10-Q

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, 2022

or

☐ 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	94-6565852
(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 10, 2022, there were 16,152,043 shares of common stock outstanding.

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, 2022 and December 31, 2021	3
	Consolidated Statements of Operations for the three and nine months ended September 30, 2022 and 2021	4
	Consolidated Statements of Equity for the three and nine months ended September 30, 2022 and 2021	5
	Consolidated Statements of Cash Flows for the nine months ended September 30, 2022 and 2021	6
	Notes to Consolidated Financial Statements	7
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	21
Item 3.	Quantitative and Qualitative Disclosures About Market Risks	28
Item 4.	Controls and Procedures	28
PART II. OTHER INFORMATION
Item 1.	Legal Proceedings	28
Item 1A.	Risk Factors	28
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	28
Item 3.	Defaults Upon Senior Securities	29
Item 4.	Mine Safety Disclosures	29
Item 5.	Other Information	29
Item 6.	Exhibits	30
Signatures		32

2

AMERICAN REALTY INVESTORS, INC.

CONSOLIDATED BALANCE SHEETS 

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

(Unaudited)

	September 30, 2022		December 31, 2021
Assets
Real estate	$	270,161	$	296,363
Cash and cash equivalents	131,236		50,748
Restricted cash	17,950		21,986
Short-term investments	75,330		16,001
Notes receivable (including $76,935 and $75,872 at September 30, 2022 and December 31, 2021, respectively, from related parties)	139,423		136,607
Investment in unconsolidated joint ventures	313,399		61,621
Receivable from related parties, net	107,229		100,599
Other assets (including $2,334 and $4,535 at September 30, 2022 and December 31, 2021, respectively, from related parties)	95,422		86,644
Total assets	$	1,150,150	$	770,569
Liabilities and Equity
Liabilities:
Mortgages and other notes payable	$	158,501	$	183,392
Bonds payable	127,497		189,452
Accounts payable and other liabilities (including $602 and $616 at September 30, 2022 and December 31, 2021, respectively, to related parties)	95,414		44,518
Accrued interest	3,195		6,565
Deferred revenue	9,791		9,791
Total liabilities	394,398		433,718
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	506,000		176,085
Total shareholders' equity	570,053		240,138
Noncontrolling interests	185,699		96,713
Total equity	755,752		336,851
Total liabilities and equity	$	1,150,150	$	770,569

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

3

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,
	2022		2021		2022		2021
Revenues:
Rental revenues (including $223 and $312 for the three months ended September 30, 2022 and 2021, respectively, and $702 and $867 for nine months ended September 30, 2022 and 2021, respectively, from related parties)	$	7,570	$	9,628	$	22,310	$	30,183
Other income	749		866		1,925		3,242
Total revenue	8,319		10,494		24,235		33,425
Expenses:
Property operating expenses (including $110 and $178 for the three months ended September 30, 2022 and 2021, respectively, and $337 and $755 for nine months ended September 30, 2022 and 2021, respectively, from related parties)	4,701		5,610		12,541		16,500
Depreciation and amortization	2,193		2,935		6,840		9,473
General and administrative (including $1,288 and $1,017 for the three months ended September 30, 2022 and 2021, respectively, and $3,368 and $3,434 for nine months ended September 30, 2022 and 2021, respectively, from related parties)	3,042		3,698		7,956		12,799
Advisory fee to related party	1,571		3,419		7,614		11,594
Total operating expenses	11,507		15,662		34,951		50,366
Net operating loss	(3,188)		(5,168)		(10,716)		(16,941)
Interest income (including $6,587 and $5,053 for the three months ended September 30, 2022 and 2021, respectively, and $16,880 and $15,139 for the nine months ended September 30, 2022 and 2021, respectively, from related parties)	9,482		6,128		25,683		17,388
Interest expense (including $2,447 and $1,431 for the three months ended September 30, 2022 and 2021, respectively, and $5,746 and $4,199 for the nine months ended September 30, 2022 and 2021, respectively, from related parties)	(6,491)		(7,057)		(19,047)		(22,476)
Gain (loss) on foreign currency transactions	1,533		(1,639)		19,437		1,185
Loss on early extinguishment of debt	(1,166)		(1,451)		(2,805)		(1,451)
Equity in income from unconsolidated joint ventures	464,143		3,543		471,385		11,451
Gain on sale or write-down of assets, net	1,539		31,312		16,580		24,265
Income tax provision	(81,548)		(605)		(81,616)		1,196
Net income	384,304		25,063		418,901		14,617
Net income attributable to noncontrolling interests	(82,015)		(5,652)		(88,986)		(4,466)
Net income attributable to the Company	$	302,289	$	19,411	$	329,915	$	10,151
Earnings per share - basic and diluted	$	18.72	$	1.20	$	20.43	$	0.63
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.

4

AMERICAN REALTY INVESTORS, INC.

CONSOLIDATED STATEMENTS OF EQUITY

(dollars in thousands)

(Unaudited)

	Preferred Stock		Common Stock		Treasury Stock		Paid-in Capital		Retained Earnings		Total Shareholders' Equity		Noncontrolling Interest		Total Equity
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
Three Months Ended September 30, 2021
Balance, July 1, 2021	$	1,801	$	162	$	—	$	62,090	$	163,478	$	227,531	$	92,429	$	319,960
Net income	—		—		—		—		19,411		19,411		5,652		25,063
Balance, September 30, 2021	$	1,801	$	162	$	—	$	62,090	$	182,889	$	246,942	$	98,081	$	345,023
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
Nine Months Ended September 30, 2021
Balance, January 1, 2021	$	1,801	$	162	$	(2)	$	62,092	$	172,738	$	236,791	$	93,615	$	330,406
Net income	—		—		—		—		10,151		10,151		4,466		14,617
Cancellation of treasury shares	—		—		2		(2)		—		—		—		—
Balance, September 30, 2021	$	1,801	$	162	$	—	$	62,090	$	182,889	$	246,942	$	98,081	$	345,023

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

5

AMERICAN REALTY INVESTORS, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

(dollars in thousands)

(Unaudited)

	Nine Months Ended September 30,
	2022		2021
Cash Flow From Operating Activities:
Net income	$	418,901	$	14,617
Adjustments to reconcile net income to net cash used in operating activities:
Gain on sale or write down of assets	(16,580)		(24,265)
Gain on foreign currency transactions	(19,437)		(1,185)
Loss on early extinguishment of debt	2,805		1,451
Depreciation and amortization	9,409		11,699
Recovery of bad debts	(3,126)		(1,326)
Equity in income from unconsolidated joint ventures	(471,385)		(11,451)
Distribution of income from unconsolidated joint ventures	3,700		3,157
Changes in assets and liabilities, net of dispositions:
Other assets	(4,925)		(9,167)
Related party receivables	(6,630)		15,461
Accrued interest payable	(4,652)		(4,801)
Accounts payable and other liabilities	85,046		(1,913)
Net cash used in operating activities	(6,874)		(7,723)
Cash Flow From Investing Activities:
Collection of notes receivable	2,726		9,319
Originations and advances on notes receivable	(2,118)		(3,882)
Purchase of short-term investment	(99,350)		—
Redemption of short-term investment	40,250		—
Development and renovation of real estate	(11,834)		(8,770)
Deferred leasing costs	(1,163)		(877)
Proceeds from sale of assets	44,591		103,727
Contribution to unconsolidated joint venture	—		(411)
Distribution from unconsolidated joint venture	181,748		7,430
Net cash provided by investing activities	154,850		106,536
Cash Flow From Financing Activities:
Proceeds from mortgages, other notes and bonds payable	—		20,015
Payments on mortgages, other notes and bonds payable	(70,170)		(117,193)
Debt extinguishment costs	(1,354)		(4,086)
Deferred financing costs	—		(606)
Net cash used in financing activities	(71,524)		(101,870)
Net increase (decrease) in cash, cash equivalents and restricted cash	76,452		(3,057)
Cash, cash equivalents and restricted cash, beginning of period	72,734		87,020
Cash, cash equivalents and restricted cash, end of period	$	149,186	$	83,963

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

6

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 are listed on the Tel-Aviv Stock Exchange ("TASE").

At September 30, 2022, our portfolio of properties consisted of:

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

●    Seven multifamily properties, owned directly by us, comprising of 1,180 units;

●    Approximately 1,847 acres of developed and undeveloped land; and

●    Seven multifamily properties, totaling 1,148 units, owned by our joint venture.

Our day to day operations are managed by Pillar Income Asset Management, Inc. (“Pillar”). Their 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. All of our employees are 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 are managed by outside management companies. Pillar and Regis are considered to be related parties (See Note 13 – 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.

The consolidated balance sheet at December 31, 2021 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, 2021. Certain 2021 consolidated financial statement amounts have been reclassified to conform to the current presentation.

7

AMERICAN REALTY INVESTORS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(dollars in thousands, except per share amounts)

(Unaudited)

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.

Newly Issued Accounting Standards

In March 2020, the FASB issued ASU 2020-04, Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting. The standard provides guidance, optional expedients and exceptions that reference London Interbank Offered Rate (“LIBOR”) or another reference rate expected to be discontinued due to reference rate reform. The adoption of the standard on January 1, 2022, did not have an impact on our consolidated financial statements.

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,
	2022		2021		2022		2021
Net income	$	384,304	$	25,063	$	418,901	$	14,617
Net income attributable to noncontrolling interests	(82,015)		(5,652)		(88,986)		(4,466)
Net income attributable to common shares	$	302,289	$	19,411	$	329,915	$	10,151
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	$	18.72	$	1.20	$	20.43	$	0.63

8

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,
	2022		2021
Cash paid for interest	$	22,211	$	26,307
Cash - beginning of period
Cash and cash equivalents	$	50,748	$	36,814
Restricted cash	21,986		50,206
	$	72,734	$	87,020
Cash - end of period
Cash and cash equivalents	$	131,236	$	63,873
Restricted cash	17,950		20,090
	$	149,186	$	83,963
Proceeds from mortgages, notes and bonds payable
Proceeds from mortgages and notes payable	$	—	$	20,015
Proceeds from bonds	—		—
	$	—	$	20,015
Payments on mortgages, notes and bonds payable
Payments on mortgages and notes payable	$	26,411	$	63,535
Payments on bonds payable	43,759		53,658
	$	70,170	$	117,193

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

	Nine Months Ended September 30,
	2022		2021
Assets contributed to joint venture	$	—	$	18,608
Liabilities assumed by joint venture	$	—	$	15,606
Notes receivable received in exchange for related party receivable	$	—	$	9,259
Distribution from joint venture applied to Earn Out Obligation	$	34,159	$	5,441

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.

9

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, 2022 and 2021:

	Three Months Ended September 30,				Nine Months Ended September 30,
	2022		2021		2022		2021
Multifamily Segment
Revenues	$	2,850	$	3,703	$	9,024	$	11,068
Operating expenses	(1,966)		(2,072)		(5,395)		(6,306)
Profit from segment	884		1,631		3,629		4,762
Commercial Segment
Revenues	4,720		5,925		13,286		19,115
Operating expenses	(2,735)		(3,538)		(7,146)		(10,194)
Profit from segment	1,985		2,387		6,140		8,921
Total profit from segments	$	2,869	$	4,018	$	9,769	$	13,683

The table below reflects the reconciliation of total profit from segments to net income for the three and nine months ended September 30, 2022 and 2021:

	Three Months Ended September 30,				Nine Months Ended September 30,
	2022		2021		2022		2021
Total profit from segments	$	2,869	$	4,018	$	9,769	$	13,683
Other non-segment items of income (expense)
Depreciation and amortization	(2,193)		(2,935)		(6,840)		(9,473)
General and administrative	(3,042)		(3,698)		(7,956)		(12,799)
Advisory fee to related party	(1,571)		(3,419)		(7,614)		(11,594)
Other income	749		866		1,925		3,242
Interest income	9,482		6,128		25,683		17,388
Interest expense	(6,491)		(7,057)		(19,047)		(22,476)
Gain (loss) on foreign currency transaction	1,533		(1,639)		19,437		1,185
Loss on early extinguishment of debt	(1,166)		(1,451)		(2,805)		(1,451)
Income from unconsolidated joint ventures	464,143		3,543		471,385		11,451
Gain on sales or write-down of assets	1,539		31,312		16,580		24,265
Income tax provision	(81,548)		(605)		(81,616)		1,196
Net income	$	384,304	$	25,063	$	418,901	$	14,617

6.    Lease Revenue

We lease our multifamily properties and commercial properties under agreements that are classified as operating leases. Our multifamily property leases generally includes minimum rents and charges for ancillary services. Our commercial property leases generally included 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, 2022 and 2021:

	Three Months Ended September 30,				Nine Months Ended September 30,
	2022		2021		2022		2021
Fixed component	$	6,977	$	9,124	$	20,854	$	28,287
Variable component	593		504		1,456		1,896
	$	7,570	$	9,628	$	22,310	$	30,183

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:

2022	$	12,927
2023	8,729
2024	7,985
2025	7,687
2026	7,632
Thereafter	21,143
	$	66,103

7.    Real Estate Activity

Below is a summary of our real estate as of September 30, 2022 and December 31, 2021:

	September 30, 2022		December 31, 2021
Land	$	64,875	$	67,514
Building and improvements	184,117		219,327
Tenant improvements	25,460		21,364
Construction in progress	59,083		51,091
Total cost	333,535		359,296
Less accumulated depreciation	(63,374)		(62,933)
Total real estate	$	270,161	$	296,363

Construction in progress represents our investment in Windmill Farms and the cost of renovating Landing Bayou.

Gain on sale or write-down of assets, net for the three and nine months ended September 30, 2022 and 2021 consists of the following:

	Three Months Ended September 30,				Nine Months Ended September 30,
	2022		2021		2022		2021
Land(1)	$	—	$	4,042	$	4,752	$	15,153
Multifamily Properties(2)	1,539		—		11,142		11,442
Commercial Properties(3)	—		27,270		890		27,270
Other(4)	—		—		(204)		(29,600)
	$	1,539	$	31,312	$	16,580	$	24,265

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AMERICAN REALTY INVESTORS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(dollars in thousands, except per share amounts)

(Unaudited)

(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.

The 2021 amount is attributed to the gain from the sale of a 50% ownership interest in Overlook at Allensville Phase II to Macquarie in 2021 (See Note 10 – Investment in Unconsolidated Joint Ventures) and the gain on sale of various multifamily properties that had previously been deferred (See Note 15 – Deferred Income).

(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.

On August 26, 2021, we sold 600 Las Colinas, a 512,173 square foot office building in Irving, Texas for $74,750, resulting in a gain on sale of $27,270. We used the proceeds to pay down the mortgage note payable on the property and for general corporate purposes.

