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“Financial Statements” herein, unless otherwise stated.
−Removed: We are a diversified real estate company with headquarters in Austin, Texas.
+Added: We are a residential and retail focused real estate company with headquarters in Austin, Texas.
We are engaged primarily in the entitlement, development, management, leasing and sale of multi-family and single-family residential and commercial real estate properties in the Austin, Texas area and other select markets in Texas.
In addition to our developed properties, we have a development portfolio that consists of approximately 1,600 acres of commercial and multi-family and single-family residential projects under development or undeveloped land held for future use.
+Added: Our commercial real estate portfolio consists of stabilized retail properties or future retail and mixed-use development projects with no commercial office space.
We generate revenues and cash flows from the sale of our developed and undeveloped properties, the lease of our retail, mixed-use and multi-family properties and development and asset management fees received from our properties.
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Due to the nature of our development-focused business, we do not expect to generate sufficient recurring cash flow to cover our general and administrative expenses each period.
−Removed: However, we believe that the unique nature and location of our assets, and our team’s ability to execute successfully on development projects, have provided and will continue to provide us with positive cash flows and net income over time, as evidenced by our sales of The Santal and The Saint Mary in
−Removed: 2021 and Block 21 in 2022, the cash distribution from the Holden Hills partnership in 2023 and our property sales in first-quarter 2024.
+Added: However, we believe that the unique nature and location of our assets, and our team’s ability to execute successfully on development projects, have provided and will continue to provide us
+Added: with positive cash flows and net income over time, as evidenced by our sales of The Santal and The Saint Mary in 2021 and Block 21 in 2022, the cash distribution from the Holden Hills partnership in 2023 and our property sales in 2024.
Further, we believe our investment strategy, current liquidity and portfolio of projects provide us with many opportunities to increase value for our stockholders.
We do not currently have any material commitments to contribute additional cash to our joint venture projects or wholly owned development projects other than the potential additional $10.0 million of capital that we may be required to contribute to our Holden Hills joint venture and our share (related to Section N) of the cost of the Tecoma Improvements.
−Removed: However, during 2023 and first-quarter 2024, we made operating loans totaling $3.3 million and $2.7 million, respectively, to the limited partnerships for The Annie B and for The Saint June.
−Removed: In April 2024, we made an additional operating loan of $85 thousand to the limited partnership of The Saint June and the Class B limited partner made an additional operating loan of $165 thousand to the limited partnership of The Saint June.
−Removed: We anticipate making future operating loans to the limited partnerships for The Annie B and The Saint George totaling up to $3.6 million over the next 12 months.
−Removed: Our estimates of future operating loans are based on estimates of future costs of the partnerships and anticipated future operating loans from the Class B limited partner of approximately $2.5 million.
+Added: As of June 30, 2024, the Holden Hills partnership had $5.2 million remaining to complete the Tecoma Improvements.
+Added: However, during 2023 and the first six months of 2024, we made operating loans totaling $3.3 million and $2.9 million, respectively, to the limited partnerships for The Annie B and for The Saint June.
+Added: The Class B limited partner also made operating loans of $250 thousand and $503 thousand during 2023 and the first six months of 2024, respectively, to the limited partnership for The Saint June.
+Added: We anticipate making future operating loans to the limited partnership for The Annie B totaling up to $3.9 million over the next 12 months.
+Added: Our estimates of future operating loans are based on estimates of future costs of the partnership.
+Added: We also anticipate contributing additional capital of $400 thousand to the limited partnership for The Saint George representing our 10 percent equity share needed by the partnership to cover interest on the construction loan.
Refer to Note 3 and “Capital Resources and Liquidity” for further discussion.
In addition, our development plans for future projects require significant additional capital.
−Removed: Largely as a result of our property sales in 2021 and 2022, the cash distribution from the Holden Hills partnership in 2023, our property sales in first-quarter 2024 and focused liquidity management on our part, as of March 31, 2024, consolidated cash totaled $20.7 million and we had $39.6 million available under our revolving credit facility, net of $13.3 million of letters of credit committed against the facility, with no amounts drawn on the facility.
+Added: As of June 30, 2024, consolidated cash totaled $13.5 million and we had $39.6 million available under our revolving credit facility, net of $13.3 million of letters of credit committed against the facility, with no amounts drawn on the facility.
We were challenged by difficult conditions in the real estate business in 2023.
Interest rates, which began rising in 2022, continued to increase, and costs remained elevated.
