*          “Beneficial Ownership” “Beneficial Ownership” means the sole or shared power to vote, or to direct the voting of, a security or investment power with respect to a security, or any combination thereof.

**       Percentages are based upon 8,639,316 shares of Common Stock outstanding at November 4, 2021.3, 2022.

(1)       Includes 5,383,192 shares owned by ARL and 1,383,226 shares owned by TRAC, over which the executive officers and members of the Board of Directors of ARL may be deemed to be the beneficial owners by virtue of their positions as executive officers and members of the Board of Directors of ARL; also includes 5,300 shares owned by EQK Holdings, Inc., which is wholly owned by ARL. The executive officers and current members of the Board of Directors of ARL disclaim beneficial ownership of such shares.

(2)       Includes 341,200620,928 shares owned by RAI, and 279,728 shares owned by AEI, over which the executive officers of RAI may be deemed to be the beneficial owners by virtue of their positions. The executive officers of RAI disclaim beneficial ownership of such shares.

PROPOSAL 1

ELECTION OF DIRECTORS

Six directors are to be elected at the Annual Meeting. Each director elected will hold office until the Annual Meeting following the fiscal year ending December 31, 2021.2022. All of the nominees for director are now serving as directors of the Company. Each of the nominees has consented to being named in this proxy statement as a nominee and has agreed to serve as a director if elected. The persons named on the proxy card will vote for all of the nominees for director listed unless you withhold authority to vote for one or more of the nominees. The nominees receiving a plurality of votes cast at the Annual Meeting will be elected as directors. Abstentions and broker non-votes will not be treated as a vote for or against any particular nominee and will not affect the outcome of the election of directors. Cumulative voting for the election of directors is not permitted. If any director is unable to stand for reelection, the Board will designate a substitute. If a substitute nominee is named, the persons named on the proxy card will vote for the election of the substitute director.

The nominees for directors are listed below, together with their ages, terms of service, all positions and offices with the Company or the Company’sCompany’s advisor, other principal occupations, business experience and directorships with other companies during the last five years or more. The designation “affiliated” “affiliated” when used below with respect to a director means that the director is an officer, director or employee of the Company or the advisor.

Henry A. Butler, 72

Henry A. Butler, 71 (Affiliated)

Retired (since April 30, 2019); for more than five years prior to retirement, Broker – Land Sales (April 30, 2011 to April 30, 2019) for Pillar Income Asset Management, Inc. (“Pillar”(“Pillar”) and (July 2003 to April 2011) for Prime Income Asset Management, LLC (“Prime”(“Prime”) and (1992 to June 2003) for Basic Capital Management, Inc. (“BCM”(“BCM”); Director (since November 2005) of the Company and (since July 2003) of ARL and Director (since February 8, 2011) and Chairman of the Board (since May 12, 2011) of Income Opportunity Realty Investors, Inc. (“IOR”(“IOR”); Chairman of the Board (since May 28, 2009) of the Company and ARL.

William J. Hogan, 64

William J. Hogan, 63

Retired (since December 31, 2020). Registered Representative and Investment Advisor Representative, employed (since January 2013)(January 2013 – December 31, 2020) by Cetera Advisor Networks LLC, a general securities and investment advisory firm with an office in San Antonio, Texas. From November 2009 through December 2012, Mr. Hogan was a registered representative, employed by Financial Network Investment Corp. in San Antonio, Texas. He holds Series 7 (General Securities Representative), Series 63 (Uniform Securities Agent State Law), and Series 65 (Investment Advisor) licenses issued by Financial Industry Regulatory Authority (“FINRA”(“FINRA”). Mr. Hogan has been a director of the Company and ARL since February 1, 2020.

Robert A. Jakuszewski, 5960

Territory Manager for Artesa Labs (since April 2015). He was a medical specialist (from January 2014 to April 2015) for VAYA Pharma, Inc.; Senior Medical Liaison for Vein Clinics of America (January 2013 to July 2013); Vice President of Sales and Marketing (September 1998 to December 2012) for New Horizons Communications, Inc.; Consultant (January 1998 - September 1998) for New Horizon Communications, Inc.; Regional Sales Manager (1996-1998) for Continental Funding; Territory Manager (1992-1996) for Sigvaris, Inc.; Senior Sales Representative (1988-1992) for Mead Johnson Nutritional Division, USPNG; and Sales Representative (1986-1987) for Muro Pharmaceutical, Inc. Mr. Jakuszewski has been a director of IOR since March 16, 2004, and a director of the Company and ARL since November 22, 2005.

Ted. R. Munselle, 6667

Vice President and Chief Financial Officer (since October 1998) of Landmark Nurseries, Inc.; President (since December 2004 until sold in April 2007) of Applied Educational Opportunities, LLC, an educational organization which had two career training schools located in Texas; Director (since February 2004) of the Company and ARL and (since May 2009) IOR; Certified Public Accountant (since 1980) who was employed as an Audit Partner in two Dallas, Texas based CPA firms (1986 to 1998), as an Audit Manager at Grant Thornton LLP (1983 to 1986) and as Audit Staff to Audit Supervisor at Laventhal & Horwath (1977 to 1983). Mr. Munselle is also a director (since February 17, 2012) of Spindletop Oil & Gas Company, a publicly held Texas corporation, whose stock is traded in the Over-The-Counter (“OTC”(“OTC”) market.