(4)The 2021 amount represents a $29,600 loss on remeasurement of the Earn Out Obligation in connection with our investment in VAA (See Note 10 - Investment in Unconsolidated Joint Ventures).

8.    Short-term Investments

We have an investment in variable denominated floating rate notes with Toyota Motor Credit Corporation and Ford Motor Corporation. The notes do not have a stated maturity and are subject to immediate repayment at our option. The interest rate on the note was 2.30% and 1.15% at September 30, 2022 and December 31, 2021, respectively.

12

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, 2022 and December 31, 2021:

	Carrying value
Property/Borrower	September 30, 2022		December 31, 2021		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)	2,326		2,486		5.00	%	7/1/25
Bellwether Ridge(1)	3,973		3,967		5.00	%	11/1/26
Forest Pines(1)	6,472		6,472		5.00	%	11/1/22
Lake Wales	3,000		3,000		9.50	%	6/30/26
Legacy Pleasant Grove	496		496		12.00	%	10/23/22
McKinney Ranch	3,926		4,554		6.00	%	9/15/24
One Realco Land Holding, Inc.	1,728		1,728		9.50	%	6/30/26
Parc at Ingleside(1)	3,663		3,700		5.00	%	11/1/26
Parc at Opelika Phase II(1)	2,914		2,305		10.00	%	1/13/23
Parc at Windmill Farms(1)	7,836		7,830		5.00	%	11/1/22
Phillips Foundation for Better Living, Inc.(2)	182		813		12.00	%	3/31/24
Plum Tree(1)	1,767		1,537		5.00	%	4/26/26
Riverview on the Park Land, LLC	1,045		1,045		9.50	%	6/30/26
Spartan Land	5,907		5,907		12.00	%	1/16/23
Spyglass of Ennis(1)	5,319		5,319		5.00	%	11/1/22
Steeple Crest(1)	6,498		6,498		5.00	%	8/1/26
Unified Housing Foundation(2)(3)	2,881		2,881		12.00	%	6/30/23
Unified Housing Foundation(2)(3)	212		212		12.00	%	6/30/23
Unified Housing Foundation(2)(3)	6,831		6,831		12.00	%	6/30/23
Unified Housing Foundation(2)(3)	10,401		10,401		12.00	%	6/30/23
Unified Housing Foundation(2)(3)	10,096		10,096		12.00	%	3/31/24
Unified Housing Foundation(2)(3)	6,990		6,990		12.00	%	3/31/23
Unified Housing Foundation(2)(3)	3,615		3,615		12.00	%	5/31/23
Unified Housing Foundation(2)(3)	27,477		24,053		12.00	%	12/31/32
Unified Housing Foundation(2)(3)	6,521		6,521		12.00	%	3/31/24
Unified Housing Foundation(2)(3)	1,549		1,549		12.00	%	4/30/24
Unified Housing Foundation(2)(3)	180		183		12.00	%	6/30/24
	$	139,423	$	136,607

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

(3) 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.

13

AMERICAN REALTY INVESTORS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(dollars in thousands, except per share amounts)

(Unaudited)

10.    Investment in Unconsolidated Joint Ventures

On November 16, 2018, our SPC subsidiary formed 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 51 multifamily properties owned by us in exchange for a 50% voting interest / 49% profit participation interest ("Class A interest") in VAA and a note payable (“Mezzanine Loan”). Concurrent with the Contribution, VAA issued Class B interests with a 2% profits participation interest and no voting rights to Daniel J. Moos, our former President and Chief Executive Officer (“Class B Member”). The Class B Member serves as the Manager of VAA.

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") for the $10,000 advance on the Earn Out that we received from Macquarie.

On March 30, 2021, we sold a 50% ownership interest in Overlook at Allensville Phase II, a 144 unit multifamily property in Sevierville, Tennessee to Macquarie for $2,551 resulting in gain on sale of $1,417. Concurrent with the sale, we each contributed our 50% ownership interests in Overlook at Allensville Phase II into VAA.

On July 13, 2021, we received the arbitration result of a dispute regarding the measurement of the Earn Out Obligation. Our position and claims were declined, and the position of Macquarie was fully accepted. As a result, we were required to pay approximately $39,600 to Macquarie to satisfy the Earn Out Obligation, and therefore, recorded a charge of $29,600 during the nine months ended September 30, 2022 (See Note 7 – Real Estate Activity). In accordance with the joint venture operating agreement, the Earn Out Obligation was paid from our share of subsequent distributions from VAA.

On June 17, 2022, we entered into an agreement to sell 45 properties (“VAA Sale Portfolio”) held by VAA and one property held by our SPC subsidiary.

On September 15, 2022, VAA, SPC, Macquarie and Pillar entered a Distribution and Holdback Property Agreement (“Distribution Agreement”), which provides the timing and ordering of the distribution of the net proceeds from the sale of the VAA Sale Portfolio, the repayment of the Mezzanine Loans, and the distribution of the remaining seven properties of VAA (“Holdback Portfolio”).

On September 16, 2022, VAA completed the sale of the VAA Sale Portfolio for $1,810,700, resulting in gain on sale of $738,665 to the joint venture. In connection with 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 November 1, 2022, in connection with the sale of the VAA Sale Portfolio, we received an additional distribution from VAA (See Note 18 - Subsequent Events), which included the full operational control of the Holdback Portfolio and a cash payment of $203,936. We are in the process of assuming the mortgage notes payable on Holdback Portfolio.

We plan to use our share of the proceeds from the sale of the VAA Sale Portfolio for additional investment in income-producing real estate, to pay down our debt and for general corporate purposes. Our ownership interest in VAA is held by SPC, and is therefore subject to the bond covenants of the three series of bonds that have been issued by SPC. These provisions include restrictions on the distribution of cash from SPC (See Note 12 - Bonds Payable).

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

14

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, 2022		December 31, 2021
Assets (1)
Assets held for sale	$	—	$	1,135,769
Real estate	141,670		142,629
Other assets (2)	679,634		69,457
Total assets	$	821,304	$	1,347,855
Liabilities and Partners' Capital (1)
Liabilities on assets held for sale	$	7,326	$	807,382
Mortgage notes payable	85,825		83,955
Mezzanine notes payable	—		242,942
Other liabilities	28,945		25,970
Our share of partners' capital	339,108		80,602
Outside partner's capital	360,100		107,004
Total liabilities and partners' capital	$	821,304	$	1,347,855
Investment in unconsolidated joint ventures
Our share of partners' capital	$	339,108	$	80,602
Our share of Mezzanine note payable	—		125,306
Basis adjustment (3)	(25,709)		(144,287)
Total investment in unconsolidated joint ventures	$	313,399	$	61,621

(1)    These amounts include the assets of VAA of $758,266 and $1,280,867 at September 30, 2022 and December 31, 2021, respectively, and liabilities of VAA of $87,079 and $329,891 at September 30, 2022 and December 31, 2021, respectively.

(2)     Includes cash and cash equivalents of $581,955 at September 30, 2022.

(3)     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.

15

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,
	2022		2021		2022		2021
Revenue (1)
Rental revenue	$	3,342	$	3,703	$	11,305	$	10,838
Other revenue	15,417		15,230		41,119		44,903
Total revenue	18,759		18,933		52,424		55,741
Expenses (2)
Operating expenses	17,335		17,225		53,866		48,043
Depreciation and amortization	1,177		1,244		3,499		3,642
Interest	5,368		5,994		17,396		17,931
Total expenses	23,880		24,463		74,761		69,616
Loss from continuing operations	(5,121)		(5,530)		(22,337)		(13,875)
Income from discontinued operations (3)	704,700		2,021		712,648		5,363
Net income (loss)	$	699,579	$	(3,509)	$	690,311	$	(8,512)
Equity in the income in unconsolidated joint ventures	$	464,143	$	3,543	$	471,385	$	11,451

(1)    These amounts include revenue of VAA of $3,591 and $3,862 for the three months ended September 30, 2022 and 2021, respectively, and $11,932 and $11,343 during the nine months ended September 30, 2022 and 2021, respectively.

(2)    These amounts include expenses of VAA of $9,003 and $10,191 for the three months ended September 30, 2022 and 2021, respectively, and $35,668 and $28,188 during the nine months ended September 30, 2022 and 2021, respectively.

(3)    These amounts represent the VAA Sale Portfolio.

16

AMERICAN REALTY INVESTORS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(dollars in thousands, except per share amounts)

(Unaudited)

11.    Mortgages and Other Notes Payable

The following table summarizes our mortgages and other notes payable as of September 30, 2022 and December 31, 2021:

	Carrying value
Property / Entity	September 30, 2022		December 31, 2021		Effective Interest Rate		Maturity Date
770 South Post Oak	11,484		11,635		4.40	%	6/1/2025
Athens	1,155		1,155		4.00	%	8/28/2023
Chelsea	7,916		8,037		3.40	%	12/1/2050
EQK Portage	3,350		3,350		10.00	%	11/13/2024
Forest Grove	7,163		7,263		3.75	%	5/5/2024
Landing Bayou	14,224		14,407		3.50	%	9/1/2053
Legacy at Pleasant Grove	13,119		13,352		3.60	%	4/1/2048
New Concept Energy	3,542		3,542		6.00	%	9/30/2023
Parc at Denham Springs Phase II	15,833		15,962		4.10	%	2/1/2060
RCM HC Enterprises	5,086		5,086		5.00	%	12/31/2022
Stanford Center(1)	38,567		38,979		6.00	%	2/26/2023
Sugar Mill Phase III(2)	—		9,216		4.50	%	2/1/2060
Toulon(3)	—		13,697		3.20	%	12/1/2051
Villas at Bon Secour	19,504		19,492		3.08	%	9/1/2031
Vista Ridge	9,714		9,830		4.00	%	8/1/2053
Windmill Farms	7,844		8,389		5.00	%	2/28/2023
	$	158,501	$	183,392

(1)     On March 3, 2022, the loan was extended to February 26, 2023 and was subsequently paid off on October 21, 2022.

(2)    On September 16, 2022, the loan was paid off in connection with the sale of the underlying property (See Note 7 - Real Estate Activity).

(3)    On January 14, 2022, the loan was paid off in connection with the sale of the underlying property (See Note 7 - Real Estate Activity).

Interest payable at September 30, 2022 and December 31, 2021, was $1,930 and $1,522, respectively. We capitalized interest of $1,048 and $3,112 for the three months ended September 30, 2022 and 2021, respectively, and $2,651 and $7,263 during the nine months ended September 30, 2022 and 2021, respectively.

As of September 30, 2022, 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.

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

There are various land mortgages, secured by the property, that are in the process of a modification or extension to the original note due to expiration of the loan. We are working with our existing lenders and new lenders to modify, extend the loans before they become due or refinancing the loans with terms that are similar to the existing agreement.

17

AMERICAN REALTY INVESTORS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(dollars in thousands, except per share amounts)

(Unaudited)

12.    Bonds Payable

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

In connection with the Bonds, we incurred a gain (loss) on foreign currency transactions of $1,533 and $(1,639) for the three months ended September 30, 2022 and 2021, respectively, and $19,437 and $1,185 for the nine months ended September 30, 2022 and 2021, respectively.

The outstanding balance of our Bonds at September 30, 2022 and December 31, 2021 is as follows:

Bond Issuance	September 30, 2022		December 31, 2021		Interest Rate		Maturity
Series A Bonds(1)	$	28,776	$	65,563	7.30	%	7/31/23
Series B Bonds(1)	35,563		54,019		6.80	%	7/31/25
Series C Bonds(2)	66,095		75,298		4.65	%	1/31/23
	130,434		194,880
Less unamortized deferred issuance costs	(2,937)		(5,428)
	$	127,497	$	189,452

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

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

13.    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 an affiliates of Realty Advisors, Inc. ("RAI"), which owns approximately 90.8% of the Company. Pillar is compensated for advisory services in accordance with an 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 $223 and $312 for the three months ended September 30, 2022 and 2021, respectively, and $702 and $867 for the nine months ended September 30, 2022 and 2021, respectively, for office space leased to Pillar and Regis.

Property operating expense includes $110 and $178 for the three months ended September 30, 2022 and 2021, respectively, and $337 and $755 for the nine months ended September 30, 2022 and 2021, respectively, for management fees on commercial properties payable to Regis.

General and administrative expense includes $1,288 and $1,017 for the three months ended September 30, 2022 and 2021, respectively, and $3,368 and $3,434 for the nine months ended September 30, 2022 and 2021, respectively, for employee compensation and other reimbursable costs payable to Pillar.

Advisor fees paid to Pillar were $1,571 and $3,419 for the three months ended September 30, 2022 and 2021, respectively, and $7,614 and $11,594 for the nine months ended September 30, 2022 and 2021, respectively.

18

AMERICAN REALTY INVESTORS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(dollars in thousands, except per share amounts)

(Unaudited)

Notes receivable include amounts held by UHF and Pillar (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 related parties. Interest income on these notes and related party receivables was $6,587 and $5,053 for the three months ended September 30, 2022 and 2021, respectively, and $16,880 and $15,139 for the nine months ended September 30, 2022 and 2021, respectively.

Interest expense on payables to Pillar was $2,447 and $1,431 for the three months ended September 30, 2022 and 2021, respectively, and $5,746 and $4,199 for the nine months ended September 30, 2022 and 2021, respectively.

Receivable from related party, net represents the net amount outstanding from Pillar for loans and unreimbursed fees, expenses and costs as provided above.

14. 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, 2022 and 2021.

15. 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.

On January 29, 2021, UHF sold El Dorado, a 208 unit multifamily property in McKinney, Texas; Limestone Ranch, a 252 unit multifamily property in Lewisville, Texas; and Marquis, a 276 unit multifamily property in Lewisville, Texas to a non-related third party. As a result of this sale, we recognized a gain of $10,026 during the nine months ended September 30, 2022 that had previously been deferred.

As of September 30, 2022 and December 31, 2021, we had deferred gain of $9,791.

16. 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,
	2022		2021		2022		2021
Current	$	81,548	$	605	$	81,616	$	(1,196)
Deferred	—		—		—		—
	$	81,548	$	605	$	81,616	$	(1,196)

17. 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.

19

AMERICAN REALTY INVESTORS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(dollars in thousands, except per share amounts)

(Unaudited)

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 to 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.

