2,295)		(1,571)		(6,883)		(7,614)
Other income	688		749		2,217		1,925
Interest income	9,008		7,035		25,201		19,937
Interest expense	(1,954)		(4,044)		(7,574)		(13,301)
Gain on foreign currency transaction	—		1,533		993		19,437
Loss on early extinguishment of debt	—		(1,166)		(1,710)		(2,805)
Income from unconsolidated joint ventures	234		464,143		2,946		471,385
(Loss) gain on sales or write-down of assets	(32)		1,539		156		16,580
Income tax provision	(1,127)		(81,548)		(2,416)		(81,616)
Net income	$	4,025	$	384,304	$	8,547	$	418,901

6. Lease Revenue

We lease our multifamily properties and commercial properties under agreements that are classified as operating leases. Our multifamily property leases generally include minimum rents and charges for ancillary services. Our commercial property leases generally include minimum rents and recoveries for property taxes and common area maintenance. Minimum rental revenues are recognized on a straight-line basis over the terms of the related leases.

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AMERICAN REALTY INVESTORS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(dollars in thousands, except per share amounts)

(Unaudited)

The following table summarizes the components of our rental revenue for the three and nine months ended September 30, 2023 and 2022:


	Three Months Ended September 30,				Nine Months Ended September 30,
	2023		2022		2023		2022
Fixed component	$	11,338	$	6,977	$	32,968	$	20,854
Variable component	500		593		1,268		1,456
	$	11,838	$	7,570	$	34,236	$	22,310

The following table summarizes the future rental payments that are payable to us from non-cancelable leases. The table excludes multifamily leases, which typically have a term of one-year or less:


2023	$	9,747
2024	10,823
2025	10,358
2026	10,056
2027	9,787
Thereafter	22,444
	$	73,215

7. Real Estate Activity

Below is a summary of our real estate as of September 30, 2023 and December 31, 2022:


	September 30, 2023		December 31, 2022
Land	$	108,993	$	108,933
Building and improvements	371,973		359,904
Tenant improvements	17,463		25,611
Construction in progress	68,512		65,427
Total cost	566,941		559,875
Less accumulated depreciation	(64,910)		(66,054)
Total real estate	$	502,031	$	493,821

On March 15, 2023, we entered into a development agreement with Pillar to build a 240 unit multifamily property in Lake Wales, Florida that is expected to be completed in 2025 for a total cost of approximately $55,330. The cost of construction will be funded in part by a $33,000 construction loan (See Note 12 - Mortgages and Other Notes Payable). The development agreement provides for a $1,637 fee that will be paid to Pillar over the construction period. As of September 30, 2023, we have incurred a total of $12,337 in development costs, including $334 in development fees.

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AMERICAN REALTY INVESTORS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(dollars in thousands, except per share amounts)

(Unaudited)

Gain on sale or write-down of assets, net for the three and nine months ended September 30, 2023 and 2022 consists of the following:


	Three Months Ended September 30,				Nine Months Ended September 30,
	2023		2022		2023		2022
Land(1)	$	—	$	—	$	188	$	4,752
Multifamily Properties(2)	—		1,539		—		11,142
Commercial Properties(3)	—		—		—		890
Other	(32)		—		(32)		(204)
	$	(32)	$	1,539	$	156	$	16,580

(1)Includes the gain on the sale of lots related to our investment in Windmill Farms, Mercer Crossing and other land holdings.

(2)On January 14, 2022, we sold Toulon, a 240 unit multifamily property in Gautier, Mississippi for $26,750, resulting in a gain on sale of $9,364. We used the proceeds to pay off the $14,740 mortgage note payable on the property and for general corporate purposes.

On September 16, 2022, in connection with a sale of properties by VAA (See Note 10 - Investment in Unconsolidated Joint Ventures), we sold Sugar Mill Phase III, a 72 unit multifamily property in Baton Rouge, Louisiana for $11,800, resulting in a gain on sale of $1,871. We used the proceeds to pay off the $9,551 mortgage note payable on the property and for general corporate purposes.

(3) On May 17, 2022, we sold Fruitland Park, a 6,722 square foot commercial building in Fruitland Park, Florida for $750, resulting in a gain on sale of $667. We used the proceeds for general corporate purposes.

8. Short-term Investments

We have investments in variable denominated floating rate notes and short-term commercial paper with maturities of less than nine months. The average interest rate on the investments was 5.29% and 4.67% at September 30, 2023 and December 31, 2022, respectively.

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AMERICAN REALTY INVESTORS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(dollars in thousands, except per share amounts)

(Unaudited)

9. Notes Receivable

The following table summarizes our notes receivable as of September 30, 2023 and December 31, 2022:


	Carrying value
Property/Borrower	September 30, 2023		December 31, 2022		Interest Rate		Maturity Date
ABC Land and Development, Inc.	$	4,408	$	4,408	9.50	%	6/30/26
ABC Paradise, LLC	1,210		1,210		9.50	%	6/30/26
Autumn Breeze(1)	2,157		2,326		5.00	%	7/1/25
Bellwether Ridge(1)	3,798		3,798		5.00	%	11/1/26
Dominion at Mercer Crossing(2)	6,354		—		9.25	%	6/7/28
Forest Pines(1)	6,472		6,472		5.00	%	5/1/24
Legacy Pleasant Grove	496		496		12.00	%	10/23/24
McKinney Ranch	3,926		3,926		6.00	%	9/15/24
One Realco Land Holding, Inc.	1,728		1,728		9.50	%	6/30/26
Parc at Ingleside(1)	3,759		3,759		5.00	%	11/1/26
Parc at Opelika Phase II(1)(3)	3,190		3,190		10.00	%	1/13/23
Parc at Windmill Farms(1)(3)	7,886		7,886		5.00	%	11/1/22
Phillips Foundation for Better Living, Inc.(4)	182		182		12.00	%	3/31/24
Plum Tree(1)	1,767		1,767		5.00	%	4/26/26
Polk County Land	3,000		3,000		9.50	%	6/30/26
Riverview on the Park Land, LLC	1,045		1,045		9.50	%	6/30/26
Spartan Land	5,907		5,907		12.00	%	1/16/25
Spyglass of Ennis(1)	5,179		5,258		5.00	%	11/1/24
Steeple Crest(1)	6,498		6,498		5.00	%	8/1/26
Unified Housing Foundation(4)(5)	20,325		20,325		12.00	%	6/30/28
Unified Housing Foundation(4)(5)	10,096		10,096		12.00	%	3/31/24
Unified Housing Foundation(4)(5)	6,990		6,990		12.00	%	3/31/25
Unified Housing Foundation(4)(5)	3,615		3,615		12.00	%	5/31/28
Unified Housing Foundation(4)(5)	27,477		27,477		12.00	%	12/31/32
Unified Housing Foundation(4)(5)	6,521		6,521		12.00	%	3/31/24
Unified Housing Foundation(4)(5)	1,549		1,549		12.00	%	4/30/24
Unified Housing Foundation(4)(5)	180		180		12.00	%	6/30/24
	$	145,715	$	139,609

(1)The note is convertible, at our option, into a 100% ownership interest in the underlying development property, and is collateralized by the underlying development property.

(2)The note has an interest rate of prime plus 1.00%.

(3)We are working with the borrower to extend the maturity and/or exercise our conversion option.

(4) The borrower is deemed to be a related party due to our significant investment in the performance of the collateral secured by the notes receivable.

(5) Principal and interest payments on the notes from Unified Housing Foundation, Inc. (“UHF”) are funded from surplus cash flow from operations, sale or refinancing of the underlying properties and are cross collateralized to the extent that any surplus cash available from any of the properties underlying the notes.

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AMERICAN REALTY INVESTORS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(dollars in thousands, except per share amounts)

(Unaudited)

10. Investment in Unconsolidated Joint Ventures

Victory Abode Apartments, LLC

On November 16, 2018, our SPC subsidiary formed the Victory Abode Apartments, LLC ("VAA"), a joint venture with the Macquarie Group (“Macquarie”). VAA was formed as a result of a sale of the 50% ownership interest in a portfolio of multifamily properties owned by us in exchange for a 50% voting interest in VAA and a note payable.

In connection with the formation of VAA, ten of the initial properties were subject to an earn-out provision ("Earn Out") that provided for a remeasurement of value after a two-year period following the completion of construction. Upon the formation of VAA, we recorded an initial liability ("Earn Out Obligation") of $10,000 for the advance on the Earn Out that we received from Macquarie. Upon remeasurement, the Earn Out Obligation was determined to be approximately $39,600. In accordance with the joint venture operating agreement, the Earn Out Obligation was paid from our share of distributions from VAA in 2022.

On September 16, 2022, VAA sold 45 of its properties (“VAA Sale Portfolio”) for $1,810,700, resulting in a gain on sale of $738,444 to the joint venture. In connection with the sale, we received an initial distribution of $182,848 from VAA, which included the payment of the remaining balance of the Earn Out Obligation.

On March 23, 2023, we received $17,976 from VAA, which represented the remaining distribution of the proceeds from the sale of the VAA Sale Portfolio.

We used our share of the proceeds from the sale of the VAA Sale Portfolio to invest in short-term investments and real estate, pay down our debt and for general corporate purposes.

Gruppa Florentina, LLC

We also own a 20% ownership interest in Gruppa Florentina, LLC ("Milano"), which operates several pizza parlors in Central and Northern California. Milano also has 23 franchised locations, and two operating in Texas under the trade name Angelo & Vito’s Pizzerias.

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AMERICAN REALTY INVESTORS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(dollars in thousands, except per share amounts)

(Unaudited)

The following is a summary of our investment in unconsolidated joint ventures:


	September 30, 2023		December 31, 2022
Assets (1)

Real estate	$	13,886	$	13,140
Cash, cash equivalents and restricted cash	20,449		66,364
Other assets	56,381		35,938
Total assets	$	90,716	$	115,442
Liabilities and Partners' Capital (1)
Liabilities from discontinued operations	$	—	$	8,824
Mortgage notes payable	13,444		16,267

Other liabilities	28,562		13,412
Our share of partners' capital	10,256		27,973
Outside partner's capital	38,454		48,966
Total liabilities and partners' capital	$	90,716	$	115,442
Investment in unconsolidated joint ventures
Our share of partners' capital	$	10,256	$	27,973

Basis adjustment (2)	—		253
Total investment in unconsolidated joint ventures	$	10,256	$	28,226

(1) These amounts include the assets of VAA of $1,447 and $52,404 at September 30, 2023 and December 31, 2022, respectively, and liabilities of VAA of $93 and $10,812 at September 30, 2023 and December 31, 2022, respectively.

(2) We amortize the difference between the cost of our investments in unconsolidated joint ventures and the book value of our underlying equity into income on a straight-line basis consistent with the lives of the underlying assets.

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AMERICAN REALTY INVESTORS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(dollars in thousands, except per share amounts)

(Unaudited)

The following is a summary of income from our investments in unconsolidated joint ventures:


	Three Months Ended September 30,				Nine Months Ended September 30,
	2023		2022		2023		2022
Revenue (1)
Rental revenue	$	—	$	3,342	$	—	$	11,305
Other revenue	22,268		15,417		49,532		41,119
Total revenue	22,268		18,759		49,532		52,424
Expenses (2)
Operating expenses	16,581		17,335		38,803		53,866
Depreciation and amortization	534		1,177		1,177		3,499

Interest	76		5,368		123		17,396
Total expenses	17,191		23,880		40,103		74,761
Income (loss) from continuing operations	5,077		(5,121)		9,429		(22,337)
Income from discontinued operations (3)	(78)		704,700		743		712,648
Net income	$	4,999	$	699,579	$	10,172	$	690,311
Equity in income from unconsolidated joint ventures	$	234	$	464,143	$	2,946	$	471,385

(1) These amounts include revenue of VAA of $3,591 and $11,932 during the three and nine months ended September 30, 2022.

(2) These amounts include expenses of VAA of $9,003 and $35,668 during the three and nine months ended September 30, 2022, respectively.

(3) These amounts represent the net (expense) income of the VAA Sale Portfolio.

11. Acquisitions

On November 1, 2022, we acquired the remaining 50% ownership interest in the VAA Holdback Portfolio that we did not previously own through a distribution from VAA (See Note 10 – Investment in Unconsolidated Joint Ventures). Prior to the acquisition, we had accounted for the VAA Holdback Portfolio under the equity method of accounting as part of our investment in VAA. The acquisition was completed in order to obtain 100% ownership and control over this well positioned portfolio of multifamily residential properties in southern United States.

The VAA Holdback Portfolio consisted of the following properties:

Property

Location

Units

Blue Lake Villas

Waxahachie, TX

186

Blue Lake Villas Phase II

Waxahachie, TX

Northside on Travis

Sherman, TX

200

Parc at Denham Springs

Denham Spring, LA

224

Residences at Holland Lake

Weatherford, TX

208

Villas of Park West I

Pueblo, CO

148

Villas of Park West II

Pueblo, CO

112

1,148

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AMERICAN REALTY INVESTORS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(dollars in thousands, except per share amounts)

(Unaudited)

The following is a summary of the preliminary allocation of the fair value of the VAA Holdback Portfolio:


Real estate	$	219,500
Other assets	4,843
Total assets acquired	224,343
Mortgage notes payable	70,330
Accounts payable and other liabilities	1,624
Accrued interest	190
Total liabilities assumed	72,144
Fair value of acquired net assets (100% ownership)	$	152,199

We have determined that the purchase price represented the fair value of the additional ownership interest in the VAA Holdback Portfolio that was acquired.


Fair value of existing ownership interest (at 50% ownership)	$	219,500
Carrying value of investment	146,313
Gain on remeasurement of assets	$	73,187

From November 1, 2022, we have included the VAA Holdback Portfolio in our consolidated financial statements.

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AMERICAN REALTY INVESTORS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(dollars in thousands, except per share amounts)

(Unaudited)

12. Mortgages and Other Notes Payable

The following table summarizes our mortgages and other notes payable as of September 30, 2023 and December 31, 2022:


	Carrying Value				Interest Rate		Maturity Date
Property/ Entity	September 30, 2023		December 31, 2022
770 South Post Oak	$	11,248	$	11,406	4.40	%	6/1/2025
Athens(1)	—		1,155		4.00	%	8/28/2023
Blue Lake Villas(2)	9,546		9,673		3.15	%	11/1/2055
Blue Lake Villas Phase II(2)	3,368		3,424		2.85	%	6/1/2052
Chelsea	7,749		7,875		3.40	%	12/1/2050
EQK Portage	3,350		3,350		10.00	%	11/13/2024
Forest Grove	7,023		7,128		3.75	%	5/5/2024
Landing Bayou	13,971		14,161		3.50	%	9/1/2053
Legacy at Pleasant Grove	12,798		13,039		3.60	%	4/1/2048
New Concept Energy	3,542		3,542		6.00	%	9/30/2025
Northside on Travis(2)	11,460		11,656		2.50	%	2/1/2053
Parc at Denham Springs(2)	16,484		16,737		3.75	%	4/1/2051
Parc at Denham Springs Phase II	15,654		15,789		4.05	%	2/1/2060
RCM HC Enterprises	5,086		5,086		5.00	%	12/31/2024
Residences at Holland Lake(3)	10,474		10,622		3.60	%	3/1/2053
Villas at Bon Secour	19,119		19,410		3.08	%	9/1/2031
Villas of Park West I(2)	9,230		9,373		3.04	%	3/1/2053
Villas of Park West II(2)	8,377		8,504		3.18	%	3/1/2053
Vista Ridge	9,553		9,674		4.00	%	8/1/2053
Windmill Farms(4)	4,396		6,400		7.75	%	2/28/2024
	$	182,428	$	188,004

(1) On August 28, 2023, we paid off the loan.

(2) On November 1, 2022, we agreed to assume the mortgage note payable from our joint venture in connection with the acquisition of the underlying property (See Note 11 - Acquisitions) and are in the process of obtaining lender approval of the assumption.

(3) On October 16, 2023, we received approval from the lender to assume the loan on the property that we acquired from our joint venture (See Note 11 - Acquisitions).

(4) On February 28, 2023, we extended the maturity of the loan to February 28, 2024 and an interest rate of 7.75%.

Interest payable at September 30, 2023 and December 31, 2022, was $2,480 and $2,004, respectively. We capitalized interest of $0 and $1,048 during the three months ended September 30, 2023 and 2022, respectively, and $642 and $2,651 during the nine months ended September 30, 2023 and 2022, respectively.

On March 15, 2023, we entered into a $33,000 construction loan to finance the development of Lake Wales (See Note 7 - Real Estate Activity) that bears interest at the Secured Overnight Financing Rate ("SOFR") plus 3% and matures on March 15, 2026, with two one-year extension options. As of September 30, 2023, no advances have been drawn on the loan.

