TRANSCONTINENTAL REALTY INVESTORS INC
For the period ended Jun 30, 2026. Filed Aug 6, 2026.
View on SEC.govAbout this filing
A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Jun 30, 2026 · Filed Aug 6, 2026
TCI$49.83-0.8%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2026-03-31; filed 2026-05-07.
0001628280-26-031845
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2026-06-30; filed 2026-08-06.
0001628280-26-054111
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 69 previous paragraphs and 76 current paragraphs.
53 unchanged; 15 reworded; 3 added; 1 removed; 0 previous and 5 current paragraphs rearranged.
Tables are not compared: 3 previous and 3 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (3)
Current report
Total occupancy for Same Properties was 81% at June 30, 2026, which includes 93% at our multifamily properties and 58% at our commercial properties. Occupancy for our Alera, Bandera Ridge and Merano at June 30, 2026 was 86%, 85% and 77%, respectively.
Current report
Comparison of the six months ended June 30, 2026 to the six months ended June 30, 2025:
Current report
The $26.3 million decrease in cash provided by financing activities was primarily due to a $38.0 million decrease inproceeds from mortgages and other notes payable offset in part by a$11.1 million decrease in payments of mortgages and other notes payable. The decrease in proceeds from mortgages and other notes payable is due to the completion of Alera, Bandera Ridge and Merano (See "Development Activities" in Management's Overview) and the decrease in payments of mortgages and other notes payable is due to the repayment of the mortgage on 770 South Post Oak in 2025.
Removed paragraphs (1)
Previous report
The $14.5 million decrease in cash provided by financing activities was primarily due to borrowings on the Alera, Bandera Ridge and Merano construction loans in 2025 (See "Development Activities" in Management's Overview).
Reworded paragraphs (15)
Previous wording
Our operations are managed by Pillar Income Asset Management, Inc. (“Pillar”) in accordance with an Advisory Agreement and a Cash Management 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 and rely upon the employees of Pillar to render services to us in accordance with the terms of the Advisory Agreement. Pillar is considered to be a related party due to our common ownership by May Realty Holdings, Inc. ("MRHI"), which owns all of Pillar and appro ximately 90.8% of ARL, which in turn owns approximately 79.2% of the Company.
Current wording
Our operations are managed by Pillar Income Asset Management, Inc. (“Pillar”) in accordance with an Advisory Agreement and a Cash Management 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 and rely upon the employees of Pillar to render services to us in accordance with the terms of the Advisory Agreement. Pillar is considered to be a related party due to our common ownership by May Realty Holdings, Inc. ("MRHI"), which owns all of Pillar and appro ximately 91.0% of ARL, which in turn owns approximately 79.2% of the Company.
Previous wording
•During the three months ended March 31, 2026, we sold 21 lots from our holdings in Windmill Farms for $1.0 million, resulting in a gain on sale of $0.8 million.
Current wording
•During the six months ended June 30, 2026, we sold 42 lots from our holdings in Windmill Farms for $2.0 million, resulting in a gain on sale of $1.6 million.
Previous wording
We have agreements to develop two parcels of our land holdings in Windmill Farms. The agreements provide for the development of 125 acres of raw land into approximately 470 land lots to be used for single family homes. During the three months ended March 31, 2026, we spent $0.4 million on reimbursable infrastructure investments.
Current wording
We have agreements to develop two parcels of our land holdings in Windmill Farms. The agreements provide for the development of 125 acres of raw land into approximately 470 land lots to be used for single family homes. During the six months ended June 30, 2026, we spent $0.4 million on reimbursable infrastructure investments.
Previous wording
We have entered into development agreements with Pillar to develop multifamily properties. Each of these development projects is being funded in part by a construction loan. In 2025, we completed the construction of Alera, a 240 unit multifamily property in Lake Wales, Florida; Bandera Ridge, a 216 unit multifamily property in Temple, Texas; and Merano, a 216 unit multifamily property in McKinney, Texas. All three of these properties are currently in lease-up, which are expected to stabilize in 2026. We are currently constructing Mountain Creek, a 234 unit multifamily property in Dallas, Texas; which is expected to becompleted in 2027. As of March 31, 2026, we've incurred a total of $12.6 million in the construction of Mountain Creek and expect to expend an additional $37.4 million to complete the project, which will be funded in part by a construction loan that allows for borrowings of up to $27.5 million.
Current wording
We have entered into development agreements with Pillar to develop multifamily properties. In 2025, we completed the construction of Alera, a 240 unit multifamily property in Lake Wales, Florida; Bandera Ridge, a 216 unit multifamily property in Temple, Texas; and Merano, a 216 unit multifamily property in McKinney, Texas. All three of these properties are currently in lease-up, which are expected to stabilize in 2026. We are currently constructing Mountain Creek, a 234 unit multifamily property in Dallas, Texas; which is expected to becompleted in 2027. As of June 30, 2026, we've incurred a total of $17.0 million in the construction of Mountain Creek and expect to expend an additional $33.0 million to complete the project, which will be funded in part by a construction loan that allows for borrowings of up to $27.5 million.
Previous wording
For the comparison of three months ended March 31, 2026 to the three months ended March 31, 2025, the Development Properties were Alera, Bandera Ridge and Merano(See "Development Activities" in Management's Overview); and the Disposition Property was Villas at Bon Secour. There were no Acquisition Properties.
Current wording
For the comparison of three and six months ended June 30, 2026 to the three and six months ended June 30, 2025, the Development Properties were Alera, Bandera Ridge and Merano(See "Development Activities" in Management's Overview); and the Disposition Property was Villas at Bon Secour. There were no Acquisition Properties.
