American Realty Investors, Inc. (ARL) reported a net loss of $14.7 million for the fiscal year ending December 31, 2024, a significant decline from a net income of $3.97 million in the previous year. The company's total revenue decreased to $47.3 million from $50.5 million in 2023, primarily due to lower rental income from both multifamily and commercial segments. Multifamily revenue fell to $34.1 million from $35 million, while commercial revenue dropped to $12.97 million from $14.94 million. The overall operating expenses also decreased to $53.96 million from $61.74 million, largely due to reduced general and administrative costs.
In terms of strategic developments, ARL engaged in several significant transactions during the year. Notably, the company sold 30 single-family lots from its Windmill Farms holdings for $1.4 million, resulting in a gain of $1.1 million. Additionally, ARL entered into multiple construction loans, including a $27.5 million loan for the development of a 234-unit multifamily property in Dallas, Texas, expected to be completed in 2026. The company also extended the maturity of its loan on Windmill Farms to February 2026 at a 7.5% interest rate.
Operationally, ARL's property portfolio as of December 31, 2024, included 14 multifamily properties with 2,328 units and four multifamily properties under development comprising 906 units. The company also holds approximately 1,804 acres of developed and undeveloped land. The total real estate investment increased to $557.4 million from $501.6 million in 2023, reflecting ongoing development activities. However, the company reported a decrease in occupancy rates, which contributed to the decline in revenue.
The filing also highlighted the impact of litigation settlements on financial performance. In October 2024, ARL settled a long-standing litigation case with David Clapper, paying $23.4 million to resolve all claims. This settlement significantly contributed to the increase in losses from real estate transactions, which rose to $23.99 million in 2024 from $1.92 million in 2023. The company anticipates that its cash flow from operations, along with potential asset sales and refinancing, will be sufficient to meet its liquidity needs in the upcoming year.
Looking ahead, ARL's management expressed cautious optimism about future performance, emphasizing a strategy focused on maximizing long-term value through the acquisition and development of income-producing properties in the Southern United States. The company plans to continue leveraging its existing portfolio while exploring new opportunities for growth, despite the competitive landscape and potential economic challenges.
About AMERICAN REALTY INVESTORS INC
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