As of September 30, 2023, we were in compliance with all of our loan covenants except for the minimum debt service coverage ratio (“DSCR”) for the loan on 770 South Post Oak. As a result, the lender requires us to lock the surplus cash flow of the property into a designated deposit account controlled by them, until we are in compliance with the DSCR for a period of two consecutive quarters.

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AMERICAN REALTY INVESTORS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(dollars in thousands, except per share amounts)

(Unaudited)

All of the above mortgages and other notes payable are collateralized by the underlying property. In addition, we have guaranteed the loans on Forest Grove, Villas at Bon Secour and Windmill Farms.

13. Bonds Payable

We have issued nonconvertible bonds ("Bonds") through SPC, which were traded on the TASE. The Bonds were denominated in New Israeli Shekels ("NIS") and provided semiannual principal and interest payments through maturity. The Bonds were subject to a number of covenants, which included restrictions on the distribution of cash from SPC.

In connection with the Bonds, we incurred a gain on foreign currency transactions of $0 and $1,533 for the three months ended September 30, 2023 and 2022, respectively, and $993 and $19,437 for the nine months ended September 30, 2023 and 2022, respectively.

The outstanding balance of our Bonds at December 31, 2022 was as follows:


Bond Issuance	Amount		Interest Rate		Maturity
Series A Bonds(1)	$	28,971	7.30	%	7/31/23
Series B Bonds(1)	35,806		6.80	%	7/31/25
Series C Bonds(2)	66,546		4.65	%	1/31/23
	131,323
Less unamortized deferred issuance costs	(2,105)
	$	129,218

(1) The bonds were collateralized by the assets of SPC.

(2) The bonds were collateralized by a trust deed on Browning Place, a 625,297 square foot office building in Dallas, Texas.

On January 31, 2023, we completed our scheduled bond payment, which included the full repayment of the Series C bonds. On May 4, 2023, we paid off the remaining balances of the Series A and Series B Bonds and withdrew from the TASE.

14. Related Party Transactions

We engage in certain services and business transactions with related parties, including but not limited to, the rent of office space, leasing services, asset management, administrative services, and the acquisition and dispositions of real estate. 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.

Pillar and Regis are wholly owned by a subsidiary of May Realty Holdings, Inc., which owns approximately 90.8% of the Company. Pillar is compensated for advisory services in accordance with an agreement and development services in accordance with a project specific agreement. Regis receives property management fees and leasing commissions in accordance with the terms of its property-level management agreement. In addition, Regis is entitled to receive real estate brokerage commissions in accordance with the terms of a non-exclusive brokerage agreement.

Rental income includes $232 and $223 for the three months ended September 30, 2023 and 2022, respectively, and $731 and $702 for the nine months ended September 30, 2023 and 2022, respectively, for office space leased to Pillar and Regis.

Property operating expense includes $97 and $110 for the three months ended September 30, 2023 and 2022, respectively, and $296 and $337 for the nine months ended September 30, 2023 and 2022, respectively, for management fees on commercial properties payable to Regis.

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AMERICAN REALTY INVESTORS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(dollars in thousands, except per share amounts)

(Unaudited)

General and administrative expense includes $856 and $1,288 for the three months ended September 30, 2023 and 2022, respectively, and $3,095 and $3,368 for the nine months ended September 30, 2023 and 2022, respectively, for employee compensation and other reimbursable costs payable to Pillar.

Advisory fees paid to Pillar were $2,295 and $1,571 for the three months ended September 30, 2023 and 2022, respectively, and $6,883 and $7,614 for the nine months ended September 30, 2023 and 2022, respectively.

Notes receivable include amounts held by UHF (See Note 9 – Notes Receivable). UHF is deemed to be a related party due to our significant investment in the performance of the collateral secured by the notes receivable. In addition, we have receivables from Pillar and other related parties. Related party receivables, net represents the net amount outstanding from Pillar for loans and unreimbursed fees, expenses and costs as provided above. Interest income on these notes and related party receivables was $4,854 and $4,140 for the three months ended September 30, 2023 and 2022, respectively, and $14,165 and $11,134 for the nine months ended September 30, 2023 and 2022, respectively.

15. Noncontrolling Interests

The noncontrolling interest represents the third party ownership interest in TCI and Income Opportunity Realty Investors, Inc. ("IOR"). We owned 78.4% of TCI, which in turn owned 81.1% of IOR during the three and nine months ended September 30, 2023 and 2022.

16. Deferred Income

In previous years, we sold properties to related parties at a gain and therefore the sales criteria for the full accrual method was not met, and as such we deferred the gain recognition and accounted for the sales by applying the finance, deposit, installment or cost recovery methods, as appropriate. The gain on these transactions is deferred until the properties are sold to a non-related third party.

As of September 30, 2023 and December 31, 2022, we had deferred gain of $9,791.

17. Income Taxes

We are part of a tax sharing and compensating agreement with respect to federal income taxes with TCI and IOR. In accordance with the agreement, our expense (benefit) in each year is calculated based on the amount of losses absorbed by taxable income multiplied by the maximum statutory tax rate of 21%. The following table summarizes our income tax provision:


	Three Months Ended September 30,				Nine Months Ended September 30,
	2023		2022		2023		2022
Current	$	5,227	$	81,548	$	6,516	$	81,616
Deferred	(4,100)		—		(4,100)		—
	$	1,127	$	81,548	$	2,416	$	81,616

18. Commitments and Contingencies

We believe that we will generate excess cash from property operations in the next twelve months; such excess, however, might not be sufficient to discharge all of our obligations as they become due. We intend to sell income-producing assets, refinance real estate and obtain additional borrowings primarily secured by real estate to meet our liquidity requirements.

We were a defendant in litigation with David Clapper and related entities (collectively, "Clapper”) regarding a multifamily property transaction that occurred in 1988. The litigation led to a substantial judgment against our affiliate and Clapper subsequently sued numerous other entities including us in Federal Court to collect that judgment. The case was tried by a jury in May 2021. The jury found the defendants owed Clapper nothing and the Court issued a take nothing judgment. Clapper subsequently filed an appeal to the US Fifth Circuit Court of Appeals, which has the case under review.

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AMERICAN REALTY INVESTORS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(dollars in thousands, except per share amounts)

(Unaudited)

19. Subsequent Events

The date to which events occurring after September 30, 2023, the date of the most recent balance sheet, have been evaluated for possible adjustment to the consolidated financial statements or disclosure is November 9, 2023, which is the date on which the consolidated financial statements were available to be issued.

On November 6, 2023, we entered into a development agreement with Pillar to build a 216 unit multifamily property in McKinney, Texas that is expected to be completed in 2025 for a total cost of approximately $51.3 million. The cost of construction will be funded in part by a $25.4 million construction loan. The development agreement provides for a $1.6 million fee that will be paid to Pillar over the construction period.

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ITEM 2.MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The following discussion and analysis by management should be read in conjunction with the unaudited Condensed Consolidated Financial Statements and Notes included in this Quarterly Report on Form 10-Q (the “Quarterly Report”) and in our Form 10-K for the year ended December 31, 2022 (the “Annual Report”).

This Report on Form 10-Q contains forward-looking statements within the meaning of the federal securities laws, principally, but not only, under the captions “Business”, “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations”. We caution investors that any forward-looking statements in this report, or which management may make orally or in writing from time to time, are based on management’s beliefs and on assumptions made by, and information currently available to, management. When used, the words “anticipate”, “believe”, “expect”, “intend”, “may”, “might”, “plan”, “estimate”, “project”, “should”, “will”, “result” and similar expressions which do not relate solely to historical matters are intended to identify forward-looking statements. These statements are subject to risks, uncertainties, and assumptions and are not guarantees of future performance, which may be affected by known and unknown risks, trends, uncertainties and factors that are beyond our control. Should one or more of these risks or uncertainties materialize, or should underlying assumptions prove incorrect, actual results may vary materially from those anticipated, estimated or projected. We caution you that, while forward-looking statements reflect our good faith beliefs when we make them, they are not guarantees of future performance and are impacted by actual events when they occur after we make such statements. We expressly disclaim any responsibility to update our forward-looking statements, whether as a result of new information, future events or otherwise. Accordingly, investors should use caution in relying on past forward-looking statements, which are based on results and trends at the time they are made, to anticipate future results or trends.

Some of the risks and uncertainties that may cause our actual results, performance or achievements to differ materially from those expressed or implied by forward-looking statements include, among others, the following:

•general risks affecting the real estate industry (including, without limitation, the inability to enter into or renew leases, dependence on tenants’ financial condition, and competition from other developers, owners and operators of real estate);

•risks associated with the availability and terms of construction and mortgage financing and the use of debt to fund acquisitions and developments;

•demand for apartments and commercial properties in our markets and the effect on occupancy and rental rates;

•our ability to obtain financing, enter into joint venture arrangements in relation to or self-fund the development or acquisition of properties;

•risks associated with the timing and amount of property sales and the resulting gains/losses associated with such sales;

•failure to manage effectively our growth and expansion into new markets or to integrate acquisitions successfully

•risks and uncertainties affecting property development and construction (including, without limitation, construction delays, cost overruns, inability to obtain necessary permits and public opposition to such activities);

•risks associated with downturns in the national and local economies, increases in interest rates, and volatility in the securities markets;

•costs of compliance with the Americans with Disabilities Act and other similar laws and regulations;

•potential liability for uninsured losses and environmental contamination; and

•risks associated with our dependence on key personnel whose continued service is not guaranteed.

The risks included here are not exhaustive. Some of the risks and uncertainties that may cause our actual results, performance, or achievements to differ materially from those expressed or implied by forward-looking statements, include among others, the factors listed and described at Part I, Item 1A. “Risk Factors” Annual Report on Form 10-K, which investors should review.

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Management's Overview

We are an externally advised and managed real estate investment company that owns a diverse portfolio of income-producing properties and land held for development throughout the Southern United States. Our portfolio of income-producing properties includes residential apartment communities ("multifamily properties"), office buildings and retail properties ("commercial properties"). Our investment strategy includes acquiring existing income-producing properties as well as developing new properties on land already owned or acquired for a specific development project.

Our operations are managed by Pillar Income Asset Management, Inc. (“Pillar”) in accordance with an Advisory Agreement. Pillar’s duties include, but are not limited to, locating, evaluating and recommending real estate and real estate-related investment opportunities. Pillar also arranges our debt and equity financing with third party lenders and investors. We have no employees. Employees of Pillar render services to us in accordance with the terms of the Advisory Agreement. Pillar is considered to be a related party due to its common ownership with Realty Advisors, Inc. (“RAI”), who is our controlling shareholder.

The following is a summary of our recent acquisition, disposition, financing and development activities:

Acquisitions and Dispositions

•On January 14, 2022, we sold Toulon, a 240 unit multifamily property in Gautier, Mississippi for $26.8 million, resulting in a gain on sale of $9.4 million. We used the proceeds to pay off the $14.7 million mortgage note payable on the property and for general corporate purposes.

•On May 17, 2022, we sold Fruitland Park, a 6,722 square foot commercial building in Fruitland Park, Florida for $0.8 million, resulting in a gain on sale of $0.7 million. We used the proceeds for general corporate purposes.

•On September 16, 2022, we sold Sugar Mill Phase III, a 72 unit multifamily property in Baton Rouge, Louisiana for $11.8 million in connection with a sale of properties by VAA (See "Other Developments"), resulting in a gain on sale of $1.9 million. We used the proceeds to pay off the $9.6 million mortgage note payable on the property and for general corporate purposes.

•On November 1, 2022, we acquired seven multifamily properties from VAA (See "Other Developments") with a fair value of $219.5 million.

•During the year ended December 31, 2022, we sold a total of 26.9 acres of land from our holdings in Windmill Farms for $5.1 million in aggregate, resulting in gains on sale of $4.2 million. In addition, we sold 0.9 acres of land from our holdings in Mercer Crossing for $0.7 million, resulting in a gain on sale of $0.2 million.

Financing Activities

•On January 14, 2022, we paid off the $14.7 million loan on Toulon in connection with the sale of the underlying property (See "Acquisitions and Dispositions").

•On March 3, 2022, we extended the loan on Stanford Center to February 26, 2023.

•On September 1, 2022, we extended our loan on Athens to August 28, 2023.

•On September 16, 2022, the $9.6 million loan on Sugar Mill Phase III was paid off in connection with the sale of the underlying property (See "Acquisitions and Dispositions").

•On October 21, 2022, we paid off the $38.5 million loan on Stanford Center from the cash generated from sale of the VAA Sale Portfolio.

•On November 1, 2022, we agreed to assume the $70.3 million mortgage notes payable on the VAA Holdback Portfolio in connection with the distribution of the underlying properties from VAA (See "Other Developments").

•On January 31, 2023, we paid off our $67.5 million of Series C bonds.

•On February 28, 2023, we extended the maturity of our loan on Windmill Farms until February 28, 2024 at a revised interest rate of 7.75%.

•On March 15, 2023, we entered into a $33.0 million construction loan to finance the development of Lake Wales (See "Development Activities") that bears interest at the Secured Overnight Financing Rate ("SOFR") plus 3% and matures on March 15, 2026, with two one-year extension options.

•On May 4, 2023, we paid off $14.0 million of our Series A Bonds and $28.9 million of our Series B Bonds, which resulted in a loss on early extinguishment of debt of $1.7 million.

•On August 28, 2023, we paid off our $1.2 million loan on Athens.

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Development Activities

On March 15, 2023, we entered into a development agreement with Pillar to build a 240 unit multifamily property in Lake Wales, Florida that is expected to be completed in 2025 for a total cost of approximately $55.3 million. The cost of construction will be funded in part by a $33.0 million construction loan. The development agreement provides for a $1.6 million fee that will be paid to Pillar over the construction period. As of September 30, 2023, we have incurred a total of $12.3 million in development costs.

In 2021, Landing Bayou, a 240 unit multifamily property in Houma, Louisiana suffered extensive damage from Hurricane Ida. As a result, the property required extensive renovation. As of September 30, 2023, we have completed the restoration and lease up of the property for a total cost of $10.4 million, which was primarily funded by insurance proceeds.

During 2023, we spent $5.0 million on our ongoing development of Windmill Farms. Our expenditure includes $0.5 million on the development of land lots for sale to single family home developers and $4.5 million on reimbursable infrastructure investments.

Other Developments:

On September 16, 2022, VAA sold 45 properties (“VAA Sale Portfolio”) for $1.8 billion, resulting in a gain on sale of $738.4 million to the joint venture. In connection with the sale, we received an initial distribution of $182.8 million from VAA.

On November 1, 2022, we received an additional distribution from VAA, which included the full operational control of the remaining seven properties of VAA (“VAA Holdback Portfolio”) and a cash payment of $204.0 million. We are in the process of negotiating the assumption of the mortgage notes payable on the VAA Holdback Portfolio with the lenders.

On March 23, 2023, we received $18.0 million from VAA, which represented the remaining distribution of the proceeds from the sale of the VAA Sale Portfolio.

We used our share of the proceeds from the sale of the VAA Sale Portfolio to invest in short-term investments and real estate, pay down our debt and for general corporate purposes.

Critical Accounting Policies

The preparation of our consolidated financial statements in conformity with United States generally accepted accounting principles (“GAAP”) requires 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 financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

Some of these estimates and assumptions include judgments on revenue recognition, estimates for common area maintenance and real estate tax accruals, provisions for uncollectible accounts, impairment of long-lived assets, the allocation of purchase price between tangible and intangible assets, capitalization of costs and fair value measurements. Our significant accounting policies are described in more detail in Note 2—Summary of Significant Accounting Policies in our notes to the consolidated financial statements in the Annual Report. However, the following policies are deemed to be critical.

Fair Value of Financial Instruments

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.

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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 our own separate interests, or affiliates of the entity.

Results of Operations

Many of the variations in the results of operations, discussed below, occurred because of the transactions affecting our properties described above, including those related to the Redevelopment Property, the Acquisition Properties and the Disposition Properties (each as defined below).

For purposes of the discussion below, we define "Same Properties" as all of our properties with the exception of those properties that have been recently constructed or leased-up (“Redevelopment Property”), properties that have recently been acquired ("Acquisition Properties") and properties that have been disposed ("Disposition Properties"). A developed property is considered leased-up, when it achieves occupancy of 80% or more. We move a property in and out of Same Properties based on whether the property is substantially leased-up and in operation for the entirety of both periods of the comparison.

For the comparison of the three and nine months ended September 30, 2023 to the three and nine months ended September 30, 2022, the Redevelopment Property is Landing Bayou (See "Development Activities" in Management's Overview). The change in revenues and expenses of the Redevelopment Property from 2022 to 2023 is primarily due to the lease-up of the property in 2023 as the restored units were placed in service. The Acquisition Properties are the VAA Holdback Portfolio (See "Other Developments" in Management's Overview), which include Blue Lake Villas, Blue Lake Villas Phase II, Northside on Travis, Parc at Denham Springs, Residences at Holland Lake, Villas of Park West I and Villas of Park West II. The Disposition Properties are Fruitland Park, Sugar Mill Phase III and Toulon.

