• It's like Equity Residential (a major apartment landlord), but diversified into commercial properties and land.
• It's similar to The Howard Hughes Corporation (HHC), managing a portfolio of developed properties (apartments, offices, retail) while also developing and selling land.

• Apartment Leasing: The company leases individual apartment units within its multifamily communities to residents.
• Commercial Property Leasing: The company leases office, industrial, and retail spaces within its commercial real estate portfolio to businesses and government agencies.
• Property and Land Sales: The company sells developed and undeveloped land, as well as entire properties from its portfolio.

American Realty Investors (ARL) serves a diverse customer base, primarily through leasing its real estate properties. Based on the company description, its major customers fall into the following categories:

• Residential Tenants: These are individuals and families who lease apartment units in ARL's numerous multifamily apartment communities. With over 10,000 apartment units, this represents a substantial segment of their customer base.
• Commercial Tenants (Businesses): These customers are various for-profit businesses that lease office, industrial, and retail space from ARL for their operations.
• Commercial Tenants (Government Agencies): This category includes local, state, and federal government agencies that lease office, industrial, and retail space from ARL.

Due to the nature of its diversified real estate portfolio, ARL does not typically have "major customers" in the sense of a few specific companies representing a dominant portion of its revenue. Instead, it serves a large number of individual tenants, businesses, and government entities across its properties.

• Basic Capital Management, Inc.
• Southwestern General Life Insurance Company
• American Phoenix, Inc.
• Investment and Development Management, Inc.

Erik L. Johnson, President and Chief Executive Officer

Erik L. Johnson was appointed President and Chief Executive Officer of American Realty Investors, Inc. effective May 28, 2024, after serving as Interim Principal Executive Officer since April 14, 2023. Prior to this, he was Executive Vice President and Chief Financial Officer of American Realty Investors, Inc. and Transcontinental Realty Investors, Inc. (TCI) since August 2020. He also held the roles of Executive Vice President and Chief Financial Officer for Pillar Income Asset Management, Inc. since June 2020, and Interim President of Pillar since April 2023. Pillar serves as the contractual advisor to American Realty Investors, Inc. Earlier in his career, Mr. Johnson was Vice President Financial Reporting at Macerich, a major retail real estate owner and developer, and served as Chief Accounting Officer of North American Scientific, Inc. He began his career as an auditor at PricewaterhouseCoopers and is a Certified Public Accountant.

Alla Dzyuba, Senior Vice President and Chief Accounting Officer

Alla Dzyuba serves as the Senior Vice President and Chief Accounting Officer of American Realty Investors, Inc. She is responsible for public accounting functions within the company.

Louis J. Corna, Executive Vice President, Tax Counsel, General Legal Counsel and Secretary

Louis J. Corna holds the positions of Executive Vice President, Tax Counsel, General Legal Counsel, and Secretary for American Realty Investors, Inc.

The key risks to American Realty Investors (ARL) are:

1. Weakness in Commercial Real Estate Portfolio: American Realty Investors faces significant challenges with its commercial property segment, which had a low occupancy rate of 58% as of Q3 2025, contrasting sharply with its multifamily portfolio's 94% occupancy. This weakness significantly impacts recurring rental revenue and overall valuation, compounded by a broader crisis in the U.S. commercial real estate market.
2. Real Estate Market Volatility and Interest Rate Fluctuations: The company is highly exposed to the cyclical nature of real estate markets, which includes fluctuations in property values, rental income, and overall economic conditions. Changes in interest rates are a primary market risk, directly impacting borrowing costs for acquisitions and development, and influencing the fair values of its financial instruments and properties.
3. Cash Flow Challenges and Reliance on Related Party Transactions: American Realty Investors has experienced struggles in cash flow management, with net cash used in operating activities being negative in Q1 2025. Additionally, the company exhibits a high reliance on related party transactions, which may lead to concerns over transparency and governance.

• The widespread adoption of hybrid and remote work models represents a clear and emerging threat to the demand for traditional office space. This shift can lead to reduced physical footprint requirements for businesses, increased vacancies, and downward pressure on rental rates and property values for ARL's office building portfolio.
• The continuous expansion of e-commerce and evolving consumer habits pose an emerging threat to the viability and demand for traditional brick-and-mortar retail properties. This trend can result in increased tenant turnover, difficulties in securing new tenants, and downward pressure on rental income and property values for ARL's retail property.