In February 2019, Paul Berger ("Berger") filed suit against us and others that alleged that our subsidiary IOR completed improper sales and/or transfers of property. Berger sought to proceed derivatively and directly, requested a payoff of various related party loans to IOR and that IOR then distribute the funds to its stockholders. After discovery and motions to dismiss substantial portions of the complaint, on June 28, 2022, Plaintiff Berger sought to voluntarily dismiss the action for reasons stated in the motion. The parties have not entered into any settlement, and neither Berger nor their counsel has received any consideration for the voluntary dismissal. The parties, through counsel, have stipulated to the dismissal with prejudice. On June 29, 2022, the United States District Court ordered that notice of the dismissal be provided to IOR shareholders. A copy of the required notice was filed as an exhibit to a Form 8-K of IOR for event occurring June 29, 2022 (the date of the Court’s order), and on July 7, 2022, a copy of the required notice was posted on IOR’s website. If no action is taken by one or more other stockholders of IOR prior to August 19, 2022, the Court may enter an order dismissing the Berger case with prejudice.

18 Subsequent Events

The date to which events occurring after September 30, 2022, the date of the most recent balance sheet, have been evaluated for possible adjustment to the consolidated financial statements or disclosure is November 10, 2022, which is the date on which the consolidated financial statements were available to be issued.

On October 21, 2022, we paid off the mortgage loan payable on Stanford Center (See Note 11 - Mortgages and Other Notes Payable) with a portion of our cash distributions from our investment in VAA (See Note 10 - Investment in Unconsolidated Joint Ventures).

On November 1, 2022, in connection with the sale of the VAA Sale Portfolio, we received an additional distribution from VAA (See Note 10 - Investment in Unconsolidated Joint Ventures), which included the full operational control of the Holdback Portfolio and a cash payment of $203,936. We are in the process of assuming the mortgage notes payable on Holdback Portfolio.

20

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, 2021 (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;

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

•the other risk factors identified in this Form 10-Q, including those described under the caption “Risk Factors.”

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.

21

We continue to closely monitor the impact of the COVID-19 pandemic on all aspects of our business and our property portfolio. While we did not incur significant disruptions during the nine months ended September 30, 2022 from the COVID-19 pandemic, our commercial properties have experienced a decline in occupancy. We believe this decline to be temporary and do not expect a significant decrease in rental revenue.

We are unable to predict the impact that the COVID-19 pandemic will have on our financial condition, results of operations and cash flows due to numerous uncertainties. These uncertainties include the scope, severity and duration of the pandemic, the actions taken to contain the pandemic or mitigate its impact and the direct and indirect economic effects of the pandemic and containment measures, among others. The pandemic continues to have an impact on the U.S. economy and on the local markets in which our properties are located. Nearly every industry has been impacted directly or indirectly, and the commercial real estate market has come under pressure due to numerous factors, including preventative measures taken by local, state and federal authorities to alleviate the public health crisis such as mandatory business closures, quarantines, and restrictions on travel and “shelter-in-place” or “stay-at-home” orders.

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:

Dispositions

•On March 30, 2021, we sold a 50% ownership interest in Overlook at Allensville Phase II, a 144 unit multifamily property in Sevierville, Tennessee to Macquarie for $2.6 million resulting in a gain on sale of $1.4 million. Concurrent with the sale, we each contributed our 50% ownership interests in Overlook at Allensville Phase II into VAA.

•On August 26, 2021, we sold 600 Las Colinas, a 512,173 square foot office building in Irving, Texas for $74.8 million, resulting in a gain on sale of $27.3 million. We used the proceeds to pay off the mortgage note payable on the property (See "Financing Activities") and for general corporate purposes.

•During the year ended December 31, 2021, we sold a total of 134.7 acres of land from our holdings in Windmill Farms for $20.2 million, in aggregate, resulting in gains on sale of $10.3 million. In addition, we sold 14.09 acres of land from our holdings in Mercer Crossing for $9.0 million, resulting in a gain on sale of $6.4 million.

•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, in connection with a sale of properties by VAA (See "Other Developments"), we sold Sugar Mill Phase III, a 72 unit multifamily property in Baton Rouge, Louisiana for $11.8 million, 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.

•During the nine months ended September 30, 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.

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Financing Activities

•On March 2, 2021, we extended our $1.2 million loan on Athens to August 28, 2022.

•On March 4, 2021, we extended the maturity of our loan on Windmill Farms until February 28, 2023 at a reduced interest rate of 5%.

•On August 25, 2021, we replaced the existing loan on Villas at Bon Secour with a new $20.0 million loan that bears interest at 3.08% and matures on September 1, 2031.

•On August 26, 2021, we paid off the $35.9 million loan on 600 Las Colinas in connection with the sale of the underlying property (See "Dispositions").

•On January 14, 2022, the loan on Toulon was paid off in connection with the sale of the underlying property (See "Dispositions").

•On March 3, 2022, the loan on Stanford Center was extended to February 26, 2023 and was subsequently paid off on October 21, 2022.

•On September 1, 2022, we extended our $1.2 million 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 "Dispositions").

Development Activities

During 2021, we spent $15.7 million on our ongoing development of Windmill Farms. Our expenditure includes $2.8 million on the development of land lots for sale to single family home developers and $13.0 million on reimbursable infrastructure investments. During the nine months ended September 30, 2022, we spent $3.7 million on our ongoing development of Windmill Farms. Our expenditure includes $1.2 million on the development of land lots for sale to single family home developers and $2.5 million on reimbursable infrastructure investments.

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. In 2022, we incurred $5.0 million in capital expenditures, which were funded by insurance proceeds. We expect to complete the renovation by the end of this year.

We have investment in nine notes receivable that were issued to fund the development of multifamily properties . As of September 30, 2022, one of the projects was in construction, one was in lease-up and seven were stabilized. In 2022, we advanced $2.1 million on these development notes. Each of these notes are convertible, at our option, into a 100% ownership interest in the underlying property.

Other Developments:

During 2021, we recorded a loss of $29.6 million on the remeasurements of certain assets ("Earn Out Obligation") that were sold in connection with our investment in VAA.

On June 17, 2022, we entered into an agreement to sell 45 properties (“VAA Sale Portfolio”) held by VAA and one property held by our SPC subsidiary.

On September 15, 2022, VAA, SPC, Macquarie and Pillar entered a Distribution and Holdback Property Agreement (“Distribution Agreement”), which provides the timing and ordering of the distribution of the net proceeds from the sale of the VAA Sale Portfolio, the repayment of the Mezzanine Loans, and the distribution of the remaining seven properties of VAA (“Holdback Portfolio”).

On September 16, 2022, VAA completed the sale of the VAA Sale Portfolio for $1.8 billion, resulting in gain on sale of $738.7 million. In connection with sale, we received $182.8 million, which consisted of a payoff of our $113.0 million Mezzanine Loan, $2.6 million of accrued interest on the Mezzanine Loan and $84.2 million of contributed capital offset in part by the $17.0 million remaining balance on our Earn Out Obligation.

On November 1, 2022, in connection with the sale of the VAA Sale Portfolio, we received an additional distribution from VAA, which included the full operational control of the Holdback Portfolio and a cash payment of $203.9 million. We are in the process of assuming the mortgage notes payable on Holdback Portfolio.

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We plan to use our share of the proceeds from the sale of the VAA Sale Portfolio for additional investment in income-producing real estate, pay down debt and for general corporate purposes. Our ownership interest in VAA is held by SPC, and is therefore subject to the bond covenants of the three series of bonds that have been issued by SPC. These provisions include restrictions on the distribution of cash from SPC (See Note 12 - Bonds Payable in our consolidated financial statements).

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.

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 Lease-Up Properties and the Disposition Properties (each as defined below).

For purposes of the discussion below, we define "Same Properties" as those properties that are substantially leased-up and in operation for the entirety of both periods of the comparison. Non-Same Properties for comparison purposes include those properties that have been recently constructed or leased-up (“Lease-up Properties”) and properties that have been disposed of ("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

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entirety of both periods of the comparison. Accordingly, the Same Properties consist of all properties, excluding the Lease-up Properties and the Disposition Properties for the periods of comparison.

For the comparison of the three and nine months ended September 30, 2022 to the three and nine months ended September 30, 2021, the Lease-up Properties are Forest Grove, Parc at Denham Springs Phase II and the Disposition Properties are Overlook at Allensville Phase II, 600 Las Colinas, Toulon and Sugar Mill Phase III.

The following table summarizes our results of operations for the three and nine months ended September 30, 2022 and 2021:

	Three Months Ended September 30,						Nine Months Ended September 30,
	2022		2021		Variance		2022		2021		Variance
Multifamily Segment
Revenue	$	2,850	$	3,703	$	(853)	$	9,024	$	11,068	$	(2,044)
Operating expenses	(1,966)		(2,072)		106		(5,395)		(6,306)		911
	884		1,631		(747)		3,629		4,762		(1,133)
Commercial Segment
Revenue	4,720		5,925		(1,205)		13,286		19,115		(5,829)
Operating expenses	(2,735)		(3,538)		803		(7,146)		(10,194)		3,048
	1,985		2,387		(402)		6,140		8,921		(2,781)
Segment profit	2,869		4,018		(1,149)		9,769		13,683		(3,914)
Other non-segment items of income (expense)
Depreciation and amortization	(2,193)		(2,935)		742		(6,840)		(9,473)		2,633
General, administrative and advisory	(4,613)		(7,117)		2,504		(15,570)		(24,393)		8,823
Interest, net	2,991		(929)		3,920		6,636		(5,088)		11,724
Loss on early extinguishment of debt	(1,166)		(1,451)		285		(2,805)		(1,451)		(1,354)
Gain (loss) on foreign currency transactions	1,533		(1,639)		3,172		19,437		1,185		18,252
Gain on sale or write down of assets	1,539		31,312		(29,773)		16,580		24,265		(7,685)
Income from joint ventures	464,143		3,543		460,600		471,385		11,451		459,934
Other (expense) income	(80,799)		261		(81,060)		(79,691)		4,438		(84,129)
Net income	$	384,304	$	25,063	$	359,241	$	418,901	$	14,617	$	404,284

Comparison of the three months ended September 30, 2022 to the three months ended September 30, 2021:

Our $359.2 million increase in net income during the three months ended September 30, 2022 is primarily attributed to the following:

•The decrease in profit from the multifamily and commercial segments is due to the Disposition Properties.

•The change in interest expense, net is primarily due a reduction in reserve for uncollectable notes receivable and a decrease in interest from mortgage notes payables on the Disposition Properties.

•The increase in gains on foreign currency transactions is due to favorable changes in the U.S. Dollar and the New Israeli Shekel conversion rate.

•The decrease in gain on sale or write down of assets is primarily due to the $27.3 million gain on the sale of 600 Las Colinas in 2021 (See "Dispositions" in Management's Overview).

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

•The change in other (expense) income is primarily due to the $87.9 million increase 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, 2022 to the nine months ended September 30, 2021:

Our $404.3 million increase in net income during the nine months ended September 30, 2022 is primarily attributed to the following:

•The decrease in profit from the multifamily and commercial segments is due to the Disposition Properties.

•The decrease in general, administrative and advisory expenses is primarily due to the decrease legal costs from the Clapper and the arbitration settlements in 2021 (See "Other Developments" in Management's Overview).

•The change in interest expense, net is primarily due a reduction in reserve for uncollectable notes receivable and a decrease in interest from mortgage notes payables on the Disposition Properties and interest on the bonds payable.

•The increase in gain on foreign currency transactions is due to favorable changes in the U.S. Dollar and the New Israeli Shekel conversion rate.

•The decrease in gain on sale or write down of assets is primarily due to the $27.3 million gain on the sale of 600 Las Colinas in 2021 (See "Dispositions" in Management's Overview) and a $10.4 million decrease in gain on sales of land parcels, offset in part by the $29.6 million loss on remeasurement of the Earn Out Obligation in 2021 (See "Other Developments" in Management's Overview).

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

•The change in other (expense) income is primarily due to the $89.1 million increase 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, 2022, along with cash that will be generated from notes and interest receivables, 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,
	2022		2021		Variance
Net cash used in operating activities	$	(6,874)	$	(7,723)	$	849
Net cash provided by investing activities	$	154,850	$	106,536	$	48,314
Net cash used in financing activities	$	(71,524)	$	(101,870)	$	30,346

The increase in cash provided by investing activities is primarily due the $172.8 million increase in distribution from joint venture and the $40.3 million redemption of short term investments in 2022 offset in part by the $99.4 million purchase of short term investments in 2022, the $59.1 million decrease in proceeds from the sale of real estate and the $6.1 million decrease in collection of notes receivable in 2022. The increase in distribution from joint venture is due to the sale of the VAA Sale Portfolio in 2022 (See "Other Developments" in Management's Overview).

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The decrease in cash used in financing activities is primarily due to the $47.0 million decrease in payments of mortgages, notes and bonds payable offset in part by the $20.0 million in proceeds on the mortgage notes payable in 2021.

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.

The following table reconciles net income attributable to the Company to FFO and FFO adjusted for the three and nine months ended September 30, 2022 and 2021 (dollars and shares in thousands):

	Three Months Ended September 30,				Nine Months Ended September 30,
	2022		2021		2022		2021
Net income attributable to the Company	$	302,289	$	19,411	$	329,915	$	10,151
Depreciation and amortization	2,193		2,935		6,840		9,473
Gain on sale or write down of assets	(1,539)		(31,312)		(16,580)		(24,265)
Gain on sale of land	—		4,042		4,752		15,153
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	4,394		2,984		8,424		7,016
FFO-Basic and Diluted	37		(1,940)		26,051		17,528
Loss on extinguishment of debt	1,166		1,451		2,805		1,451
Loss on early extinguishment of debt from unconsolidated joint venture at our pro rata share	15,254		—		15,254		—
(Gain) loss on foreign currency transactions	(1,533)		1,639		(19,437)		(1,185)
FFO-adjusted	$	14,924	$	1,150	$	24,673	$	17,794

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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

In February 2019, Paul Berger ("Berger") filed suit against us and others that alleged that our subsidiary IOR completed improper sales and/or transfers of property. Berger sought to proceed derivatively and directly, requested a payoff of various related party loans to IOR and that IOR then distribute the funds to its stockholders. After discovery and motions to dismiss substantial portions of the complaint, on June 28, 2022, Plaintiff Berger sought to voluntarily dismiss the action for reasons stated in the motion. The parties have not entered into any settlement, and neither Berger nor their counsel has received any consideration for the voluntary dismissal. The parties, through counsel, have stipulated to the dismissal with prejudice. On June 29, 2022, the United States District Court ordered that notice of the dismissal be provided to IOR shareholders. A copy of the required notice was filed as an exhibit to a Form 8-K of IOR for event occurring June 29, 2022 (the date of the Court’s order), and on July 7, 2022, a copy of the required notice was posted on IOR’s website. If no action is taken by one or more other stockholders of IOR prior to August 19, 2022, the Court may enter an order dismissing the Berger case with prejudice.

ITEM 1A    RISK FACTORS

Except as set forth below, there have been no material changes from the risk factors previously disclosed in the 2021 10-K. For a discussion on these risk factors, please see “Item 1A. Risk Factors” contained in the 2021 10-K.

Risks Related to COVID-19 Pandemic

We continue to closely monitor the impact of the COVID-19 pandemic on all aspects of our business and our property portfolio. While we did not incur significant disruptions during the nine months ended September 30, 2022 from the COVID-19 pandemic, our commercial properties have experienced a decline in occupancy. We are unable to predict the impact that the COVID-19 pandemic will have on our financial condition, results of operations and cash flows due to numerous uncertainties. These uncertainties include the scope, severity and duration of the pandemic, the actions taken to contain the pandemic or mitigate its impact and the direct and indirect economic effects of the pandemic and containment measures, among others. Nearly every industry has been impacted directly or indirectly, and the commercial real estate market has come under pressure due to numerous factors, including preventative measures taken by local, state and federal authorities to alleviate the public health crisis such as mandatory business closures, quarantines, and restrictions on travel and “shelter-in-place” or “stay-at-home” orders. The future impact of COVID-19 on our business and financial activities will depend on future developments, which at this stage are unpredictable considering the fluctuations of COVID-19 outbreaks and the resulting changes in the markets.

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, 2022. As of September 30, 2022, 986,750 shares have been purchased and 263,250 shares may be purchased under the program.

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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 Officer pursuant to Rule 13a-14 and 15d-14 under the Securities Exchange Act of 1934, as amended.
31.2*	Certification by the Principal 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 10, 2022	By:	/s/ ERIK L. JOHNSON
		Erik L. Johnson Executive Vice President and Chief Financial Officer

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EX-31.1

Exhibit 31.1

CERTIFICATION

I, Bradley J. Muth, 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 10, 2022	By:	/s/ BRADLEY J. MUTH
		Bradley J. Muth
		President and Chief Executive Officer

EX-31.2

Exhibit 31.2

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 10, 2022	By:	/s/ ERIK L. JOHNSON
		Erik L. Johnson
		Executive Vice President and Chief Financial Officer

EX-32.1

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, 2022 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, 2022 fairly presents in all material respects, the financial condition and results of operations of the Company, at and for the period indicated.

Dated: November 10, 2022	By:	/s/ BRADLEY J. MUTH
		Bradley J. Muth
		President and Chief Executive Officer
		/s/ ERIK L. JOHNSON
		Erik L. Johnson
		Executive Vice President and Chief Financial Officer

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Cover - shares	9 Months Ended
	Sep. 30, 2022	Nov. 10, 2022
Cover [Abstract]
Document Type	10-Q
Document Quarterly Report	true
Document Period End Date	Sep. 30, 2022
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	94-6565852
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	2022

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CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands	Sep. 30, 2022	Dec. 31, 2021
Assets
Real estate	$ 270,161	$ 296,363
Cash and cash equivalents	131,236	50,748
Restricted cash	17,950	21,986
Short-term investments	75,330	16,001
Notes receivable (including $76,935 and $75,872 at September 30, 2022 and December 31, 2021, respectively, from related parties)	139,423	136,607
Investment in unconsolidated joint ventures	313,399	61,621
Receivable from related parties, net	107,229	100,599
Other assets (including $2,334 and $4,535 at September 30, 2022 and December 31, 2021, respectively, from related parties)	95,422	86,644
Total assets	1,150,150	770,569
Liabilities:
Mortgages and other notes payable	158,501	183,392
Bonds payable	127,497	189,452
Accounts payable and other liabilities (including $602 and $616 at September 30, 2022 and December 31, 2021, respectively, to related parties)	95,414	44,518
Accrued interest	3,195	6,565
Deferred revenue	9,791	9,791
Total liabilities	394,398	433,718
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	506,000	176,085
Total shareholders' equity	570,053	240,138
Noncontrolling interests	185,699	96,713
Total equity	755,752	336,851
Total liabilities and partners' capital	$ 1,150,150	$ 770,569

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CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) $ in Thousands	Sep. 30, 2022	Dec. 31, 2021
Notes and interest receivable	$ 139,423	$ 136,607
Other assets	95,422	86,644
Accounts payable and other liabilities	$ 95,414	$ 44,518
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 Parties
Notes and interest receivable	$ 76,935	$ 75,872
Other assets	2,334	4,535
Accounts payable and other liabilities	$ 602	$ 616

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CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2022	Sep. 30, 2021	Sep. 30, 2022	Sep. 30, 2021
Income Statement [Abstract]
Rental revenues (including $223 and $312 for the three months ended September 30, 2022 and 2021, respectively, and $702 and $867 for nine months ended September 30, 2022 and 2021, respectively, from related parties)	$ 7,570	$ 9,628	$ 22,310	$ 30,183
Other income	749	866	1,925	3,242
Total revenue	8,319	10,494	24,235	33,425
Property operating expenses (including $110 and $178 for the three months ended September 30, 2022 and 2021, respectively, and $337 and $755 for nine months ended September 30, 2022 and 2021, respectively, from related parties)	4,701	5,610	12,541	16,500
Depreciation and amortization	2,193	2,935	6,840	9,473
General and administrative (including $1,288 and $1,017 for the three months ended September 30, 2022 and 2021, respectively, and $3,368 and $3,434 for nine months ended September 30, 2022 and 2021, respectively, from related parties)	3,042	3,698	7,956	12,799
Advisory fee to related party	1,571	3,419	7,614	11,594
Total operating expenses	11,507	15,662	34,951	50,366
Net operating loss	(3,188)	(5,168)	(10,716)	(16,941)
Interest income (including $6,587 and $5,053 for the three months ended September 30, 2022 and 2021, respectively, and $16,880 and $15,139 for the nine months ended September 30, 2022 and 2021, respectively, from related parties)	9,482	6,128	25,683	17,388
Interest expense (including $2,447 and $1,431 for the three months ended September 30, 2022 and 2021, respectively, and $5,746 and $4,199 for the nine months ended September 30, 2022 and 2021, respectively, from related parties)	(6,491)	(7,057)	(19,047)	(22,476)
Gain (loss) on foreign currency transactions			19,437	1,185
Loss on early extinguishment of debt	(1,166)	(1,451)	(2,805)	(1,451)
Equity in income from unconsolidated joint ventures	464,143	3,543	471,385	11,451
Gain on sale or write-down of assets, net	1,539	31,312	16,580	24,265
Income tax provision	(81,548)	(605)	(81,616)	1,196
Net income	384,304	25,063	418,901	14,617
Net income attributable to noncontrolling interests	(82,015)	(5,652)	(88,986)	(4,466)
Net income attributable to common shares	$ 302,289	$ 19,411	$ 329,915	$ 10,151
Earnings per share - basic and diluted
Basic (in dollars per share)	$ 18.72	$ 1.20	$ 20.43	$ 0.63
Diluted (in dollars per share)	$ 18.72	$ 1.20	$ 20.43	$ 0.63
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

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CONSOLIDATED STATEMENTS OF OPERATIONS (Parenthetical) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2022	Sep. 30, 2021	Sep. 30, 2022	Sep. 30, 2021
Rental revenue	$ 7,570	$ 9,628	$ 22,310	$ 30,183
Property operating expenses	4,701	5,610	12,541	16,500
General and administrative	3,042	3,698	7,956	12,799
Interest income	9,482	6,128	25,683	17,388
Interest expense	6,491	7,057	19,047	22,476
Affiliate
Rental revenue	223	312	702	867
Property operating expenses	110	178	337	755
General and administrative	1,288	1,017	3,368	3,434
Interest income	6,587	5,053	16,880	15,139
Interest expense	$ 2,447	$ 1,431	$ 5,746	$ 4,199

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CONSOLIDATED STATEMENTS OF EQUITY - USD ($) $ in Thousands	Total	Total Shareholders' Equity	Preferred Stock	Common Stock	Treasury Stock	Paid-in Capital	Retained Earnings	Noncontrolling Interest
Balance at beginning at Dec. 31, 2020	$ 330,406	$ 236,791	$ 1,801	$ 162	$ (2)	$ 62,092	$ 172,738	$ 93,615
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net income	14,617	10,151					10,151	4,466
Cancellation of treasury shares	0				2	(2)
Balance at ending at Sep. 30, 2021	345,023	246,942	1,801	162	0	62,090	182,889	98,081
Balance at beginning at Jun. 30, 2021	319,960	227,531	1,801	162	0	62,090	163,478	92,429
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net income	25,063	19,411					19,411	5,652
Balance at ending at Sep. 30, 2021	345,023	246,942	1,801	162	0	62,090	182,889	98,081
Balance at beginning at Dec. 31, 2021	336,851	240,138	1,801	162	0	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	0	62,090	506,000	185,699
Balance at beginning at Jun. 30, 2022	371,448	267,764	1,801	162	0	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	$ 0	$ 62,090	$ 506,000	$ 185,699

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CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands	9 Months Ended
	Sep. 30, 2022	Sep. 30, 2021
Cash Flow From Operating Activities:
Net income	$ 418,901	$ 14,617
Adjustments to reconcile net income to net cash used in operating activities:
Gain on sale or write down of assets	(16,580)	(24,265)
Gain on foreign currency transactions	(19,437)	(1,185)
Loss on early extinguishment of debt	2,805	1,451
Depreciation and amortization	9,409	11,699
Recovery of bad debts	(3,126)	(1,326)
Equity in income from unconsolidated joint ventures	(471,385)	(11,451)
Distribution of income from unconsolidated joint ventures	3,700	3,157
Changes in assets and liabilities, net of dispositions:
Other assets	(4,925)	(9,167)
Related party receivables	(6,630)	15,461
Accrued interest payable	(4,652)	(4,801)
Accounts payable and other liabilities	85,046	(1,913)
Net cash used in operating activities	(6,874)	(7,723)
Cash Flow From Investing Activities:
Collection of notes receivable	2,726	9,319
Originations and advances on notes receivable	(2,118)	(3,882)
Purchase of short-term investment	(99,350)	0
Redemption of short-term investment	40,250	0
Development and renovation of real estate	(11,834)	(8,770)
Deferred leasing costs	(1,163)	(877)
Proceeds from sale of assets	44,591	103,727
Contribution to unconsolidated joint venture	0	(411)
Distribution from unconsolidated joint venture	181,748	7,430
Net cash provided by investing activities	154,850	106,536
Cash Flow From Financing Activities:
Proceeds from mortgages, other notes and bonds payable	0	20,015
Payments on mortgages, other notes and bonds payable	(70,170)	(117,193)
Debt extinguishment costs	(1,354)	(4,086)
Deferred financing costs	0	(606)
Net cash used in financing activities	(71,524)	(101,870)
Net increase (decrease) in cash, cash equivalents and restricted cash	76,452	(3,057)
Cash, cash equivalents and restricted cash, beginning of period	72,734	87,020
Cash, cash equivalents and restricted cash, end of period	$ 149,186	$ 83,963

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Organization

9 Months Ended

Sep. 30, 2022

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 are listed on the Tel-Aviv Stock Exchange ("TASE").

At September 30, 2022, our portfolio of properties consisted of:

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

●    Seven multifamily properties, owned directly by us, comprising of 1,180 units;

●    Approximately 1,847 acres of developed and undeveloped land; and

●    Seven multifamily properties, totaling 1,148 units, owned by our joint venture.

Our day to day operations are managed by Pillar Income Asset Management, Inc. (“Pillar”). Their 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. All of our employees are 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 are managed by outside management companies. Pillar and Regis are considered to be related parties (See Note 13 – Related Party Transactions).

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Summary of Significant Accounting Policies

9 Months Ended

Sep. 30, 2022

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.

The consolidated balance sheet at December 31, 2021 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, 2021. Certain 2021 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.

Newly Issued Accounting Standards

In March 2020, the FASB issued ASU 2020-04, Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting. The standard provides guidance, optional expedients and exceptions that reference London Interbank Offered Rate (“LIBOR”) or another reference rate expected to be discontinued due to reference rate reform. The adoption of the standard on January 1, 2022, did not have an impact on our consolidated financial statements.

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Earnings Per Share

9 Months Ended

Sep. 30, 2022

Earnings Per Share [Abstract]

Earnings Per Share

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,
	2022		2021		2022		2021
Net income	$	384,304	$	25,063	$	418,901	$	14,617
Net income attributable to noncontrolling interests	(82,015)		(5,652)		(88,986)		(4,466)
Net income attributable to common shares	$	302,289	$	19,411	$	329,915	$	10,151
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	$	18.72	$	1.20	$	20.43	$	0.63

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Supplemental Cash Flow Information

9 Months Ended

Sep. 30, 2022

Supplemental Cash Flow Elements [Abstract]

Supplemental Cash Flow Information

Supplemental Cash Flow Information

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

	Nine Months Ended September 30,
	2022		2021
Cash paid for interest	$	22,211	$	26,307
Cash - beginning of period
Cash and cash equivalents	$	50,748	$	36,814
Restricted cash	21,986		50,206
	$	72,734	$	87,020
Cash - end of period
Cash and cash equivalents	$	131,236	$	63,873
Restricted cash	17,950		20,090
	$	149,186	$	83,963
Proceeds from mortgages, notes and bonds payable
Proceeds from mortgages and notes payable	$	—	$	20,015
Proceeds from bonds	—		—
	$	—	$	20,015
Payments on mortgages, notes and bonds payable
Payments on mortgages and notes payable	$	26,411	$	63,535
Payments on bonds payable	43,759		53,658
	$	70,170	$	117,193

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

	Nine Months Ended September 30,
	2022		2021
Assets contributed to joint venture	$	—	$	18,608
Liabilities assumed by joint venture	$	—	$	15,606
Notes receivable received in exchange for related party receivable	$	—	$	9,259
Distribution from joint venture applied to Earn Out Obligation	$	34,159	$	5,441

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Operating Segments

9 Months Ended

Sep. 30, 2022

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, 2022 and 2021:

	Three Months Ended September 30,				Nine Months Ended September 30,
	2022		2021		2022		2021
Multifamily Segment
Revenues	$	2,850	$	3,703	$	9,024	$	11,068
Operating expenses	(1,966)		(2,072)		(5,395)		(6,306)
Profit from segment	884		1,631		3,629		4,762
Commercial Segment
Revenues	4,720		5,925		13,286		19,115
Operating expenses	(2,735)		(3,538)		(7,146)		(10,194)
Profit from segment	1,985		2,387		6,140		8,921
Total profit from segments	$	2,869	$	4,018	$	9,769	$	13,683

The table below reflects the reconciliation of total profit from segments to net income for the three and nine months ended September 30, 2022 and 2021:

	Three Months Ended September 30,				Nine Months Ended September 30,
	2022		2021		2022		2021
Total profit from segments	$	2,869	$	4,018	$	9,769	$	13,683
Other non-segment items of income (expense)
Depreciation and amortization	(2,193)		(2,935)		(6,840)		(9,473)
General and administrative	(3,042)		(3,698)		(7,956)		(12,799)
Advisory fee to related party	(1,571)		(3,419)		(7,614)		(11,594)
Other income	749		866		1,925		3,242
Interest income	9,482		6,128		25,683		17,388
Interest expense	(6,491)		(7,057)		(19,047)		(22,476)
Gain (loss) on foreign currency transaction	1,533		(1,639)		19,437		1,185
Loss on early extinguishment of debt	(1,166)		(1,451)		(2,805)		(1,451)
Income from unconsolidated joint ventures	464,143		3,543		471,385		11,451
Gain on sales or write-down of assets	1,539		31,312		16,580		24,265
Income tax provision	(81,548)		(605)		(81,616)		1,196
Net income	$	384,304	$	25,063	$	418,901	$	14,617

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Lease Revenue

9 Months Ended

Sep. 30, 2022

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 includes minimum rents and charges for ancillary services. Our commercial property leases generally included 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, 2022 and 2021:

	Three Months Ended September 30,				Nine Months Ended September 30,
	2022		2021		2022		2021
Fixed component	$	6,977	$	9,124	$	20,854	$	28,287
Variable component	593		504		1,456		1,896
	$	7,570	$	9,628	$	22,310	$	30,183

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:

2022	$	12,927
2023	8,729
2024	7,985
2025	7,687
2026	7,632
Thereafter	21,143
	$	66,103

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Real Estate Activity

9 Months Ended

Sep. 30, 2022

Real Estate [Abstract]

Real Estate Activity

Real Estate Activity

Below is a summary of our real estate as of September 30, 2022 and December 31, 2021:

	September 30, 2022		December 31, 2021
Land	$	64,875	$	67,514
Building and improvements	184,117		219,327
Tenant improvements	25,460		21,364
Construction in progress	59,083		51,091
Total cost	333,535		359,296
Less accumulated depreciation	(63,374)		(62,933)
Total real estate	$	270,161	$	296,363

Construction in progress represents our investment in Windmill Farms and the cost of renovating Landing Bayou.

Gain on sale or write-down of assets, net for the three and nine months ended September 30, 2022 and 2021 consists of the following:

	Three Months Ended September 30,				Nine Months Ended September 30,
	2022		2021		2022		2021
Land(1)	$	—	$	4,042	$	4,752	$	15,153
Multifamily Properties(2)	1,539		—		11,142		11,442
Commercial Properties(3)	—		27,270		890		27,270
Other(4)	—		—		(204)		(29,600)
	$	1,539	$	31,312	$	16,580	$	24,265

(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.

The 2021 amount is attributed to the gain from the sale of a 50% ownership interest in Overlook at Allensville Phase II to Macquarie in 2021 (See Note 10 – Investment in Unconsolidated Joint Ventures) and the gain on sale of various multifamily properties that had previously been deferred (See Note 15 – Deferred Income).

(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.

On August 26, 2021, we sold 600 Las Colinas, a 512,173 square foot office building in Irving, Texas for $74,750, resulting in a gain on sale of $27,270. We used the proceeds to pay down the mortgage note payable on the property and for general corporate purposes.

(4)The 2021 amount represents a $29,600 loss on remeasurement of the Earn Out Obligation in connection with our investment in VAA (See Note 10 - Investment in Unconsolidated Joint Ventures).

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Short-term Investments	9 Months Ended
	Sep. 30, 2022
Investments, Debt and Equity Securities [Abstract]
Short-term Investments	Short-term InvestmentsWe have an investment in variable denominated floating rate notes with Toyota Motor Credit Corporation and Ford Motor Corporation. The notes do not have a stated maturity and are subject to immediate repayment at our option. The interest rate on the note was 2.30% and 1.15% at September 30, 2022 and December 31, 2021, respectively.

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Notes Receivable

9 Months Ended

Sep. 30, 2022

Receivables [Abstract]

Notes Receivable

Notes Receivable

The following table summarizes our notes receivable as of September 30, 2022 and December 31, 2021:

	Carrying value
Property/Borrower	September 30, 2022		December 31, 2021		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)	2,326		2,486		5.00	%	7/1/25
Bellwether Ridge(1)	3,973		3,967		5.00	%	11/1/26
Forest Pines(1)	6,472		6,472		5.00	%	11/1/22
Lake Wales	3,000		3,000		9.50	%	6/30/26
Legacy Pleasant Grove	496		496		12.00	%	10/23/22
McKinney Ranch	3,926		4,554		6.00	%	9/15/24
One Realco Land Holding, Inc.	1,728		1,728		9.50	%	6/30/26
Parc at Ingleside(1)	3,663		3,700		5.00	%	11/1/26
Parc at Opelika Phase II(1)	2,914		2,305		10.00	%	1/13/23
Parc at Windmill Farms(1)	7,836		7,830		5.00	%	11/1/22
Phillips Foundation for Better Living, Inc.(2)	182		813		12.00	%	3/31/24
Plum Tree(1)	1,767		1,537		5.00	%	4/26/26
Riverview on the Park Land, LLC	1,045		1,045		9.50	%	6/30/26
Spartan Land	5,907		5,907		12.00	%	1/16/23
Spyglass of Ennis(1)	5,319		5,319		5.00	%	11/1/22
Steeple Crest(1)	6,498		6,498		5.00	%	8/1/26
Unified Housing Foundation(2)(3)	2,881		2,881		12.00	%	6/30/23
Unified Housing Foundation(2)(3)	212		212		12.00	%	6/30/23
Unified Housing Foundation(2)(3)	6,831		6,831		12.00	%	6/30/23
Unified Housing Foundation(2)(3)	10,401		10,401		12.00	%	6/30/23
Unified Housing Foundation(2)(3)	10,096		10,096		12.00	%	3/31/24
Unified Housing Foundation(2)(3)	6,990		6,990		12.00	%	3/31/23
Unified Housing Foundation(2)(3)	3,615		3,615		12.00	%	5/31/23
Unified Housing Foundation(2)(3)	27,477		24,053		12.00	%	12/31/32
Unified Housing Foundation(2)(3)	6,521		6,521		12.00	%	3/31/24
Unified Housing Foundation(2)(3)	1,549		1,549		12.00	%	4/30/24
Unified Housing Foundation(2)(3)	180		183		12.00	%	6/30/24
	$	139,423	$	136,607

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

(3) 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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Investment in Unconsolidated Joint Ventures

9 Months Ended

Sep. 30, 2022

Equity Method Investments and Joint Ventures [Abstract]

Investment in Unconsolidated Joint Ventures

Investment in Unconsolidated Joint Ventures

On November 16, 2018, our SPC subsidiary formed 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 51 multifamily properties owned by us in exchange for a 50% voting interest / 49% profit participation interest ("Class A interest") in VAA and a note payable (“Mezzanine Loan”). Concurrent with the Contribution, VAA issued Class B interests with a 2% profits participation interest and no voting rights to Daniel J. Moos, our former President and Chief Executive Officer (“Class B Member”). The Class B Member serves as the Manager of VAA.

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") for the $10,000 advance on the Earn Out that we received from Macquarie.

On March 30, 2021, we sold a 50% ownership interest in Overlook at Allensville Phase II, a 144 unit multifamily property in Sevierville, Tennessee to Macquarie for $2,551 resulting in gain on sale of $1,417. Concurrent with the sale, we each contributed our 50% ownership interests in Overlook at Allensville Phase II into VAA.

On July 13, 2021, we received the arbitration result of a dispute regarding the measurement of the Earn Out Obligation. Our position and claims were declined, and the position of Macquarie was fully accepted. As a result, we were required to pay approximately $39,600 to Macquarie to satisfy the Earn Out Obligation, and therefore, recorded a charge of $29,600 during the nine months ended September 30, 2022 (See Note 7 – Real Estate Activity). In accordance with the joint venture operating agreement, the Earn Out Obligation was paid from our share of subsequent distributions from VAA.

On June 17, 2022, we entered into an agreement to sell 45 properties (“VAA Sale Portfolio”) held by VAA and one property held by our SPC subsidiary.

On September 15, 2022, VAA, SPC, Macquarie and Pillar entered a Distribution and Holdback Property Agreement (“Distribution Agreement”), which provides the timing and ordering of the distribution of the net proceeds from the sale of the VAA Sale Portfolio, the repayment of the Mezzanine Loans, and the distribution of the remaining seven properties of VAA (“Holdback Portfolio”).

On September 16, 2022, VAA completed the sale of the VAA Sale Portfolio for $1,810,700, resulting in gain on sale of $738,665 to the joint venture. In connection with 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 November 1, 2022, in connection with the sale of the VAA Sale Portfolio, we received an additional distribution from VAA (See Note 18 - Subsequent Events), which included the full operational control of the Holdback Portfolio and a cash payment of $203,936. We are in the process of assuming the mortgage notes payable on Holdback Portfolio.

We plan to use our share of the proceeds from the sale of the VAA Sale Portfolio for additional investment in income-producing real estate, to pay down our debt and for general corporate purposes. Our ownership interest in VAA is held by SPC, and is therefore subject to the bond covenants of the three series of bonds that have been issued by SPC. These provisions include restrictions on the distribution of cash from SPC (See Note 12 - Bonds Payable).

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

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

	September 30, 2022		December 31, 2021
Assets (1)
Assets held for sale	$	—	$	1,135,769
Real estate	141,670		142,629
Other assets (2)	679,634		69,457
Total assets	$	821,304	$	1,347,855
Liabilities and Partners' Capital (1)
Liabilities on assets held for sale	$	7,326	$	807,382
Mortgage notes payable	85,825		83,955
Mezzanine notes payable	—		242,942
Other liabilities	28,945		25,970
Our share of partners' capital	339,108		80,602
Outside partner's capital	360,100		107,004
Total liabilities and partners' capital	$	821,304	$	1,347,855
Investment in unconsolidated joint ventures
Our share of partners' capital	$	339,108	$	80,602
Our share of Mezzanine note payable	—		125,306
Basis adjustment (3)	(25,709)		(144,287)
Total investment in unconsolidated joint ventures	$	313,399	$	61,621

(1)    These amounts include the assets of VAA of $758,266 and $1,280,867 at September 30, 2022 and December 31, 2021, respectively, and liabilities of VAA of $87,079 and $329,891 at September 30, 2022 and December 31, 2021, respectively.

(2)     Includes cash and cash equivalents of $581,955 at September 30, 2022.

(3)     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.

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

	Three Months Ended September 30,				Nine Months Ended September 30,
	2022		2021		2022		2021
Revenue (1)
Rental revenue	$	3,342	$	3,703	$	11,305	$	10,838
Other revenue	15,417		15,230		41,119		44,903
Total revenue	18,759		18,933		52,424		55,741
Expenses (2)
Operating expenses	17,335		17,225		53,866		48,043
Depreciation and amortization	1,177		1,244		3,499		3,642
Interest	5,368		5,994		17,396		17,931
Total expenses	23,880		24,463		74,761		69,616
Loss from continuing operations	(5,121)		(5,530)		(22,337)		(13,875)
Income from discontinued operations (3)	704,700		2,021		712,648		5,363
Net income (loss)	$	699,579	$	(3,509)	$	690,311	$	(8,512)
Equity in the income in unconsolidated joint ventures	$	464,143	$	3,543	$	471,385	$	11,451

(1)    These amounts include revenue of VAA of $3,591 and $3,862 for the three months ended September 30, 2022 and 2021, respectively, and $11,932 and $11,343 during the nine months ended September 30, 2022 and 2021, respectively.

(2)    These amounts include expenses of VAA of $9,003 and $10,191 for the three months ended September 30, 2022 and 2021, respectively, and $35,668 and $28,188 during the nine months ended September 30, 2022 and 2021, respectively.

(3)    These amounts represent the VAA Sale Portfolio.

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Mortgages and Other Notes Payable

9 Months Ended

Sep. 30, 2022

Debt Disclosure [Abstract]

Mortgages and Other Notes Payable

Mortgages and Other Notes Payable

The following table summarizes our mortgages and other notes payable as of September 30, 2022 and December 31, 2021:

	Carrying value
Property / Entity	September 30, 2022		December 31, 2021		Effective Interest Rate		Maturity Date
770 South Post Oak	11,484		11,635		4.40	%	6/1/2025
Athens	1,155		1,155		4.00	%	8/28/2023
Chelsea	7,916		8,037		3.40	%	12/1/2050
EQK Portage	3,350		3,350		10.00	%	11/13/2024
Forest Grove	7,163		7,263		3.75	%	5/5/2024
Landing Bayou	14,224		14,407		3.50	%	9/1/2053
Legacy at Pleasant Grove	13,119		13,352		3.60	%	4/1/2048
New Concept Energy	3,542		3,542		6.00	%	9/30/2023
Parc at Denham Springs Phase II	15,833		15,962		4.10	%	2/1/2060
RCM HC Enterprises	5,086		5,086		5.00	%	12/31/2022
Stanford Center(1)	38,567		38,979		6.00	%	2/26/2023
Sugar Mill Phase III(2)	—		9,216		4.50	%	2/1/2060
Toulon(3)	—		13,697		3.20	%	12/1/2051
Villas at Bon Secour	19,504		19,492		3.08	%	9/1/2031
Vista Ridge	9,714		9,830		4.00	%	8/1/2053
Windmill Farms	7,844		8,389		5.00	%	2/28/2023
	$	158,501	$	183,392

(1)     On March 3, 2022, the loan was extended to February 26, 2023 and was subsequently paid off on October 21, 2022.

(2)    On September 16, 2022, the loan was paid off in connection with the sale of the underlying property (See Note 7 - Real Estate Activity).

(3)    On January 14, 2022, the loan was paid off in connection with the sale of the underlying property (See Note 7 - Real Estate Activity).

Interest payable at September 30, 2022 and December 31, 2021, was $1,930 and $1,522, respectively. We capitalized interest of $1,048 and $3,112 for the three months ended September 30, 2022 and 2021, respectively, and $2,651 and $7,263 during the nine months ended September 30, 2022 and 2021, respectively.

As of September 30, 2022, 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.

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

There are various land mortgages, secured by the property, that are in the process of a modification or extension to the original note due to expiration of the loan. We are working with our existing lenders and new lenders to modify, extend the loans before they become due or refinancing the loans with terms that are similar to the existing agreement.

