Transcontinental Realty Earns $1.29 Per Share Third Quarter 2001 Net Income vs. $.80


DALLAS, Nov. 9, 2001 (PRIMEZONE) -- Transcontinental Realty Investors, Inc. (NYSE:TCI) Friday announced 2001 third quarter and nine months net incomes of $11.12 million and $25.76 million, or $1.29 and $2.98 per share, on revenues of $32.42 million and $103.46 million, compared to net incomes of $6.89 million and $17.02 million, or $.80 and $1.97 per share, on revenues of $35.16 million and $103.86 million for the same periods in 2000.

Net income for the third quarter and nine months of 2001 included:


 -- Gains on the sale of real estate that increased to $18.78 million
    and $47.53 million, from $11.76 million and $29.56 million in the
    2000 comparable periods. 

 -- Rents that decreased due to property sales in 2000 and 2001 were
    partially offset by increased rental and occupancy rates at the 
    commercial properties and rents generated by properties purchased
    in 2000 and 2001.  Operations revenue from the hotels, leased out
    prior to January 1, 2001, increased by $1.1 million in the first 
    nine months of 2001.

 -- Interest income increased to $1.02 million and $2.28 million, from
    $936,000 and $1.93 million in the 2000 periods, due to loans 
    funded in 2000 and 2001.
 
 -- Loss of equity investees increased to $2.16 million and $4.53
    million, from $185,000 and $477,000 in the 2000 periods.

Total expenses decreased in third quarter and increased in nine months 2001 to $38.94 million and $122.98 million, as compared to $40.78 million and $117.85 million for the same periods in 2000. Expenses included:


 -- Operations expenses decreasing in the third quarter and increasing
    in the nine months 2001 to $19.64 million and $60.08 million, from
    $19.90 million and $56.66 million in 2000, due to property sales 
    partially offset by properties purchased in 2000 and 2001, as well
    as increases in utilities, maintenance costs, leasing costs, and
    taxes. Hotel operation expenses increased by $1.20 million and 
    $3.40 million.  

 -- Interest expense decreasing to $9.43 million and $31.38 million,
    from $12.25 million and $35.41 million in 2000, due to sales of
    property subject to debt, loan payoffs, refinancings, principal
    paydowns and lower variable interest rates.

 -- Depreciation decreasing to $4.74 million and $14.79 million, from
    $5.40 million and $14.87 million in 2000, due to property sales
    and fully depreciated building and land improvements at the 
    apartments.
 
 -- Net income fees, advisory fees, and incentive fees increasing due
    to increased net income, gross assets and property sales, the 
    basis for such fees.
 
 -- General and administrative expenses increasing to $1.61 million
    and $7.53 million, from $1.33 million and $5.71 million in 2000,
    due to increased legal and other professional fees.

Transcontinental Realty Investors, Inc., a Dallas-based real estate investment company, invests in real estate through direct equity ownership and partnerships nationwide.


                       FINANCIAL HIGHLIGHTS
     (dollars in thousands, except share and per share data)
 
                           Three months ended      Nine months ended
                             September 30,           September 30,
                            2001       2000        2001         2000

 Income from rents      $  32,423   $  35,164   $ 103,464   $ 103,855
 Expense from operations   19,643      19,896      60,084      56,659
    Operating income       12,780      15,268      43,380      47,196

 Other income (loss)    $  (1,147)  $     751   $  (2,254)  $   1,451
 Other expense             19,297      20,883      62,892      61,187
 Gain on sale
   of real estate          18,780      11,755      47,529      29,562
                           (1,664)     (8,377)    (17,617)    (30,174)

 Net Income             $  11,116   $   6,891   $  25,763   $  17,022
 Preferred dividend
  requirement                  (7)         (7)        (22)        (22)

 Net income applicable
  to common shares      $  11,109   $   6,884   $  25,741   $  17,000

 Earnings Per Share
  Net Income
     Basic              $    1.29   $     .80   $    2.98   $    1.97
     Diluted            $    1.28   $     .80   $    2.97   $    1.97

 Weighted average common
  shares used to compute
  earnings per share
     Basic              8,603,614   8,633,211   8,625,230   8,630,029
     Diluted            8,653,614   8,633,211   8,675,230   8,630,029

            

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