+Added: During the first half of 2024, interest rates stabilized but costs remain elevated.
We saw limited opportunities for transactions on favorable terms.
Accordingly, during this market cycle, we have been working to maintain our business, advance our projects under construction or development, control costs and advance entitlements, relationships and opportunities to position us to capture value when market conditions improve.
−Removed: During 2023, among other things, we completed construction and began lease-up of The Saint June multi-family project, continued construction of The Saint George multi-family project, advanced road and utility infrastructure construction on the Holden Hills project, managed our completed retail projects and advanced entitlements on other projects.
−Removed: Although 2023 was challenging, we see reasons for optimism regarding improving real estate market conditions in our markets as the year 2024 progresses.
−Removed: At March 31, 2024, our retail portfolio consisted of five stabilized projects, namely Jones Crossing, Kingwood Place, Lantana Place – Retail, Magnolia Place – Retail and West Killeen Market.
−Removed: In first-quarter 2024, we entered into a contract to sell West Killeen Market for $12.8 million, which we expect to close in second-quarter 2024.
−Removed: After repaying the project loan, we expect the sale to generate approximately $7.2 million of pre-tax net cash proceeds.
−Removed: We have engaged brokers to explore the sale of Lantana Place – Retail, Magnolia Place – Retail and Kingwood Place.
−Removed: In connection with such sales, we anticipate returning capital to stockholders, subject to obtaining required consents from Comerica Bank.
+Added: During 2023 and the first half of 2024, among other things, we completed construction and began and substantially completed the lease-up of The Saint June multi-family project, continued construction of The Saint George multi-family project, advanced road and utility infrastructure construction on the Holden Hills project, managed our completed retail projects and advanced entitlements on other projects.
+Added: Although 2023 and the first half of 2024 were challenging, we see reasons for optimism regarding improving real estate market conditions in our markets over the next 12 months.
+Added: Among other things, interest rates are widely expected to decline.
+Added: As of June 30, 2024, our retail and multi-family portfolio consisted of six stabilized projects, namely The Saint June, Jones Crossing – Retail, Kingwood Place, Lantana Place – Retail, Magnolia Place – Retail and West Killeen Market.
+Added: As previously disclosed, we have been testing the market for potential sales of West Killeen Market, Magnolia Place – Retail, Lantana Place – Retail and Kingwood Place.
+Added: In first-quarter 2024, we entered into a contract to sell West Killeen Market for $12.8 million;
+Added: however, in June 2024 the buyer failed to close and we elected to terminate the contract.
+Added: In June 2024, we entered into a contract to sell Magnolia Place – Retail for $8.9 million.
+Added: The sale is expected to close in mid-August 2024 and generate pre-tax net cash proceeds of approximately $8.7 million.
+Added: We continue to explore a sale of Kingwood Place.
+Added: We have paused exploring the sales of West Killeen Market and Lantana Place – Retail, deciding to retain these cash-flowing properties at this time.
+Added: We believe market conditions will improve for the sale of our remaining retail properties over the next 12 months, and are optimistic that we will be able to sell these properties at attractive prices during that time.
+Added: In connection with these sales, we anticipate returning capital to stockholders, subject to obtaining required consents from Comerica Bank.
We believe we have sufficient liquidity and access to capital to sell properties when market conditions are favorable to us and to hold our properties or to continue to develop our properties, as applicable, through the market cycle.
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We may sell or lease the properties we develop, depending on market conditions.
−Removed: Multi-family and retail rental properties that we develop are reclassified to our Leasing Operations segment when construction is completed and they are ready for occupancy.
+Added: Multi-family and retail rental properties that we develop are
+Added: reclassified to our Leasing Operations segment when construction is completed and they are ready for occupancy.
Revenue in our Real Estate Operations segment may be generated from the sale of properties that are developed, undeveloped or under development, depending on market conditions.
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Revenue in our Leasing Operations segment is generated from the lease of space at retail and mixed-use properties that we developed and the lease of residences in the multi-family projects that we developed.
+Added: Our Leasing Operations segment does not have exposure to office space.
We may also generate income from the sale of our leased properties, depending on market conditions.
−Removed: Summary financial results for first-quarter 2024.
−Removed: Our revenues totaled $26.5 million in first-quarter 2024 compared with $5.8 million in first-quarter 2023.