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The following table summarizes our results of operations for the three and nine months ended September 30, 2023 and 2022:


	Three Months Ended September 30,						Nine Months Ended September 30,
	2023		2022		Variance		2023		2022		Variance
Multifamily Segment
Revenue	$	7,899	$	2,850	$	5,049	$	22,930	$	9,024	$	13,906
Operating expenses	(4,811)		(1,966)		(2,845)		(12,997)		(5,395)		(7,602)
	3,088		884		2,204		9,933		3,629		6,304
Commercial Segment
Revenue	3,939		4,720		(781)		11,306		13,286		(1,980)
Operating expenses	(2,632)		(2,735)		103		(7,583)		(7,146)		(437)
	1,307		1,985		(678)		3,723		6,140		(2,417)
Segment profit	4,395		2,869		1,526		13,656		9,769		3,887
Other non-segment items of income (expense)
Depreciation and amortization	(3,313)		(2,193)		(1,120)		(9,615)		(6,840)		(2,775)
General, administrative and advisory	(3,874)		(4,613)		739		(15,307)		(15,570)		263
Interest income, net	7,054		2,991		4,063		17,627		6,636		10,991
Loss on early extinguishment of debt	—		(1,166)		1,166		(1,710)		(2,805)		1,095
Gain on foreign currency transactions	—		1,533		(1,533)		993		19,437		(18,444)
(Loss) gain on sale or write down of assets	(32)		1,539		(1,571)		156		16,580		(16,424)
Income from joint ventures	234		464,143		(463,909)		2,946		471,385		(468,439)
Other expense	(439)		(80,799)		80,360		(199)		(79,691)		79,492
Net income	$	4,025	$	384,304	$	(380,279)	$	8,547	$	418,901	$	(410,354)

Comparison of the three months ended September 30, 2023 to the three months ended September 30, 2022:

Our $380.3 million decrease in net income is primarily attributed to the following:

•The increase in profit from the multifamily segment is primarily due to an increase of $2.0 million from the Acquisition Properties and $0.3 million from the Same Properties offset in part by a decrease of $0.1 million from the Disposition Properties.

•The decrease in profit from the commercial segment is primarily due to a decrease in revenue as a result of decline in occupancy at Stanford Center and an increase in insurance cost.

•The increase in interest income, net is due to a $2.0 million increase in interest income and a $2.1 million decrease in interest expense. The increase in interest income is primarily due to our investment of cash distributions received from VAA in 2022 (See "Other Developments" in Management's Overview). The decrease in interest expense is primarily due to the repayment of the bonds payable in 2023 and the repayment of mortgage notes payable on properties sold in 2022 (See "Acquisitions and Dispositions" in Management's Overview).

•The loss on early extinguishment of debt in 2022 is due to the early repayment of the mortgage note payable on Sugar Mill Phase III (See Financing Activities" in Management's Overview).

•The decrease in gain on foreign currency transactions is due to the repayment of our bonds payable in 2023.

•The decrease in gain on sale or write down of assets is primarily due to the sale of Sugar Mill Phase III in 2022 (See "Acquisitions and Dispositions" in Management's Overview).

•The decrease in income from joint venture is primarily due to our share of the gain on the sale of the VAA Sale Portfolio (See "Other Developments" in Management's Overview) in 2022.

•The decrease in other expense is primarily due to the $80.4 million decrease in our tax provision as a result of the sale of the VAA Sale Portfolio in 2022.

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Comparison of the nine months ended September 30, 2023 to the nine months ended September 30, 2022:

Our $410.4 million decrease in net income is primarily attributed to the following:

•The increase in profit from the multifamily segment is primarily due to an increase of $6.2 million from the Acquisition Properties, $0.4 million from the Redevelopment Property and $0.2 million from the Same Properties offset in part by a decrease of $0.5 million from the Disposition Properties.

•The decrease in profit from the commercial segment is primarily due to a decrease in revenue as a result of decline in occupancy at Stanford Center and an increase in insurance cost.

•The increase in interest income, net is due to a $5.3 million increase in interest income and a $5.7 million decrease in interest expense. The increase in interest income is due to a $7.7 million increase in interest income from cash equivalents and short-term investments and a $2.4 million decrease in interest from notes receivables and related party receivables. The increase in interest income from investments is primarily due to our investment of cash distributions received from VAA in 2022 (See "Other Developments" in Management's Overview).

The decrease in interest expense is primarily due to the repayment of the bonds payable in 2023 and the repayment of mortgage notes payable on properties sold in 2022 (See "Acquisitions and Dispositions" in Management's Overview) offset in part by the interest on the mortgage notes payable from the Acquisition Properties.

•The decrease in gain on foreign currency transactions is due to the repayment of our bonds payable in 2023 and changes in exchange rates during the period that the bonds were outstanding.

•The decrease in gain on sale or write down of assets is primarily due to the $9.4 million gain on the sales of Toulon and Sugar Mill Phase III in 2022 (See "Acquisitions and Dispositions" in Management's Overview) and the $4.8 million in gain on the sale of land parcels in 2023 (See "Acquisitions and Dispositions" in Management's Overview).

•The decrease in income from joint venture is primarily due to our share of the gain on the sale of the VAA Sale Portfolio (See "Other Developments" in Management's Overview) in 2022.

•The decrease in other expense income is primarily due to the $79.2 million decrease in the tax provision as a result of the sale of the VAA Sale Portfolio in 2022.

Liquidity and Capital Resources

Our principal sources of cash have been, and will continue to be, property operations; proceeds from land and income-producing property sales; collection of notes receivable; refinancing of existing mortgage notes payable; and additional borrowings, including mortgage notes and bonds payable, and lines of credit.

Our principal liquidity needs are to fund normal recurring expenses; meet debt service and principal repayment obligations including balloon payments on maturing debt; fund capital expenditures, including tenant improvements and leasing costs; fund development costs not covered under construction loans; and fund possible property acquisitions.

We anticipate that our cash and cash equivalents as of September 30, 2023, along with cash that will be generated from notes related party receivables and investment in cash equivalents and short-term investments, will be sufficient to meet all of our cash requirements. We may selectively sell land and income-producing assets, refinance or extend real estate debt and seek additional borrowings secured by real estate to meet our liquidity requirements. Although history cannot predict the future, historically, we have been successful at refinancing and extending a portion of our current maturity obligations.

The following summary discussion of our cash flows is based on the consolidated statements of cash flows in our consolidated financial statements, and is not meant to be an all-inclusive discussion of the changes in our cash flows for the periods presented below (dollars in thousands):


	Nine Months Ended September 30,
	2023		2022		Variance
Net cash provided by (used in) operating activities	$	7,846	$	(6,874)	$	14,720
Net cash (used in) provided by investing activities	$	(9,566)	$	154,850	$	(164,416)
Net cash used in financing activities	$	(137,260)	$	(71,524)	$	(65,736)

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The increase in cash provided by operating activities is primarily due to an increase in interest income and rents provided by the Acquisition Properties (See "Acquisitions and Dispositions" in Management's Overview). The increase in interest income is primarily due to an increase in short-term investments and cash equivalents and an increase in interest rates.

The $164.4 million change in cash from investing activities is primarily due the $159.3 million distribution from joint venture in 2023 (See "Other Developments" in Management's Overview) and the $44.4 million decrease in proceeds from the sale of real estate offset in part by the $44.7 million increase in net purchase of short term investments.

The $65.7 million increase in cash used in financing activities is primarily due to the $87.4 million increase in the payments of the bond payable offset in part by the $20.8 million decrease in repayment of mortgage and other notes payable. The increase in payments on bonds payable is primarily due to the payoff of the bonds in 2023 (See "Financing Activities" in Management's Overview) and the decrease in the repayment of the mortgage and other notes payable is primarily due to the payoff of the mortgage notes on Toulon and Sugar Mill Phase III in 2022 in connection with the sales of the underlying properties.

Funds From Operations ("FFO")

We use FFO in addition to net income to report our operating and financial results and consider FFO and FFO-diluted as supplemental measures for the real estate industry and a supplement to GAAP measures. The National Association of Real Estate Investment Trusts ("Nareit") defines FFO as net income (loss) (computed in accordance with GAAP), excluding gains (or losses) from sales of properties, plus real estate related depreciation and amortization, impairment write-downs of real estate and write-downs of investments in an affiliate where the write-downs have been driven by a decrease in the value of real estate held by the affiliate and after adjustments for unconsolidated joint ventures. Adjustments for unconsolidated joint ventures are calculated to reflect FFO on the same basis. We also present FFO excluding the impact of the effects of foreign currency transactions.

FFO and FFO on a diluted basis are useful to investors in comparing operating and financial results between periods. This is especially true since FFO excludes real estate depreciation and amortization, as we believe real estate values fluctuate based on market conditions rather than depreciating in value ratably on a straight-line basis over time. We believe that such a presentation also provides investors with a meaningful measure of our operating results in comparison to the operating results of other real estate companies. In addition, we believe that FFO excluding gain (loss) from foreign currency transactions provide useful supplemental information regarding our performance as they show a more meaningful and consistent comparison of our operating performance and allows investors to more easily compare our results.

We believe that FFO does not represent cash flow from operations as defined by GAAP, should not be considered as an alternative to net income as defined by GAAP, and is not indicative of cash available to fund all cash flow needs. We also caution that FFO, as presented, may not be comparable to similarly titled measures reported by other real estate companies.

We compensate for the limitations of FFO by providing investors with financial statements prepared according to GAAP, along with this detailed discussion of FFO and a reconciliation of net income to FFO and FFO-diluted. We believe that to further understand our performance, FFO should be compared with our reported net income and considered in addition to cash flows in accordance with GAAP, as presented in our consolidated financial statements.

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The following table reconciles net income attributable to the Company to FFO and FFO adjusted for the three and nine months ended September 30, 2023 and 2022 (dollars and shares in thousands):


	Three Months Ended September 30,				Nine Months Ended September 30,
	2023		2022		2023		2022
Net income attributable to the Company	$	2,988	$	302,289	$	6,091	$	329,915
Depreciation and amortization	3,313		2,193		9,615		6,840
Loss (gain) on sale or write down of assets, net	32		(1,539)		(156)		(16,580)
Gain on sale of land	—		—		188		4,752
Gain on sale of assets from unconsolidated joint ventures at our pro rata share	—		(307,300)		—		(307,300)
Depreciation and amortization on unconsolidated joint ventures at our pro rata share	106		4,394		235		8,424
FFO-Basic and Diluted	6,439		37		15,973		26,051
Loss on extinguishment of debt	—		1,166		1,710		2,805
Loss on early extinguishment of debt from unconsolidated joint venture at our pro rata share	—		15,254		—		15,254
Gain on foreign currency transactions	—		(1,533)		(993)		(19,437)
FFO-adjusted	$	6,439	$	14,924	$	16,690	$	24,673

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ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISKS

Optional and not included.

ITEM 4. CONTROLS AND PROCEDURES

Based on an evaluation by our management (with the participation of our Principal Executive Officer and Principal Financial Officer), as of the end of the period covered by this report, our Principal Executive Officer and Principal Financial Officer concluded that our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), were effective to provide reasonable assurance that information required to be disclosed by us in reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in SEC rules and forms and that such information is accumulated and communicated to our management, including our Principal Executive Officer and Principal Financial Officer, to allow timely decisions regarding required disclosures.

There has been no change in our internal control over financial reporting (as defined in Exchange Act Rule 13a-15(f)) during the most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

PART II. OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

None

ITEM 1A RISK FACTORS

There have been no material changes from the risk factors previously disclosed in the 2022 10-K. For a discussion on these risk factors, please see “Item 1A. Risk Factors” contained in the 2022 10-K.

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

We have a program that allows for the repurchase of up to 1,250,000 shares. There were no shares purchased under this program during the nine months ended September 30, 2023. As of September 30, 2023, 986,750 shares have been purchased and 263,250 shares may be purchased under the program.

ITEM 3. DEFAULTS UPON SENIOR SECURITIES

None

ITEM 4. MINE SAFETY DISCLOSURES

None

ITEM 5. OTHER INFORMATION

None

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ITEM 6. EXHIBITS

The following exhibits are filed herewith or incorporated by reference as indicated below:


Exhibit Number						Description of Exhibit
3.0						Certificate of Restatement of Articles of Incorporation of American Realty Investors, Inc. dated August 3, 2000 (incorporated by reference to Exhibit 3.0 to the Registrant’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2000).

3.1						Certificate of Correction of Restated Articles of Incorporation of American Realty Investors, Inc. dated August 29, 2000 (incorporated by reference to Exhibit 3.1 to Registrant’s Quarterly Report on Form 10-Q dated September 30, 2000).

3.2						Articles of Amendment to the Restated Articles of Incorporation of American Realty Investors, Inc. decreasing the number of authorized shares of and eliminating Series B Cumulative Convertible Preferred Stock dated August 23, 2003 (incorporated by reference to Exhibit 3.3 to Registrant’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2003).

3.3						Articles of Amendment to the Restated Articles of Incorporation of American Realty Investors, Inc., decreasing the number of authorized shares of and eliminating Series I Cumulative Preferred Stock dated October 1, 2003 (incorporated by reference to Exhibit 3.4 to Registrant’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2003).

3.4						Bylaws of American Realty Investors, Inc. (incorporated by reference to Exhibit 3.2 to Registrant’s Registration Statement on Form S-4 filed December 30, 1999).

4.1						Certificate of Designations, Preferences and Relative Participating or Optional or Other Special Rights, and Qualifications, Limitations or Restrictions Thereof of Series F Redeemable Preferred Stock of American Realty Investors, Inc., dated June 11, 2001 (incorporated by reference to Exhibit 4.1 to the Registrant’s Annual Report on Form 10-K for the year ended December 31, 2001).

4.2						Certificate of Withdrawal of Preferred Stock, Decreasing the Number of Authorized Shares of and Eliminating Series F Redeemable Preferred Stock, dated June 18, 2002 (incorporated by reference to Exhibit 3.0 to the Registrant’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2002).

4.3						Certificate of Designation, Preferences and Rights of the Series I Cumulative Preferred Stock of American Realty Investors, Inc., dated February 3, 2003 (incorporated by reference to Exhibit 4.3 to the Registrant’s Annual Report on Form 10-K for the year ended December 31, 2002).

4.4						Certificate of Designation for Nevada Profit Corporations designating the Series J 8% Cumulative Convertible Preferred Stock as filed with the Secretary of State of Nevada on March 16, 2006 (incorporated by reference to Registrant’s current report on Form 8-K for event of March 16, 2006).

4.5						Certificate of Designation for Nevada Profit Corporation designating the Series K Convertible Preferred Stock as filed with the Secretary of State of Nevada on May 6, 2013 (incorporated by reference to Registrant’s current report on form 8-K for event of May 7, 2013).

10.1						Advisory Agreement between American Realty Investors, Inc. and Pillar Income Asset Management, Inc., dated April 30, 2011 (incorporated by reference to Exhibit 10.1 to the Registrant’s Current Report on Form 8-K, dated May 2, 2011).

10.2						Second Amendment to Modification of Stipulation of Settlement dated October 17, 2001 (incorporated by reference to Exhibit 10.1 to the Registrant’s Registration Statement on Form S-4, dated February 24, 2002).

31.1*						Certification by the Principal Executive and Financial Officer pursuant to Rule 13a-14 and 15d-14 under the Securities Exchange Act of 1934, as amended.



32.1*						Certification pursuant to 18 U.S.C. 1350 as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

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101.INS						XBRL Instance Document

101.SCH						XBRL Taxonomy Extension Schema Document

101.CAL						XBRL Taxonomy Extension Calculation Linkbase Document

101.DEF						XBRL Taxonomy Extension Definition Linkbase Document

101.LAB						XBRL Taxonomy Extension Label Linkbase Document

101.PRE						XBRL Taxonomy Extension Presentation Linkbase Document

* Filed herewith.

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SIGNATURE PAGE

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.


	AMERICAN REALTY INVESTORS, INC.

Date: November 9, 2023	By:	/s/ ERIK L. JOHNSON
		Erik L. Johnson Executive Vice President and Chief Financial Officer

Exhibit 31.1

CERTIFICATION

I, Erik L. Johnson, certify that:

1.I have reviewed this quarterly report on Form 10-Q of American Realty Investors, Inc.;

2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the period presented in this report;

4.The registrant’s other certifying officers(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the Registrant and have:

(a)Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b)Designed such internal controls over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c)Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluations; and

(d)Disclosed in the report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5.The registrant’s other certifying officers(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

(a)All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the Registrant’s ability to record, process, summarize and report financial information; and

(b)Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.


