The InterGroup Corporation reported a net loss of $398,000 for the three months ending September 30, 2024, a decrease from a net loss of $1,244,000 in the same period of the previous year. This improvement is attributed to increased operating income from real estate operations and a reduction in losses from investment transactions, despite a rise in operating losses from hotel operations.

For the hotel segment, the net loss increased to $725,000 in Q3 2024 from $639,000 in Q3 2023, primarily due to higher mortgage interest expenses resulting from a 4% default interest rate on senior and mezzanine loans effective January 1, 2024. Hotel operating income rose to $3,028,000 on total revenues of $11,820,000, compared to $1,812,000 on revenues of $11,093,000 in the prior year. Room revenue increased by $549,000, and food and beverage revenue grew by $106,000 year-over-year. Total hotel revenues saw a 6.5% increase, while average daily room rates (ADR) decreased by $8, and occupancy rates improved by 8.0%.

In real estate operations, revenue for Q3 2024 was $5,086,000, up from $4,417,000 in Q3 2023, driven by reduced vacancy at a Missouri property undergoing rebranding. However, real estate operating expenses rose to $2,457,000 from $2,356,000, mainly due to higher insurance and maintenance costs.

As of September 30, 2024, the company’s total shareholders’ deficit stood at $(107,479,000), reflecting an increase from $(96,287,000) a year earlier. The accumulated deficit rose to $(63,030,000) from $(54,079,000) in the previous year. The company waived $1,030,134 in incentive fees due to recovery from the COVID-19 pandemic, establishing a performance threshold of $15,257,301 EBITDA for fiscal years 2019 through 2023.

The company’s cash and cash equivalents increased to $5,592,000 from $4,333,000 as of June 30, 2024. Restricted cash also rose to $4,626,000, while marketable securities decreased to $6,648,000 from $7,266,000. The outstanding balance of the company’s senior mortgage and mezzanine loans totaled $100,546,000, with both loans maturing on January 1, 2024.

The Hilton San Francisco Financial District hotel, a key asset, achieved a RevPAR index of 145% and an ADR index of 90% for the quarter, with a year-over-year RevPAR growth of 5.7%, contrasting with an 18.5% decline in its competitive set. The hotel received a Quality Assurance inspection score of 94.45%, the highest in a decade, indicating improved performance in a recovering market.