AMERICAN REALTY INVESTORS INC
For the period ended Sep 30, 2026. Filed Nov 12, 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.
Sep 30, 2026 · Filed Nov 12, 2026
ARL$22.93-0.2%Stored close · as of Nov 12, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2026-06-30; filed 2026-08-06.
0001628280-26-054101
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2026-09-30; filed 2026-11-12.
0001628280-26-073261
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 76 previous paragraphs and 79 current paragraphs.
47 unchanged; 26 reworded; 4 added; 3 removed; 0 previous and 2 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 (4)
Current report
Acquisition and Disposition Activities
Current report
•On October 2, 2026, we entered into an agreement to purchase Bellwether Ridge, a 150 unit multifamily property in DeSoto, Texas; Parc at Ingleside, a 192 unit multifamily property in Ingleside, Texas; Parc at Opelika, a 168 unit multifamily property in Opelika, Alabama; and Parc at Windmill Farms, a 272 unit multifamily property in Forney, Texas (collectively referred to as the "Barton Portfolio") in exchange for the settlement of our four notes receivable and a cash payment of$12.0 million. We are currently working with lenders to obtain approval to assume the underlying HUD loan on each of the properties.
Current report
•On April 30, 2026, we extended the loan on Alera at Hunters Glen to September 15, 2026, and was further extended on October 28, 2026 to November 5, 2027, and we have an option to further extend the loan to March 15, 2028.
Current report
Comparison of the nine months ended September 30, 2026 to the nine months ended September 30, 2025:
Removed paragraphs (3)
Previous report
Disposition Activities
Previous report
•On April 30, 2026, we extended the loan on Alera to September 15, 2026. The loan contains two one-year extension options.
Previous report
Comparison of the six months ended June 30, 2026 to the six months ended June 30, 2025:
Reworded paragraphs (26)
Previous wording
•failure to manage effectively our growth and expansion into new markets or to integrate acquisitions successfully;
Current wording
•failure to effectively manage our growth and expansion into new markets or to integrate acquisitions successfully;
Previous wording
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.
Current wording
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” in our Annual Report on Form 10-K, which investors should review.
Previous 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.
Current wording
•During the nine months ended September 30, 2026, we sold 63 lots from our holdings in Windmill Farms for $3.1 million, resulting in a gain on sale of $2.4 million.
Previous wording
•On October 10, 2025, we paid off the$18.8 million loan on Villas at Bon Secour in connection with the sale of the underlying property (See "Disposition Activities").
Current wording
•On October 10, 2025, we paid off the$18.8 million loan on Villas at Bon Secour in connection with the sale of the underlying property (See "Acquisition and Disposition Activities").
Previous wording
We have agreements to develop two parcels of land from 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.
Current wording
We have agreements to develop two parcels of land from 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 nine months ended September 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. 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.
Current wording
In 2025, we completed the construction of Alera at Hunters Glen, 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. We completed the lease-up of these properties in the third quarter of 2026. We are currently constructing The Wylan, a 234 unit multifamily property in Dallas, Texas; which we expect to complete by end of year. As of September 30, 2026, we've incurred a total of $27.4 million in the construction of The Wylan and expect to expend an additional $22.6 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
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.
Current wording
We apply ASC Topic 850, “Related Party Disclosures”, 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 its own separate interests, or affiliates of the entity.
Previous wording
For purposes of the discussion below, we define "Same Properties" as all of our properties with the exception of those properties that have been recently constructed or are in lease-up (“Development Properties”), properties that have recently been acquired ("Acquisition Properties") and properties that have been disposed ("Disposition Properties"). A developed property is considered substantially complete or 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 complete or in operation for the entirety of both periods of comparison.
Current wording
For purposes of the discussion below, we define "Same Properties" as all of our properties with the exception of those properties that have been recently constructed or are in lease-up (“Development Properties”), properties that have recently been acquired ("Acquisition Properties") and properties that have been disposed ("Disposition Property"). A developed property is considered substantially complete or 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 complete or in operation for the entirety of both periods of comparison.
Previous 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.
Current wording
For the comparison of three and nine months ended September 30, 2026 to the three and nine months ended September 30, 2025, the Development Properties were Alera at Hunters Glen, 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
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 wording
Total occupancy for Same Properties was 82% at September 30, 2026, which includes 95% at our multifamily properties and 57% at our commercial properties. Occupancy for our Alera at Hunters Glen, Bandera Ridge and Merano at September 30, 2026 was 96%, 99% and 95%, respectively.