Dated: November 9, 2023	By:	/s/ ERIK L. JOHNSON
		Erik L. Johnson
		Executive Vice President and Chief Financial Officer
		(Principal Executive and Financial Officer)

Exhibit 32.1

CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350 AS ADOPTED PURSUANT TO SECTION 906

OF THE SARBANES-OXLEY ACT OF 2002

The undersigned officer of American Realty Investors, Inc., a Nevada corporation (the “Company”) hereby certifies that:

(i)The Company’s Quarterly Report on Form 10-Q for the three months ended September 30, 2023 fully complies with the requirements of Section 13(a) of the Securities Exchange Act of 1934, as amended; and

(ii)The information contained in the Company’s Quarterly Report on Form 10-Q for the three months ended September 30, 2023 fairly presents in all material respects, the financial condition and results of operations of the Company, at and for the period indicated.


Dated: November 9, 2023	By:	/s/ ERIK L. JOHNSON
		Erik L. Johnson
		Executive Vice President and Chief Financial Officer
		(Principal Executive and Financial Officer)

Cover - shares	9 Months Ended
Cover - shares	Sep. 30, 2023	Nov. 09, 2023
Cover [Abstract]
Document Type	10-Q
Document Quarterly Report	true
Document Period End Date	Sep. 30, 2023
Document Transition Report	false
Entity File Number	001-15663
Entity Registrant Name	AMERICAN REALTY INVESTORS, INC.
Entity Incorporation, State or Country Code	NV
Entity Tax Identification Number	75-2847135
Entity Address, Address Line One	1603 Lyndon B. Johnson Freeway
Entity Address, Address Line Two	Suite 800
Entity Address, City or Town	Dallas
Entity Address, State or Province	TX
Entity Address, Postal Zip Code	75234
City Area Code	469
Local Phone Number	522-4200
Title of 12(b) Security	Common Stock
Trading Symbol	ARL
Security Exchange Name	NYSE
Entity Current Reporting Status	Yes
Entity Interactive Data Current	Yes
Entity Filer Category	Non-accelerated Filer
Entity Small Business	true
Entity Emerging Growth Company	false
Entity Shell Company	false
Entity Common Stock, Shares Outstanding		16,152,043
Entity Central Index Key	0001102238
Amendment Flag	false
Current Fiscal Year End Date	--12-31
Document Fiscal Period Focus	Q3
Document Fiscal Year Focus	2023

CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands	Sep. 30, 2023	Dec. 31, 2022
Assets
Real estate	$ 502,031	$ 493,821
Cash and cash equivalents	47,203	113,445
Restricted cash	36,145	108,883
Short-term investments	134,185	119,787
Notes receivable (including $76,935 at September 30, 2023 and December 31, 2022 from related parties)	145,715	139,609
Investment in unconsolidated joint ventures	10,256	28,226
Receivable from related parties, net	92,385	108,184
Other assets (including $3,605 and $4,663 at September 30, 2023 and December 31, 2022, respectively, from related parties)	94,358	85,524
Total assets	1,062,278	1,197,479
Liabilities:
Mortgages and other notes payable	182,428	188,004
Bonds payable	0	129,218
Accounts payable and other liabilities (including $1,025 at September 30, 2023 and $599 at December 31, 2022 from related parties)	46,864	53,100
Accrued interest	2,480	5,198
Deferred revenue	9,791	9,791
Total liabilities	241,563	385,311
Shareholders' Equity:
Preferred stock, Series A, $2.00 par value, 15,000,000 shares authorized, 1,800,614 shares issued and outstanding	1,801	1,801
Common stock, $0.01 par value, 100,000,000 shares authorized; 16,152,043 shares issued and outstanding	162	162
Additional paid-in capital	62,090	62,090
Retained earnings	555,525	549,434
Total shareholders' equity	619,578	613,487
Noncontrolling interests	201,137	198,681
Total equity	820,715	812,168
Total liabilities and equity	$ 1,062,278	$ 1,197,479

CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) $ in Thousands	Sep. 30, 2023	Dec. 31, 2022
Notes receivable	$ 145,715	$ 139,609
Other assets	94,358	85,524
Accounts payable and other liabilities	$ 46,864	$ 53,100
Preferred stock, par value (in dollars per share)	$ 2.00	$ 2.00
Preferred stock, authorized (in shares)	15,000,000	15,000,000
Preferred stock, issued (in shares)	1,800,614	1,800,614
Preferred stock, outstanding (in shares)	1,800,614	1,800,614
Common stock, par value (in dollars per share)	$ 0.01	$ 0.01
Common stock, authorized (in shares)	100,000,000	100,000,000
Common stock, issued (in shares)	16,152,043	16,152,043
Common stock, outstanding (in shares)	16,152,043	16,152,043
Related Party
Notes receivable	$ 76,935	$ 76,935
Other assets	3,605	4,663
Accounts payable and other liabilities	$ 1,025	$ 599

CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2023	Sep. 30, 2022	Sep. 30, 2023	Sep. 30, 2022
Revenues:
Rental revenues (including $232 and $223 for the three months ended September 30, 2023 and 2022, respectively, and $731 and $702 for the nine months ended September 30, 2023 and 2022, respectively, from related parties)	$ 11,838	$ 7,570	$ 34,236	$ 22,310
Other income	688	749	2,217	1,925
Total revenue	12,526	8,319	36,453	24,235
Expenses:
Property operating expenses (including $97 and $110 for the three months ended September 30, 2023 and 2022, respectively, and $296 and $337 for the nine months ended September 30, 2023 and 2022, respectively, from related parties)	7,443	4,701	20,580	12,541
Depreciation and amortization	3,313	2,193	9,615	6,840
General and administrative (including $856 and $1,288 for the three months ended September 30, 2023 and 2022, respectively, and $3,095 and $3,368 for the nine months ended September 30, 2023 and 2022, respectively, from related parties)	1,579	3,042	8,424	7,956
Advisory fee to related party	2,295	1,571	6,883	7,614
Total operating expenses	14,630	11,507	45,502	34,951
Net operating loss	(2,104)	(3,188)	(9,049)	(10,716)
Interest income (including $4,854 and $4,140 for the three months ended September 30, 2023 and 2022, respectively, and $14,165 and $11,134 for the nine months ended September 30, 2023 and 2022, respectively, from related parties)	9,008	7,035	25,201	19,937
Interest expense	(1,954)	(4,044)	(7,574)	(13,301)
Gain on foreign currency transactions	0	1,533	993	19,437
Loss on early extinguishment of debt	0	(1,166)	(1,710)	(2,805)
Equity in income from unconsolidated joint ventures	234	464,143	2,946	471,385
(Loss) gain on sales or write-down of assets	(32)	1,539	156	16,580
Income tax provision	(1,127)	(81,548)	(2,416)	(81,616)
Net income	4,025	384,304	8,547	418,901
Net income attributable to noncontrolling interests	(1,037)	(82,015)	(2,456)	(88,986)
Net income attributable to common shares	$ 2,988	$ 302,289	$ 6,091	$ 329,915
Earnings per share - basic and diluted
Basic (in dollars per share)	$ 0.18	$ 18.72	$ 0.38	$ 20.43
Diluted (in dollars per share)	$ 0.18	$ 18.72	$ 0.38	$ 20.43
Weighted average common shares used in computing earnings per share
Basic (in shares)	16,152,043	16,152,043	16,152,043	16,152,043
Diluted (in shares)	16,152,043	16,152,043	16,152,043	16,152,043

CONSOLIDATED STATEMENTS OF OPERATIONS (Parenthetical) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2023	Sep. 30, 2022	Sep. 30, 2023	Sep. 30, 2022
Rental revenues	$ 11,838	$ 7,570	$ 34,236	$ 22,310
Property operating expenses	7,443	4,701	20,580	12,541
General and administrative	1,579	3,042	8,424	7,956
Interest income	9,008	7,035	25,201	19,937
Related Party
Rental revenues	232	223	731	702
Property operating expenses	97	110	296	337
General and administrative	856	1,288	3,095	3,368
Interest income	$ 4,854	$ 4,140	$ 14,165	$ 11,134

CONSOLIDATED STATEMENTS OF EQUITY - USD ($) $ in Thousands	Total	Total Shareholders' Equity	Preferred Stock	Common Stock	Paid-in Capital	Retained Earnings	Noncontrolling Interest
Balance at beginning at Dec. 31, 2021	$ 336,851	$ 240,138	$ 1,801	$ 162	$ 62,090	$ 176,085	$ 96,713
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net income	418,901	329,915				329,915	88,986
Balance at ending at Sep. 30, 2022	755,752	570,053	1,801	162	62,090	506,000	185,699
Balance at beginning at Jun. 30, 2022	371,448	267,764	1,801	162	62,090	203,711	103,684
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net income	384,304	302,289				302,289	82,015
Balance at ending at Sep. 30, 2022	755,752	570,053	1,801	162	62,090	506,000	185,699
Balance at beginning at Dec. 31, 2022	812,168	613,487	1,801	162	62,090	549,434	198,681
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net income	8,547	6,091				6,091	2,456
Balance at ending at Sep. 30, 2023	820,715	619,578	1,801	162	62,090	555,525	201,137
Balance at beginning at Jun. 30, 2023	816,690	616,590	1,801	162	62,090	552,537	200,100
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net income	4,025	2,988				2,988	1,037
Balance at ending at Sep. 30, 2023	$ 820,715	$ 619,578	$ 1,801	$ 162	$ 62,090	$ 555,525	$ 201,137

CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands	9 Months Ended
	Sep. 30, 2023	Sep. 30, 2022
Cash Flow From Operating Activities:
Net income	$ 8,547	$ 418,901
Adjustments to reconcile net income to net cash provided by (used in) operating activities:
Gain on sale or write down of assets	(156)	(16,580)
Gain on foreign currency transactions	(993)	(19,437)
Loss on early extinguishment of debt	1,710	2,805
Depreciation and amortization	10,518	9,409
Provision (recovery) of bad debts	875	(3,126)
Equity in income from unconsolidated joint ventures	(2,946)	(471,385)
Distribution of income from unconsolidated joint ventures	0	3,700
Changes in assets and liabilities, net of dispositions:
Other assets	(11,336)	(4,925)
Related party receivables	(4,369)	(6,630)
Accrued interest	(1,872)	(4,652)
Accounts payable and other liabilities	7,868	85,046
Net cash provided by (used in) operating activities	7,846	(6,874)
Cash Flow From Investing Activities:
Collection of notes receivable	394	2,726
Originations and advances on notes receivable	(6,500)	(2,118)
Purchase of short-term investments	(89,566)	(99,350)
Redemption of short-term investments	75,168	40,250
Development and renovation of real estate	(9,876)	(11,834)
Deferred leasing costs	(290)	(1,163)
Proceeds from sale of assets	188	44,591
Distribution from unconsolidated joint venture	20,916	181,748
Net cash (used in) provided by investing activities	(9,566)	154,850
Cash Flow From Financing Activities:
Payments on mortgages, other notes and bonds payable	(136,809)	(70,170)
Debt extinguishment costs	(435)	(1,354)
Deferred financing costs	(16)	0
Net cash used in financing activities	(137,260)	(71,524)
Net (decrease) increase in cash, cash equivalents and restricted cash	(138,980)	76,452
Cash, cash equivalents and restricted cash, beginning of period	222,328	72,734
Cash, cash equivalents and restricted cash, end of period	$ 83,348	$ 149,186

Organization	9 Months Ended
Organization	Sep. 30, 2023
Organization, Consolidation and Presentation of Financial Statements [Abstract]
Organization	Organization As used herein, the terms “the Company”, “we”, “our” or “us” refer to American Realty Investors, Inc., a Nevada corporation, which was formed in 1999. Our common stock is listed on the New York Stock Exchange (“NYSE”) under the symbol (“ARL”) and over 90% of our stock is owned by related party entities. Our primary business is the acquisition, development and ownership of income-producing multifamily and commercial 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 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 income from the sale of land. We own approximately 78.4% of Transcontinental Realty Investors, Inc. ("TCI") and substantially all of our operations are conducted through TCI, whose common stock is traded on the NYSE under the symbol “TCI”. Accordingly, we include TCI’s financial results in our consolidated financial statements. Substantially all of TCI's assets are held by its wholly-owned subsidiary, Southern Properties Capital Ltd. (“SPC”), which was formed for the purpose of raising funds by issuing non-convertible bonds that were listed on the Tel Aviv Stock Exchange ("TASE"). At September 30, 2023, our portfolio of properties consisted of: ● Four office buildings comprising in aggregate of approximately 1,056,793 square feet; ● Fourteen multifamily properties, owned directly by us, comprising of 2,328 units; and ● Approximately 1,858 acres of developed and undeveloped land. Our day to day operations are managed by Pillar Income Asset Management, Inc. (“Pillar”). Pillar's duties include, but are not limited to, locating, evaluating and recommending real estate and real estate-related investment opportunities and arranging debt and equity financing with third party lenders and investors. We have no employees; all of our services are performed by Pillar employees. Three of our commercial properties are managed by Regis Realty Prime, LLC (“Regis”). Regis provides leasing, construction management and brokerage services. Our multifamily properties and one of our commercial properties are managed by outside management companies. Pillar and Regis are considered to be related parties (See Note 14 – Related Party Transactions).

Summary of Significant Accounting Policies	9 Months Ended
Summary of Significant Accounting Policies	Sep. 30, 2023
Accounting Policies [Abstract]
Summary of Significant Accounting Policies	Summary of Significant Accounting Policies Basis of Presentation The accompanying unaudited consolidated financial statements have been prepared in accordance with the instructions to Form 10-Q and Article 10 of Regulation S-X. Certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) have been condensed or omitted in accordance with such rules and regulations, although management believes the disclosures are adequate to prevent the information presented from being misleading. In the opinion of management, all adjustments (consisting of normal recurring matters) considered necessary for a fair presentation have been included. Certain prior year amounts have been reclassified to conform with the current year presentation. These reclassifications had no effect on the reported results of operation. An adjustment has been made to reclassify $2,447 and $5,746 interest expense to related parties for the three and nine months ended September 30, 2022, respectively, from interest expense to interest income on the consolidated statements of operations. The consolidated balance sheet at December 31, 2022 was derived from the audited consolidated financial statements at that date, but does not include all of the information and disclosures required by GAAP for complete financial statements. For further information, refer to the consolidated financial statements and notes thereto included in our Annual Report on Form 10-K for the year ended December 31, 2022. Certain 2022 consolidated financial statement amounts have been reclassified to conform to the current presentation. We consolidate entities in which we are considered to be the primary beneficiary of a variable interest entity (“VIE”) or have a majority of the voting interest of the entity. We have determined that we are a primary beneficiary of the VIE when we have (i) the power to direct the activities of a VIE that most significantly impacts its economic performance, and (ii) the obligations to absorb losses or the right to receive benefits that could potentially be significant to the VIE. In determining whether we are the primary beneficiary, we consider qualitative and quantitative factors, including ownership interest, management representation, ability to control decision and other contractual rights. We account for entities in which we have less than a controlling financial interest or entities where we are not deemed to be the primary beneficiary under the equity method of accounting. Accordingly, we include our share of the net earnings or losses of these entities in our results of operations.

Earnings Per Share

9 Months Ended

Sep. 30, 2023

Earnings Per Share [Abstract]

Earnings Per Share

The following table details our basic and diluted earnings per common share calculation:


	Three Months Ended September 30,				Nine Months Ended September 30,
	2023		2022		2023		2022
Net income	$	4,025	$	384,304	$	8,547	$	418,901
Net income attributable to noncontrolling interests	(1,037)		(82,015)		(2,456)		(88,986)
Net income attributable to common shares	$	2,988	$	302,289	$	6,091	$	329,915

Weighted-average common shares outstanding — basic and diluted	16,152,043		16,152,043		16,152,043		16,152,043

EPS - attributable to common shares — basic and diluted	$	0.18	$	18.72	$	0.38	$	20.43

Supplemental Cash Flow Information

9 Months Ended

Sep. 30, 2023

Supplemental Cash Flow Elements [Abstract]

Supplemental Cash Flow Information

The following presents the schedule of interest paid and other supplemental cash flow information:


	Nine Months Ended September 30,
	2023		2022
Cash paid for interest	$	9,432	$	22,211
Cash - beginning of period
Cash and cash equivalents	$	113,445	$	50,748
Restricted cash	108,883		21,986
	$	222,328	$	72,734
Cash - end of period
Cash and cash equivalents	$	47,203	$	131,236
Restricted cash	36,145		17,950
	$	83,348	$	149,186




Payments on mortgages, other notes and bonds payable
Payments on mortgages and other notes payable	$	5,633	$	26,411
Payments on bonds payable	131,176		43,759
	$	136,809	$	70,170

The following is a schedule of noncash investing and financing activities:


	Nine Months Ended September 30,
	2023		2022


Property acquired in exchange for reduction in related party receivable	$	6,064	$	—

Distribution from joint venture applied to Earn Out Obligation	$	—	$	34,159

Operating Segments

9 Months Ended

Sep. 30, 2023

Segment Reporting [Abstract]

Operating Segments

Operating SegmentsOur segments are based on the internal reporting that we review for operational decision-making purposes. We operate in two reportable segments: (i) the acquisition, development, ownership and management of multifamily properties and (ii) the acquisition, ownership and management of commercial properties. The services for our multifamily segment include rental of apartments and other tenant services, including parking and storage space rental. Asset information by segment is not reported because we do not use this measure to assess performance or make decisions to allocate resources. Therefore, depreciation and amortization expense is not allocated among segments. General and administrative expenses, advisory fees, interest income and interest expense are not included in segment profit as our internal reporting addresses these items on a corporate level.