Bradford A. Phillips, 5657

Chief Executive Officer (since March 1, 2008) and Chairman of LBL Group of Insurance Companies since 1999. Mr. Phillips has served as President of Midland Securities, LLC, a Dallas, Texas based broker/dealer, since 2002. Prior to joining LBL Group, he served as President of InterFirst Capital Corporation of Los Angeles, California. Mr. Phillips holds a number of securities licenses, including the Series 4 (Options Principal), Series 7 (General Securities License), Series 24 (General Securities Principal), Series 27 (Financial and Operations Principal), Series 53 (Municipal Securities Principal), Series 55 (Equity Trading Principal), and Series 63 (Blue Sky Securities License). He has been a director of the Company and of ARL (since March 11, 2021).

Raymond D. Roberts, Sr., 8990

Retired since December 31, 2014; for more than five years prior thereto, he was Director of Aviation of Stellar Aviation, Inc., a privately held Nevada corporation, engaged in the business of aircraft (Boeing 737) and logistical management. Mr. Roberts is also a Director of ARL and IOR (each, since June 2, 2016) and New Concept Energy, Inc. (since June 17, 2015), a publicly held Nevada corporation (“GBR”(“GBR”), whose stock is listed and traded on the NYSE American.

The Board of Directors unanimously recommends a vote FOR

the election of all of the Nominees named above.

PROPOSAL 2

PROPOSAL 2

RATIFICATION OF APPOINTMENT OF

INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

The Audit Committee has appointed Farmer, Fuqua & Huff, P.C. as the independent registered public accounting firm of the Company for the 20212022 fiscal year and to conduct quarterly reviews through September 30, 2022.2023. The Company’sCompany’s Bylaws do not require that stockholders ratify the appointment of Farmer, Fuqua & Huff, P.C. as the Company’sCompany’s independent registered public accounting firm. Farmer, Fuqua & Huff, P.C. has served as the Company’sCompany’s independent public accounting firm for each of the fiscal years ended December 31, 2004 through 2020.2021. The Audit Committee will consider the outcome of this vote in its decision to appoint an independent registered public accounting firm next year, however, it is not bound by the stockholders’ stockholders’ decision. Even if the selection is ratified, the Audit Committee, in its sole discretion, may change the appointment at any time during the year if it determines that such a change would be in the best interest of the Company and its stockholders.

A representative of Farmer, Fuqua & Huff, P.C.P. C. will attend the Annual Meeting. The representative will have an opportunity to make a statement if he or she desires to do so and will be available to respond to appropriate questions from the stockholders.

The Board of Directors recommends a vote FOR the ratification of the

appointment of Farmer, Fuqua & Huff, P.C. as the

Company’sCompany’s independent registered public accounting firm.

Fiscal Years 20192020 and 20202021 Audit Firm Fee Summary

The following table sets forth the aggregate fees for professional services rendered to or for the Company only for the years 20192020 and 20202021 by Farmer, Fuqua & Huff, P.C.P. C.:

The audit fees for 20192020 and 2020,2021, respectively, were for professional services rendered for the audits and reviews of the consolidated financial statements of the Company. Tax fees for 20192020 and 2020,2021, respectively, were for services related to federal and state compliance and advice.

All services rendered by the principal auditors are permissible under applicable laws and regulations and were pre-approved by either the Board of Directors or the Audit Committee, as required by law. The fees paid the principal auditors for services as described in the above table fall under the categories listed below:

Audit Fees. These are fees for professional services performed by the principal auditor for the audit of the Company’sCompany’s annual financial statements and review of financial statements included in the Company’sCompany’s 10-Q filings and services that are normally provided in connection with statutory and regulatory filing or engagements.

Audit-Related Fees. These are fees for assurance and related services performed by the principal auditor that are reasonably related to the performance of the audit or review of the Company’sCompany’s financial statements. These services include attestations by the principal auditor that are not required by statute or regulation and consulting on financial accounting/reporting standards.

Tax Fees. These are fees for professional services performed by the principal auditor with respect to tax compliance, tax planning, tax consultation, returns preparation and review of returns. The review of tax returns includes the Company and its consolidated subsidiaries.

All Other Fees. These are fees for other permissible work performed by the principal auditor that do not meet the above category descriptions.

These services are actively monitored (as to both spending level and work content) by the Audit Committee to maintain the appropriate objectivity and independence in the principal auditor’sauditor’s core work, which is the audit of the Company’sCompany’s consolidated financial statements.

Report of the Audit Committee

The Audit Committee of the Board of Directors is composed of four directors, each of whom satisfies the requirements of independence, experience and financial literacy under the requirements of the NYSE and the SEC. The Audit Committee has directed the preparation of this report and has approved its content and submission to the stockholders.

The Audit Committee is responsible for, among other things:

●        retaining and overseeing the independent registered public accounting firm that serves as our independent auditor and evaluating their performance and independence;

●        reviewing the annual audit plan with management and the independent registered public accounting firm;

●        preapproving any permitted non-audit services provided by our independent registered public accounting firm;

●        approving the fees to be paid to our independent registered public accounting firm;

●        reviewing the adequacy and effectiveness of our internal controls with management, internal auditors and the independent registered public accounting firm;

●        reviewing and discussing the annual audited financial statements and the interim unaudited financial statements with management and the registered public accounting firm; and

●        approving our internal audit plan and reviewing reports of our internal auditors.

The Audit Committee operates under a written charter adopted by the Board of Directors. The Audit Committee’sCommittee’s responsibilities are set forth in this charter which is available on our website at www.transconrealty-invest.com.