Previous wording
The following table (dollars in thousands) summarizes our results of operations for the three and six months ended June 30, 2026 and 2025:
Current wording
The following table (dollars in thousands) summarizes our results of operations for the three and nine months ended September 30, 2026 and 2025:
Previous wording
Our $4.1 million decrease in net income is primarily attributed to the following:
Current wording
Our $1.1 million decrease in net income is primarily attributed to the following:
Previous wording
•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 wording
•The $0.3 million increase in multifamily NOI is due to an increase of $1.0 million from the Development Properties offset in part by decreases of$0.5 million from the Same Properties and$0.2 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 increase in NOI from the Development Properties is primarily due to the lease-up of newly constructed properties in 2026 (See "Development Activities" in Management's Overview).
Previous wording
•The $0.2 million increase in NOI from our commercial segment is primarily due to a decrease in expense at Stanford Center.
Current wording
•The $0.6 million decrease in NOI from our commercial segment is primarily due to a decrease in revenue at Stanford Center.
Previous wording
•The $2.9 million decrease in interest income, net is due to a $0.7 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).
Current wording
•The $1.2 million decrease in interest income, net is due to a $0.6 million decrease in interest income and a $0.7 million increase in interest expense. The decrease in interest income was primarily due to a decrease in interest rates. The increase in interest expense is primarily due to an increase in borrowings and interest rates of debt on the Development Properties (See "Development Activities" in Management's Overview).
Previous wording
•The decrease in other income, net 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 decrease in other expense is primarily attributed to the decrease in the tax provision.
Previous wording
Our $8.6 million decrease in net income is primarily attributed to the following:
Current wording
Our $9.6 million decrease in net income is primarily attributed to the following:
Previous 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).
Current wording
•Our multifamily segment had a $2.5 million decrease in NOI, which was attributed to decreases of $1.6 million from the Same Properties, $0.5 million from the Disposition Property and $0.4 million from the Development Properties.
Previous 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.
Current wording
•The $0.3 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 $1.6 million decrease in interest income, net is due to a $0.5 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 wording
•The $4.1 million decrease in interest income, net is due to a $1.3 million decrease in interest income and a $2.8 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 an increase in borrowings and interest rates of debt on the Development Properties (See "Development Activities" in Management's Overview).
Previous 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).
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 "Acquisition and Disposition Activities" in Management's Overview).
Previous wording
The $8.8 million decrease in cash used in operating activities is primarily due to a $2.1 million increase in other assets, a $6.5 million decrease in accounts payable and other liabilities.
Current wording
The $8.9 million increase in cash from operating activities is primarily due to a $7.0 million smaller increase in other assets.
Previous wording
The $20.3 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 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 to the repayment of the mortgage on 770 South Post Oak in 2025.
Current wording
The $29.9 million decrease in cash used in investing activities is primarily due to the $42.8 million decrease in development and renovation of real estate offset in part by the $12.0 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 at Hunters Glen, 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 decrease in development costs and the repayment of the mortgage on 770 South Post Oak in 2025.
Previous wording
The $30.2 million decrease in cash provided by financing activities was primarily due 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.
Current wording
The $37.6 million decrease in cash provided by financing activities was primarily due to a $44.4 million decrease inproceeds from mortgages and other notes payable offset in part by a$10.1 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 at Hunters
Previous wording
We use FFO in addition to net income to report our operating and financial results and consider FFO 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.
Current wording
We use FFO in addition to net income to report our operating and financial results and consider FFO as a supplemental measure 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.
Previous 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):
Current wording
The following table reconciles net income attributable to the Company to FFO for the three and nine months ended September 30, 2026 and 2025 (dollars in thousands):
Rearranged current paragraphs (2)
Current report — wording carried from elsewhere
The decrease in NOI from the Same Properties is primarily due to an increase in repairs and maintenance costs. The decrease in NOI from the Development Properties is primarily due to the lease-up of newly constructed properties in 2026 (See "Development Activities" in Management's Overview).
Current report — wording carried from elsewhere
Glen, Bandera Ridge and Merano in 2025 (See "Development Activities" in Management's Overview), which resulted in a decrease in borrowings on the corresponding construction loans in 2026. 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.