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Bonds Payable

9 Months Ended

Sep. 30, 2022

Debt Disclosure [Abstract]

Bonds Payable

Bonds Payable

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

In connection with the Bonds, we incurred a gain (loss) on foreign currency transactions of $1,533 and $(1,639) for the three months ended September 30, 2022 and 2021, respectively, and $19,437 and $1,185 for the nine months ended September 30, 2022 and 2021, respectively.

The outstanding balance of our Bonds at September 30, 2022 and December 31, 2021 is as follows:

Bond Issuance	September 30, 2022		December 31, 2021		Interest Rate		Maturity
Series A Bonds(1)	$	28,776	$	65,563	7.30	%	7/31/23
Series B Bonds(1)	35,563		54,019		6.80	%	7/31/25
Series C Bonds(2)	66,095		75,298		4.65	%	1/31/23
	130,434		194,880
Less unamortized deferred issuance costs	(2,937)		(5,428)
	$	127,497	$	189,452

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

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

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Related Party Transactions

9 Months Ended

Sep. 30, 2022

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 an affiliates of Realty Advisors, Inc. ("RAI"), which owns approximately 90.8% of the Company. Pillar is compensated for advisory services in accordance with an 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 $223 and $312 for the three months ended September 30, 2022 and 2021, respectively, and $702 and $867 for the nine months ended September 30, 2022 and 2021, respectively, for office space leased to Pillar and Regis.

Property operating expense includes $110 and $178 for the three months ended September 30, 2022 and 2021, respectively, and $337 and $755 for the nine months ended September 30, 2022 and 2021, respectively, for management fees on commercial properties payable to Regis.

General and administrative expense includes $1,288 and $1,017 for the three months ended September 30, 2022 and 2021, respectively, and $3,368 and $3,434 for the nine months ended September 30, 2022 and 2021, respectively, for employee compensation and other reimbursable costs payable to Pillar.

Advisor fees paid to Pillar were $1,571 and $3,419 for the three months ended September 30, 2022 and 2021, respectively, and $7,614 and $11,594 for the nine months ended September 30, 2022 and 2021, respectively.

Notes receivable include amounts held by UHF and Pillar (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 related parties. Interest income on these notes and related party receivables was $6,587 and $5,053 for the three months ended September 30, 2022 and 2021, respectively, and $16,880 and $15,139 for the nine months ended September 30, 2022 and 2021, respectively.

Interest expense on payables to Pillar was $2,447 and $1,431 for the three months ended September 30, 2022 and 2021, respectively, and $5,746 and $4,199 for the nine months ended September 30, 2022 and 2021, respectively.

Receivable from related party, net represents the net amount outstanding from Pillar for loans and unreimbursed fees, expenses and costs as provided above.

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Noncontrolling Interests	9 Months Ended
	Sep. 30, 2022
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, 2022 and 2021.

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Deferred Income

9 Months Ended

Sep. 30, 2022

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.

On January 29, 2021, UHF sold El Dorado, a 208 unit multifamily property in McKinney, Texas; Limestone Ranch, a 252 unit multifamily property in Lewisville, Texas; and Marquis, a 276 unit multifamily property in Lewisville, Texas to a non-related third party. As a result of this sale, we recognized a gain of $10,026 during the nine months ended September 30, 2022 that had previously been deferred.

As of September 30, 2022 and December 31, 2021, we had deferred gain of $9,791.

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Income Taxes

9 Months Ended

Sep. 30, 2022

Income Tax Disclosure [Abstract]

Income Taxes

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,
	2022		2021		2022		2021
Current	$	81,548	$	605	$	81,616	$	(1,196)
Deferred	—		—		—		—
	$	81,548	$	605	$	81,616	$	(1,196)

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Commitments and Contingencies

9 Months Ended

Sep. 30, 2022

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 to 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.

In February 2019, Paul Berger ("Berger") filed suit against us and others that alleged that our subsidiary IOR completed improper sales and/or transfers of property. Berger sought to proceed derivatively and directly, requested a payoff of various related party loans to IOR and that IOR then distribute the funds to its stockholders. After discovery and motions to dismiss substantial portions of the complaint, on June 28, 2022, Plaintiff Berger sought to voluntarily dismiss the action for reasons stated in the motion. The parties have not entered into any settlement, and neither Berger nor their counsel has received any consideration for the voluntary dismissal. The parties, through counsel, have stipulated to the dismissal with prejudice. On June 29, 2022, the United States District Court ordered that notice of the dismissal be provided to IOR shareholders. A copy of the required notice was filed as an exhibit to a Form 8-K of IOR for event occurring June 29, 2022 (the date of the Court’s order), and on July 7, 2022, a copy of the required notice was posted on IOR’s website. If no action is taken by one or more other stockholders of IOR prior to August 19, 2022, the Court may enter an order dismissing the Berger case with prejudice.

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Subsequent Events

9 Months Ended

Sep. 30, 2022

Subsequent Events [Abstract]

Subsequent Events

Subsequent Events

The date to which events occurring after September 30, 2022, the date of the most recent balance sheet, have been evaluated for possible adjustment to the consolidated financial statements or disclosure is November 10, 2022, which is the date on which the consolidated financial statements were available to be issued.

On October 21, 2022, we paid off the mortgage loan payable on Stanford Center (See Note 11 - Mortgages and Other Notes Payable) with a portion of our cash distributions from our investment in VAA (See Note 10 - Investment in Unconsolidated Joint Ventures).

On November 1, 2022, in connection with the sale of the VAA Sale Portfolio, we received an additional distribution from VAA (See Note 10 - Investment in Unconsolidated Joint Ventures), which included the full operational control of the Holdback Portfolio and a cash payment of $203,936. We are in the process of assuming the mortgage notes payable on Holdback Portfolio.

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Summary of Significant Accounting Policies (Policies)

9 Months Ended

Sep. 30, 2022

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.

The consolidated balance sheet at December 31, 2021 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, 2021. Certain 2021 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.

Newly Issued Accounting Standards

Newly Issued Accounting Standards

In March 2020, the FASB issued ASU 2020-04, Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting. The standard provides guidance, optional expedients and exceptions that reference London Interbank Offered Rate (“LIBOR”) or another reference rate expected to be discontinued due to reference rate reform. The adoption of the standard on January 1, 2022, did not have an impact on our consolidated financial statements.

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Earnings per Share (Tables)

9 Months Ended

Sep. 30, 2022

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,
	2022		2021		2022		2021
Net income	$	384,304	$	25,063	$	418,901	$	14,617
Net income attributable to noncontrolling interests	(82,015)		(5,652)		(88,986)		(4,466)
Net income attributable to common shares	$	302,289	$	19,411	$	329,915	$	10,151
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	$	18.72	$	1.20	$	20.43	$	0.63

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Supplemental Cash Flow Information (Tables)

9 Months Ended

Sep. 30, 2022

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,
	2022		2021
Cash paid for interest	$	22,211	$	26,307
Cash - beginning of period
Cash and cash equivalents	$	50,748	$	36,814
Restricted cash	21,986		50,206
	$	72,734	$	87,020
Cash - end of period
Cash and cash equivalents	$	131,236	$	63,873
Restricted cash	17,950		20,090
	$	149,186	$	83,963
Proceeds from mortgages, notes and bonds payable
Proceeds from mortgages and notes payable	$	—	$	20,015
Proceeds from bonds	—		—
	$	—	$	20,015
Payments on mortgages, notes and bonds payable
Payments on mortgages and notes payable	$	26,411	$	63,535
Payments on bonds payable	43,759		53,658
	$	70,170	$	117,193

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

	Nine Months Ended September 30,
	2022		2021
Assets contributed to joint venture	$	—	$	18,608
Liabilities assumed by joint venture	$	—	$	15,606
Notes receivable received in exchange for related party receivable	$	—	$	9,259
Distribution from joint venture applied to Earn Out Obligation	$	34,159	$	5,441

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Operating Segments (Tables)

9 Months Ended

Sep. 30, 2022

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, 2022 and 2021:

	Three Months Ended September 30,				Nine Months Ended September 30,
	2022		2021		2022		2021
Multifamily Segment
Revenues	$	2,850	$	3,703	$	9,024	$	11,068
Operating expenses	(1,966)		(2,072)		(5,395)		(6,306)
Profit from segment	884		1,631		3,629		4,762
Commercial Segment
Revenues	4,720		5,925		13,286		19,115
Operating expenses	(2,735)		(3,538)		(7,146)		(10,194)
Profit from segment	1,985		2,387		6,140		8,921
Total profit from segments	$	2,869	$	4,018	$	9,769	$	13,683

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, 2022 and 2021:

	Three Months Ended September 30,				Nine Months Ended September 30,
	2022		2021		2022		2021
Total profit from segments	$	2,869	$	4,018	$	9,769	$	13,683
Other non-segment items of income (expense)
Depreciation and amortization	(2,193)		(2,935)		(6,840)		(9,473)
General and administrative	(3,042)		(3,698)		(7,956)		(12,799)
Advisory fee to related party	(1,571)		(3,419)		(7,614)		(11,594)
Other income	749		866		1,925		3,242
Interest income	9,482		6,128		25,683		17,388
Interest expense	(6,491)		(7,057)		(19,047)		(22,476)
Gain (loss) on foreign currency transaction	1,533		(1,639)		19,437		1,185
Loss on early extinguishment of debt	(1,166)		(1,451)		(2,805)		(1,451)
Income from unconsolidated joint ventures	464,143		3,543		471,385		11,451
Gain on sales or write-down of assets	1,539		31,312		16,580		24,265
Income tax provision	(81,548)		(605)		(81,616)		1,196
Net income	$	384,304	$	25,063	$	418,901	$	14,617

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Lease Revenue (Tables)

9 Months Ended

Sep. 30, 2022

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, 2022 and 2021:

	Three Months Ended September 30,				Nine Months Ended September 30,
	2022		2021		2022		2021
Fixed component	$	6,977	$	9,124	$	20,854	$	28,287
Variable component	593		504		1,456		1,896
	$	7,570	$	9,628	$	22,310	$	30,183

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:

2022	$	12,927
2023	8,729
2024	7,985
2025	7,687
2026	7,632
Thereafter	21,143
	$	66,103

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Real Estate Activity (Tables)

9 Months Ended

Sep. 30, 2022

Real Estate [Abstract]

Schedule of the Real Estate Owned

Below is a summary of our real estate as of September 30, 2022 and December 31, 2021:

	September 30, 2022		December 31, 2021
Land	$	64,875	$	67,514
Building and improvements	184,117		219,327
Tenant improvements	25,460		21,364
Construction in progress	59,083		51,091
Total cost	333,535		359,296
Less accumulated depreciation	(63,374)		(62,933)
Total real estate	$	270,161	$	296,363

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, 2022 and 2021 consists of the following:

	Three Months Ended September 30,				Nine Months Ended September 30,
	2022		2021		2022		2021
Land(1)	$	—	$	4,042	$	4,752	$	15,153
Multifamily Properties(2)	1,539		—		11,142		11,442
Commercial Properties(3)	—		27,270		890		27,270
Other(4)	—		—		(204)		(29,600)
	$	1,539	$	31,312	$	16,580	$	24,265

(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.

The 2021 amount is attributed to the gain from the sale of a 50% ownership interest in Overlook at Allensville Phase II to Macquarie in 2021 (See Note 10 – Investment in Unconsolidated Joint Ventures) and the gain on sale of various multifamily properties that had previously been deferred (See Note 15 – Deferred Income).

(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.

On August 26, 2021, we sold 600 Las Colinas, a 512,173 square foot office building in Irving, Texas for $74,750, resulting in a gain on sale of $27,270. We used the proceeds to pay down the mortgage note payable on the property and for general corporate purposes.

(4)The 2021 amount represents a $29,600 loss on remeasurement of the Earn Out Obligation in connection with our investment in VAA (See Note 10 - Investment in Unconsolidated Joint Ventures).

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Notes Receivable (Tables)

9 Months Ended

Sep. 30, 2022

Receivables [Abstract]

Schedule of Notes Receivable

The following table summarizes our notes receivable as of September 30, 2022 and December 31, 2021:

	Carrying value
Property/Borrower	September 30, 2022		December 31, 2021		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)	2,326		2,486		5.00	%	7/1/25
Bellwether Ridge(1)	3,973		3,967		5.00	%	11/1/26
Forest Pines(1)	6,472		6,472		5.00	%	11/1/22
Lake Wales	3,000		3,000		9.50	%	6/30/26
Legacy Pleasant Grove	496		496		12.00	%	10/23/22
McKinney Ranch	3,926		4,554		6.00	%	9/15/24
One Realco Land Holding, Inc.	1,728		1,728		9.50	%	6/30/26
Parc at Ingleside(1)	3,663		3,700		5.00	%	11/1/26
Parc at Opelika Phase II(1)	2,914		2,305		10.00	%	1/13/23
Parc at Windmill Farms(1)	7,836		7,830		5.00	%	11/1/22
Phillips Foundation for Better Living, Inc.(2)	182		813		12.00	%	3/31/24
Plum Tree(1)	1,767		1,537		5.00	%	4/26/26
Riverview on the Park Land, LLC	1,045		1,045		9.50	%	6/30/26
Spartan Land	5,907		5,907		12.00	%	1/16/23
Spyglass of Ennis(1)	5,319		5,319		5.00	%	11/1/22
Steeple Crest(1)	6,498		6,498		5.00	%	8/1/26
Unified Housing Foundation(2)(3)	2,881		2,881		12.00	%	6/30/23
Unified Housing Foundation(2)(3)	212		212		12.00	%	6/30/23
Unified Housing Foundation(2)(3)	6,831		6,831		12.00	%	6/30/23
Unified Housing Foundation(2)(3)	10,401		10,401		12.00	%	6/30/23
Unified Housing Foundation(2)(3)	10,096		10,096		12.00	%	3/31/24
Unified Housing Foundation(2)(3)	6,990		6,990		12.00	%	3/31/23
Unified Housing Foundation(2)(3)	3,615		3,615		12.00	%	5/31/23
Unified Housing Foundation(2)(3)	27,477		24,053		12.00	%	12/31/32
Unified Housing Foundation(2)(3)	6,521		6,521		12.00	%	3/31/24
Unified Housing Foundation(2)(3)	1,549		1,549		12.00	%	4/30/24
Unified Housing Foundation(2)(3)	180		183		12.00	%	6/30/24
	$	139,423	$	136,607

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

(3) 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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Investment in Unconsolidated Joint Ventures (Tables)

9 Months Ended

Sep. 30, 2022

Equity Method Investments and Joint Ventures [Abstract]

Summary of Investments in Unconsolidated Joint Ventures

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

	September 30, 2022		December 31, 2021
Assets (1)
Assets held for sale	$	—	$	1,135,769
Real estate	141,670		142,629
Other assets (2)	679,634		69,457
Total assets	$	821,304	$	1,347,855
Liabilities and Partners' Capital (1)
Liabilities on assets held for sale	$	7,326	$	807,382
Mortgage notes payable	85,825		83,955
Mezzanine notes payable	—		242,942
Other liabilities	28,945		25,970
Our share of partners' capital	339,108		80,602
Outside partner's capital	360,100		107,004
Total liabilities and partners' capital	$	821,304	$	1,347,855
Investment in unconsolidated joint ventures
Our share of partners' capital	$	339,108	$	80,602
Our share of Mezzanine note payable	—		125,306
Basis adjustment (3)	(25,709)		(144,287)
Total investment in unconsolidated joint ventures	$	313,399	$	61,621

(1)    These amounts include the assets of VAA of $758,266 and $1,280,867 at September 30, 2022 and December 31, 2021, respectively, and liabilities of VAA of $87,079 and $329,891 at September 30, 2022 and December 31, 2021, respectively.

