AMERICAN REALTY INVESTORS INC. Files 2023 Annual Report on Form 10-K

TL;DR

<b>AMERICAN REALTY INVESTORS INC. has filed its 2023 10-K report detailing financial information and business operations.</b>

AI Summary

AMERICAN REALTY INVESTORS INC (ARL) filed a Annual Report (10-K) with the SEC on March 21, 2024. Filed Form 10-K for the fiscal year ended December 31, 2023. Company is "AMERICAN REALTY INVESTORS INC.", Central Index Key: 0001102238. Incorporated in Nevada, with principal business address in Dallas, TX. Standard Industrial Classification: Real Estate Operators (No Developers) & Lessors [6510]. The filing includes data related to related party members and various stock and equity accounts for fiscal years 2020-2023.

Why It Matters

For investors and stakeholders tracking AMERICAN REALTY INVESTORS INC, this filing contains several important signals. This 10-K filing provides a comprehensive overview of the company's financial performance and position for the fiscal year 2023, crucial for investors to assess its stability and growth prospects. The inclusion of detailed data on related party transactions and equity accounts offers transparency into the company's financial structure and potential influences on its operations.

Risk Assessment

Risk Level: low — AMERICAN REALTY INVESTORS INC shows low risk based on this filing. The filing is a standard 10-K report with no immediate red flags, indicating a routine disclosure of financial information.

Analyst Insight

Review the detailed financial statements and notes within the 10-K filing to understand the company's performance and any specific risks or opportunities.

Key Numbers

• 2023-12-31 — Fiscal Year End (Reporting Period)
• 2024-03-21 — Filing Date (Date of Submission)
• 0001102238 — Accession Number (Unique identifier for the filing)
• 6510 — SIC Code (Real Estate Operators & Lessors)

Key Players & Entities

• AMERICAN REALTY INVESTORS INC. (company) — Filer name
• 0001102238 (company) — Central Index Key
• NV (company) — State of Incorporation
• Dallas, TX (company) — Business Address City, State
• 6510 (company) — Standard Industrial Classification
• 20231231 (date) — Fiscal Year End
• 20240321 (date) — Filing Date
• Transcontinental Realty Investors Inc. (company) — Related Party Entity

FAQ

Industry Context

The company operates within the Real Estate Operators (No Developers) & Lessors sector, focusing on managing and leasing properties.

Regulatory Implications

The filing is made under the Securities Exchange Act of 1934, requiring public companies to submit regular financial disclosures.

What Investors Should Do

1. Analyze the financial statements for revenue, net income, and asset values.
2. Examine any disclosures related to related party transactions.
3. Review the business description for operational details and strategic focus.

Key Dates

• 2023-12-31: Fiscal Year End — End of the reporting period for the 10-K filing.
• 2024-03-21: Filing Date — Date the 10-K report was officially submitted to the SEC.

Year-Over-Year Comparison

This is the initial filing analyzed, so no comparison to a previous filing is available.

Key Financial Figures

• $67.5 million — On January 31, 2023 , we paid off our $67.5 million of Series C bonds. On February 28, 202
• $33.0 million — On March 15, 2023 , we entered into a $33.0 million construction loan to finance the develo
• $14.0 million — May 4, 2023, we paid off the remaining $14.0 million of our Series A Bonds and $28.9 million
• $28.9 million — $14.0 million of our Series A Bonds and $28.9 million of our Series B Bonds, which resulted i
• $1.7 million — loss on early extinguishment of debt of $1.7 million. On August 28, 2023, we paid off our $
• $1.2 million — n. On August 28, 2023, we paid off our $1.2 million loan on Athens . On November 6, 2023 ,
• $25.4 million — On November 6, 2023 , we entered into a $25.4 million construction loan to finance the develo
• $23.5 million — n December 15, 2023 , we entered into a $23.5 million construction loan to finance the develo
• $24.3 million — for single family homes for a total of $24.3 million. We estimate that we will complete the
• $5.0 million — quarter of 2024. During 2023, we spent $5.0 million on the project, which included $0.5 mil
• $0.5 million — million on the project, which included $0.5 million on lot development and $4.5 million on
• $4.5 million — ded $0.5 million on lot development and $4.5 million on reimbursable infrastructure investme
• $55.3 million — 2025 for a total cost of approximately $55.3 million. The cost of construction will be funde
• $1.6 million — he development agreement provides for a $1.6 million fee that will be paid to Pillar over th
• $6.1 million — related party at an appraised value of $6.1 million. As of December 31, 2023, we have incur

Filing Documents

• arl-20231231.htm (10-K) — 1905KB
• arl20231231ex211subsidiari.htm (EX-21.1) — 10KB
• arl20231231ex261.htm (EX-26.1) — 12KB
• arl20231231ex311.htm (EX-31.1) — 10KB
• arl20231231ex321.htm (EX-32.1) — 5KB
• 0001102238-24-000004.txt (&nbsp;) — 10022KB
• arl-20231231.xsd (EX-101.SCH) — 70KB
• arl-20231231_cal.xml (EX-101.CAL) — 98KB
• arl-20231231_def.xml (EX-101.DEF) — 320KB
• arl-20231231_lab.xml (EX-101.LAB) — 622KB
• arl-20231231_pre.xml (EX-101.PRE) — 534KB
• arl-20231231_htm.xml (XML) — 1694KB

Business

Business 3 Item 1A.

