WASHINGTON, D.C. 20549

                                    FORM 8-K

                                 CURRENT REPORT

                     PURSUANT TO SECTION 13 OR 15(d) OF THE

                         SECURITIES EXCHANGE ACT OF 1934

                                 April 26, 2002
                Date of Report (Date of Earliest Event Reported)

                         AMERICAN REALTY INVESTORS, INC.
             (Exact Name of Registrant as Specified in its Charter)

        Nevada                       1-15663                    75-2847135
(State of Incorporation)           (Commission                (IRS Employer
                                    File No.)               Identification No.)

  1800 Valley View Lane, Suite 300,        Dallas, TX             75234
(Address of Principal Executive Offices)                        (Zip Code)

Registrant's Telephone Number, Including Area Code: (469) 522-4200


     On April 26, 2002, the Registrant sent a letter to the Board of Trustees of
Prime Group Realty Trust ("Prime Group") proposing that the Registrant and Prime
Group explore a business combination. On May 1, 2002, Prime Group issued a press
release indicating that it had referred the Registrant's letter to its Board of
Trustees and


to its financial advisors for consideration. Thereafter, on May 2, 2002, Prime
Group announced that it had agreed to sell its office properties in one or more
material transactions. The Registrant has had no discussions with Prime Group or
its financial advisors since the delivery of the Registrant's proposal to
explore a business combination or since the announcement of Prime Group's
agreement to sell its office properties.



     Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned hereto duly authorized.

                                       AMERICAN REALTY INVESTORS, INC.

Date: May 9, 2002                      By: /s/ RONALD E. KIMBROUGH
      -----------                          -----------------------------------
                                           Ronald E. Kimbrough
                                           Executive Vice President and
                                           Chief Financial Officer
                                           (Principal Financial and Accounting
                                           Officer and Acting Principal
                                           Executive Officer)