The following table presents our reportable segments for the three and nine months ended September 30, 2023 and 2022:


	Three Months Ended September 30,				Nine Months Ended September 30,
	2023		2022		2023		2022
Multifamily Segment
Revenues	$	7,899	$	2,850	$	22,930	$	9,024
Operating expenses	(4,811)		(1,966)		(12,997)		(5,395)
Profit from segment	3,088		884		9,933		3,629
Commercial Segment
Revenues	3,939		4,720		11,306		13,286
Operating expenses	(2,632)		(2,735)		(7,583)		(7,146)
Profit from segment	1,307		1,985		3,723		6,140
Total profit from segments	$	4,395	$	2,869	$	13,656	$	9,769

The table below reflects the reconciliation of total profit from segments to net income for the three and nine months ended September 30, 2023 and 2022:


	Three Months Ended September 30,				Nine Months Ended September 30,
	2023		2022		2023		2022
Total profit from segments	$	4,395	$	2,869	$	13,656	$	9,769
Other non-segment items of income (expense)
Depreciation and amortization	(3,313)		(2,193)		(9,615)		(6,840)
General and administrative	(1,579)		(3,042)		(8,424)		(7,956)
Advisory fee to related party	(2,295)		(1,571)		(6,883)		(7,614)
Other income	688		749		2,217		1,925
Interest income	9,008		7,035		25,201		19,937
Interest expense	(1,954)		(4,044)		(7,574)		(13,301)
Gain on foreign currency transaction	—		1,533		993		19,437
Loss on early extinguishment of debt	—		(1,166)		(1,710)		(2,805)
Income from unconsolidated joint ventures	234		464,143		2,946		471,385
(Loss) gain on sales or write-down of assets	(32)		1,539		156		16,580
Income tax provision	(1,127)		(81,548)		(2,416)		(81,616)
Net income	$	4,025	$	384,304	$	8,547	$	418,901

Lease Revenue

9 Months Ended

Sep. 30, 2023

Leases [Abstract]

Lease Revenue

Lease RevenueWe lease our multifamily properties and commercial properties under agreements that are classified as operating leases. Our multifamily property leases generally include minimum rents and charges for ancillary services. Our commercial property leases generally include minimum rents and recoveries for property taxes and common area maintenance. Minimum rental revenues are recognized on a straight-line basis over the terms of the related leases.

The following table summarizes the components of our rental revenue for the three and nine months ended September 30, 2023 and 2022:


	Three Months Ended September 30,				Nine Months Ended September 30,
	2023		2022		2023		2022
Fixed component	$	11,338	$	6,977	$	32,968	$	20,854
Variable component	500		593		1,268		1,456
	$	11,838	$	7,570	$	34,236	$	22,310

The following table summarizes the future rental payments that are payable to us from non-cancelable leases. The table excludes multifamily leases, which typically have a term of one-year or less:


2023	$	9,747
2024	10,823
2025	10,358
2026	10,056
2027	9,787
Thereafter	22,444
	$	73,215

Real Estate Activity

9 Months Ended

Sep. 30, 2023

Real Estate [Abstract]

Real Estate Activity

Below is a summary of our real estate as of September 30, 2023 and December 31, 2022:


	September 30, 2023		December 31, 2022
Land	$	108,993	$	108,933
Building and improvements	371,973		359,904
Tenant improvements	17,463		25,611
Construction in progress	68,512		65,427
Total cost	566,941		559,875
Less accumulated depreciation	(64,910)		(66,054)
Total real estate	$	502,031	$	493,821

Gain on sale or write-down of assets, net for the three and nine months ended September 30, 2023 and 2022 consists of the following:


	Three Months Ended September 30,				Nine Months Ended September 30,
	2023		2022		2023		2022
Land(1)	$	—	$	—	$	188	$	4,752
Multifamily Properties(2)	—		1,539		—		11,142
Commercial Properties(3)	—		—		—		890
Other	(32)		—		(32)		(204)
	$	(32)	$	1,539	$	156	$	16,580

(1)Includes the gain on the sale of lots related to our investment in Windmill Farms, Mercer Crossing and other land holdings.

Short-term Investments	9 Months Ended
Short-term Investments	Sep. 30, 2023
Investments, Debt and Equity Securities [Abstract]
Short-term Investments	Short-term InvestmentsWe have investments in variable denominated floating rate notes and short-term commercial paper with maturities of less than nine months. The average interest rate on the investments was 5.29% and 4.67% at September 30, 2023 and December 31, 2022, respectively.

Notes Receivable

9 Months Ended

Sep. 30, 2023

Receivables [Abstract]

Notes Receivable

The following table summarizes our notes receivable as of September 30, 2023 and December 31, 2022:


	Carrying value
Property/Borrower	September 30, 2023		December 31, 2022		Interest Rate		Maturity Date
ABC Land and Development, Inc.	$	4,408	$	4,408	9.50	%	6/30/26
ABC Paradise, LLC	1,210		1,210		9.50	%	6/30/26
Autumn Breeze(1)	2,157		2,326		5.00	%	7/1/25
Bellwether Ridge(1)	3,798		3,798		5.00	%	11/1/26
Dominion at Mercer Crossing(2)	6,354		—		9.25	%	6/7/28
Forest Pines(1)	6,472		6,472		5.00	%	5/1/24
Legacy Pleasant Grove	496		496		12.00	%	10/23/24
McKinney Ranch	3,926		3,926		6.00	%	9/15/24
One Realco Land Holding, Inc.	1,728		1,728		9.50	%	6/30/26
Parc at Ingleside(1)	3,759		3,759		5.00	%	11/1/26
Parc at Opelika Phase II(1)(3)	3,190		3,190		10.00	%	1/13/23
Parc at Windmill Farms(1)(3)	7,886		7,886		5.00	%	11/1/22
Phillips Foundation for Better Living, Inc.(4)	182		182		12.00	%	3/31/24
Plum Tree(1)	1,767		1,767		5.00	%	4/26/26
Polk County Land	3,000		3,000		9.50	%	6/30/26
Riverview on the Park Land, LLC	1,045		1,045		9.50	%	6/30/26
Spartan Land	5,907		5,907		12.00	%	1/16/25
Spyglass of Ennis(1)	5,179		5,258		5.00	%	11/1/24
Steeple Crest(1)	6,498		6,498		5.00	%	8/1/26
Unified Housing Foundation(4)(5)	20,325		20,325		12.00	%	6/30/28
Unified Housing Foundation(4)(5)	10,096		10,096		12.00	%	3/31/24
Unified Housing Foundation(4)(5)	6,990		6,990		12.00	%	3/31/25
Unified Housing Foundation(4)(5)	3,615		3,615		12.00	%	5/31/28
Unified Housing Foundation(4)(5)	27,477		27,477		12.00	%	12/31/32
Unified Housing Foundation(4)(5)	6,521		6,521		12.00	%	3/31/24
Unified Housing Foundation(4)(5)	1,549		1,549		12.00	%	4/30/24
Unified Housing Foundation(4)(5)	180		180		12.00	%	6/30/24
	$	145,715	$	139,609

(1)The note is convertible, at our option, into a 100% ownership interest in the underlying development property, and is collateralized by the underlying development property.

(2)The note has an interest rate of prime plus 1.00%.

(3)We are working with the borrower to extend the maturity and/or exercise our conversion option.

(4) The borrower is deemed to be a related party due to our significant investment in the performance of the collateral secured by the notes receivable.

Investment in Unconsolidated Joint Ventures

9 Months Ended

Sep. 30, 2023

Equity Method Investments and Joint Ventures [Abstract]

Investment in Unconsolidated Joint Ventures

Victory Abode Apartments, LLC

On March 23, 2023, we received $17,976 from VAA, which represented the remaining distribution of the proceeds from the sale of the VAA Sale Portfolio.

We used our share of the proceeds from the sale of the VAA Sale Portfolio to invest in short-term investments and real estate, pay down our debt and for general corporate purposes.

Gruppa Florentina, LLC

The following is a summary of our investment in unconsolidated joint ventures:


	September 30, 2023		December 31, 2022
Assets (1)

Real estate	$	13,886	$	13,140
Cash, cash equivalents and restricted cash	20,449		66,364
Other assets	56,381		35,938
Total assets	$	90,716	$	115,442
Liabilities and Partners' Capital (1)
Liabilities from discontinued operations	$	—	$	8,824
Mortgage notes payable	13,444		16,267

Other liabilities	28,562		13,412
Our share of partners' capital	10,256		27,973
Outside partner's capital	38,454		48,966
Total liabilities and partners' capital	$	90,716	$	115,442
Investment in unconsolidated joint ventures
Our share of partners' capital	$	10,256	$	27,973

Basis adjustment (2)	—		253
Total investment in unconsolidated joint ventures	$	10,256	$	28,226

The following is a summary of income from our investments in unconsolidated joint ventures:


	Three Months Ended September 30,				Nine Months Ended September 30,
	2023		2022		2023		2022
Revenue (1)
Rental revenue	$	—	$	3,342	$	—	$	11,305
Other revenue	22,268		15,417		49,532		41,119
Total revenue	22,268		18,759		49,532		52,424
Expenses (2)
Operating expenses	16,581		17,335		38,803		53,866
Depreciation and amortization	534		1,177		1,177		3,499

Interest	76		5,368		123		17,396
Total expenses	17,191		23,880		40,103		74,761
Income (loss) from continuing operations	5,077		(5,121)		9,429		(22,337)
Income from discontinued operations (3)	(78)		704,700		743		712,648
Net income	$	4,999	$	699,579	$	10,172	$	690,311
Equity in income from unconsolidated joint ventures	$	234	$	464,143	$	2,946	$	471,385

(1) These amounts include revenue of VAA of $3,591 and $11,932 during the three and nine months ended September 30, 2022.

(2) These amounts include expenses of VAA of $9,003 and $35,668 during the three and nine months ended September 30, 2022, respectively.

(3) These amounts represent the net (expense) income of the VAA Sale Portfolio.

Acquisitions

9 Months Ended

Sep. 30, 2023

Business Combination and Asset Acquisition [Abstract]

Acquisitions

The VAA Holdback Portfolio consisted of the following properties:

Property

Location

Units

Blue Lake Villas

Waxahachie, TX

186

Blue Lake Villas Phase II

Waxahachie, TX

Northside on Travis

Sherman, TX

200

Parc at Denham Springs

Denham Spring, LA

224

Residences at Holland Lake

Weatherford, TX

208

Villas of Park West I

Pueblo, CO

148

Villas of Park West II

Pueblo, CO

112

1,148

The following is a summary of the preliminary allocation of the fair value of the VAA Holdback Portfolio:


Real estate	$	219,500
Other assets	4,843
Total assets acquired	224,343
Mortgage notes payable	70,330
Accounts payable and other liabilities	1,624
Accrued interest	190
Total liabilities assumed	72,144
Fair value of acquired net assets (100% ownership)	$	152,199

We have determined that the purchase price represented the fair value of the additional ownership interest in the VAA Holdback Portfolio that was acquired.


Fair value of existing ownership interest (at 50% ownership)	$	219,500
Carrying value of investment	146,313
Gain on remeasurement of assets	$	73,187

From November 1, 2022, we have included the VAA Holdback Portfolio in our consolidated financial statements.

Mortgages and Other Notes Payable

9 Months Ended

Sep. 30, 2023

Debt Disclosure [Abstract]

Mortgages and Other Notes Payable

The following table summarizes our mortgages and other notes payable as of September 30, 2023 and December 31, 2022:


	Carrying Value				Interest Rate		Maturity Date
Property/ Entity	September 30, 2023		December 31, 2022
770 South Post Oak	$	11,248	$	11,406	4.40	%	6/1/2025
Athens(1)	—		1,155		4.00	%	8/28/2023
Blue Lake Villas(2)	9,546		9,673		3.15	%	11/1/2055
Blue Lake Villas Phase II(2)	3,368		3,424		2.85	%	6/1/2052
Chelsea	7,749		7,875		3.40	%	12/1/2050
EQK Portage	3,350		3,350		10.00	%	11/13/2024
Forest Grove	7,023		7,128		3.75	%	5/5/2024
Landing Bayou	13,971		14,161		3.50	%	9/1/2053
Legacy at Pleasant Grove	12,798		13,039		3.60	%	4/1/2048
New Concept Energy	3,542		3,542		6.00	%	9/30/2025
Northside on Travis(2)	11,460		11,656		2.50	%	2/1/2053
Parc at Denham Springs(2)	16,484		16,737		3.75	%	4/1/2051
Parc at Denham Springs Phase II	15,654		15,789		4.05	%	2/1/2060
RCM HC Enterprises	5,086		5,086		5.00	%	12/31/2024
Residences at Holland Lake(3)	10,474		10,622		3.60	%	3/1/2053
Villas at Bon Secour	19,119		19,410		3.08	%	9/1/2031
Villas of Park West I(2)	9,230		9,373		3.04	%	3/1/2053
Villas of Park West II(2)	8,377		8,504		3.18	%	3/1/2053
Vista Ridge	9,553		9,674		4.00	%	8/1/2053
Windmill Farms(4)	4,396		6,400		7.75	%	2/28/2024
	$	182,428	$	188,004

(1) On August 28, 2023, we paid off the loan.

(3) On October 16, 2023, we received approval from the lender to assume the loan on the property that we acquired from our joint venture (See Note 11 - Acquisitions).

(4) On February 28, 2023, we extended the maturity of the loan to February 28, 2024 and an interest rate of 7.75%.

All of the above mortgages and other notes payable are collateralized by the underlying property. In addition, we have guaranteed the loans on Forest Grove, Villas at Bon Secour and Windmill Farms.

Bonds Payable

9 Months Ended

Sep. 30, 2023

Debt Disclosure [Abstract]

Bonds Payable

The outstanding balance of our Bonds at December 31, 2022 was as follows:


Bond Issuance	Amount		Interest Rate		Maturity
Series A Bonds(1)	$	28,971	7.30	%	7/31/23
Series B Bonds(1)	35,806		6.80	%	7/31/25
Series C Bonds(2)	66,546		4.65	%	1/31/23
	131,323
Less unamortized deferred issuance costs	(2,105)
	$	129,218

(1) The bonds were collateralized by the assets of SPC.

(2) The bonds were collateralized by a trust deed on Browning Place, a 625,297 square foot office building in Dallas, Texas.

Related Party Transactions	9 Months Ended
Related Party Transactions	Sep. 30, 2023
Related Party Transactions [Abstract]
Related Party Transactions	Related Party Transactions We engage in certain services and business transactions with related parties, including but not limited to, the rent of office space, leasing services, asset management, administrative services, and the acquisition and dispositions of real estate. 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. Pillar and Regis are wholly owned by a subsidiary of May Realty Holdings, Inc., which owns approximately 90.8% of the Company. Pillar is compensated for advisory services in accordance with an agreement and development services in accordance with a project specific agreement. Regis receives property management fees and leasing commissions in accordance with the terms of its property-level management agreement. In addition, Regis is entitled to receive real estate brokerage commissions in accordance with the terms of a non-exclusive brokerage agreement. Rental income includes $232 and $223 for the three months ended September 30, 2023 and 2022, respectively, and $731 and $702 for the nine months ended September 30, 2023 and 2022, respectively, for office space leased to Pillar and Regis. Property operating expense includes $97 and $110 for the three months ended September 30, 2023 and 2022, respectively, and $296 and $337 for the nine months ended September 30, 2023 and 2022, respectively, for management fees on commercial properties payable to Regis. General and administrative expense includes $856 and $1,288 for the three months ended September 30, 2023 and 2022, respectively, and $3,095 and $3,368 for the nine months ended September 30, 2023 and 2022, respectively, for employee compensation and other reimbursable costs payable to Pillar. Advisory fees paid to Pillar were $2,295 and $1,571 for the three months ended September 30, 2023 and 2022, respectively, and $6,883 and $7,614 for the nine months ended September 30, 2023 and 2022, respectively. Notes receivable include amounts held by UHF (See Note 9 – Notes Receivable). UHF is deemed to be a related party due to our significant investment in the performance of the collateral secured by the notes receivable. In addition, we have receivables from Pillar and other related parties. Related party receivables, net represents the net amount outstanding from Pillar for loans and unreimbursed fees, expenses and costs as provided above. Interest income on these notes and related party receivables was $4,854 and $4,140 for the three months ended September 30, 2023 and 2022, respectively, and $14,165 and $11,134 for the nine months ended September 30, 2023 and 2022, respectively.