Previous wording
The following table (dollars in thousands) summarizes our results of operations for the three months ended March 31, 2026 and 2025:
Current wording
The following table (dollars in thousands) summarizes our results of operations for the three and six months ended June 30, 2026 and 2025:
Previous wording
Our $4.5 million decrease in net income is primarily attributed to the following:
Current wording
Our $1.3 million decrease in net income is primarily attributed to the following:
Previous wording
•Our multifamily segment had a $1.7 million decrease in NOI, which was attributed to decreases of $0.7 million from the Development Properties, $0.6 million from the Same Properties and $0.4 million from the Disposition Property. The decrease in NOI from the Development Properties is primarily due to the lease-up of newly constructed properties in 2025 (See "Development Activities" in Management's Overview).
Current wording
•Our multifamily segment had a $2.8 million decrease in NOI, which was attributed to decreases of $1.4 million from the Development Properties, $1.1 million from the Same Properties and $0.3 million from the Disposition Property. The decrease in NOI from the Same Properties is due to a decrease in occupancy in certain markets due to increased competition from newly constructed properties. The decrease in NOI from the Development Properties is primarily due to the lease-up of newly constructed properties in 2025 (See "Development Activities" in Management's Overview).
Previous wording
•The $0.7 million increase in NOI from our commercial segment is primarily due to an increase in occupancy at Browning Place and Stanford Center.
Current wording
•The $0.9 million increase in NOI from our commercial segment is primarily due to an increase in occupancy at Browning Place and Stanford Center.
Previous wording
•The $1.4 million decrease in interest income, net is due to a $0.2 million decrease in interest income and a $1.2 million increase in interest expense. The decrease in interest income was primarily due to a decrease in funds available for investments and a decline in interest rates. The increase in interest expense is primarily due the interest on the Development Properties that were placed in service in the fourth quarter of 2025 (See "Development Activities" in Management's Overview).
Current wording
•The $3.2 million decrease in interest income, net is due to a $1.1 million decrease in interest income and a $2.2 million increase in interest expense. The decrease in interest income was primarily due to a decrease in funds available for investments and a decline in interest rates. The increase in interest expense is primarily due to the interest on the Development Properties that were placed in service in the fourth quarter of 2025 (See "Development Activities" in Management's Overview).
Previous wording
•The $3.5 million decrease in gain on sale or write down of assets, net is primarily due to the gain on condemnation of land at Windmill Farms in 2025 (See "Disposition Activities" in Management's Overview).
Current wording
•The $3.6 million decrease in gain on sale or write down of assets, net is primarily due to the gain on condemnation of land at Windmill Farms in 2025 (See "Disposition Activities" in Management's Overview).
Previous wording
•The change in other income (expense) is primarily attributed to the decrease in the tax provision, which was due to the gain on real estate transactions in 2025.
Current wording
•The $3.9 million change in other income (expense) is primarily attributed to the decrease in the tax provision, which was due to the gain on real estate transactions in 2025.
Previous wording
The $4.5 million decrease in cash used in operating activities is primarily due to a decrease in payments on accounts payable and other liabilities.
Current wording
The $5.0 million decrease in cash used in operating activities is primarily due to an increase in other assets and a decrease in payments on accounts payable and other liabilities.
Previous wording
The $12.1 million decrease in cash used in investing activities is primarily due to the $21.8 million decrease in development and renovation of real estate offset in part by the $8.6 million decrease in net redemption of short-term investments. The decrease in development and renovation of real estate is primarily due to the completion of the construction of Alera, Bandera Ridge and Merano in 2025 (See "Development Activities" in Management's Overview). The decrease in net redemption of short-term investments was due to the repayment of the mortgage on 770 South Post Oak in 2025.
Current wording
The $20.2 million decrease in cash used in investing activities is primarily due to the $41.8 million decrease in development and renovation of real estate offset in part by the $20.2 million decrease in net redemption of short-term investments. The decrease in development and renovation of real estate is primarily due to the completion of Alera, Bandera Ridge and Merano in 2025 (See "Development Activities" in Management's Overview). The decrease in net redemption of short-term investments was due the decrease in development costs and the repayment of the mortgage on 770 South Post Oak in 2025.
Previous wording
The following table reconciles net income attributable to the Company to FFO for the three months ended March 31, 2026 and 2025 (dollars and shares in thousands):
Current wording
The following table reconciles net income attributable to the Company to FFO for the three and six months ended June 30, 2026 and 2025 (dollars and shares in thousands):
Rearranged current paragraphs (5)
Current report — wording carried from elsewhere
•The $1.1 million decrease in multifamily NOI is due to decreases of $0.6 million from the Development Properties and$0.5 million from the Same Properties. The decrease in NOI from the Same Properties is due to a decrease in occupancy in certain markets due to increased competition from newly constructed properties. The decrease in NOI from the Development Properties is primarily due to the lease-up of newly constructed properties in 2025 (See "Development Activities" in Management's Overview).
Current report — wording carried from elsewhere
•The $0.2 million increase in NOI from our commercial segment is primarily due to a decrease in expense at Stanford Center.
Current report — wording carried from elsewhere
•The $1.9 million decrease in our interest income, net is due to a $0.8 million decrease in interest income and a $1.0 million increase in interest expense. The decrease in interest income was primarily due to a decrease in funds available for investments and a decline in interest rates. The increase in interest expense is primarily due to the interest on the Development Properties that were placed in service in the fourth quarter of 2025 (See "Development Activities" in Management's Overview).
Current report — wording carried from elsewhere
•The increase in other expense is primarily attributed to the decrease in the tax provision, which was due to the gain on real estate transactions in 2025.
Current report — wording carried from elsewhere
Our $5.8 million decrease in net income is primarily attributed to the following: