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Here's a brief analogy for American Realty Investors (ARL):

• "It's like a much smaller, publicly traded real estate conglomerate, similar to how a firm like Brookfield Asset Management invests across many types of real estate properties and also provides real estate loans, but as a standalone company."

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• Commercial Property Leasing: Providing businesses with rental space across office, retail, and industrial sectors.
• Residential Property Leasing: Offering rental units to individuals in various residential properties.

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American Realty Investors (ARL) operates as a Real Estate Investment Trust (REIT) with a diversified portfolio of income-producing properties, including office buildings, retail centers, industrial facilities, apartments, and single-family homes.

According to their financial filings (most recently their 2022 10-K), no single tenant accounted for 10% or more of ARL's total revenue for the years ended December 31, 2022, 2021, and 2020. Therefore, ARL does not have "major customers" in the traditional sense that can be individually named as significant sources of revenue. Instead, its customer base is diverse across various property types.

Based on its diversified real estate portfolio, ARL serves the following categories of customers:

1. Businesses Leasing Commercial Office Space: This category includes a wide range of companies and organizations from various industries (e.g., professional services, finance, technology, healthcare) that lease office space within ARL's commercial office properties for their operational needs.

2. Businesses Leasing Retail and Industrial Space: This category encompasses diverse commercial tenants such as retailers, service providers (e.g., restaurants, salons), and industrial users (e.g., logistics companies, distributors, light manufacturers) that occupy space in ARL's shopping centers and industrial buildings.

3. Individuals and Households Leasing Residential Properties: This category consists of individuals and families who rent apartment units and single-family homes owned by ARL for their personal residential use.

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Erik L. Johnson President and Chief Executive Officer

Erik L. Johnson serves as the President and Chief Executive Officer of American Realty Investors, Inc.. He also holds officer positions in affiliated companies, including Transcontinental Realty Investors, Inc. (TCI) and Income Opportunity Realty Investors, Inc. (IOT), as American Realty Investors is externally managed by Pillar Income Asset Management, Inc.. This structure is part of a larger group of affiliated real estate entities historically associated with Gene E. Phillips and now controlled by Realty Advisors, Inc., which owns 90% of American Realty Investors.

Alla Dzyuba Senior Vice President, Chief Accounting Officer

Alla Dzyuba is the Senior Vice President and Chief Accounting Officer for American Realty Investors, Inc.. In line with the company's external management model, she also serves as an officer in American Realty Investors' affiliated companies, Transcontinental Realty Investors, Inc. and Income Opportunity Realty Investors, Inc.. Her background is primarily within this group of related real estate entities that are managed by Pillar Income Asset Management, Inc., which is ultimately controlled by Realty Advisors, Inc..

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

Louis J. Corna holds the positions of Executive Vice President, General Counsel, Tax Counsel, and Secretary for American Realty Investors, Inc.. He also serves as the Secretary for Transcontinental Realty Investors, Inc. (TCI) and Income Opportunity Realty Investors, Inc. (IOR), which are affiliated entities within the same externally managed real estate group.

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Here are the key risks to American Realty Investors (ARL):

1. High Reliance on Related Parties: American Realty Investors, Inc. exhibits a significant dependence on transactions with related parties for a substantial portion of its revenue and expenses. This can lead to concerns regarding transparency and governance within the company. Such reliance may impact the company's long-term growth and competitiveness in the real estate investment market.
2. Cash Flow Challenges: The company has faced struggles in managing its cash flow, as evidenced by negative net cash used in operating activities, which was $(7.408) million in Q1 2025, compared to $3.867 million in Q1 2024. This indicates difficulties in generating sufficient cash from its core operations.
3. Vulnerabilities in Commercial Real Estate Holdings and Debt Management in a High-Interest Rate Environment: American Realty Investors experiences uneven performance across its property segments, with commercial properties lagging significantly at 57% occupancy, in contrast to a strong 94% occupancy in its multifamily properties. This disparity highlights sector-specific vulnerabilities and the need to potentially diversify revenue streams or reposition underperforming assets. Furthermore, the company faces potential risks in debt management due to increased mortgages and other notes payable, and its SOFR-linked debt is sensitive to changes in the high-interest-rate environment. The broader commercial real estate sector is also grappling with significant refinancing pressures as loans mature.