−Removed: The $19.6 million increase in revenues from our Real Estate Operations segment in first-quarter 2024, compared to first-quarter 2023, is primarily a result of the sales of approximately 47 acres of undeveloped land at Magnolia Place for $14.5 million and two Amarra Villas homes for a total of $7.6 million, compared with the sale of one Amarra Villas home in first-quarter 2023 for $2.5 million.
−Removed: In addition, revenues from our Leasing Operations segment increased by $1.1 million, primarily reflecting new revenue from The Saint June, which had no rental revenue in first-quarter 2023, as well as increased revenue from Lantana Place – Retail and Kingwood Place, primarily due to new leases.
−Removed: Refer to “Results of Operations” below for further discussion of the results of operations of our segments.
−Removed: Our net income attributable to common stockholders totaled $4.6 million, or $0.56 per diluted share in first-quarter 2024, compared to net loss attributable to common stockholders of $5.8 million, or $0.73 per diluted share, in first-quarter 2023, with the increase due primarily to the increase in revenues.
+Added: Summary financial results for the second-quarter and first six months of 2024.
+Added: Our revenues totaled $8.5 million in second-quarter 2024 and $35.0 million for the first six months of 2024, compared with $3.5 million in second-quarter 2023 and $9.3 million for the first six months of 2023.
+Added: The $23.2 million increase in revenues from our Real Estate Operations segment in the first six months of 2024, compared to first six months of 2023, is primarily a result of the sales of approximately 47 acres of undeveloped land at Magnolia Place for $14.5 million and three Amarra Villas homes for a total of $11.3 million in the first six months of 2024, compared with the sale of one Amarra Villas home in the first six months of 2023 for $2.5 million.
+Added: The $3.6 million increase in revenues in our Real Estate Operations segment in second-quarter 2024, compared to second-quarter 2023, is primarily a result of the sale of one Amarra Villas home in the second quarter of 2024 compared to no sales in the prior period.
+Added: In addition, revenues from our Leasing Operations segment increased in both the three and six-month 2024 periods, primarily reflecting new revenue from The Saint June, which had no rental revenue in the 2023 periods, as well as increased revenue from Kingwood Place, Lantana Place – Retail and Magnolia Place – Retail primarily due to new leases.
+Added: Refer to “Results of Operations” below for further discussion of our segments.
+Added: Our net loss attributable to common stockholders totaled $1.7 million, or $0.21 per diluted share in second-quarter 2024, compared to $5.3 million, or $0.66 per diluted share, in second-quarter 2023.
+Added: During the first six months of 2024 our net income attributable to common stockholders totaled $2.8 million, or $0.35 per diluted share, compared to net loss attributable to common stockholders of $11.1 million, or $1.39 per diluted share, during the first six months of 2023.
RECENT DEVELOPMENT ACTIVITIES
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In first-quarter 2023, we completed and sold one home for $2.5 million.
−Removed: In first-quarter 2024, we completed construction on two of the homes, and we sold two of the homes for a total of $7.6 million, leaving two completed homes in inventory as of March 31, 2024.
−Removed: Construction on the last six homes continues to progress and is expected to be completed in second-quarter 2024.
−Removed: As of May 10, 2024, one home was under contract to sell for $3.6 million and seven homes remain available for sale.
+Added: In first-quarter 2024, we completed construction on two of the homes, and we sold two of the homes for a total of $7.6 million.
+Added: In second-quarter 2024, we sold another Amarra Villas home for $3.6 million, leaving one completed home in inventory as of June 30, 2024.
+Added: In July 2024, we sold one Amarra Villas home for $4.0 million.
+Added: Construction on the last five homes continues to progress and is expected to be completed in fourth-quarter 2024.
+Added: As of August 9, 2024, one home was under contract to sell for $3.8 million and five homes remain available for sale.
The Saint June.
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The first units were available for occupancy in July 2023, and construction was completed in fourth-quarter 2023.
−Removed: As of May 10, 2024, we had signed leases for approximately 90 percent of the units.
+Added: As of August 9, 2024, occupancy of The Saint June was approximately 98 percent.
Holden Hills.
Our final large residential development within the Barton Creek community, Holden Hills, consists of 495 acres.
−Removed: The community has been designed to feature unique residences to be developed in multiple phases with a focus on health and wellness, sustainability and energy conservation.
+Added: The community has been designed to feature unique luxury residences to be developed in multiple phases with a focus on health and wellness, sustainability and energy conservation.
