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American Realty Investors Inc. Reports Operating Results (10-Q)

August 15, 2011 | About:
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10qk

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American Realty Investors Inc. (ARL) filed Quarterly Report for the period ended 2011-06-30.

American Realty Investors Inc. has a market cap of $23.63 million; its shares were traded at around $2 with and P/S ratio of 0.15.

Highlight of Business Operations:

Rental and other property revenues were $37.5 million for the three months ended June 30, 2011. This represents an increase of $1.0 million, as compared to the prior period revenues of $36.5 million. This change, by segment, is an increase in the commercial portfolio of $0.6 million, an increase in the apartment portfolio of $0.7 million, offset by a decrease in the hotel portfolio of $0.3 million. Within the apartment portfolio, there was an increase of $0.3 million due to the developed properties in the lease-up phase and an increase of $0.4 million in the same property portfolio. Within the commercial portfolio, the same property portfolio increased by $0.5 million primarily due to a $2.6 million tenant lease buy-out. Overall, the commercial portfolio decreased due to an increase in vacancy, which we attribute to the current state of the economy. Revenues from our same hotel portfolio are also suffering due to the economy with decreased stays from travelers. We have directed our efforts to apartment development and put some additional land projects on hold until the economic conditions turn around. We are also continuing to market our properties aggressively to attract new tenants and strive for continuous improvement of our properties in order to maintain our existing tenants.

Property operating expenses were $21.2 million for the three months ended June 30, 2011. This represents a decrease of $2.1 million, as compared to the prior period operating expenses of $23.3 million. This change, by segment, is a decrease in our commercial properties of $0.6 million, a decrease in our apartment portfolio of $0.6 million, and a decrease in our in our land and other segments of $0.9 million. Within the apartment portfolio, the same apartment properties decreased $0.9 million due to a decrease in overall costs and additional repairs and maintenance, offset by an increase of $0.3 million from developed properties in the lease-up phase. The decrease in the land and other portfolios was due to a prior year real estate tax accrual adjustment.

Mortgage and loan interest expense was $17.7 million for the three months ended June 30, 2011. This represents a decrease of $2.6 million, as compared to the prior period interest expense of $20.3 million. This change, by segment, is a decrease in our commercial properties of $1.1 million, a decrease in our apartment portfolio of $0.3 million, and a decrease in our land portfolio of $0.9 million and a decrease in our other portfolio of $0.3 million. The decrease in the apartment portfolio is primarily due to loans that were refinanced in 2010 at a lower interest rate. The majority of the decrease in the commercial portfolio is due to a matured loan that is being negotiated. The decrease in the other portfolio was due to a decrease in interest expense on loan amounts due to our advisor.

Gain on land sales was $14.0 million for the three months ended June 30, 2011. This represents an increase of $18.1 million as compared to the prior period loss of $4.1 million. In the current period, we sold 1,067 acres of land in 19 separate transactions for an aggregate sales price of $60.4 million and recorded a gain of $14.0 million. In the prior period, we sold 23.56 acres of land in two transactions for an aggregate sales price of $17.6 million and recorded a loss $4.1 million.

For the six months ended June 30, 2011, we reported a net gain applicable to common shares of $4.0 million or $0.35 per diluted earnings per share, as compared to a net loss applicable to common shares of ($26.9) million or ($2.34) per diluted earnings per share for the same period ended 2010.

Rental and other property revenues were $74.1 million for the six months ended June 30, 2011. This represents a decrease of $0.2 million, as compared to the prior period revenues of $74.3 million. This change, by segment, is a decrease in the commercial portfolio of $1.6 million, a decrease in the hotel portfolio of $0.5 million, an increase in the land and other portfolios of $0.1 million, and an increase in the apartment portfolio of $1.8 million. Within the apartment portfolio, there was an increase of $0.5 million due to the developed properties in the lease-up phase and an increase of $1.3 million in the same property portfolio. Within the commercial portfolio the decrease was attributable to the same properties due to an increase in vacancy, which we attribute to the current state of the economy. Revenues from our same hotel portfolio are also suffering due to the economy with decreased stays from travelers. We have directed our efforts to apartment development and put some additional land projects on hold until the economic conditions turn around. We are continuing to market our properties aggressively to attract new tenants and strive for continuous improvement of our properties in order to maintain our existing tenants.

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