Noncontrolling Interests	9 Months Ended
Noncontrolling Interests	Sep. 30, 2023
Noncontrolling Interest [Abstract]
Noncontrolling Interests	Noncontrolling InterestsThe noncontrolling interest represents the third party ownership interest in TCI and Income Opportunity Realty Investors, Inc. ("IOR"). We owned 78.4% of TCI, which in turn owned 81.1% of IOR during the three and nine months ended September 30, 2023 and 2022.

Deferred Income	9 Months Ended
Deferred Income	Sep. 30, 2023
Revenue from Contract with Customer [Abstract]
Deferred Income	Deferred Income In previous years, we sold properties to related parties at a gain and therefore the sales criteria for the full accrual method was not met, and as such we deferred the gain recognition and accounted for the sales by applying the finance, deposit, installment or cost recovery methods, as appropriate. The gain on these transactions is deferred until the properties are sold to a non-related third party. As of September 30, 2023 and December 31, 2022, we had deferred gain of $9,791.

Income Taxes

9 Months Ended

Sep. 30, 2023

Income Tax Disclosure [Abstract]

Income Taxes


	Three Months Ended September 30,				Nine Months Ended September 30,
	2023		2022		2023		2022
Current	$	5,227	$	81,548	$	6,516	$	81,616
Deferred	(4,100)		—		(4,100)		—
	$	1,127	$	81,548	$	2,416	$	81,616

Commitments and Contingencies	9 Months Ended
Commitments and Contingencies	Sep. 30, 2023
Commitments and Contingencies Disclosure [Abstract]
Commitments and Contingencies	Commitments and ContingenciesWe believe that we will generate excess cash from property operations in the next twelve months; such excess, however, might not be sufficient to discharge all of our obligations as they become due. We intend to sell income-producing assets, refinance real estate and obtain additional borrowings primarily secured by real estate to meet our liquidity requirements.We were a defendant in litigation with David Clapper and related entities (collectively, "Clapper”) regarding a multifamily property transaction that occurred in 1988. The litigation led to a substantial judgment against our affiliate and Clapper subsequently sued numerous other entities including us in Federal Court to collect that judgment. The case was tried by a jury in May 2021. The jury found the defendants owed Clapper nothing and the Court issued a take nothing judgment. Clapper subsequently filed an appeal to the US Fifth Circuit Court of Appeals, which has the case under review.

Subsequent Events	9 Months Ended
Subsequent Events	Sep. 30, 2023
Subsequent Events [Abstract]
Subsequent Events	Subsequent Events The date to which events occurring after September 30, 2023, the date of the most recent balance sheet, have been evaluated for possible adjustment to the consolidated financial statements or disclosure is November 9, 2023, which is the date on which the consolidated financial statements were available to be issued.On November 6, 2023, we entered into a development agreement with Pillar to build a 216 unit multifamily property in McKinney, Texas that is expected to be completed in 2025 for a total cost of approximately $51.3 million. The cost of construction will be funded in part by a $25.4 million construction loan. The development agreement provides for a $1.6 million fee that will be paid to Pillar over the construction period.

Summary of Significant Accounting Policies (Policies)	9 Months Ended
Summary of Significant Accounting Policies (Policies)	Sep. 30, 2023
Accounting Policies [Abstract]
Basis of Presentation	Basis of Presentation The accompanying unaudited consolidated financial statements have been prepared in accordance with the instructions to Form 10-Q and Article 10 of Regulation S-X. Certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) have been condensed or omitted in accordance with such rules and regulations, although management believes the disclosures are adequate to prevent the information presented from being misleading. In the opinion of management, all adjustments (consisting of normal recurring matters) considered necessary for a fair presentation have been included. Certain prior year amounts have been reclassified to conform with the current year presentation. These reclassifications had no effect on the reported results of operation. An adjustment has been made to reclassify $2,447 and $5,746 interest expense to related parties for the three and nine months ended September 30, 2022, respectively, from interest expense to interest income on the consolidated statements of operations. The consolidated balance sheet at December 31, 2022 was derived from the audited consolidated financial statements at that date, but does not include all of the information and disclosures required by GAAP for complete financial statements. For further information, refer to the consolidated financial statements and notes thereto included in our Annual Report on Form 10-K for the year ended December 31, 2022. Certain 2022 consolidated financial statement amounts have been reclassified to conform to the current presentation. We consolidate entities in which we are considered to be the primary beneficiary of a variable interest entity (“VIE”) or have a majority of the voting interest of the entity. We have determined that we are a primary beneficiary of the VIE when we have (i) the power to direct the activities of a VIE that most significantly impacts its economic performance, and (ii) the obligations to absorb losses or the right to receive benefits that could potentially be significant to the VIE. In determining whether we are the primary beneficiary, we consider qualitative and quantitative factors, including ownership interest, management representation, ability to control decision and other contractual rights. We account for entities in which we have less than a controlling financial interest or entities where we are not deemed to be the primary beneficiary under the equity method of accounting. Accordingly, we include our share of the net earnings or losses of these entities in our results of operations.

Earnings per Share (Tables)

9 Months Ended

Sep. 30, 2023

Earnings Per Share [Abstract]

Schedule of Earnings Per Share

The following table details our basic and diluted earnings per common share calculation:


	Three Months Ended September 30,				Nine Months Ended September 30,
	2023		2022		2023		2022
Net income	$	4,025	$	384,304	$	8,547	$	418,901
Net income attributable to noncontrolling interests	(1,037)		(82,015)		(2,456)		(88,986)
Net income attributable to common shares	$	2,988	$	302,289	$	6,091	$	329,915

Weighted-average common shares outstanding — basic and diluted	16,152,043		16,152,043		16,152,043		16,152,043

EPS - attributable to common shares — basic and diluted	$	0.18	$	18.72	$	0.38	$	20.43

Supplemental Cash Flow Information (Tables)

9 Months Ended

Sep. 30, 2023

Supplemental Cash Flow Elements [Abstract]

Schedule of Interest Paid and Other Supplemental Cash Flow Information

The following presents the schedule of interest paid and other supplemental cash flow information:


	Nine Months Ended September 30,
	2023		2022
Cash paid for interest	$	9,432	$	22,211
Cash - beginning of period
Cash and cash equivalents	$	113,445	$	50,748
Restricted cash	108,883		21,986
	$	222,328	$	72,734
Cash - end of period
Cash and cash equivalents	$	47,203	$	131,236
Restricted cash	36,145		17,950
	$	83,348	$	149,186




Payments on mortgages, other notes and bonds payable
Payments on mortgages and other notes payable	$	5,633	$	26,411
Payments on bonds payable	131,176		43,759
	$	136,809	$	70,170

The following is a schedule of noncash investing and financing activities:


	Nine Months Ended September 30,
	2023		2022


Property acquired in exchange for reduction in related party receivable	$	6,064	$	—

Distribution from joint venture applied to Earn Out Obligation	$	—	$	34,159

Operating Segments (Tables)

9 Months Ended

Sep. 30, 2023

Segment Reporting [Abstract]

Schedule of Profit by Reportable segment

The following table presents our reportable segments for the three and nine months ended September 30, 2023 and 2022:


	Three Months Ended September 30,				Nine Months Ended September 30,
	2023		2022		2023		2022
Multifamily Segment
Revenues	$	7,899	$	2,850	$	22,930	$	9,024
Operating expenses	(4,811)		(1,966)		(12,997)		(5,395)
Profit from segment	3,088		884		9,933		3,629
Commercial Segment
Revenues	3,939		4,720		11,306		13,286
Operating expenses	(2,632)		(2,735)		(7,583)		(7,146)
Profit from segment	1,307		1,985		3,723		6,140
Total profit from segments	$	4,395	$	2,869	$	13,656	$	9,769

Schedule of Reconciliation of Revenue from Segments to Consolidated

The table below reflects the reconciliation of total profit from segments to net income for the three and nine months ended September 30, 2023 and 2022:


	Three Months Ended September 30,				Nine Months Ended September 30,
	2023		2022		2023		2022
Total profit from segments	$	4,395	$	2,869	$	13,656	$	9,769
Other non-segment items of income (expense)
Depreciation and amortization	(3,313)		(2,193)		(9,615)		(6,840)
General and administrative	(1,579)		(3,042)		(8,424)		(7,956)
Advisory fee to related party	(2,295)		(1,571)		(6,883)		(7,614)
Other income	688		749		2,217		1,925
Interest income	9,008		7,035		25,201		19,937
Interest expense	(1,954)		(4,044)		(7,574)		(13,301)
Gain on foreign currency transaction	—		1,533		993		19,437
Loss on early extinguishment of debt	—		(1,166)		(1,710)		(2,805)
Income from unconsolidated joint ventures	234		464,143		2,946		471,385
(Loss) gain on sales or write-down of assets	(32)		1,539		156		16,580
Income tax provision	(1,127)		(81,548)		(2,416)		(81,616)
Net income	$	4,025	$	384,304	$	8,547	$	418,901

Lease Revenue (Tables)

9 Months Ended

Sep. 30, 2023

Leases [Abstract]

Schedule of Rental Revenue

The following table summarizes the components of our rental revenue for the three and nine months ended September 30, 2023 and 2022:


	Three Months Ended September 30,				Nine Months Ended September 30,
	2023		2022		2023		2022
Fixed component	$	11,338	$	6,977	$	32,968	$	20,854
Variable component	500		593		1,268		1,456
	$	11,838	$	7,570	$	34,236	$	22,310

Schedule of Future Rental Payments

The following table summarizes the future rental payments that are payable to us from non-cancelable leases. The table excludes multifamily leases, which typically have a term of one-year or less:


2023	$	9,747
2024	10,823
2025	10,358
2026	10,056
2027	9,787
Thereafter	22,444
	$	73,215

Real Estate Activity (Tables)

9 Months Ended

Sep. 30, 2023

Real Estate [Abstract]

Schedule of the Real Estate Owned

Below is a summary of our real estate as of September 30, 2023 and December 31, 2022:


	September 30, 2023		December 31, 2022
Land	$	108,993	$	108,933
Building and improvements	371,973		359,904
Tenant improvements	17,463		25,611
Construction in progress	68,512		65,427
Total cost	566,941		559,875
Less accumulated depreciation	(64,910)		(66,054)
Total real estate	$	502,031	$	493,821

Schedule of Gain Loss on Sale or Write-down of Assets

Gain on sale or write-down of assets, net for the three and nine months ended September 30, 2023 and 2022 consists of the following:


	Three Months Ended September 30,				Nine Months Ended September 30,
	2023		2022		2023		2022
Land(1)	$	—	$	—	$	188	$	4,752
Multifamily Properties(2)	—		1,539		—		11,142
Commercial Properties(3)	—		—		—		890
Other	(32)		—		(32)		(204)
	$	(32)	$	1,539	$	156	$	16,580

(1)Includes the gain on the sale of lots related to our investment in Windmill Farms, Mercer Crossing and other land holdings.

Notes Receivable (Tables)

9 Months Ended

Sep. 30, 2023

Receivables [Abstract]

Schedule of Notes Receivable

The following table summarizes our notes receivable as of September 30, 2023 and December 31, 2022:


	Carrying value
Property/Borrower	September 30, 2023		December 31, 2022		Interest Rate		Maturity Date
ABC Land and Development, Inc.	$	4,408	$	4,408	9.50	%	6/30/26
ABC Paradise, LLC	1,210		1,210		9.50	%	6/30/26
Autumn Breeze(1)	2,157		2,326		5.00	%	7/1/25
Bellwether Ridge(1)	3,798		3,798		5.00	%	11/1/26
Dominion at Mercer Crossing(2)	6,354		—		9.25	%	6/7/28
Forest Pines(1)	6,472		6,472		5.00	%	5/1/24
Legacy Pleasant Grove	496		496		12.00	%	10/23/24
McKinney Ranch	3,926		3,926		6.00	%	9/15/24
One Realco Land Holding, Inc.	1,728		1,728		9.50	%	6/30/26
Parc at Ingleside(1)	3,759		3,759		5.00	%	11/1/26
Parc at Opelika Phase II(1)(3)	3,190		3,190		10.00	%	1/13/23
Parc at Windmill Farms(1)(3)	7,886		7,886		5.00	%	11/1/22
Phillips Foundation for Better Living, Inc.(4)	182		182		12.00	%	3/31/24
Plum Tree(1)	1,767		1,767		5.00	%	4/26/26
Polk County Land	3,000		3,000		9.50	%	6/30/26
Riverview on the Park Land, LLC	1,045		1,045		9.50	%	6/30/26
Spartan Land	5,907		5,907		12.00	%	1/16/25
Spyglass of Ennis(1)	5,179		5,258		5.00	%	11/1/24
Steeple Crest(1)	6,498		6,498		5.00	%	8/1/26
Unified Housing Foundation(4)(5)	20,325		20,325		12.00	%	6/30/28
Unified Housing Foundation(4)(5)	10,096		10,096		12.00	%	3/31/24
Unified Housing Foundation(4)(5)	6,990		6,990		12.00	%	3/31/25
Unified Housing Foundation(4)(5)	3,615		3,615		12.00	%	5/31/28
Unified Housing Foundation(4)(5)	27,477		27,477		12.00	%	12/31/32
Unified Housing Foundation(4)(5)	6,521		6,521		12.00	%	3/31/24
Unified Housing Foundation(4)(5)	1,549		1,549		12.00	%	4/30/24
Unified Housing Foundation(4)(5)	180		180		12.00	%	6/30/24
	$	145,715	$	139,609

(1)The note is convertible, at our option, into a 100% ownership interest in the underlying development property, and is collateralized by the underlying development property.

(2)The note has an interest rate of prime plus 1.00%.

(3)We are working with the borrower to extend the maturity and/or exercise our conversion option.

(4) The borrower is deemed to be a related party due to our significant investment in the performance of the collateral secured by the notes receivable.

Investment in Unconsolidated Joint Ventures (Tables)

9 Months Ended

Sep. 30, 2023

Equity Method Investments and Joint Ventures [Abstract]

Schedule of Investments in Unconsolidated Joint Ventures

The following is a summary of our investment in unconsolidated joint ventures:


	September 30, 2023		December 31, 2022
Assets (1)

Real estate	$	13,886	$	13,140
Cash, cash equivalents and restricted cash	20,449		66,364
Other assets	56,381		35,938
Total assets	$	90,716	$	115,442
Liabilities and Partners' Capital (1)
Liabilities from discontinued operations	$	—	$	8,824
Mortgage notes payable	13,444		16,267

Other liabilities	28,562		13,412
Our share of partners' capital	10,256		27,973
Outside partner's capital	38,454		48,966
Total liabilities and partners' capital	$	90,716	$	115,442
Investment in unconsolidated joint ventures
Our share of partners' capital	$	10,256	$	27,973

Basis adjustment (2)	—		253
Total investment in unconsolidated joint ventures	$	10,256	$	28,226

The following is a summary of income from our investments in unconsolidated joint ventures:


	Three Months Ended September 30,				Nine Months Ended September 30,
	2023		2022		2023		2022
Revenue (1)
Rental revenue	$	—	$	3,342	$	—	$	11,305
Other revenue	22,268		15,417		49,532		41,119
Total revenue	22,268		18,759		49,532		52,424
Expenses (2)
Operating expenses	16,581		17,335		38,803		53,866
Depreciation and amortization	534		1,177		1,177		3,499

Interest	76		5,368		123		17,396
Total expenses	17,191		23,880		40,103		74,761
Income (loss) from continuing operations	5,077		(5,121)		9,429		(22,337)
Income from discontinued operations (3)	(78)		704,700		743		712,648
Net income	$	4,999	$	699,579	$	10,172	$	690,311
Equity in income from unconsolidated joint ventures	$	234	$	464,143	$	2,946	$	471,385

(1) These amounts include revenue of VAA of $3,591 and $11,932 during the three and nine months ended September 30, 2022.

(2) These amounts include expenses of VAA of $9,003 and $35,668 during the three and nine months ended September 30, 2022, respectively.

(3) These amounts represent the net (expense) income of the VAA Sale Portfolio.

Acquisitions (Tables)

9 Months Ended

Sep. 30, 2023

Business Combination and Asset Acquisition [Abstract]

Schedule of Acquisitions

The VAA Holdback Portfolio consisted of the following properties:

Property

Location

Units

Blue Lake Villas

Waxahachie, TX

186

Blue Lake Villas Phase II

Waxahachie, TX

Northside on Travis

Sherman, TX

200

Parc at Denham Springs

Denham Spring, LA

224

Residences at Holland Lake

Weatherford, TX

208

Villas of Park West I

Pueblo, CO

148

Villas of Park West II

Pueblo, CO

112

1,148

We have determined that the purchase price represented the fair value of the additional ownership interest in the VAA Holdback Portfolio that was acquired.


