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Transcontinental Realty Investors, Inc. Reports Third Quarter 2018 Results

November 13, 2018

DALLAS--(BUSINESS WIRE)--Nov 13, 2018--Transcontinental Realty Investors, Inc. (NYSE: TCI), a Dallas-based real estate investment company, today reported results of operations for the third quarter ended September 30, 2018. For the three months ended September 30, 2018, we reported net income applicable to common shares of $21.9 million or $2.52 per share compared to a net income applicable to common shares of $6.9 million or $0.79 per share for the same period ended 2017.

The results demonstrate the Company’s overall focus on growing its portfolio as it continues working on several strategic initiatives that were previously announced earlier this year. Overall, management remains very encouraged about the overall performance of the company; especially tied to the quality of our assets in our portfolio, and the new multifamily apartment projects under various stages of development.

Revenues

Rental and other property revenues were $33.5 million for the three months ended September 30, 2018. This represents an increase of $2.0 million compared to rental and other operating revenues in the same period in 2017 of $31.5 million. The increase is driven primarily by an increase in revenues of $2.0 million from our apartment operating segment.

Expense

Property operating expenses were $15.9 million for the three months ended September 30, 2018. This represents an increase of $0.7 million compared to property operating expenses in the same period in 2017 of $15.2 million. The increase is due to correlating increases in operating expenses in the apartment portfolio of $0.7 million, as occupancy revenue continues to rise.

Depreciation and amortization expense was $6.9 million for the three months ended September 30, 2018 for an increase of $0.6 million as compared to depreciation and amortization expense in the same period in 2017 of $6.3 million. The change is attributable to the depreciation on acquired apartments.

General and Administrative expense was $1.9 million for the three months ended September 30, 2018. This represents an increase of $0.3 million compared to general and administrative expense in the same period in 2017 of $1.6 million. The increase is primarily due to $1.8 million of transaction costs.

Other income (expense)

Other income was $18.7 million for the three months ended September 30, 2018. This represents an increase of $18.5 million compared to other expense in the same period in 2017 of $0.2 million. The increase is primarily the result of a $17.6 million gain recognized in September 2018 for deferred income associated with the sale of assets.

Mortgage and loan interest expense was $15.6 million for the three months ended September 30, 2018. This represents an increase of $1.4 million in mortgage and loan interest expense compared to the same period in 2017 of $14.2 million. The change by segment is an increase in the other portfolio of $0.9 million, apartment portfolio of $0.6 million, offset by a decrease in the land portfolio of $0.1 million.

Foreign currency transaction was a loss of $1.3 million for the three months ended September 30, 2018. This represents a decrease of $3.2 million compared to foreign currency transaction gain in the same period in 2017 of $1.9 million. The increase is the result of a loss in foreign currency exchange as a result of the unfavorable exchange rate between the Israel Shekels and the U.S. Dollar related to our Bond program.

There was no sale of income-producing properties during the three months ended September 30, 2018. For the same period in 2017, we recognized a gain on sale of income-producing properties of $9.8 million as a result of a deferred gain from property sales of two apartment communities.

About Transcontinental Realty Investors, Inc.

Transcontinental Realty Investors, Inc., a Dallas-based real estate investment company, holds a diverse portfolio of equity real estate located across the U.S., including apartments, office buildings, shopping centers, and developed and undeveloped land. The Company invests in real estate through direct ownership, leases and partnerships and invests in mortgage loans on real estate. For more information, visit the Company’s website at www.transconrealty-invest.com.

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CONTACT: Transcontinental Realty Investors, Inc.

Investor Relations

Gene Bertcher (800) 400-6407

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