The Audit Committee assists the Board in fulfilling its responsibilities for general oversight of the integrity of the Company’sCompany’s financial statements, the adequacy of the Company’sCompany’s system of internal controls, the Company’sCompany’s risk management, the Company’sCompany’s compliance with legal and regulatory requirements, the independent auditors’ auditors’ qualifications and independence, and the performance of the Company’sCompany’s independent auditors. The Audit Committee has sole authority over the selection of the Company’sCompany’s independent auditors and manages the Company’sCompany’s relationship with its independent auditors. The Audit Committee has the authority to obtain advice and assistance from outside legal, accounting or other advisors as the Audit Committee deems necessary to carry out its duties and receive appropriate funding, as determined by the Audit Committee, from the Company for such advice and assistance.

The Audit Committee met five times during 2020.2021. The Audit Committee schedules its meetings with a view to ensuring that it devotes appropriate attention to all of its tasks. The Audit Committee’sCommittee’s meetings include private sessions with the Company’sCompany’s independent auditors without the presence of the Company’sCompany’s management, as well as executive sessions consisting of only Audit Committee members. The Audit Committee also meets senior management from time to time.

Management has the primary responsibility for the Company’sCompany’s financial reporting process, including its system of internal control over financial reporting and for the preparation of consolidated financial statements in accordance with accounting principles generally accepted in the United States of America. The Company’sCompany’s independent auditors are responsible for auditing those financial statements in accordance with professional standards and expressing an opinion as to their material conformity with U.S. generally accepted accounting principles and for auditing management’smanagement’s assessment of, and the effective operation of, internal control over financial reporting. The Audit Committee’sCommittee’s responsibility is to monitor and review the Company’sCompany’s financial reporting process and discuss management’smanagement’s report on the Company’sCompany’s internal control over financial reporting. It is not the Audit Committee’sCommittee’s duty or responsibility to conduct audits or accounting reviews or procedures. The Audit Committee has relied, without independent verification, on management’smanagement’s representation that the financial statements have been prepared with integrity and objectivity and in conformity with accounting principles generally accepted in the United States of America and on the opinion of the independent registered public accountants included in their report on the Audit Committee’sCommittee’s financial statements.

As part of its oversight of the Company’sCompany’s financial statements, the Audit Committee reviews and discusses with both management and the Company’sCompany’s independent registered public accountants all annual and quarterly financial statements prior to their issuance. During 2020,2021, management advised the Audit Committee that each set of financial statements reviewed had been prepared in accordance with accounting principles generally accepted in the United States of America, and reviewed significant accounting and disclosure issues with the Audit Committee. These reviews include discussions with the independent accountants of the matters required to be discussed pursuant to Statement on Auditing Standards No. 61 (Codification of Statements on Auditing Standards), including the quality (not merely the acceptability) of the Company’sCompany’s accounting principles, the reasonableness of significant judgments, the clarity of disclosures in the financial statements and disclosures related to critical accounting practices. The Audit Committee has also discussed with Farmer, Fuqua & Huff, P.C. matters relating to its independence, including a review of audit and non-audit fees, and written disclosures from Farmer, Fuqua & Huff, P.C.P. C. to the Company pursuant to Independence Standards Board Standard No. 1 (Independence Discussions with Audit Committees). The Audit Committee also considered whether non-audit services, provided by the independent accountants are compatible with the independent accountant’saccountant’s independence. The Company also received regular updates on the amount of fees and scope of audit, audit related, and tax services provided.

In addition, the Audit Committee reviewed key initiatives and programs aimed at strengthening the effectiveness of the Company’sCompany’s internal and disclosure control structure. As part of this process, the Audit Committee continued to monitor the scope and adequacy of the Company’sCompany’s internal controls, reviewed staffing levels and steps taken to implement recommended improvements in any internal procedures and controls.

Based on the Audit Committee’sCommittee’s discussion with management and the independent accountants and the Audit Committee’sCommittee’s review of the representation of management and the report of the independent accountants to the Board of Directors, the Audit Committee recommended to the Board of Directors, and the Board of Directors has approved, that the audited consolidated financial statements be included in the Company’sCompany’s Annual Report on Form 10-K for the year ended December 31, 2020,2021, filed with the SEC. The Audit Committee and the Board of Directors have also selected Farmer, Fuqua & Huff, P.C.P. C. as the Company’sCompany’s independent registered public accountants and auditors for the fiscal year ending December 31, 2021.2022.

AUDIT COMMITTEE

The members of the Audit Committee discussed the fact that Ted Munselle serves as the Chairman of the Audit Committee and the qualified Audit Committee financial expert within the meaning of SEC Regulations and that he has the accounting and related financial management expertise within the meaning of the listing standards of the NYSE with respect to this corporation, as well as two other corporations which are part of a consolidated group for financial statement purposes, and that he serves in a similar capacity for an unrelated corporation involved in another industry, the Common Stock of which is available for trading in the Over-the-Counter (“OTC”(“OTC”) Market, thus making four entities for which he serves in a similar capacity. The Audit Committee has determined, after discussion, that the fact that three entities are part of a consolidated group requires Mr. Munselle to be familiar with the financial reporting requirements and standards of each of those entities due to the fact of consolidation and does not create an additional burden upon Mr. Munselle but, in fact, confers a benefit on each of the entities, as it may well save on Mr. Munselle’sMunselle’s time and responsibility. While this entity and the other two consolidated entities have no specific policy or prohibition upon Mr. Munselle or any other person’sperson’s service to other publicly held entities, the members of this Committee periodically review other relationships among Committee and Board members with other independent entities to ensure that no conflict exists and, in fact, have confirmed that service to other entities in other industries benefits the expertise of the individuals involved.