We entered into a limited partnership agreement with a third-party equity investor for this project in January 2023, and in February 2023 obtained construction financing for Phase I of the project and commenced infrastructure construction.
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Using an entitlement strategy similar to that used for Holden Hills, we continue to progress the development plans for Section N, our approximately 570-acre tract located along Southwest Parkway in the southern portion of the Barton Creek community adjacent to Holden Hills.
−Removed: We are designing a dense, mid-rise, mixed-use project, with extensive multi-family and retail components, coupled with limited office, entertainment and hospitality uses, surrounded by extensive outdoor recreational and greenspace amenities, which is expected to
−Removed: result in a significant increase in development density as compared to our prior plans.
+Added: We are designing a mixed-use project, with extensive residential uses, coupled with limited entertainment and hospitality uses, surrounded by extensive outdoor recreational and greenspace amenities, which is expected to result in a significant increase in development density as compared to our prior plans.
In addition, due to the ETJ process described below, our development plans for Section N are under review.
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A number of cities in Texas have brought lawsuits challenging the ETJ Law.
+Added: A hearing has been scheduled for September 19, 2024 and any decision rendered may be appealed.
If the ETJ Law is upheld, we expect that the removal of our properties from the ETJ of the City of Austin will streamline the development permitting process, allow greater flexibility in the design of projects, potentially decrease certain development costs, and potentially permit meaningful increases in development density.
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We entered into a construction loan for this project and began construction in third-quarter 2022.
−Removed: We currently expect to achieve substantial completion by third-quarter 2024.
+Added: We currently expect to achieve substantial completion in fourth-quarter 2024.
Lakeway Multi-Family
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In connection with the sale, the Magnolia Place construction loan, which had a balance of $8.8 million was repaid.
−Removed: Following the sale, we have retained our existing two retail buildings totaling 18,582 square feet, potential development of approximately 11 acres planned for 275 multi-family units and approximately $12 million of potential future reimbursement from the municipal utility district (MUD).
+Added: Following the sale, we retained our existing two retail buildings totaling 18,582 square feet, which are currently under contract of sale for $8.9 million, potential development of approximately 11 acres planned for 275
+Added: multi-family units and approximately $12 million of potential future reimbursement from the municipal utility district (MUD).
Other Residential
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Stabilized Retail Projects
−Removed: As of March 31, 2024, we also owned and operated the following stabilized retail projects that we developed:
+Added: As of June 30, 2024, we also owned and operated the following stabilized retail projects that we developed:
• West Killeen Market is our H-E-B shadow-anchored retail project in West Killeen, Texas, near Fort Cavazos.
−Removed: As of March 31, 2024, we had signed leases for approximately 74 percent of the 44,493-square-foot retail space.
−Removed: • Jones Crossing is our H-E-B-anchored mixed-use project in College Station, Texas, the location of Texas A&M University.
−Removed: As of March 31, 2024, we had signed leases for substantially all of the completed retail space, including the H-E-B grocery store, totaling 154,092 square feet, and a ground lease on one retail pad site.
+Added: As of June 30, 2024, we had signed leases for approximately 74 percent of the 44,493-square-foot retail space.
+Added: • Jones Crossing - Retail is part of our H-E-B-anchored mixed-use project in College Station, Texas, the location of Texas A&M University.
+Added: As of June 30, 2024, we had signed leases for substantially all of the completed retail space, including the H-E-B grocery store, totaling 154,092 square feet, and a ground lease on one retail pad site.
Four retail pad sites remain available for lease.
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• Lantana Place – Retail is part of our mixed-use development project within the Lantana community south of Barton Creek in Austin, Texas.
−Removed: As of March 31, 2024, we had signed leases for substantially all of the 99,377-square-foot retail space, including the anchor tenant, Moviehouse & Eatery, and a ground lease for an AC Hotel by Marriott that opened in November 2021.
+Added: As of June 30, 2024, we had signed leases for substantially all of the 99,377-square-foot retail space, including the anchor tenant, Moviehouse & Eatery, and a ground lease for an AC Hotel by Marriott that opened in November 2021.
• Kingwood Place is our H-E-B-anchored, mixed-use development project in Kingwood, Texas (in the greater Houston area).
We have constructed 151,877 square feet of retail space at Kingwood Place, including an H-E-B grocery store.
−Removed: As of March 31, 2024, we had signed leases for substantially all of the retail space, including the H-E-B grocery store.
