InterGroup Corporation Reports $750,000 Net Income for Q1 2025, Significant Turnaround from Previous Year

The InterGroup Corporation reported a net income of $750,000 for the three months ended March 31, 2025, a significant improvement compared to a net loss of $3.9 million during the same period in 2024. This turnaround is attributed primarily to a waiver of default interest and forbearance fees from lenders, alongside increased room revenues at the Hilton San Francisco Financial District, the company’s primary asset. Total revenues for the hotel segment reached $12.2 million, up from $10.8 million in the prior year, driven by a 13% increase in hotel revenues, with room revenues alone rising by $1.5 million.

For the nine months ending March 31, 2025, InterGroup reported a net loss of $5.3 million, an improvement from a loss of $7.6 million in the same period the previous year. The hotel operations segment recorded a net loss of $2.98 million, down from $4.24 million, reflecting increased room revenues and reduced operating expenses. The company’s real estate operations also saw revenue growth, increasing to $14.2 million from $12.6 million, primarily due to improved occupancy rates at its properties.

Operationally, the company has made strategic moves to enhance its financial position, including the successful refinancing of its senior mortgage and mezzanine loans in March 2025. The new senior mortgage loan amounts to $67 million, with a two-year term and options for extensions, while the mezzanine loan was modified to $36.3 million at a fixed rate of 7.25%. These refinancing efforts are expected to improve liquidity and provide a stable capital structure for ongoing operations, although the company continues to face challenges such as high interest rates and reduced business travel demand in the San Francisco market.

As of March 31, 2025, InterGroup's total cash, cash equivalents, and restricted cash stood at $13.4 million, an increase from $8.7 million at the end of June 2024. The company also reported marketable securities valued at $751,000, down from $7.3 million, indicating a shift in investment strategy. The company’s reliance on a related party credit facility with Portsmouth Square, Inc. remains critical, with an outstanding balance of $38.1 million as of the reporting date. Management continues to evaluate operational efficiencies and financing strategies to navigate ongoing market pressures and ensure liquidity.