Pre-approval Policy for Audit and Non-Audit Services

Under the Sarbanes-Oxley Act of 2002 (the “SO Act”“SO Act”), and the rules of the SEC, the Audit Committee of the Board of Directors is responsible for the appointment, compensation and oversight of the work of the independent auditor. The purpose of the provisions of the SO Act and the SEC rules for the Audit Committee role in retaining the independent registered public accounting firm is twofold. First, the authority and responsibility for the appointment, compensation and oversight of the auditors should be with directors who are independent of management. Second, any non-audit work performed by the auditors should be reviewed and approved by these same independent directors to ensure that any non-audit services performed by the auditor do not impair the independence of the independent auditor. To implement the provisions of the SO Act, the SEC issued rules specifying the types of services that an independent auditor may not provide to its audit client, and governing the Audit Committee’sCommittee’s administration of the engagement of the independent auditor. As part of this responsibility, the Audit Committee is required to preapprove the audit and non-audit services performed by the independent auditor in order to assure that they do not impair the auditor’sauditor’s independence. Accordingly, the Audit Committee has adopted a written pre-approval policy of audit and non-audit services (the “Policy”“Policy”), which sets forth the procedures and conditions pursuant to which services to be performed by the independent auditor are to be preapproved. Consistent with the SEC rules establishing two different approaches to approving non-prohibited services, the policy of the Audit Committee covers pre-approval of audit services, audit-related services, international administration tax services, non-U.S. income tax compliance services, pension and benefit plan consulting and compliance services, and U.S. tax compliance and planning. At the beginning of each fiscal year, the Audit Committee will evaluate other known potential engagements of the independent auditor, including the scope of work proposed to be performed and the proposed fees, and approve or reject each service, taking into account whether services are permissible under applicable law and the possible impact of each non-audit service on the independent auditor’sauditor’s independence from management. Typically, in addition to the generally preapproved services, other services would include due diligence for an acquisition that may or may not have been known at the beginning of the year. The Audit Committee has also delegated to any member of the Audit Committee designated by the Board or the financial expert member of the Audit Committee responsibilities to preapprove services to be performed by the independent auditor not exceeding $25,000 in value or cost per engagement of audit and non-audit services, and such authority may only be exercised when the Audit Committee is not in session.

Executive Compensation

Executive Compensation

The Company has no employees, payroll or benefit plans and pays no compensation to its executive officers. The executive officers of the Company who are also officers or employees of Pillar, the Company’sCompany’s advisor, are compensated by Pillar. Such executive officers perform a variety of services for Pillar and the amount of their compensation is determined solely by Pillar. Pillar does not allocate the cash compensation of its officers among the various entities for which it serves as advisor. See “The Advisor” “The Advisor” for a discussion of the compensation payable to Pillar under the Advisory Agreement.

Compensation Committee Report

Compensation Committee Report

The Compensation Committee of the Board of Directors is comprised of at least two directors who are independent of management and the Company. Each member of the Compensation Committee must be determined to be independent by the Board under the Corporate Governance Guidelines on Director Independence adopted by the Board and under the NYSE standards for nonemployee directors and Rule 16b-3(b)(3)(i) of the rules and regulations promulgated under the Securities Exchange Act of 1934 and the requirements for “outside directors” “outside directors” set forth in Treasury Regulations, Section 27(e)(3). Each member of the Compensation Committee is to be free of any relationship that in the judgment of the Board from time to time may interfere with the exercise of his or her independent judgment. Each Compensation Committee member is appointed annually subject to removal at any time by the Board and serves until his or her Compensation Committee appointment is terminated by the Board. The Compensation Committee is composed of four directors, each of whom meets the standards described above.

The purposes of the Compensation Committee are to oversee the policies of the Company relating to compensation to be paid by the Company to the Company’sCompany’s principal executive officer (“CEO”(“CEO”) and any other officers designated by the Board and make recommendations to the Board with respect to such policies, produce necessary reports and executive compensation for inclusion in the Company’sCompany’s proxy statement, in accordance with applicable rules and regulations, and monitor the development and implementation of succession plans for the CEO and other key executives and make recommendations to the Board with respect to such plans.

The Company has no employees, payroll or benefit plans and pays no compensation to its executive officers. The executive officers of the Company, who are also officers or employees of Pillar, are compensated by Pillar. Such executive officers perform a variety of services for Pillar, and the amount of their compensation is determined solely by Pillar. Pillar does not allocate the cash compensation of its officers among the various entities for which it may serve as advisor or sub-advisor.

The only remuneration paid by the Company is to directors who are not officers or directors of Pillar. These independent directors (i) review the business plan of the Company to determine that it is the best interest of the stockholders, (ii) review the advisory contract and recommend any appropriate changes thereto, (iii) supervise the performance of the Company’sCompany’s advisor, and review the reasonableness of the compensation paid to the advisor in terms of the nature and quality of services performed, (iv) review the reasonableness of the total fees and expenses of the Company, and (v) select, when necessary, a qualified, independent real estate appraiser to appraise properties to be acquired. See the sub caption “Directors’ Compensation” “Directors’ Compensation” in the Proxy Statement for a description of the compensation paid.

The Charter of the Compensation Committee was adopted on March 22, 2004, and the members of the Compensation Committee, all of whom are independent within the meaning of the listing standards of the NYSE and the Company’sCompany’s Corporate Governance Guidelines, are listed below. Since its formation on March 22, 2004, the Compensation Committee has annually reviewed its existing charter and regularly performed the tasks described above relating to the business plan, advisory contract, reasonableness of compensation paid to the advisor, and the reasonableness of the total fees and expenses of the Company.