The addressable markets for American Realty Investors (ARL) main products and services in the United States are sized as follows:

• Multifamily Apartment Communities (U.S.): The United States multifamily market size was valued at approximately $265 billion in 2022 and is projected to reach $466 billion by 2030, growing at a compound annual growth rate (CAGR) of 7.31% from 2023 to 2030. The investment volume for apartment transactions in the U.S. totaled $165.5 billion in 2025.
• Commercial Real Estate (U.S. - overall): The United States Commercial Real Estate Market size is estimated at $1.74 trillion in 2026, with projections to reach $1.97 trillion by 2031, growing at a 2.45% CAGR over 2026-2031.
• Commercial Real Estate (Office, Industrial, Retail segments): null
• Land Sales: null

Here are 3-5 expected drivers of future revenue growth for American Realty Investors (ARL) over the next 2-3 years:

1. Increasing Occupancy and Rental Rates in Commercial Properties: American Realty Investors anticipates revenue growth from improved occupancy and rental rates within its commercial property portfolio. For instance, increased occupancy at Stanford Center was a primary contributor to revenue growth in the fourth quarter of 2025. The company's commercial properties had a stabilized occupancy of 59% as of December 31, 2025, indicating significant room for future improvement.
2. Stabilized Occupancy and Rental Rate Growth in Multifamily Portfolio, including Lease-Up Properties: The company's substantial portfolio of multifamily apartment communities is expected to drive revenue through consistent rental income. While some multifamily revenue was affected by property sales in late 2025, overall rental revenues are supported by increases in rents at multifamily properties. Furthermore, properties currently in the lease-up phase, such as Alera, Bandera Ridge, and Merano, are expected to reach stabilized occupancy, contributing to future revenue streams as they come online and achieve higher occupancy rates.
3. Strategic Development and Acquisition of Income-Producing Properties: American Realty Investors focuses on maximizing long-term value through the acquisition, development, and ownership of residential and commercial real estate. The company made significant investments in multifamily development in 2025, funded by new construction loans. This ongoing strategy suggests a pipeline of new income-producing properties that will contribute to revenue growth as they are completed, leased, and integrated into the portfolio.
4. Opportunistic Sales of Land and Properties: While gains from real estate transactions, such as the sale of Villas at Bon Secour, significantly boosted net income in 2025, the company's business model includes the strategic sale of land and properties. Management intends to sell income-producing assets and refinance or extend debt secured by real estate to meet liquidity needs. These opportunistic sales contribute to the company's overall revenue and financial performance.

Outbound Investments

• American Realty Investors was engaged in significant multifamily property development. The company entered into a development agreement to build a 216-unit multifamily property in McKinney, Texas, named "Merano," with an estimated total cost of approximately $51.9 million. As of December 31, 2023, $16.9 million in development costs had been incurred for this project.
• The company also commenced development of another 216-unit multifamily property in Temple, Texas, known as "Bandera Ridge." This project has an estimated total cost of about $49.6 million, with $3.1 million in development costs incurred as of December 31, 2023.
• In 2023, American Realty Investors spent $5.0 million on the development of two land parcels in Windmill Farms. These parcels are being developed into approximately 470 single-family home lots, with an estimated total development cost of $24.3 million.
• As of December 31, 2025, the multifamily projects Alera, Bandera Ridge, and Merano had completed construction and were in the lease-up phase.

Capital Expenditures

• Primary capital expenditures during this period were focused on the development of new multifamily apartment communities. Specifically, for the "Merano" project, the estimated total cost is $51.9 million, with $16.9 million incurred by December 31, 2023.
• The "Bandera Ridge" multifamily property also represents a substantial capital expenditure, with an estimated total cost of $49.6 million, and $3.1 million incurred as of December 31, 2023.
• In 2023, the company expended $5.0 million for the development of land parcels at Windmill Farms, which includes lot development and reimbursable infrastructure investments.