(2)     Includes cash and cash equivalents of $581,955 at September 30, 2022.

(3)     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.

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

	Three Months Ended September 30,				Nine Months Ended September 30,
	2022		2021		2022		2021
Revenue (1)
Rental revenue	$	3,342	$	3,703	$	11,305	$	10,838
Other revenue	15,417		15,230		41,119		44,903
Total revenue	18,759		18,933		52,424		55,741
Expenses (2)
Operating expenses	17,335		17,225		53,866		48,043
Depreciation and amortization	1,177		1,244		3,499		3,642
Interest	5,368		5,994		17,396		17,931
Total expenses	23,880		24,463		74,761		69,616
Loss from continuing operations	(5,121)		(5,530)		(22,337)		(13,875)
Income from discontinued operations (3)	704,700		2,021		712,648		5,363
Net income (loss)	$	699,579	$	(3,509)	$	690,311	$	(8,512)
Equity in the income in unconsolidated joint ventures	$	464,143	$	3,543	$	471,385	$	11,451

(1)    These amounts include revenue of VAA of $3,591 and $3,862 for the three months ended September 30, 2022 and 2021, respectively, and $11,932 and $11,343 during the nine months ended September 30, 2022 and 2021, respectively.

(2)    These amounts include expenses of VAA of $9,003 and $10,191 for the three months ended September 30, 2022 and 2021, respectively, and $35,668 and $28,188 during the nine months ended September 30, 2022 and 2021, respectively.

(3)    These amounts represent the VAA Sale Portfolio.

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Mortgages and Other Notes Payable (Tables)

9 Months Ended

Sep. 30, 2022

Debt Disclosure [Abstract]

Schedule of Debt

The following table summarizes our mortgages and other notes payable as of September 30, 2022 and December 31, 2021:

	Carrying value
Property / Entity	September 30, 2022		December 31, 2021		Effective Interest Rate		Maturity Date
770 South Post Oak	11,484		11,635		4.40	%	6/1/2025
Athens	1,155		1,155		4.00	%	8/28/2023
Chelsea	7,916		8,037		3.40	%	12/1/2050
EQK Portage	3,350		3,350		10.00	%	11/13/2024
Forest Grove	7,163		7,263		3.75	%	5/5/2024
Landing Bayou	14,224		14,407		3.50	%	9/1/2053
Legacy at Pleasant Grove	13,119		13,352		3.60	%	4/1/2048
New Concept Energy	3,542		3,542		6.00	%	9/30/2023
Parc at Denham Springs Phase II	15,833		15,962		4.10	%	2/1/2060
RCM HC Enterprises	5,086		5,086		5.00	%	12/31/2022
Stanford Center(1)	38,567		38,979		6.00	%	2/26/2023
Sugar Mill Phase III(2)	—		9,216		4.50	%	2/1/2060
Toulon(3)	—		13,697		3.20	%	12/1/2051
Villas at Bon Secour	19,504		19,492		3.08	%	9/1/2031
Vista Ridge	9,714		9,830		4.00	%	8/1/2053
Windmill Farms	7,844		8,389		5.00	%	2/28/2023
	$	158,501	$	183,392

(1)     On March 3, 2022, the loan was extended to February 26, 2023 and was subsequently paid off on October 21, 2022.

(2)    On September 16, 2022, the loan was paid off in connection with the sale of the underlying property (See Note 7 - Real Estate Activity).

(3)    On January 14, 2022, the loan was paid off in connection with the sale of the underlying property (See Note 7 - Real Estate Activity).

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Bonds Payable (Tables)

9 Months Ended

Sep. 30, 2022

Debt Disclosure [Abstract]

Schedule of Bonds Payable

The outstanding balance of our Bonds at September 30, 2022 and December 31, 2021 is as follows:

Bond Issuance	September 30, 2022		December 31, 2021		Interest Rate		Maturity
Series A Bonds(1)	$	28,776	$	65,563	7.30	%	7/31/23
Series B Bonds(1)	35,563		54,019		6.80	%	7/31/25
Series C Bonds(2)	66,095		75,298		4.65	%	1/31/23
	130,434		194,880
Less unamortized deferred issuance costs	(2,937)		(5,428)
	$	127,497	$	189,452

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

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

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Income Taxes (Tables)

9 Months Ended

Sep. 30, 2022

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,
	2022		2021		2022		2021
Current	$	81,548	$	605	$	81,616	$	(1,196)
Deferred	—		—		—		—
	$	81,548	$	605	$	81,616	$	(1,196)

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Organization (Details)	Sep. 30, 2022 a ft² property apartment
Office Building
Real Estate Properties [Line Items]
Number of real estate properties	4
Area of property | ft²	1,056,793
Apartment Building
Real Estate Properties [Line Items]
Number of real estate properties	7
Number of units in real estate property | apartment	1,180
Land and Land Improvements
Real Estate Properties [Line Items]
Area of land | a	1,847
VAA
Real Estate Properties [Line Items]
Number of units in real estate property | apartment	1,148
VAA | Apartment Building
Real Estate Properties [Line Items]
Number of real estate properties	7
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%

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Earnings per Share (Details) - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2022	Sep. 30, 2021	Sep. 30, 2022	Sep. 30, 2021
Earnings Per Share [Abstract]
Net income	$ 384,304	$ 25,063	$ 418,901	$ 14,617
Net income attributable to noncontrolling interests	(82,015)	(5,652)	(88,986)	(4,466)
Net income attributable to common shares	$ 302,289	$ 19,411	$ 329,915	$ 10,151
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)	$ 18.72	$ 1.20	$ 20.43	$ 0.63
EPS - attributable to common shares- diluted (in dollars per share)	$ 18.72	$ 1.20	$ 20.43	$ 0.63

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Supplemental Cash Flows Information - Noncash Investing and Financing Activities (Details) - USD ($) $ in Thousands	9 Months Ended
	Sep. 30, 2022	Sep. 30, 2021
Supplemental Cash Flow Elements [Abstract]
Cash paid for interest	$ 22,211	$ 26,307
Cash and cash equivalents, beginning balance	50,748	36,814
Restricted cash and cash equivalents, beginning balance	21,986	50,206
Cash, cash equivalents and restricted cash, beginning of period	72,734	87,020
Cash and cash equivalents, ending balance	131,236	63,873
Restricted Cash and cash equivalents, ending balance	17,950	20,090
Cash, cash equivalents and restricted cash, end of period	149,186	83,963
Proceeds from mortgages, notes and bonds payable
Proceeds from mortgages and notes payable	0	20,015
Proceeds from bonds	0	0
Proceeds from mortgages, other notes and bonds payable	0	20,015
Payments on mortgages, notes and bonds payable
Payments on mortgages and notes payable	26,411	63,535
Payments on bonds payable	43,759	53,658
Payments on mortgages, other notes and bonds payable	$ 70,170	$ 117,193

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Supplemental Cash Flows Information - Schedule of Noncash Investing and Financing Activities (Details) - USD ($) $ in Thousands	9 Months Ended
	Sep. 30, 2022	Sep. 30, 2021
Related Party Transaction [Line Items]
Assets contributed to joint venture	$ 0	$ 18,608
Liabilities assumed by joint venture	0	15,606
Distribution from joint venture applied to Earn Out Obligation	34,159	5,441
Affiliate
Related Party Transaction [Line Items]
Notes receivable received in exchange for related party receivable	$ 0	$ 9,259

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Operating Segments - Narrative (Details)	9 Months Ended
	Sep. 30, 2022 segment
Segment Reporting [Abstract]
Number of reportable segments	2

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Operating Segments - Profit by Reportable Segment (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2022	Sep. 30, 2021	Sep. 30, 2022	Sep. 30, 2021
Segment Reporting Information [Line Items]
Revenues	$ 8,319	$ 10,494	$ 24,235	$ 33,425
Total profit from segments	(3,188)	(5,168)	(10,716)	(16,941)
Operating segments
Segment Reporting Information [Line Items]
Total profit from segments	2,869	4,018	9,769	13,683
Operating segments | Multifamily Segment
Segment Reporting Information [Line Items]
Revenues	2,850	3,703	9,024	11,068
Operating expenses	(1,966)	(2,072)	(5,395)	(6,306)
Profit from segment	884	1,631	3,629	4,762
Operating segments | Commercial Segment
Segment Reporting Information [Line Items]
Revenues	4,720	5,925	13,286	19,115
Operating expenses	(2,735)	(3,538)	(7,146)	(10,194)
Profit from segment	$ 1,985	$ 2,387	$ 6,140	$ 8,921

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Operating Segments - Profit by Reportable Segment to Net Income (Loss) (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2022	Sep. 30, 2021	Sep. 30, 2022	Sep. 30, 2021
Segment Reporting Information [Line Items]
Total profit from segments	$ (3,188)	$ (5,168)	$ (10,716)	$ (16,941)
Depreciation and amortization	(2,193)	(2,935)	(6,840)	(9,473)
General and administrative	(3,042)	(3,698)	(7,956)	(12,799)
Advisory fee to related party	(1,571)	(3,419)	(7,614)	(11,594)
Other income	749	866	1,925	3,242
Interest income	9,482	6,128	25,683	17,388
Interest expense	(6,491)	(7,057)	(19,047)	(22,476)
Gain (loss) on foreign currency transaction			19,437	1,185
Loss on early extinguishment of debt	(1,166)	(1,451)	(2,805)	(1,451)
Income from unconsolidated joint ventures	464,143	3,543	471,385	11,451
Gain on sales or write-down of assets	1,539	31,312	16,580	24,265
Income tax provision	(81,548)	(605)	(81,616)	1,196
Net income	384,304	25,063	418,901	14,617
Operating segments
Segment Reporting Information [Line Items]
Total profit from segments	2,869	4,018	9,769	13,683
Other non-segment items of income (expense)
Segment Reporting Information [Line Items]
Depreciation and amortization	(2,193)	(2,935)	(6,840)	(9,473)
General and administrative	(3,042)	(3,698)	(7,956)	(12,799)
Advisory fee to related party	(1,571)	(3,419)	(7,614)	(11,594)
Other income	749	866	1,925	3,242
Interest income	9,482	6,128	25,683	17,388
Interest expense	(6,491)	(7,057)	(19,047)	(22,476)
Gain (loss) on foreign currency transaction	1,533	(1,639)	19,437	1,185
Loss on early extinguishment of debt	(1,166)	(1,451)	(2,805)	(1,451)
Income from unconsolidated joint ventures	464,143	3,543	471,385	11,451
Gain on sales or write-down of assets	1,539	31,312	16,580	24,265
Income tax provision	(81,548)	(605)	(81,616)	1,196
Net income	$ 384,304	$ 25,063	$ 418,901	$ 14,617

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Lease Revenue - Schedule of Rental Revenue (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2022	Sep. 30, 2021	Sep. 30, 2022	Sep. 30, 2021
Leases [Abstract]
Fixed component	$ 6,977	$ 9,124	$ 20,854	$ 28,287
Variable component	593	504	1,456	1,896
Total rental revenue	$ 7,570	$ 9,628	$ 22,310	$ 30,183

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Lease Revenue - Schedule of Future Rental Payments (Details) $ in Thousands	Sep. 30, 2022 USD ($)
Leases [Abstract]
2022	$ 12,927
2023	8,729
2024	7,985
2025	7,687
2026	7,632
Thereafter	21,143
Total	$ 66,103

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Real Estate Activity - Real Estate Investment Components (Details) - USD ($) $ in Thousands	Sep. 30, 2022	Dec. 31, 2021
Real Estate [Abstract]
Land	$ 64,875	$ 67,514
Building and improvements	184,117	219,327
Tenant improvements	25,460	21,364
Construction in progress	59,083	51,091
Total cost	333,535	359,296
Less accumulated depreciation	(63,374)	(62,933)
Total real estate	$ 270,161	$ 296,363

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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 ($) apartment	Aug. 26, 2021 USD ($) ft²	Sep. 30, 2022 USD ($)	Sep. 30, 2021 USD ($)	Sep. 30, 2022 USD ($)	Sep. 30, 2021 USD ($)
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items]
Gain on sale or write-down of assets, net					$ 1,539	$ 31,312	$ 16,580	$ 24,265
Overlook At Allensville Phase II Apartments
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items]
Ownership interest sold							50.00%
Macquarie
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items]
Earn out obligation charge					29,600		$ 29,600
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
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 | ft²		6,722
600 Las Colinas | 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				$ 74,750
Gain on sale				$ 27,270
Area of property | ft²				512,173
Land
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items]
Gain on sale or write-down of assets, net					0	4,042	4,752	15,153
Multifamily Properties
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items]
Gain on sale or write-down of assets, net					1,539	0	11,142	11,442
Commercial Properties
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items]
Gain on sale or write-down of assets, net					0	27,270	890	27,270
Other
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items]
Gain on sale or write-down of assets, net					$ 0	$ 0	$ (204)	$ (29,600)

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Short-term Investments (Details)	Sep. 30, 2022	Dec. 31, 2021
Investments, Debt and Equity Securities [Abstract]
Investment Interest Rate	2.30%	1.15%