Risk Factors

Risk Factors 7 Item 1B. Unresolved Staff Comments 11 Item 2.

Properties

Properties 12 Item 3.

Legal Proceedings

Legal Proceedings 14 Item 4. Mine Safety Disclosures 14 PART II Item 5. Market for Registrant's Common Equity, Related Stockholder Matters, and Issuer Purchases of Equity Securities 15 Item 6.

Selected Financial Data

Selected Financial Data 15 Item 7.

Management's Discussion and Analysis of Financial Condition and Results of Operations

Management's Discussion and Analysis of Financial Condition and Results of Operations 15 Item 7A.

Quantitative and Qualitative Disclosures About Market Risk

Quantitative and Qualitative Disclosures About Market Risk 22 Item 8. Consolidated Financial Statements and Supplementary Data 23 Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure 54 Item 9A.

Controls and Procedures

Controls and Procedures 54 Item 9B. Other Information 54 PART III Item 10. Directors, Executive Officers and Corporate Governance 55 Item 11.

Executive Compensation

Executive Compensation 62 Item 12.

Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters

Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters 63 Item 13. Certain Relationships and Related Transactions, and Director Independence 64 Item 14. Principal Accounting Fees and Services 65 PART IV Item 15. Exhibits, Financial Statement Schedules 67 Item 16. Form 10-K Summary 69

FORWARD-LOOKING STATEMENTS

FORWARD-LOOKING STATEMENTS Certain Statements in this Form 10-K are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, Section 27A of the Securities Act of 1933, and Section 21E of the Securities Exchange Act of 1934. The words "estimate," "plan," "intend," "expect," "anticipate," "believe," and similar expressions are intended to identify forward-looking statements. The forward-looking statements are found at various places throughout this Report and in the documents incorporated herein by reference. The Company disclaims any intention or obligations to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. Although we believe that our expectations are based upon reasonable assumptions, we can give no assurance that our goals will be achieved. Important factors that could cause our actual results to differ from estimates or projections contained in any forward-looking statements are described in Part I, Item 1A. "Risk Factors". PART I

BUSINESS

ITEM 1. BUSINESS General American Realty Investors, Inc. (the "Company"), a Nevada Corporation, is a fully integrated externally managed real estate company. We operate high quality multifamily and commercial properties throughout the Southern United States. We also invest in mortgage notes receivable and in land that is either held for appreciation or development. As used herein, the terms "ARL", "the Company", "We", "Our", or "Us" refer to the Company. Corporate Structure We own approximately 78.4% of the common stock of Transcontinental Realty Investors, Inc. ("TCI") and substantially all of our operations are conducted through TCI, whose common stock is traded on the New York Stock Exchange ("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 to raise funds by issuing non-convertible bonds that were listed and traded on the Tel-Aviv Stock Exchange ("TASE"). In addition, TCI owns approximately 82.3% of the common stock of Income Opportunity Realty Investors, Inc. ("IOR") a Nevada corporation, which is publicly listed and traded on the NYSE under the symbol IOR. On November 19, 2018, SPC formed the Victory Abode Apartments, LLC ("VAA") joint venture with the Macquarie Group ("Macquarie"). In connection with the formation of VAA, we sold a 50% ownership interest in 51 multifamily properties. We account for our investment in VAA under the equity method. In 2022, VAA sold 45 of its properties to a third party and distributed the remaining seven properties to us in a liquidating distribution. Controlling Stockholder Realty Advisors, Inc. ("RAI"), a Nevada corporation, and its affiliates own approximate ly 90.8% of our common stock. As described in Part III, Item 13. "Certain Relationships and Related Transactions, and Director Independen ce", our officers and

RISK FACTORS

ITEM 1A. RISK FACTORS An investment in our securities involves various risks. All investors should carefully consider the following risk factors in conjunction with the other information in this report before trading our securities. FACTORS AFFECTING THE INDUSTRY Our operating performance is subject to risks associated with the real estate industry. Real estate investments are subject to various risks, fluctuations and cycles in value and demand, many of which are beyond our control. These events include, but are not limited to: adverse changes in international, national or local economic conditions; inability to rent space on favorable terms, including possible market pressures to offer tenants rent abatements, tenant improvements, early termination rights or below-market renewal options; adverse changes in financial conditions of actual or potential investors, buyers, sellers or tenants; inability to collect rent from tenants; competition from other real estate investors, including other real estate operating companies, publicly-traded REITs and institutional investment funds; reduced tenant demand for office space and residential units from matters such as: (i) trends in space utilization, (ii) changes in the relative popularity of our properties, (iii) the type of space we lease, (iv) purchasing versus leasing, (v) increasing crime or homelessness in our submarkets or (vi) economic recessions; increases in the supply of office space and residential units; fluctuations in interest rates and the availability of credit, which could adversely affect our ability to obtain financing on favorable terms or at all; increases in operating costs, including: (i) insurance costs, (ii) labor costs, (iii) energy prices, (iv) property taxes, and (v) costs of compliance with laws, regulations and governmental policies; utility disruptions; changes in, and changes in enforcement of, laws, regulations and governmental policies, including, without limitation, health

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