COMPENSATION COMMITTEE

Compensation Committee Interlocks and Insider Participation

The Company’sCompany’s Compensation Committee is made up of nonemployee directors who have never served as officers of, or been employed by, the Company. None of the Company’sCompany’s executive officers serve on a board of directors of any entity that has a director or officer serving on this Compensation Committee.

Executive Officers

Executive officers of the Company are all employed by Pillar. None of the executive officers receive any direct remuneration from the Company nor do any hold any options granted by the Company. Their positions with the Company are not subject to a vote of stockholders. No family relationship exists among any director or executive officer of the Company. The ages, terms of service and all positions and offices with the Company, Pillar, and other affiliated entities, other principal occupations, business experience and directorships with other publicly held companies during the last five years or more are set forth below.

Bradley J. Muth, 62

President and Chief Executive Officer (since December 16, 2021) of the Company, ARL and IOR; President and Chief Executive Officer (since November 2021) of Pillar. Prior thereto, from July 2019 to September 2021, Senior Managing Director, Capital Markets and Development of ValueRock Realty Partners, an Irvine, California based national real estate investment services firm, focusing on value-ad commercial real estate throughout California, Hawaii and Arizona; prior thereto, from December 2014 to June 2019, Senior Managing Director, Portfolio and Asset Management of Madison Marquette, a leading commercial real estate investment manager, service provider, developer and operator of real property based in San Francisco, California and Washington, D. C. From 2012 to 2014, Chief Investment Officer of Buckingham Companies, a real estate investment firm engaged in the multifamily sector; from 1994 to 2012, Managing Principal or Senior Managing Partner of ING/Concert Realty Partners, a real estate investment and operations firm; Certified Public Accountant (1984).

Louis J. Corna, 7475

Executive Vice President-General Counsel/Tax Counsel and Secretary (since January 2004) of the Company, ARL and IOR; Executive Vice President–TaxPresidentBTax and Chief Financial Officer (June 2001 to October 2001) and Senior Vice President–TaxPresidentBTax (April 2001 to June 2001) of ARL and (prior to July 2003) of BCM; Executive Vice President, General Counsel/Tax Counsel and Secretary (February 2004 to June 2011) of Prime Income Asset Management, Inc. (“PIAMI”(“PIAMI”); Private Attorney (January 2000 to December 2000); Vice President–TaxesPresidentBTaxes and Assistant Treasurer (March 1998 to January 2000) of IMC Global, Inc.; Vice President–TaxesPresidentBTaxes (July 1991 to February 1998) of Whitman Corporation; Executive Vice President-General Counsel/Tax Counsel (since March 31, 2011) and Secretary (since December 17, 2010) of Pillar.

Erik L. Johnson, 5354

Executive Vice President and Chief Financial Officer (since August 17, 2020) of the Company and ARL; Chief Financial Officer (since July 1, 2020) of Pillar. Mr. Johnson, a Certified Public Accountant, most recently was Vice President of Financial Reporting of The Macerich Company (NYSE: MAC) in Santa Monica, California, a position he held for more than the past five years, from 2005 through June 2020. Mr. Johnson was, from 2001-2005, Controller/Chief Accounting Officer of North American Scientific, Inc. (NASDAQ: NASI), based in Los Angeles, California, and from 2000-2001, he was the Controller of Launch Media, Inc. (NASDAQ: LAUN) in Santa Monica, California.

In addition to the foregoing executive officers, the Company has several vice presidents and assistant secretaries who are not listed herein.Since the August 14, 2020 resignation of Daniel J. Moos, age 69, the offices of President and Chief Executive Officer of the Company have been vacant. Mr. Moos was President (from April 2007 until August 14, 2020) and Chief Executive Officer (from March 2010 until August 14, 2020) of the Company. At the time of his resignation, Mr. Moos advised that his resignation was not the result of any disagreement with the Company, its management, the Board of Directors or any committee of the Board with respect to procedures, policies or operations of the Company.

The Advisor

Although the Board of Directors is directly responsible for managing the affairs of the Company and for setting the policies which guide it, day-to-day operations are performed by a contractual advisor under the supervision of the Board of Directors. The duties of the advisor include, among other things, locating, investigating, evaluating and recommending real estate and mortgage note investment and sales opportunities, as well as financing and refinancing sources. The advisor also serves as a consultant to the Board of Directors in connection with the business plan and investment decisions made by the Board.

Pillar is the contractual advisor to the Company. Pillar is a Nevada corporation which is owned by Realty Advisors, LLC (“RALLC”(“RALLC”), a Nevada limited liability company, the sole member of which is RAI, which is 100% owned by MRHI, the sole stockholder of which is a trust known as the May Trust, which is a trust for the benefit of the children of Gene E. Phillips, deceased. Pillar is a company of which Messrs. Johnson and Corna serve as executive officers. Prior to his passing away on August 16, 2019, Mr. Phillips was not an officer or director of Pillar, RAI or MRHI nor a Trustee of the May Trust.

Under the Advisory Agreement, Pillar is required to annually formulate and submit for Board approval a budget and business plan containing a twelve-month forecast of operations and cash flow, a general plan for asset sales and purchases, borrowing activity and other investments. Pillar is required to report to the Board, on a quarterly basis, the Company’sCompany’s performance against the business plan. In addition, all transactions require prior Board approval, unless they are explicitly provided for in the approved plan or are made pursuant to authority expressly delegated to Pillar by the Board.