Fair value of existing ownership interest (at 50% ownership)	$	219,500
Carrying value of investment	146,313
Gain on remeasurement of assets	$	73,187

Schedule of Preliminary Allocation of Fair Value in Acquisition

The following is a summary of the preliminary allocation of the fair value of the VAA Holdback Portfolio:


Real estate	$	219,500
Other assets	4,843
Total assets acquired	224,343
Mortgage notes payable	70,330
Accounts payable and other liabilities	1,624
Accrued interest	190
Total liabilities assumed	72,144
Fair value of acquired net assets (100% ownership)	$	152,199

Mortgages and Other Notes Payable (Tables)

9 Months Ended

Sep. 30, 2023

Debt Disclosure [Abstract]

Schedule of Debt

The following table summarizes our mortgages and other notes payable as of September 30, 2023 and December 31, 2022:


	Carrying Value				Interest Rate		Maturity Date
Property/ Entity	September 30, 2023		December 31, 2022
770 South Post Oak	$	11,248	$	11,406	4.40	%	6/1/2025
Athens(1)	—		1,155		4.00	%	8/28/2023
Blue Lake Villas(2)	9,546		9,673		3.15	%	11/1/2055
Blue Lake Villas Phase II(2)	3,368		3,424		2.85	%	6/1/2052
Chelsea	7,749		7,875		3.40	%	12/1/2050
EQK Portage	3,350		3,350		10.00	%	11/13/2024
Forest Grove	7,023		7,128		3.75	%	5/5/2024
Landing Bayou	13,971		14,161		3.50	%	9/1/2053
Legacy at Pleasant Grove	12,798		13,039		3.60	%	4/1/2048
New Concept Energy	3,542		3,542		6.00	%	9/30/2025
Northside on Travis(2)	11,460		11,656		2.50	%	2/1/2053
Parc at Denham Springs(2)	16,484		16,737		3.75	%	4/1/2051
Parc at Denham Springs Phase II	15,654		15,789		4.05	%	2/1/2060
RCM HC Enterprises	5,086		5,086		5.00	%	12/31/2024
Residences at Holland Lake(3)	10,474		10,622		3.60	%	3/1/2053
Villas at Bon Secour	19,119		19,410		3.08	%	9/1/2031
Villas of Park West I(2)	9,230		9,373		3.04	%	3/1/2053
Villas of Park West II(2)	8,377		8,504		3.18	%	3/1/2053
Vista Ridge	9,553		9,674		4.00	%	8/1/2053
Windmill Farms(4)	4,396		6,400		7.75	%	2/28/2024
	$	182,428	$	188,004

(1) On August 28, 2023, we paid off the loan.

(3) On October 16, 2023, we received approval from the lender to assume the loan on the property that we acquired from our joint venture (See Note 11 - Acquisitions).

(4) On February 28, 2023, we extended the maturity of the loan to February 28, 2024 and an interest rate of 7.75%.

Bonds Payable (Tables)

9 Months Ended

Sep. 30, 2023

Debt Disclosure [Abstract]

Schedule of Bonds Payable

The outstanding balance of our Bonds at December 31, 2022 was as follows:


Bond Issuance	Amount		Interest Rate		Maturity
Series A Bonds(1)	$	28,971	7.30	%	7/31/23
Series B Bonds(1)	35,806		6.80	%	7/31/25
Series C Bonds(2)	66,546		4.65	%	1/31/23
	131,323
Less unamortized deferred issuance costs	(2,105)
	$	129,218

(1) The bonds were collateralized by the assets of SPC.

(2) The bonds were collateralized by a trust deed on Browning Place, a 625,297 square foot office building in Dallas, Texas.

Income Taxes (Tables)

9 Months Ended

Sep. 30, 2023

Income Tax Disclosure [Abstract]

Schedule of Components of Income Tax Provisions

The following table summarizes our income tax provision:


	Three Months Ended September 30,				Nine Months Ended September 30,
	2023		2022		2023		2022
Current	$	5,227	$	81,548	$	6,516	$	81,616
Deferred	(4,100)		—		(4,100)		—
	$	1,127	$	81,548	$	2,416	$	81,616

Organization (Details)	Sep. 30, 2023 ft² a property apartment
Office Building
Real Estate Properties [Line Items]
Number of real estate properties	4
Area of property (sq. ft.) \| ft²	1,056,793
Apartment Building
Real Estate Properties [Line Items]
Number of real estate properties	14
Number of units in real estate property \| apartment	2,328
Land and Land Improvements
Real Estate Properties [Line Items]
Acres of developed and undeveloped land \| a	1,858
Regis Realty Prime, LLC \| Commercial Properties
Real Estate Properties [Line Items]
Number of real estate properties	3
ARL \| Related Party Entities \| Majority Shareholder
Real Estate Properties [Line Items]
Ownership interest	90.00%
TCI
Real Estate Properties [Line Items]
Ownership interest	78.40%

Summary of Significant Accounting Policies (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2023	Sep. 30, 2022	Sep. 30, 2023	Sep. 30, 2022
Related Party Transaction [Line Items]
Interest expense	$ 1,954	$ 4,044	$ 7,574	$ 13,301
Related Party
Related Party Transaction [Line Items]
Interest expense		$ 2,447		$ 5,746

Earnings per Share (Details) - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2023	Sep. 30, 2022	Sep. 30, 2023	Sep. 30, 2022
Earnings Per Share [Abstract]
Net income	$ 4,025	$ 384,304	$ 8,547	$ 418,901
Net income attributable to noncontrolling interests	(1,037)	(82,015)	(2,456)	(88,986)
Net income attributable to common shares	$ 2,988	$ 302,289	$ 6,091	$ 329,915
Weighted-average common shares outstanding - basic (in shares)	16,152,043	16,152,043	16,152,043	16,152,043
Weighted-average common shares outstanding - diluted (in shares)	16,152,043	16,152,043	16,152,043	16,152,043
EPS - attributable to common shares- basic (in dollars per share)	$ 0.18	$ 18.72	$ 0.38	$ 20.43
EPS - attributable to common shares- diluted (in dollars per share)	$ 0.18	$ 18.72	$ 0.38	$ 20.43

Supplemental Cash Flows Information - Noncash Investing and Financing Activities (Details) - USD ($) $ in Thousands	9 Months Ended
	Sep. 30, 2023	Sep. 30, 2022
Supplemental Cash Flow Elements [Roll Forward]
Cash paid for interest	$ 9,432	$ 22,211
Cash and cash equivalents, beginning balance	113,445	50,748
Restricted cash, beginning balance	108,883	21,986
Cash, cash equivalents and restricted cash, beginning of period	222,328	72,734
Cash and cash equivalents, ending balance	47,203	131,236
Restricted cash, ending balance	36,145	17,950
Cash, cash equivalents and restricted cash, end of period	83,348	149,186
Payments on mortgages, other notes and bonds payable
Payments on mortgages and other notes payable	5,633	26,411
Payments on bonds payable	131,176	43,759
Payments on mortgages, other notes and bonds payable	$ 136,809	$ 70,170

Supplemental Cash Flows Information - Schedule of Noncash Investing and Financing Activities (Details) - USD ($) $ in Thousands	9 Months Ended
	Sep. 30, 2023	Sep. 30, 2022
Related Party Transaction [Line Items]
Distribution from joint venture applied to Earn Out Obligation	$ 0	$ 34,159
Related Party
Related Party Transaction [Line Items]
Property acquired in exchange for reduction in related party receivable	$ 6,064	$ 0

Operating Segments - Narrative (Details)	9 Months Ended
Operating Segments - Narrative (Details)	Sep. 30, 2023 segment
Segment Reporting [Abstract]
Number of reportable segments	2

Operating Segments - Profit by Reportable Segment (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2023	Sep. 30, 2022	Sep. 30, 2023	Sep. 30, 2022
Segment Reporting Information [Line Items]
Revenues	$ 12,526	$ 8,319	$ 36,453	$ 24,235
Total profit from segments	(2,104)	(3,188)	(9,049)	(10,716)
Operating Segments
Segment Reporting Information [Line Items]
Total profit from segments	4,395	2,869	13,656	9,769
Operating Segments \| Multifamily Segment
Segment Reporting Information [Line Items]
Revenues	7,899	2,850	22,930	9,024
Operating expenses	(4,811)	(1,966)	(12,997)	(5,395)
Profit from segment	3,088	884	9,933	3,629
Operating Segments \| Commercial Segment
Segment Reporting Information [Line Items]
Revenues	3,939	4,720	11,306	13,286
Operating expenses	(2,632)	(2,735)	(7,583)	(7,146)
Profit from segment	$ 1,307	$ 1,985	$ 3,723	$ 6,140

Operating Segments - Profit by Reportable Segment to Net Income (Loss) (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2023	Sep. 30, 2022	Sep. 30, 2023	Sep. 30, 2022
Segment Reporting Information [Line Items]
Total profit from segments	$ (2,104)	$ (3,188)	$ (9,049)	$ (10,716)
Depreciation and amortization	(3,313)	(2,193)	(9,615)	(6,840)
General and administrative	(1,579)	(3,042)	(8,424)	(7,956)
Advisory fee to related party	(2,295)	(1,571)	(6,883)	(7,614)
Other income	688	749	2,217	1,925
Interest income	9,008	7,035	25,201	19,937
Interest expense	(1,954)	(4,044)	(7,574)	(13,301)
Gain on foreign currency transaction	0	1,533	993	19,437
Loss on early extinguishment of debt	0	(1,166)	(1,710)	(2,805)
Income from unconsolidated joint ventures	234	464,143	2,946	471,385
(Loss) gain on sales or write-down of assets	(32)	1,539	156	16,580
Income tax provision	(1,127)	(81,548)	(2,416)	(81,616)
Net income	4,025	384,304	8,547	418,901
Operating Segments
Segment Reporting Information [Line Items]
Total profit from segments	4,395	2,869	13,656	9,769
Other non-segment items of income (expense)
Segment Reporting Information [Line Items]
Depreciation and amortization	(3,313)	(2,193)	(9,615)	(6,840)
General and administrative	(1,579)	(3,042)	(8,424)	(7,956)
Advisory fee to related party	(2,295)	(1,571)	(6,883)	(7,614)
Other income	688	749	2,217	1,925
Interest income	9,008	7,035	25,201	19,937
Interest expense	(1,954)	(4,044)	(7,574)	(13,301)
Gain on foreign currency transaction	0	1,533	993	19,437
Loss on early extinguishment of debt	0	(1,166)	(1,710)	(2,805)
Income from unconsolidated joint ventures	234	464,143	2,946	471,385
(Loss) gain on sales or write-down of assets	(32)	1,539	156	16,580
Income tax provision	(1,127)	(81,548)	(2,416)	(81,616)
Net income	$ 4,025	$ 384,304	$ 8,547	$ 418,901

Lease Revenue - Schedule of Rental Revenue (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2023	Sep. 30, 2022	Sep. 30, 2023	Sep. 30, 2022
Leases [Abstract]
Fixed component	$ 11,338	$ 6,977	$ 32,968	$ 20,854
Variable component	500	593	1,268	1,456
Total rental revenue	$ 11,838	$ 7,570	$ 34,236	$ 22,310

Lease Revenue - Schedule of Future Rental Payments (Details) $ in Thousands	Sep. 30, 2023 USD ($)
Leases [Abstract]
2023	$ 9,747
2024	10,823
2025	10,358
2026	10,056
2027	9,787
Thereafter	22,444
Total	$ 73,215

Real Estate Activity - Real Estate Investment Components (Details) - USD ($) $ in Thousands	Sep. 30, 2023	Dec. 31, 2022
Real Estate [Abstract]
Land	$ 108,993	$ 108,933
Building and improvements	371,973	359,904
Tenant improvements	17,463	25,611
Construction in progress	68,512	65,427
Total cost	566,941	559,875
Less accumulated depreciation	(64,910)	(66,054)
Total real estate	$ 502,031	$ 493,821

Real Estate Activity - Narrative (Details) - Lake Wales $ in Thousands		9 Months Ended
	Mar. 15, 2023 USD ($) apartment	Sep. 30, 2023 USD ($)
Real Estate [Line Items]
Number of units in real estate property \| apartment	240
Real estate investment property, at cost	$ 55,330
Proceeds from construction loans payable	33,000
Fees related to construction	$ 1,637
Development costs		$ 12,337
Development fees		$ 334

Real Estate Activity - Schedule of Gain (Loss) on Sale or Write-down of Assets (Details) $ in Thousands				3 Months Ended		9 Months Ended
	Sep. 16, 2022 USD ($) apartment	May 17, 2022 USD ($) ft²	Jan. 14, 2022 USD ($) apartment	Sep. 30, 2023 USD ($)	Sep. 30, 2022 USD ($)	Sep. 30, 2023 USD ($)	Sep. 30, 2022 USD ($)
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items]
(Loss) gain on sales or write-down of assets				$ (32)	$ 1,539	$ 156	$ 16,580
Disposal Group, Held-for-sale or Disposed of by Sale, Not Discontinued Operations
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items]
Notes assumed	$ 9,551		$ 14,740
Land
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items]
(Loss) gain on sales or write-down of assets				0	0	188	4,752
Multifamily Properties
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items]
(Loss) gain on sales or write-down of assets				0	1,539	0	11,142
Commercial Properties
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items]
(Loss) gain on sales or write-down of assets				0	0	0	890
Other
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items]
(Loss) gain on sales or write-down of assets				$ (32)	$ 0	$ (32)	$ (204)
Toulon \| Disposal Group, Held-for-sale or Disposed of by Sale, Not Discontinued Operations
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items]
Number of units in real estate property \| apartment			240
Proceeds from sale			$ 26,750
Gain on sale			$ 9,364
Sugar Mill Phase III \| Disposal Group, Held-for-sale or Disposed of by Sale, Not Discontinued Operations
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items]
Number of units in real estate property \| apartment	72
Proceeds from sale	$ 11,800
Gain on sale	$ 1,871
Fruitland Park \| Disposal Group, Held-for-sale or Disposed of by Sale, Not Discontinued Operations
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items]
Proceeds from sale		$ 750
Gain on sale		$ 667
Area of property (sq. ft.) \| ft²		6,722

Short-term Investments (Details)	Sep. 30, 2023	Dec. 31, 2022
Investments, Debt and Equity Securities [Abstract]
Investment interest rate	5.29%	4.67%

Notes Receivable - Schedule of Notes Receivable (Details) - USD ($) $ in Thousands	9 Months Ended
	Sep. 30, 2023	Dec. 31, 2022
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items]
Carrying value	$ 145,715	$ 139,609
Notes Receivable \| ABC Land and Development, Inc.
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items]
Carrying value	$ 4,408	4,408
Interest Rate	9.50%
Notes Receivable \| ABC Paradise, LLC
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items]
Carrying value	$ 1,210	1,210
Interest Rate	9.50%
Notes Receivable \| Autumn Breeze
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items]
Carrying value	$ 2,157	2,326
Interest Rate	5.00%
Ownership interest if note converted	100.00%
Notes Receivable \| Bellwether Ridge
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items]
Carrying value	$ 3,798	3,798
Interest Rate	5.00%
Ownership interest if note converted	100.00%
Notes Receivable \| Dominion at Mercer Crossing
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items]
Carrying value	$ 6,354	0
Interest Rate	9.25%
Notes Receivable \| Dominion at Mercer Crossing \| Prime Rate
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items]
Interest Rate	1.00%
Notes Receivable \| Forest Pines
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items]
Carrying value	$ 6,472	6,472
Interest Rate	5.00%
Ownership interest if note converted	100.00%
Notes Receivable \| Legacy Pleasant Grove
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items]
Carrying value	$ 496	496
Interest Rate	12.00%
Notes Receivable \| McKinney Ranch
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items]
Carrying value	$ 3,926	3,926
Interest Rate	6.00%
Notes Receivable \| One Realco Land Holding, Inc.
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items]
Carrying value	$ 1,728	1,728
Interest Rate	9.50%
Notes Receivable \| Parc at Ingleside
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items]
Carrying value	$ 3,759	3,759
Interest Rate	5.00%
Ownership interest if note converted	100.00%
Notes Receivable \| Parc at Opelika Phase II
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items]
Carrying value	$ 3,190	3,190
Interest Rate	10.00%
Ownership interest if note converted	100.00%
Notes Receivable \| Parc at Windmill Farms
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items]
Carrying value	$ 7,886	7,886
Interest Rate	5.00%
Ownership interest if note converted	100.00%
Notes Receivable \| Phillips Foundation for Better Living, Inc.
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items]
Carrying value	$ 182	182
Interest Rate	12.00%
Notes Receivable \| Plum Tree
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items]
Carrying value	$ 1,767	1,767
Interest Rate	5.00%
Ownership interest if note converted	100.00%
Notes Receivable \| Polk County Land
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items]
Carrying value	$ 3,000	3,000
Interest Rate	9.50%
Notes Receivable \| Riverview on the Park Land, LLC
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items]
Carrying value	$ 1,045	1,045
Interest Rate	9.50%
Notes Receivable \| Spartan Land
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items]
Carrying value	$ 5,907	5,907
Interest Rate	12.00%
Notes Receivable \| Spyglass of Ennis
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items]
Carrying value	$ 5,179	5,258
Interest Rate	5.00%
Ownership interest if note converted	100.00%
Notes Receivable \| Steeple Crest
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items]
Carrying value	$ 6,498	6,498
Interest Rate	5.00%
Ownership interest if note converted	100.00%
Notes Receivable \| Unified Housing Foundation Inc., Maturing June 30, 2028 A
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items]
Carrying value	$ 20,325	20,325
Interest Rate	12.00%
Notes Receivable \| Unified Housing Foundation Inc., Maturing March 31, 2024
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items]
Carrying value	$ 10,096	10,096
Interest Rate	12.00%
Notes Receivable \| Unified Housing Foundation Inc., Maturing March 31, 2025
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items]
Carrying value	$ 6,990	6,990
Interest Rate	12.00%
Notes Receivable \| Unified Housing Foundation Inc., Maturing May 31, 2028
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items]
Carrying value	$ 3,615	3,615
Interest Rate	12.00%
Notes Receivable \| Unified Housing Foundation Inc., Maturing December 31, 2032
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items]
Carrying value	$ 27,477	27,477
Interest Rate	12.00%
Notes Receivable \| Unified Housing Foundation Inc., Maturing March 31, 2024 A
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items]
Carrying value	$ 6,521	6,521
Interest Rate	12.00%
Notes Receivable \| Unified Housing Foundation Inc., Maturing April 30, 2024
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items]
Carrying value	$ 1,549	1,549
Interest Rate	12.00%
Notes Receivable \| Unified Housing Foundation Inc., Maturing June 30, 2024
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items]
Carrying value	$ 180	$ 180
Interest Rate	12.00%