+Added: As of June 30, 2024, we had signed leases for substantially all of the retail space, including the H-E-B grocery store.
We have also signed ground leases on four of the retail pad sites.
One retail pad site remains available for lease.
−Removed: • Magnolia Place – Retail is our H-E-B shadow-anchored, mixed-use development project in Magnolia, Texas.
+Added: • Magnolia Place – Retail is part of our H-E-B shadow-anchored, mixed-use development project in Magnolia, Texas.
We have constructed 18,582 square feet of retail space at Magnolia Place.
−Removed: As of March 31, 2024, we had signed leases for all the retail space in the first phase of development, and all tenants were open for business.
+Added: As of June 30, 2024, we had signed leases for all the retail space in the first phase of development, and all tenants were open for business.
As discussed above, in February 2024, we sold the land planned for a second phase of retail development and all remaining pad sites.
−Removed: In first-quarter 2024, we entered into a contract to sell West Killeen Market for $12.8 million, which we expect to close in second-quarter 2024.
−Removed: After repaying the project loan, we expect the sale to generate approximately $7.2 million of pre-tax net cash proceeds.
−Removed: We have engaged brokers to explore the sale of Lantana Place – Retail, Magnolia Place – Retail and Kingwood Place.
+Added: As previously disclosed, we have been testing the market for potential sales of West Killeen Market, Magnolia Place – Retail, Lantana Place – Retail and Kingwood Place.
+Added: In first-quarter 2024, we entered into a contract to sell West Killeen Market for $12.8 million;
+Added: however, in June 2024 the buyer failed to close and we elected to terminate the contract.
+Added: In June 2024, we entered into a contract to sell Magnolia Place – Retail for $8.9 million.
+Added: The sale is expected to close in mid-August 2024 and generate pre-tax net cash proceeds of approximately $8.7 million.
+Added: We continue to explore a sale of Kingwood Place.
+Added: We have paused exploring the sales of West Killeen Market and Lantana Place – Retail, deciding to retain these cash-flowing properties at this time.
+Added: We believe market conditions will improve for the sale of our remaining retail properties over the next 12 months, and are optimistic that we will be
+Added: able to sell these properties at attractive prices during that time.
+Added: In connection with these sales, we anticipate returning capital to stockholders, subject to obtaining required consents from Comerica Bank.
Potential Development Projects and Pipeline
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Since June 2022, the rate of inflation generally has declined;
−Removed: however, it has remained at high levels compared to recent historical periods.
+Added: however, it has remained above the U.S.
+Added: Federal Reserve’s target inflation rate of two percent through July 2024.
In response, the Federal Reserve raised the federal funds target rate multiple times from March 2022 through July 2023, by 525 basis points on a cumulative basis.
−Removed: These factors have increased our costs, adversely impacted the projected profitability of our new projects, delayed the start of or completion of projects, adversely impacted our ability to raise
−Removed: equity capital on attractive terms and in our desired time frame and adversely impacted our ability to sell some properties at attractive prices in our desired time frame.
+Added: These factors have increased our costs, adversely impacted the projected profitability of our new projects, delayed the start of or completion of projects, adversely impacted our ability to raise equity capital on attractive terms and in our desired time frame and adversely impacted our ability to sell some properties at attractive prices in our desired time frame.
To manage the risks of rising construction and labor costs, we go through extensive pricing exercises culminating with competitive bids from reputable contractors based on final plans and specifications.
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however, rising costs and delays in delivery of materials may increase the risk of default by contractors and subcontractors.
−Removed: Also, as discussed elsewhere in this report, higher costs have required us to make operating loans to some of our joint ventures, and we expect to make additional operating loans during the next 12 months.
+Added: Also, as discussed elsewhere in this report, higher costs and project delays have required us to make operating loans to some of our joint ventures, and we expect to make additional operating loans and an equity contribution during the next 12 months.
Refer to Part I, Item 1A.
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urban markets.
−Removed: Federal Reserve has signaled that it may lower rates in 2024, although there is no certainty with respect to the timing and pace of potential decreases or if such decreases will occur.
−Removed: We continue to see reasons for optimism regarding improving real estate market conditions in our Texas markets as the year 2024 progresses.
+Added: Federal Reserve has signaled that it may lower rates in the second half of 2024, which is widely expected to occur, although there is no certainty with respect to the timing and pace of potential decreases or if such decreases will occur.