The Advisory Agreement also requires prior approval of the Board for the retention of all consultants and third party professionals, other than legal counsel. The Advisory Agreement provides that Pillar shall be deemed to be in a fiduciary relationship to the stockholders; contains a broad standard governing Pillar’sPillar’s liability for losses by the Company; and contains guidelines for Pillar’sPillar’s allocation of investment opportunities as among itself, the Company and other entities it advises.

The Advisory Agreement provides for the advisor to receive monthly base compensation at the rate of 0.0625% per month (0.75% on an annualized basis) of average gross asset value (total assets less allowance for amortization, depreciation or depletion and valuation reserves) and an annual net income fee equal to 7.5% of the Company’sCompany’s net income.

The Advisory Agreement also provides for Pillar to receive an annual incentive sales fee equal to 10% of the amount, if any, by which the aggregate sales consideration for all real estate sold by the Company during such fiscal year exceeds the sum of: (i) the cost of each such property originally recorded in the Company’sCompany’s books for tax purposes (without deduction for depreciation, amortization or reserve for losses), (ii) capital improvements made to such assets during the period owned, and (iii) all closing costs, (including real estate commissions) incurred in the sale of such real estate; provided, however, no incentive fee shall be paid unless (a) such real estate sold in such fiscal year, in the aggregate, has produced 8% simple annual return on the net investment including capital improvements, calculated over the holding period before depreciation and inclusive of operating income and sale consideration, and (b) the aggregate net operating income from all real estate owned for each of the prior and current fiscal years shall be at least 5% higher in the current fiscal year than in the prior fiscal year.

Additionally, pursuant to the Advisory Agreement, Pillar or an affiliate of Pillar is to receive an acquisition commission for supervising the acquisition, purchase or long-term lease of real estate equal to the lesser of (i) up to 1% of the cost of acquisition, inclusive of commissions, if any, paid to nonaffiliated brokers, or (ii) the compensation customarily charged in arm’sarm’s length transactions by others rendering similar property acquisition services as an ongoing public activity in the same geographical location and for comparable property, provided that the aggregate purchase price of each property (including acquisition fees and real estate brokerage commissions) may not exceed such property’sproperty’s appraised value at acquisition. Pillar does not receive any commission or acquisitions from an affiliated or related party.

The Advisory Agreement requires Pillar or any affiliate of Pillar to pay to the Company one half of any compensation received from third parties with respect to the origination, placement or brokerage of any loan made by the Company; provided, however, that the compensation retained by Pillar or any affiliate of Pillar shall not exceed the lesser of (i) 2% of the amount of the loan commitment, or (ii) a loan brokerage and commitment fee which is reasonable and fair under the circumstances.

The Advisory Agreement also provides that Pillar or an affiliate of Pillar is to receive a mortgage or loan acquisition fee with respect to the acquisition or purchase of any existing mortgage loan by the Company equal to the lesser of (i) 1% of the amount of the loan purchased, or (ii) a brokerage and commitment fee which is reasonable and fair under the circumstances. Such fee will not be paid in connection with the origination or funding of any mortgage loan by the Company.

Under the Advisory Agreement, Pillar or an affiliate of Pillar also is to receive a mortgage brokerage and equity refinancing fee for obtaining loans or refinancing on properties equal to the lesser of (i) 1% of the amount of the loan or the amount refinanced, or (ii) a brokerage or refinancing fee which is reasonable and fair under the circumstances; provided, however, that no such fee shall be paid on loans from Pillar or an affiliate of Pillar without the approval of the Company’sCompany’s Board of Directors. No fee shall be paid on loan extensions.

The Advisory Agreement also provides that for all activities in connection with or related to construction for the Company and its subsidiaries, Pillar shall receive a fee equal to 6% of the so-called “hard costs” “hard costs” only of any costs of construction on a completed basis, based upon amounts set forth as approved on any architect certificate issued in connection with such construction, which fee is payable at such time as the applicable architect certifies others costs for payment to third parties. The phrase “hard costs” “hard costs” means all actual costs of construction paid to contractors, subcontractors, and third parties for material or labor performed as part of the construction but does not include items generally regarded as “soft“soft costs,” which are consulting fees, attorneys’ attorneys’ fees, architectural fees, permit fees and fees of other professionals.

Under the Advisory Agreement, Pillar receives reimbursement of certain expenses incurred by it in the performance of advisory services. Under the Advisory Agreement, all or a portion of the annual advisory fee must be refunded by the advisor if the Operating Expenses of the Company (as defined in the Advisory Agreement) exceed certain limits specified in the Advisory Agreement based on the book value, net of asset value and net income of the Company during the fiscal year.

If and to the extent that the Company shall request of Pillar, or any director, officer, partner or employee of Pillar, to render services to the Company other than those required to be rendered by Pillar under the Advisory Agreement, such additional services, if performed, will be compensated separately on terms agreed upon between such party and the Company from time to time.

The Advisory Agreement automatically renews from year to year unless terminated in accordance with its terms. Management believes that the terms of the Advisory Agreement are at least as fair as could be obtained from unaffiliated third parties.

Situations may develop in which the interests of the Company are in conflict with those of one or more directors or officers in their individual capacities or of Pillar, or of their respective affiliates. In addition to services performed for the Company, Pillar actively provides similar services as agent for, and advisor to, other real estate enterprises, including persons and entities involved in real estate developing and financing, including ARL, IOR, and the Company. The Advisory Agreement provides that Pillar may also serve as advisor to those entities.

As advisor, Pillar is a fiduciary of the Company’sCompany’s public investors. In determining to which entity a particular investment opportunity will be allocated, Pillar will consider the respective investment objectives of each entity and the appropriateness of a particular investment in light of each such entity’sentity’s existing mortgage note and real estate portfolio and business plan. To the extent any particular investment opportunity is appropriate to more than one such entity, such investment opportunity will be allocated to the entity that has had funds available for investment for the longest period of time, or, if appropriate, the investment may be shared among various entities.