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• The widespread adoption of remote and hybrid work models, reducing demand for traditional office space. This ongoing shift impacts office occupancy rates, rental income, and property values for REITs like ARL with office property exposure.
• The accelerating growth of e-commerce and the continuous evolution of consumer shopping behaviors, which continue to challenge the viability and demand for traditional brick-and-mortar retail properties. This trend can lead to tenant defaults, higher vacancies, and downward pressure on rental rates and property values for ARL's retail portfolio.

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American Realty Investors, Inc. (ARL) operates primarily in the Southern United States, focusing on the acquisition, development, ownership, and management of multifamily residential properties, various commercial properties (office, industrial, and retail), and land for development.

The addressable markets for American Realty Investors' main products and services within the U.S. region are sized as follows:

• Multifamily Residential Properties (Apartments): The multifamily origination market in the U.S. is expected to total approximately $370 billion to $380 billion for 2025. This represents the market for new loans and acquisitions in this sector. Separately, multifamily investment sales volume reached $157.7 billion over the trailing twelve months as of May 2025.
• Commercial Real Estate (Overall): The U.S. commercial real estate market size is estimated at approximately $1.70 trillion in 2025, and is projected to reach $1.94 trillion by 2030, growing at a Compound Annual Growth Rate (CAGR) of 2.61%.
• Office Real Estate: The U.S. office real estate market is expected to reach approximately $369.58 billion in 2025.
• Industrial Real Estate: Industrial property sales in the U.S. totaled over $65 billion in 2024. Transaction volume for industrial assets was $18.8 billion in Q2 2025, suggesting an annual run rate of approximately $75.2 billion.
• Retail Real Estate: U.S. retail real estate transaction activity was $17.6 billion in Q2 2025, indicating an annual run rate of approximately $70.4 billion.
• Land Development: The market size for land development in the U.S. is estimated at approximately $22.9 billion in 2025.

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

1. Increased Rental Revenue from Existing Properties: American Realty Investors' business model is centered on generating recurring rental income from its portfolio of commercial properties and multifamily apartments. Recent reports indicate a rise in rental revenue, partly due to increased occupancy at assets like Stanford Center and sustained high occupancy rates in its multifamily properties. Improving the performance of commercial properties, where occupancy has been lower, is identified as a key success factor.
2. Successful Development and Lease-up of Multifamily Projects: The company is actively engaged in developing new multifamily projects, including Mountain Creek. Several initial units at properties such as Alera, Bandera Ridge, and Merano are entering the lease-up phase. The successful execution of these development and lease-up milestones is expected to be a significant contributor to future revenue.
3. Strategic Asset Sales and Property Dispositions: Beyond recurring rental income, American Realty Investors generates revenue through the sale of development properties and selective acquisitions. One-time gains from asset sales, such as the sale of single-family lots at Windmill Farms and the recent sale of Villas at Bon Secour, have notably contributed to profitability.
4. Growth Through Acquisitions: Although not explicitly detailed in recent forward guidance, the company's business model mentions selective acquisitions as a complement to its rental income. Expanding its portfolio through strategic property acquisitions could also drive future revenue growth.

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Share Repurchases

• American Realty Investors (ARL) had an authorized share repurchase program for up to 1,250,000 shares.
• As of June 30, 2022, 986,750 shares had been repurchased under this program, with 263,250 shares remaining authorized for future repurchases.
• In the fiscal year ended December 30, 2024, ARL reported using $802,000 for equity repurchases.

Share Issuance

• No significant share issuances for capital raising purposes with reported dollar amounts were identified within the last 3-5 years.

Inbound Investments

• No significant inbound investments made in American Realty Investors by third-parties were identified within the last 3-5 years.

Outbound Investments

• American Realty Investors' primary asset and source of operating results is its investment in Transcontinental Realty Investors, Inc. (TCI).
• ARL and a subsidiary owned approximately 78.38% of TCI's common stock as of 2020.
• No new strategic outbound investments in other companies were highlighted within the 3-5 year period.

Capital Expenditures

• As of Q3 2025, American Realty Investors incurred $151.9 million in development costs for four multifamily projects, encompassing 906 units.
• The primary focus of capital expenditures is the acquisition, development, and ownership of income-producing multifamily and commercial properties, predominantly in the Southern United States.
• In October 2025, ARL sold the Villas at Bon Secour, a 200-unit multifamily property, for $28.0 million, using the proceeds to repay an $18.8 million property loan and for general corporate purposes.