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Notes Receivable - Schedule of Notes Receivable (Details) - USD ($) $ in Thousands	9 Months Ended
	Sep. 30, 2022	Dec. 31, 2021
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items]
Carrying value	$ 139,423	$ 136,607
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	$ 2,326	2,486
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	$ 3,973	3,967
Interest Rate	5.00%
Ownership interest if note converted	100.00%
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 | Lake Wales
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 | 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	4,554
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	$ 3,663	3,700
Interest Rate	5.00%
Ownership interest if note converted	100.00%
Notes Receivable | Parc at Opelika
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items]
Carrying value	$ 2,914	2,305
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	$ 7,836	7,830
Interest Rate	5.00%
Ownership interest if note converted	100.00%
Notes Receivable | Phillips Foundation For Better Living Inc ., Maturing March 31, 2024
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items]
Carrying value	$ 182	813
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	1,537
Interest Rate	5.00%
Ownership interest if note converted	100.00%
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	$ 5,319	5,319
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, 2023 A
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items]
Carrying value	$ 2,881	2,881
Interest Rate	12.00%
Notes Receivable | Unified Housing Foundation Inc., Maturing June 30, 2023 B
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items]
Carrying value	$ 212	212
Interest Rate	12.00%
Notes Receivable | Unified Housing Foundation Inc., Maturing June 30, 2023 C
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items]
Carrying value	$ 6,831	6,831
Interest Rate	12.00%
Notes Receivable | Unified Housing Foundation Inc., Maturing June 30, 2023 D
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items]
Carrying value	$ 10,401	10,401
Interest Rate	12.00%
Notes Receivable | Unified Housing Foundation Inc., Maturing March 31, 2022
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, 2023
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, 2023
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	24,053
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	$ 183
Interest Rate	12.00%

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Investment in Unconsolidated Joint Ventures - Narrative (Details) $ in Thousands					3 Months Ended	9 Months Ended
	Nov. 01, 2022 USD ($)	Sep. 16, 2022 USD ($)	Mar. 30, 2021 USD ($) apartment	Nov. 16, 2018 property	Sep. 30, 2022 USD ($) apartment series	Sep. 30, 2022 USD ($) franchised_location apartment series	Sep. 30, 2021 USD ($)	Sep. 15, 2022 property	Jun. 17, 2022 property	Jul. 13, 2021 USD ($)	Nov. 19, 2018 USD ($)
Schedule of Equity Method Investments [Line Items]
Distribution from unconsolidated joint venture						$ 181,748	$ 7,430
Macquarie
Schedule of Equity Method Investments [Line Items]
Earn out obligation										$ 39,600
Earn out obligation charge					$ 29,600	$ 29,600
Overlook At Allensville Phase II Apartments | VAA | Disposal Group, Held-for-sale or Disposed of by Sale, Not Discontinued Operations | Contributions to Joint Venture
Schedule of Equity Method Investments [Line Items]
Number of units in real estate property | apartment			144
VAA Sale Portfolio | Disposal Group, Held-for-sale or Disposed of by Sale, Not Discontinued Operations
Schedule of Equity Method Investments [Line Items]
Gain on sale		$ 738,665
Proceeds from sale		1,810,700
Distribution from unconsolidated joint venture		$ 182,848
VAA Sale Portfolio | Disposal Group, Held-for-sale or Disposed of by Sale, Not Discontinued Operations | Subsequent event
Schedule of Equity Method Investments [Line Items]
Distribution from unconsolidated joint venture	$ 203,936
Overlook At Allensville Phase II Apartments | Overlook At Allensville Phase II Apartments
Schedule of Equity Method Investments [Line Items]
Ownership interest sold			50.00%
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
Number of units in real estate property | apartment					1,148	1,148
Number of series of bonds | series					3	3
VAA | Gruppa Florentina LLC
Schedule of Equity Method Investments [Line Items]
Number of franchised locations | franchised_location						23
VAA | Overlook At Allensville Phase II Apartments
Schedule of Equity Method Investments [Line Items]
Proceeds from real estate and real estate joint ventures			$ 2,551
Gain on sale			$ 1,417
VAA | Angelo And Vito's Pizzerias | Gruppa Florentina LLC
Schedule of Equity Method Investments [Line Items]
Number of franchised locations | franchised_location						2
VAA | VAA | Class A interest
Schedule of Equity Method Investments [Line Items]
Equity method investment profit participation percentage				0.49
VAA | VAA | Class B interest
Schedule of Equity Method Investments [Line Items]
Equity method investment profit participation percentage				0.02
VAA | Multifamily | VAA
Schedule of Equity Method Investments [Line Items]
Number of real estate properties | property				51
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
Schedule of Equity Method Investments [Line Items]
Percentage of ownership in VAA				50.00%
Overlook At Allensville Phase II Apartments | VAA | Overlook At Allensville Phase II Apartments
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%	20.00%
SPC subsidiary | 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									1

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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, 2022	Sep. 30, 2021	Sep. 30, 2022	Sep. 30, 2021	Dec. 31, 2021	Dec. 31, 2020
Assets
Real estate	$ 270,161		$ 270,161		$ 296,363
Other assets	95,422		95,422		86,644
Total assets	1,150,150		1,150,150		770,569
Liabilities and Equity
Total liabilities and partners' capital	1,150,150		1,150,150		770,569
Investment in unconsolidated joint ventures	313,399		313,399		61,621
Liabilities	394,398		394,398		433,718
Cash and cash equivalents	149,186	$ 83,963	149,186	$ 83,963	72,734	$ 87,020
Revenues:
Rental revenue	7,570	9,628	22,310	30,183
Other income	749	866	1,925	3,242
Total revenue	8,319	10,494	24,235	33,425
Expenses:
Depreciation and amortization			9,409	11,699
Net income	384,304	25,063	418,901	14,617
Equity in the income in unconsolidated joint ventures	464,143	3,543	471,385	11,451
VAA
Liabilities and Equity
Mezzanine notes payable	0		0		125,306
Our share of partners' capital	339,108		339,108		80,602
Basis adjustment	(25,709)		(25,709)		(144,287)
Investment in unconsolidated joint ventures	313,399		313,399		61,621
Revenues:
Rental revenue	3,342	3,703	11,305	10,838
Other income	15,417	15,230	41,119	44,903
Total revenue	18,759	18,933	52,424	55,741
Expenses:
Operating expenses	17,335	17,225	53,866	48,043
Depreciation and amortization	1,177	1,244	3,499	3,642
Interest	5,368	5,994	17,396	17,931
Total expenses	23,880	24,463	74,761	69,616
Loss from continuing operations	(5,121)	(5,530)	(22,337)	(13,875)
Income from discontinued operations	704,700	2,021	712,648	5,363
Net income	699,579	(3,509)	690,311	(8,512)
Equity in the income in unconsolidated joint ventures	464,143	3,543	471,385	11,451
VAA | VAA
Assets
Total assets	758,266		758,266		1,280,867
Liabilities and Equity
Liabilities	87,079		87,079		329,891
Revenues:
Total revenue	3,591	3,862	11,932	11,343
Expenses:
Total expenses	9,003	$ 10,191	35,668	$ 28,188
VAA | Unconsolidated Joint Ventures
Assets
Assets held for sale	0		0		1,135,769
Real estate	141,670		141,670		142,629
Other assets	679,634		679,634		69,457
Total assets	821,304		821,304		1,347,855
Liabilities and Equity
Liabilities on assets held for sale	7,326		7,326		807,382
Mortgage notes payable	85,825		85,825		83,955
Mezzanine notes payable	0		0		242,942
Other liabilities	28,945		28,945		25,970
Our share of partners' capital	339,108		339,108		80,602
Outside partner's capital	360,100		360,100		107,004
Total liabilities and partners' capital	821,304		821,304		$ 1,347,855
Cash and cash equivalents	$ 581,955		$ 581,955

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Mortgages and Other Notes Payable - Schedule of Debt (Details) - USD ($) $ in Thousands	Sep. 30, 2022	Dec. 31, 2021
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items]
Mortgages and other notes payable	$ 158,501	$ 183,392
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]
Mortgages and other notes payable	$ 11,484	11,635
Effective 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]
Mortgages and other notes payable	$ 1,155	1,155
Effective Interest Rate	4.00%
Mortgages and other notes payable | Chelsea
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items]
Mortgages and other notes payable	$ 7,916	8,037
Effective 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]
Mortgages and other notes payable	$ 3,350	3,350
Effective 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]
Mortgages and other notes payable	$ 7,163	7,263
Effective 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]
Mortgages and other notes payable	$ 14,224	14,407
Effective 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]
Mortgages and other notes payable	$ 13,119	13,352
Effective 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]
Mortgages and other notes payable	$ 3,542	3,542
Effective Interest Rate	6.00%
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]
Mortgages and other notes payable	$ 15,833	15,962
Effective Interest Rate	4.10%
Mortgages and other notes payable | RCM HC Enterprises
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items]
Mortgages and other notes payable	$ 5,086	5,086
Effective Interest Rate	5.00%
Mortgages and other notes payable | Standford Center
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items]
Mortgages and other notes payable	$ 38,567	38,979
Effective Interest Rate	6.00%
Mortgages and other notes payable | Sugar Mill Phase III(2)
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items]
Mortgages and other notes payable	$ 0	9,216
Effective Interest Rate	4.50%
Mortgages and other notes payable | Toulon
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items]
Mortgages and other notes payable	$ 0	13,697
Effective Interest Rate	3.20%
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]
Mortgages and other notes payable	$ 19,504	19,492
Effective Interest Rate	3.08%
Mortgages and other notes payable | Vista Ridge
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items]
Mortgages and other notes payable	$ 9,714	9,830
Effective 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]
Mortgages and other notes payable	$ 7,844	$ 8,389
Effective Interest Rate	5.00%

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Mortgages and Other Notes Payable - Narrative (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2022	Sep. 30, 2021	Sep. 30, 2022	Sep. 30, 2021	Dec. 31, 2021
Debt Instrument [Line Items]
Interest payable	$ 3,195		$ 3,195		$ 6,565
Interest costs capitalized	1,048	$ 3,112	2,651	$ 7,263
Mortgages and other notes payable
Debt Instrument [Line Items]
Interest payable	$ 1,930		$ 1,930		$ 1,522

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Bonds Payable - Narrative (Details) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2022 USD ($) bond	Sep. 30, 2021 USD ($)	Sep. 30, 2022 USD ($) bond	Sep. 30, 2021 USD ($)
Debt Instrument [Line Items]
Number issued | bond	3		3
Gain (loss) on foreign currency transaction			$ 19,437	$ 1,185
Bonds
Debt Instrument [Line Items]
Gain (loss) on foreign currency transaction	$ 1,533	$ (1,639)	$ 19,437	$ 1,185

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Bonds Payable - Schedule of Long-term Debt Instruments (Details) $ in Thousands	9 Months Ended
	Sep. 30, 2022 USD ($) ft²	Dec. 31, 2021 USD ($)
Debt Instrument [Line Items]
Bonds payable	$ 127,497	$ 189,452
Bonds
Debt Instrument [Line Items]
Bonds	130,434	194,880
Less unamortized deferred issuance costs	(2,937)	(5,428)
Bonds payable	127,497	189,452
Series A Bonds
Debt Instrument [Line Items]
Bonds	$ 28,776	65,563
Interest Rate	7.30%
Series B Bonds
Debt Instrument [Line Items]
Bonds	$ 35,563	54,019
Interest Rate	6.80%
Series C Bonds
Debt Instrument [Line Items]
Bonds	$ 66,095	$ 75,298
Interest Rate	4.65%
Series C Bonds | Browning Place
Debt Instrument [Line Items]
Land collateral | ft²	625,297

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Related Party Transactions (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2022	Sep. 30, 2021	Sep. 30, 2022	Sep. 30, 2021
Related Party Transaction [Line Items]
Rental revenue	$ 7,570	$ 9,628	$ 22,310	$ 30,183
Property operating expenses	4,701	5,610	12,541	16,500
General and administrative	3,042	3,698	7,956	12,799
Advisory fee to related party	1,571	3,419	7,614	11,594
Interest income	9,482	6,128	25,683	17,388
Interest expense	6,491	7,057	19,047	22,476
Affiliate
Related Party Transaction [Line Items]
Rental revenue	223	312	702	867
Property operating expenses	110	178	337	755
General and administrative	1,288	1,017	3,368	3,434
Interest income	6,587	5,053	16,880	15,139
Interest expense	2,447	1,431	5,746	4,199
Affiliate | Pillar and Regis
Related Party Transaction [Line Items]
Rental revenue	223	312	702	867
Affiliate | Regis
Related Party Transaction [Line Items]
Property operating expenses	110	178	337	755
Affiliate | Pillar
Related Party Transaction [Line Items]
General and administrative	1,288	1,017	3,368	3,434
Advisory fee to related party	1,571	3,419	7,614	11,594
Interest expense	2,447	1,431	5,746	4,199
Affiliate | UHF and Pillar
Related Party Transaction [Line Items]
Interest income	$ 6,587	$ 5,053	$ 16,880	$ 15,139
ARL | Affiliate | MRHI
Related Party Transaction [Line Items]
Ownership interest	90.80%		90.80%

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Noncontrolling Interest (Details)	Sep. 30, 2022	Sep. 30, 2021
TCI
Noncontrolling Interest [Line Items]
Ownership interest	78.40%
IOR
Noncontrolling Interest [Line Items]
Ownership interest	81.10%	81.10%

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Deferred Income (Details) $ in Thousands	9 Months Ended
	Sep. 30, 2022 USD ($)	Dec. 31, 2021 USD ($)	Jan. 29, 2021 property
Disaggregation of Revenue [Line Items]
Deferred revenue | $	$ 9,791	$ 9,791
UHF
Disaggregation of Revenue [Line Items]
Gain on sale | $	$ 10,026
UHF | Multifamily | El Dorado
Disaggregation of Revenue [Line Items]
Number of real estate properties			208
UHF | Multifamily | Limestone Ranch
Disaggregation of Revenue [Line Items]
Number of real estate properties			252
UHF | Multifamily | Marquis
Disaggregation of Revenue [Line Items]
Number of real estate properties			276

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Income Taxes (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2022	Sep. 30, 2021	Sep. 30, 2022	Sep. 30, 2021
Income Tax Disclosure [Abstract]
Current	$ 81,548	$ 605	$ 81,616	$ (1,196)
Deferred	0	0	0	0
Income tax provision	$ 81,548	$ 605	$ 81,616	$ (1,196)

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Subsequent Events (Details) - USD ($) $ in Thousands			9 Months Ended
	Nov. 01, 2022	Sep. 16, 2022	Sep. 30, 2022	Sep. 30, 2021
Subsequent Event [Line Items]
Distribution from unconsolidated joint venture			$ 181,748	$ 7,430
VAA Sale Portfolio | Disposal Group, Held-for-sale or Disposed of by Sale, Not Discontinued Operations
Subsequent Event [Line Items]
Distribution from unconsolidated joint venture		$ 182,848
Subsequent event | VAA Sale Portfolio | Disposal Group, Held-for-sale or Disposed of by Sale, Not Discontinued Operations
Subsequent Event [Line Items]
Distribution from unconsolidated joint venture	$ 203,936