Effective April 30, 2011, the Company and Pillar entered into a Cash Management Agreement to further define the administration of the Company’sCompany’s day-to-day investment operations, relationship contacts, flow of funds and deposit and borrowing of funds. Under the Cash Management Agreement, all funds of the Company are delivered to Pillar which has a deposit liability to the Company and is responsible for payment of all payables and investment of all excess funds which earn interest at the Wall Street Journal Pillar Rate plus 1% per annum, as set quarterly on the first day of each calendar quarter. Borrowings for the benefit of the Company bear the same interest rate. The term of the Cash Management Agreement is coterminous with the Advisory Agreement, and it is automatically renewed each year unless terminated with the Advisory Agreement.

Pillar may assign the Advisory Agreement only with the prior consent of the Company.

The directors and principal executive officers of Pillar are set forth below:

Property Management

Effective January 1, 2011, Regis Realty Prime, LLC d/b/a Regis Property Management, LLC, a Nevada limited liability company (“Regis”(“Regis”), the sole member of which is RALLC, has managed the Company’sCompany’s commercial properties for a fee of 3% or less of the monthly gross rents collected on any commercial properties Regis manages and leasing commissions of 6% or less in accordance with the terms of a property level management agreement.

Real Estate Brokerage

Regis also provides real estate brokerage services to the Company on a nonexclusive basis. Regis is entitled to receive a real estate commission for property purchases and sales in accordance with a sliding scale of total fees to be paid (i) maximum fee of 4.5% on the first $2 million of any purchase or sale transaction of which no more than 3.5% would be paid to Regis or affiliates; (ii) maximum fee of 3.5% on transaction amounts between $2 million and $5 million, of which no more than 3% would be paid to Regis or affiliates; (iii) maximum fee of 2.5% on transaction amounts between $5 million and $10 million, of which no more than 2% would be paid to Regis or affiliates; and (iv) maximum fee of 2% on transaction amounts in excess of $10 million, of which no more than 1.5% would be paid to Regis or affiliates.

Certain Relationships and Related Transactions

Certain Business Relationships

Certain Business Relationships

Pillar, the Company’sCompany’s advisor, is a company for which Messrs. Johnson and Corna serve as executive officers. The executive officers of the Company also serve as executive officers of ARL and IOR and owe fiduciary duties to each of those entities, as well as to Pillar, under applicable law. ARL and IOR each have the same relationship with Pillar as does the Company. Mr. Roberts is a director of GBR and, as such, owes fiduciary duties to GBR.

The Company contracts with affiliates of Pillar for property management and brokerage services.

The Company owns an equity interest in IOR. At December 31, 2020,2021, the Company owned, and at present continues to own, 3,381,570 shares of IOR Common Stock which comprises over 81% of IOR’sIOR’s outstanding common stock. Henry A. Butler, William J. Hogan, Robert A. Jakuszewski, Ted R. Munselle and Raymond D. Roberts, Sr., directors of the Company, all (except Mr. Hogan) are also members of the Board of Directors of IOR. ARL, directly and through a wholly owned subsidiary, owns over 78% of outstanding common stock of the Company; all of the Directors of the Company are also Directors of ARL.

Tax Sharing Agreement

For tax periods ending before August 31, 2012, the Company was part of the ARL consolidated federal return. After that date, the Company and the rest of the ARL group (ARL and IOR) joined the MRHI consolidated group for tax purposes. The income tax expense (benefit) for 2010 and 2011 tax periods was calculated under a tax sharing and compensating agreement among the Company, ARL, and IOR. That agreement continued until August 31, 2012, at which time the new tax sharing and compensating agreement was entered into among the Company, ARL, IOR, and MRHI for the remainder of 2012. For 2012, the Company, ARL, and IOR had a combined net taxable loss. The benefit or expense under such arrangements is calculated based upon the amount of losses absorbed by taxable income multiplied by the statutory rate of 35% per the tax sharing and compensating agreements.

Related Party Transactions

Historically, the Company, ARL, IOR and Pillar have each engaged in, and may continue to engage in, business transactions, including real estate partnerships, with related parties. Management believes that all of the related party transactions represented the best investments available at the time and were at least as advantageous to the Company as could have been obtained from unrelated parties.

TCI paid Pillar advisory fees of $5.8 million, net income fees of $400,000, cost reimbursements of $3.6 million, and received interest income of $6.8 million from Pillar and related parties in 2020.2021.

TCI paid property management fees, construction management fees, and leasing commission of $1,000,000 to Regis in 2020.2021.

Operating Relationships

In the year ended December 31, 2020,2021, the Company received $1.1 million in rent from Pillar and affiliates for rents of company owned properties, including Browning Place in Dallas, Texas.

Advances and Loans

From time to time, the Company and its affiliates have made advances to each other, which generally have not had specific repayment terms, did not bear interest, are unsecured, and have been reflected in the Company’sCompany’s financial statements as other assets or other liabilities. The Company and the advisor charge interest on the outstanding balance of funds advanced to or from the Company. The interest rate, set at the beginning of each quarter, is the prime rate plus 1% on the average daily cash balances advanced. At December 31, 2020,2021, the Company had a receivable from ARL in the amount of $142.1 million.