Investment in Unconsolidated Joint Ventures - Narrative (Details) $ in Thousands					9 Months Ended
	Mar. 23, 2023 USD ($)	Nov. 01, 2022 USD ($) property	Sep. 16, 2022 USD ($) property	Nov. 16, 2018 USD ($) property	Sep. 30, 2023 USD ($) franchised_location	Sep. 30, 2022 USD ($)
Schedule of Equity Method Investments [Line Items]
Distribution from unconsolidated joint venture					$ 20,916	$ 181,748
Distribution of income from unconsolidated joint ventures					$ 0	$ 3,700
VAA Sale Portfolio \| Disposal Group, Held-for-sale or Disposed of by Sale, Not Discontinued Operations
Schedule of Equity Method Investments [Line Items]
Proceeds from sale			$ 1,810,700
Gain on sale			738,444
Distribution from unconsolidated joint venture		$ 204,036	$ 182,848
Macquarie
Schedule of Equity Method Investments [Line Items]
Earn out obligation				$ 39,600
VAA
Schedule of Equity Method Investments [Line Items]
Contributed properties with earn-out provisions \| property				10
Earn-out provision terms				2 years
Earn out obligation				$ 10,000
VAA \| Gruppa Florentina LLC
Schedule of Equity Method Investments [Line Items]
Number of franchised locations \| franchised_location					23
VAA \| Gruppa Florentina LLC \| Angelo And Vito's Pizzerias
Schedule of Equity Method Investments [Line Items]
Number of franchised locations \| franchised_location					2
VAA \| Disposal Group, Held-for-sale or Disposed of by Sale, Not Discontinued Operations
Schedule of Equity Method Investments [Line Items]
Number of real estate properties \| property		7
VAA \| VAA
Schedule of Equity Method Investments [Line Items]
Percentage of ownership in VAA				50.00%
VAA \| VAA \| Disposal Group, Held-for-sale or Disposed of by Sale, Not Discontinued Operations
Schedule of Equity Method Investments [Line Items]
Number of real estate properties \| property			45
VAA \| VAA \| VAA Sale Portfolio
Schedule of Equity Method Investments [Line Items]
Distribution of income from unconsolidated joint ventures	$ 17,976
VAA \| VAA \| VAA
Schedule of Equity Method Investments [Line Items]
Percentage of ownership in VAA				50.00%
Milano \| VAA \| Milano
Schedule of Equity Method Investments [Line Items]
Percentage of ownership in VAA					20.00%

Investment in Unconsolidated Joint Ventures - Financial Position And Results of Operations From Our Investees (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2023	Sep. 30, 2022	Sep. 30, 2023	Sep. 30, 2022	Dec. 31, 2022	Dec. 31, 2021
Assets
Real estate	$ 502,031		$ 502,031		$ 493,821
Cash, cash equivalents and restricted cash	83,348	$ 149,186	83,348	$ 149,186	222,328	$ 72,734
Other assets	94,358		94,358		85,524
Total assets	1,062,278		1,062,278		1,197,479
Liabilities and Partners' Capital
Total liabilities and equity	1,062,278		1,062,278		1,197,479
Investment in unconsolidated joint ventures	10,256		10,256		28,226
Liabilities	241,563		241,563		385,311
Revenues:
Rental revenue	11,838	7,570	34,236	22,310
Other income	688	749	2,217	1,925
Total revenue	12,526	8,319	36,453	24,235
Expenses:
Depreciation and amortization			10,518	9,409
Net income	4,025	384,304	8,547	418,901
Equity in income from unconsolidated joint ventures	234	464,143	2,946	471,385
VAA
Liabilities and Partners' Capital
Our share of partners' capital	10,256		10,256		27,973
Basis adjustment	0		0		253
Investment in unconsolidated joint ventures	10,256		10,256		28,226
Revenues:
Rental revenue	0	3,342	0	11,305
Other income	22,268	15,417	49,532	41,119
Total revenue	22,268	18,759	49,532	52,424
Expenses:
Operating expenses	16,581	17,335	38,803	53,866
Depreciation and amortization	534	1,177	1,177	3,499
Interest	76	5,368	123	17,396
Total expenses	17,191	23,880	40,103	74,761
Income (loss) from continuing operations	5,077	(5,121)	9,429	(22,337)
Income from discontinued operations	(78)	704,700	743	712,648
Net income	4,999	699,579	10,172	690,311
Equity in income from unconsolidated joint ventures	234	464,143	2,946	471,385
VAA \| VAA
Assets
Total assets	1,447		1,447		52,404
Liabilities and Partners' Capital
Liabilities	93		93		10,812
Revenues:
Total revenue		3,591		11,932
Expenses:
Total expenses		$ 9,003		$ 35,668
VAA \| Unconsolidated Joint Ventures
Assets
Real estate	13,886		13,886		13,140
Cash, cash equivalents and restricted cash	20,449		20,449		66,364
Other assets	56,381		56,381		35,938
Total assets	90,716		90,716		115,442
Liabilities and Partners' Capital
Liabilities from discontinued operations	0		0		8,824
Mortgage notes payable	13,444		13,444		16,267
Other liabilities	28,562		28,562		13,412
Our share of partners' capital	10,256		10,256		27,973
Outside partner's capital	38,454		38,454		48,966
Total liabilities and equity	$ 90,716		$ 90,716		$ 115,442

Acquisitions - Narrative (Details) - VAA Holdback Portfolio	Nov. 01, 2022
Business Acquisition [Line Items]
Ownership interest acquired	50.00%
Ownership interest after interest acquired	100.00%

Acquisitions - Asset Acquisition Of Properties (Details) - VAA Holdback Portfolio	Nov. 01, 2022 property
Business Acquisition [Line Items]
Number of units in real estate property	1,148
Blue Lake Villas
Business Acquisition [Line Items]
Number of units in real estate property	186
Blue Lake Villas Phase II
Business Acquisition [Line Items]
Number of units in real estate property	70
Northside on Travis
Business Acquisition [Line Items]
Number of units in real estate property	200
Parc at Denham Springs
Business Acquisition [Line Items]
Number of units in real estate property	224
Residences at Holland Lake
Business Acquisition [Line Items]
Number of units in real estate property	208
Villas of Park West I
Business Acquisition [Line Items]
Number of units in real estate property	148
Villas of Park West II
Business Acquisition [Line Items]
Number of units in real estate property	112

Acquisitions - Schedule of Preliminary Allocation of The Fair Value (Details) - VAA Holdback Portfolio $ in Thousands	Nov. 01, 2022 USD ($)
Business Acquisition [Line Items]
Real estate	$ 219,500
Other assets	4,843
Total assets acquired	224,343
Mortgage notes payable	70,330
Accounts payable and other liabilities	1,624
Accrued interest	190
Total liabilities assumed	72,144
Fair value of acquired net assets (100% ownership)	$ 152,199
Ownership interest after interest acquired	100.00%

Acquisitions - Purchase Price Of Additional Ownership Interest (Details) - VAA Holdback Portfolio $ in Thousands	Nov. 01, 2022 USD ($)
Business Acquisition [Line Items]
Ownership interest acquired	50.00%
Fair value of existing ownership interest (at 50% ownership)	$ 219,500
Carrying value of investment	146,313
Gain on remeasurement of assets	$ 73,187

Mortgages and Other Notes Payable - Schedule of Debt (Details) - USD ($) $ in Thousands	Sep. 30, 2023	Feb. 28, 2023	Dec. 31, 2022
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items]
Carrying Value	$ 182,428		$ 188,004
Mortgages and Other Notes Payable \| 770 South Post Oak
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items]
Carrying Value	$ 11,248		11,406
Interest Rate	4.40%
Mortgages and Other Notes Payable \| Athens
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items]
Carrying Value	$ 0		1,155
Interest Rate	4.00%
Mortgages and Other Notes Payable \| Blue Lake Villas
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items]
Carrying Value	$ 9,546		9,673
Interest Rate	3.15%
Mortgages and Other Notes Payable \| Blue Lake Villas Phase II
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items]
Carrying Value	$ 3,368		3,424
Interest Rate	2.85%
Mortgages and Other Notes Payable \| Chelsea
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items]
Carrying Value	$ 7,749		7,875
Interest Rate	3.40%
Mortgages and Other Notes Payable \| EQK Portage
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items]
Carrying Value	$ 3,350		3,350
Interest Rate	10.00%
Mortgages and Other Notes Payable \| Forest Grove
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items]
Carrying Value	$ 7,023		7,128
Interest Rate	3.75%
Mortgages and Other Notes Payable \| Landing Bayou
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items]
Carrying Value	$ 13,971		14,161
Interest Rate	3.50%
Mortgages and Other Notes Payable \| Legacy at Pleasant Grove
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items]
Carrying Value	$ 12,798		13,039
Interest Rate	3.60%
Mortgages and Other Notes Payable \| New Concept Energy
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items]
Carrying Value	$ 3,542		3,542
Interest Rate	6.00%
Mortgages and Other Notes Payable \| Northside on Travis
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items]
Carrying Value	$ 11,460		11,656
Interest Rate	2.50%
Mortgages and Other Notes Payable \| Parc at Denham Springs
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items]
Carrying Value	$ 16,484		16,737
Interest Rate	3.75%
Mortgages and Other Notes Payable \| Parc at Denham Springs Phase II
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items]
Carrying Value	$ 15,654		15,789
Interest Rate	4.05%
Mortgages and Other Notes Payable \| RCM HC Enterprises
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items]
Carrying Value	$ 5,086		5,086
Interest Rate	5.00%
Mortgages and Other Notes Payable \| Residences at Holland Lake
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items]
Carrying Value	$ 10,474		10,622
Interest Rate	3.60%
Mortgages and Other Notes Payable \| Villas at Bon Secour
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items]
Carrying Value	$ 19,119		19,410
Interest Rate	3.08%
Mortgages and Other Notes Payable \| Villas of Park West I
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items]
Carrying Value	$ 9,230		9,373
Interest Rate	3.04%
Mortgages and Other Notes Payable \| Villas of Park West II
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items]
Carrying Value	$ 8,377		8,504
Interest Rate	3.18%
Mortgages and Other Notes Payable \| Vista Ridge
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items]
Carrying Value	$ 9,553		9,674
Interest Rate	4.00%
Mortgages and Other Notes Payable \| Windmill Farms
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items]
Carrying Value	$ 4,396		$ 6,400
Interest Rate	7.75%	7.75%

Mortgages and Other Notes Payable - Narrative (Details) $ in Thousands		3 Months Ended		9 Months Ended
	Mar. 15, 2023 USD ($) extension_option	Sep. 30, 2023 USD ($)	Sep. 30, 2022 USD ($)	Sep. 30, 2023 USD ($)	Sep. 30, 2022 USD ($)	Dec. 31, 2022 USD ($)
Debt Instrument [Line Items]
Interest payable		$ 2,480		$ 2,480		$ 5,198
Interest costs capitalized		0	$ 1,048	642	$ 2,651
Lake Wales
Debt Instrument [Line Items]
Proceeds from construction loans payable	$ 33,000
Number of extension options \| extension_option	2
Extension term	1 year
SOFR \| Lake Wales
Debt Instrument [Line Items]
Variable interest rate	3.00%
Mortgages and Other Notes Payable
Debt Instrument [Line Items]
Interest payable		$ 2,480		$ 2,480		$ 2,004

Bonds Payable - Narrative (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2023	Sep. 30, 2022	Sep. 30, 2023	Sep. 30, 2022
Debt Instrument [Line Items]
Gain on foreign currency transaction	$ 0	$ 1,533	$ 993	$ 19,437
Bonds
Debt Instrument [Line Items]
Gain on foreign currency transaction	$ 0	$ 1,533	$ 993	$ 19,437

Bonds Payable - Schedule of Long-term Debt Instruments (Details) $ in Thousands	12 Months Ended
	Dec. 31, 2022 USD ($) ft²	Sep. 30, 2023 USD ($)
Debt Instrument [Line Items]
Bonds payable	$ 129,218	$ 0
Bonds
Debt Instrument [Line Items]
Bonds	131,323
Less unamortized deferred issuance costs	(2,105)
Bonds payable	129,218
Series A Bonds
Debt Instrument [Line Items]
Bonds	$ 28,971
Interest Rate	7.30%
Series B Bonds
Debt Instrument [Line Items]
Bonds	$ 35,806
Interest Rate	6.80%
Series C Bonds
Debt Instrument [Line Items]
Bonds	$ 66,546
Interest Rate	4.65%
Series C Bonds \| Browning Place
Debt Instrument [Line Items]
Land collateral \| ft²	625,297

Related Party Transactions (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2023	Sep. 30, 2022	Sep. 30, 2023	Sep. 30, 2022
Related Party Transaction [Line Items]
Rental revenue	$ 11,838	$ 7,570	$ 34,236	$ 22,310
Property operating expenses	7,443	4,701	20,580	12,541
General and administrative	1,579	3,042	8,424	7,956
Advisory fee to related party	2,295	1,571	6,883	7,614
Interest income	9,008	7,035	25,201	19,937
Related Party \| Pillar and Regis
Related Party Transaction [Line Items]
Rental revenue	232	223	731	702
Related Party \| Regis
Related Party Transaction [Line Items]
Property operating expenses	97	110	296	337
Related Party \| Pillar
Related Party Transaction [Line Items]
General and administrative	856	1,288	3,095	3,368
Advisory fee to related party	2,295	1,571	6,883	7,614
Related Party \| UHF and Pillar
Related Party Transaction [Line Items]
Interest income	$ 4,854	$ 4,140	$ 14,165	$ 11,134
ARL \| Related Party \| MRHI
Related Party Transaction [Line Items]
Ownership interest	90.80%		90.80%

Noncontrolling Interest (Details)	Sep. 30, 2023	Sep. 30, 2022
TCI
Noncontrolling Interest [Line Items]
Ownership interest	78.40%
IOR
Noncontrolling Interest [Line Items]
Ownership interest	81.10%	81.10%

Deferred Income (Details) - USD ($) $ in Thousands	Sep. 30, 2023	Dec. 31, 2022
Revenue from Contract with Customer [Abstract]
Deferred revenue	$ 9,791	$ 9,791

Income Taxes (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
Income Taxes (Details) - USD ($) $ in Thousands	Sep. 30, 2023	Sep. 30, 2022	Sep. 30, 2023	Sep. 30, 2022
Income Tax Disclosure [Abstract]
Current	$ 5,227	$ 81,548	$ 6,516	$ 81,616
Deferred	(4,100)	0	(4,100)	0
Income tax provision	$ 1,127	$ 81,548	$ 2,416	$ 81,616

Subsequent Events (Details) - McKinney - Subsequent event $ in Millions	Nov. 06, 2023 USD ($) apartment
Subsequent Event [Line Items]
Number of units in real estate property \| apartment	216
Real estate investment property, at cost	$ 51.3
Proceeds from construction loans payable	25.4
Fees related to construction	$ 1.6

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