InterGroup Returns to Net Income as Hotel Performance Strengthens

The InterGroup Corporation reported a return to GAAP net income for the fiscal year ended June 30, 2026, driven by broad-based improvements across its three reportable segments. The Los Angeles-based company recorded GAAP net income of $0.336 million, a reversal from a net loss of $7.547 million in the prior fiscal year. Total revenues rose approximately 15% year-over-year to $73.951 million, while income from operations increased by approximately 55% to $11.866 million.

Hotel Operations, conducted through majority-owned subsidiary Portsmouth Square, Inc., was the primary driver of the performance shift. Segment income grew approximately 43% to $12.524 million, up from $8.732 million in fiscal 2025. Hotel revenues increased by approximately 20% to $55.797 million. Management attributed the improvement to higher room revenues resulting from increased average daily rate, higher occupancy, and improved business travel and convention demand. Average daily rate climbed to $253 from $218, while average occupancy rose to 95% from 92%. RevPAR increased to $239 from $200 over the same period. These gains were partially offset by higher operating expenses and the absence of a $1.030 million Aimbridge incentive management fee waiver recognized in fiscal 2025.

Real Estate Operations segment income increased approximately 5% to $8.853 million from $8.465 million. Revenues were relatively stable at $18.154 million, compared with $18.015 million in the prior year, while operating expenses decreased to $9.301 million from $9.550 million. The segment results included a GAAP gain of approximately $3.508 million from the sale of a non-core 12-unit multifamily property in Los Angeles County for $4.85 million during December 2025. No comparable gain was recorded in fiscal 2025.

The Investment Transactions segment loss narrowed significantly, improving by approximately $2.289 million to a loss of $0.213 million from a loss of $2.502 million in fiscal 2025. This improvement was driven by a net gain on marketable securities of $0.953 million in fiscal 2026, compared with a net loss of $1.347 million in the prior year.

EBITDA, a non-GAAP measure used by management to evaluate performance before interest, taxes, and non-cash charges, increased approximately 63% to $22.834 million from $13.987 million. The reconciliation adds back margin-interest component of trading and margin interest expense but does not adjust for gains or losses on securities or the real estate sale gain.

As of June 30, 2026, InterGroup held cash and cash equivalents of $6.356 million and restricted cash of $10.943 million, totaling $17.299 million, compared with $15.195 million in the prior year. Marketable securities had a fair value of $4.394 million, up from $0.969 million. Net cash provided by operating activities was $3.450 million in fiscal 2026, down from $5.893 million in fiscal 2025.

Portsmouth holds a senior mortgage loan of $67.0 million and a mezzanine loan of $36.3 million that reach maturity on April 9, 2027. Both instruments offer three one-year extension options contingent on meeting specified conditions. The company reported compliance with all applicable loan covenants as of June 30, 2026, and management currently expects to meet the requirements to exercise the first extension option through April 9, 2028.

The hotel was closed from July 31, 2026 through August 9, 2026 for the physical removal of the pedestrian bridge connecting it to Portsmouth Square Park, resuming guest operations on August 10, 2026.