Restrictions on Related Party Transactions

Article FOURTEENTH of the Company’sCompany’s Articles of Incorporation provides that the Company shall not, directly or indirectly, contract or engage in any transaction with (i) any director, officer or employee of the Company, (ii) any director, officer or employee of the advisor, (iii) the advisor, or (iv) any affiliate or associate (as such terms are defined in Rule 12b-2 under the Securities Exchange Act of 1934, as amended) of any of the aforementioned persons, unless (a) the material facts as to the relationship among or financial interest of the relevant individuals or persons and as to the contract or transaction are disclosed to or are known by the Board of Directors or the appropriate committee thereof, and (b) the Board of Directors or committee thereof determines that such contract or transaction is fair to the Company and simultaneously authorizes or ratifies such contract or transaction by the affirmative vote of a majority of independent directors of the Company entitled to vote thereon. Article FOURTEENTH defines an “Independent Director” “Independent Director” as one who is neither an officer or employee of the Company, nor a director, officer or employee of the Company’sCompany’s advisor.

OTHER MATTERS

The Board of Directors knows of no other matters that may be properly or should be brought before the Annual Meeting. However, if any other matters are properly brought before the Annual Meeting, the persons named in the enclosed proxy or their substitutes will vote in accordance with their best judgment on such matters.

FINANCIAL STATEMENTS

The audited financial statements of the Company, in comparative form for the years ended December 31, 20192020 and 20202021 are contained in the 20202021 Annual Report to Stockholders, which was mailed to stockholders in April 2021.2022. However, such report and the financial statements contained therein are not to be considered part of this solicitation.

SOLICITATION OF PROXIES

THIS PROXY STATEMENT IS FURNISHED TO STOCKHOLDERS TO SOLICIT PROXIES ON BEHALF OF THE BOARD OF DIRECTORS OF TRANSCONTINENTAL REALTY INVESTORS, INC. The cost of soliciting proxies will be bornborne by the Company. Directors and officers of the Company may, without additional compensation, solicit by mail, in person or by telecommunication.

FUTURE PROPOSALS OF STOCKHOLDERS

Stockholder proposals for our Annual Meeting to be held in 20222023 must be received by us by December 31, 2021,2022, and must otherwise comply with the rules promulgated by the SEC to be considered for inclusion in our proxy statement for that year. Any stockholder proposal, whether or not to be included in our proxy materials, must be sent to our Corporate Secretary at 1603 LBJ Freeway, Suite 800, Dallas, Texas 75234.

COPIES OF TRANSCONTINENTAL REALTY INVESTORS, INC.’S’S ANNUAL REPORT FOR THE FISCAL YEAR ENDED DECEMBER 31, 2019,2021, TO THE SEC ON FORM 10-K AS FILED WITH THE SEC (WITHOUT EXHIBITS) ARE AVAILABLE TO STOCKHOLDERS WITHOUT CHARGE THROUGH OUR WEBSITE WWW.TRANSCONREALTY-INVEST.COMOR UPON WRITTEN REQUEST TO TRANSCONTINENTAL REALTY INVESTORS, INC., 1603 LBJ FREEWAY, SUITE 800 DALLAS, TEXAS 75234, ATTN: INVESTOR RELATIONS.

Dated: November 3, 2022

PROXY

TRANSCONTINENTAL REALTY INVESTORS, INC.

This Proxy is solicited on behalf of the Board of Directors for the Annual Meeting of Stockholders to be held on December 15, 2021.7, 2022.

NOTICE OF INTERNET AVAILABILITY OF PROXY MATERIAL:

The Notice of Meeting, Proxy Statement, Proxy Card

are available at www.transconrealty-invest.com.

The undersigned stockholder of TRANSCONTINENTAL REALTY INVESTORS, INC. hereby appoints HENRY A. BUTLER and LOUIS J. CORNA, and each of them, proxies with full power of substitution in each of them, in the name, place and stead of the undersigned, as attorneys and proxies to vote all shares of Common Stock, par value $0.01 per share, of TRANSCONTINENTAL REALTY INVESTORS, INC. which the undersigned is entitled to vote at the Annual Meeting of Stockholders to be held on Wednesday, December 15, 2021,7, 2022, at 9:30 a.m., local Dallas, Texas time, at 1603 LBJ Freeway, Suite 800, Dallas, Texas 75234, or any adjournment(s) thereof, with all powers the undersigned would possess if personally present, as indicated below, for the transaction of such business as may properly come before said meeting or any adjournment(s) thereof, all as set forth in the November 5, 2021,3, 2022, Proxy Statement for said meeting.

(Continued and to be Completed on the Other Side)

THIS PROXY WILL BE VOTED AS DIRECTED BUT IF NO DIRECTION IS INDICATED, IT WILL BE VOTED FOR ALL NOMINEES AND FOR RATIFICATION OF THE APPOINTMENT OF FARMER, FUQUA & HUFF, P.C. AS THE INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM. ON OTHER MATTERS THAT MAY COME BEFORE SAID MEETING, THIS PROXY WILL BE VOTED IN THE DISCRETION OF THE ABOVE-NAMED PERSONS.

Henry A. Butler, William J. Hogan, Robert A. Jakuszewski, Ted R. Munselle, Bradford A. Phillips, Raymond D. Roberts, Sr.

Instruction: To withhold authority to vote for any individual nominee, strike a line through the nominee’s name listed above.

The Board of Directors of Transcontinental Realty Investors, Inc. recommends approval of all nominees for election as directors

and a vote FOR ratification of the appointment of Farmer, Fuqua and Huff, P.C. as the independent registered public accounting firm.

Please sign, date and return promptly in the enclosed envelope.

(Continued and to be Signed and Dated on the Other Side)