TCI posts a net loss of $0.1 million in the third quarter of 2026
Key Facts
Transcontinental Realty Investors, known as TCI, reported a net loss attributable to common shares of $0.1 million, or $0.02 per share, for the three months ended September 30, 2026, according to results published by Business Wire. The company reported net income of $0.7 million, or $0.08 per share, in the same quarter of 2025. The swing to a loss came as quarterly revenue rose to $13.9 million from $12.8 million a year earlier. But revenue growth did not prevent the bottom line from weakening, as the operating loss widened and net interest income declined. TCI shares closed at $48.53 on November 11, 2026, according to EL7 data.
The company said higher revenue reflected mixed performance in its residential and commercial businesses: multifamily property revenue rose by $1.5 million, while commercial revenue fell by $0.4 million compared with the third quarter of 2025. TCI attributed the increase in multifamily property revenue to the gradual leasing of development properties. Overall occupancy at stabilized properties was 82% on September 30, 2026, comprising 95% at multifamily properties and 57% at commercial properties. TCI said it completed leasing at the Alera at Hunters Glen, Bandera Ridge and Merano projects during the third quarter. Occupancy at those projects at the end of September was 96%, 99% and 95%, respectively.
The operating loss widened to $2.4 million in the third quarter, compared with a loss of $1.4 million in the same period a year earlier. The company attributed part of the increase to a $1.4 million rise in operating expenses for properties under lease-up. At multifamily properties, net operating income rose by $0.3 million overall, including a $1.0 million contribution from development properties. This was offset by a $0.5 million decline at comparable properties and a $0.2 million decline at a property that was disposed of. Net operating income for the commercial segment also fell by $0.6 million from the year-earlier quarter.
TCI said lower occupancy in some markets, amid increased competition from newly built properties, weighed on net operating income at comparable properties. To explain the decline in net income attributable to common shares, the company cited a $1.0 million increase in the operating loss and a $1.4 million decrease in net interest income. A $1.4 million reduction in the income tax provision partly offset those effects. These items show how revenue improved while expenses and interest income came under pressure. The quarterly result was therefore weaker than the company’s income in the year-earlier period, despite revenue growth.
The decline extended to the first nine months of 2026, when the company recorded a net loss attributable to it of $1.1 million through September 30. In the same period of 2025, net income attributable to the company was $5.511 million. TCI reported positive operating cash flow of $2.882 million in the first nine months of 2026, after using $2.175 million in the year-earlier period. The company also sold 21 lots from its Windmill Farms holdings during the quarter for $1.0 million, recording a gain of $0.8 million. TCI said cash and cash equivalents at the end of September, together with expected cash from bonds, receivables and short-term investments, would be sufficient to meet its cash needs.
In portfolio-related moves, the company entered into an agreement on October 2, 2026, to acquire four multifamily properties in exchange for settling four notes receivable and paying $12.0 million in cash. The properties include Bellwether Ridge in DeSoto, Texas, with 150 units, and Parc at Ingleside in Texas, with 192 units. The transaction also includes Parc at Opelika in Alabama, with 168 units, and Parc at Windmill Farms in Texas, with 272 units. TCI said it was working with lenders to obtain approval to assume the mortgages on the properties. The deal follows the sale of Windmill Farms lots during the quarter and is another part of the company’s real estate activity during the period.
At its residential project The Wylan in Dallas, the company was building a 234-unit property and expected to complete it by the end of 2026. Accumulated construction costs were $27.4 million as of September 30, while TCI expected to spend an additional $22.6 million to complete the project. On financing, the company said it exercised an option on October 28 to extend the maturity of the Alera at Hunters Glen loan to November 5, 2027. The extension follows the announcement that leasing at the project was completed in the third quarter, with occupancy reaching 96% at the end of September. The company cited these projects and the property deal alongside its quarterly results.