+Added: We continue to see reasons for optimism regarding improving real estate market conditions in our Texas markets over the next 12 months.
RESULTS OF OPERATIONS
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We use operating income or loss to measure the performance of our operating segments.
−Removed: Corporate, eliminations and other includes consolidated general and administrative expenses, which primarily consist of employee compensation and other costs described herein.
+Added: Corporate, eliminations and other include consolidated general and administrative expenses, which primarily consist of employee compensation and other costs described herein.
The following table summarizes our operating results (in thousands):
−Removed: Three Months Ended
−Removed: Operating income (loss):
+Added: Three Months Ended Six Months Ended
+Added: June 30, June 30,
+Added: 2024 2023 2024 2023
+Added: Operating (loss) income:
Real Estate Operations a
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(3,826) (4,067) (8,275) (8,781)
−Removed: Operating income (loss) $ 3,685 $ (5,593)
−Removed: Net income (loss) attributable to common stockholders $ 4,552 $ (5,801)
+Added: Operating (loss) income (2,920) (5,352) 765 (10,945)
+Added: Total comprehensive loss attributable to noncontrolling interests 1,053 8 1,908 480
+Added: Net (loss) income attributable to common stockholders
+Added: $ (1,725) $ (5,301) $ 2,827 $ (11,102)
Includes sales commissions and other revenues together with related expenses.
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The following table summarizes our Real Estate Operations segment results (in thousands):
−Removed: Three Months Ended
+Added: Three Months Ended Six Months Ended
+Added: June 30, June 30,
+Added: 2024 2023 2024 2023
Developed property sales $ 3,625 $ — $ 11,248 $ 2,493
Undeveloped property sales — — 14,500 —
+Added: Commissions and other 4 58 4 58
Total revenues 3,629 58 25,752 2,551
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Depreciation and amortization (44) (50) (88) (77)
−Removed: Operating income (loss) $ 6,801 $ (2,021)
+Added: Operating (loss) income $ (839) $ (2,689) $ 5,962 $ (4,710)
Developed Property Sales.
−Removed: The following table summarizes our developed property sales (dollars in thousands):
−Removed: Three Months Ended March 31,
−Removed: Homes Revenues Average Cost Per Home Homes Revenues Average Cost Per Home
+Added: The following tables summarize our developed property sales (dollars in thousands):
+Added: Three Months Ended June 30,
+Added: Homes Revenues Average Cost Per Home Lots/Units Revenues Average Cost Per Lot/Unit
Amarra Drive:
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Total Residential 1 $ 3,625 — $ —
−Removed: The increase in revenues from developed property sales for first-quarter 2024, compared to first-quarter 2023, reflects the sale of two Amarra Villas homes in first-quarter 2024 compared to the sale of one Amarra Villas home in first-quarter 2023, as well as an increase in average sales price by approximately 53 percent, from $2.5 million per home in first-quarter 2023 to $3.8 million per home in first-quarter 2024, reflecting higher prices per square foot in the community.
−Removed: We entered into a contract in April 2024 to sell an Amarra Villas home for $3.6 million.
+Added: Six Months Ended June 30,
+Added: Homes Revenues Average Cost Per Home Lots/Units Revenues Average Cost Per Lot/Unit
+Added: Amarra Drive:
+Added: Amarra Villas homes 3 $ 11,248 $ 3,143 1 $ 2,493 $ 2,249
+Added: Total Residential 3 $ 11,248 1 $ 2,493
+Added: The increase in revenues from developed property sales for second-quarter 2024, compared to second-quarter 2023, reflects the sale of one Amarra Villas home in second-quarter 2024 compared to no sales in second-quarter 2023.
+Added: The increase in revenues for the first six months of 2024 compared to the first six months of 2023, reflects the sales of three Amarra Villas homes in the 2024 period compared to one sale in the 2023 period, as well as an increase in average sales price by approximately 50 percent, from $2.5 million per home in the first six months of 2023 to $3.7 million per home in the first six months of 2024.
+Added: In July 2024, we sold one Amarra Villas home for $4.0 million.
+Added: We have entered into a contract to sell another Amarra Villas home for $3.8 million.
No assurances can be given that the pending sale will be completed or that future sale prices will be as high as sale prices to date in 2024.
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Cost of sales, excluding depreciation and amortization, includes costs of property sold, project operating and marketing expenses and allocated overhead costs.
−Removed: Cost of sales increased to $15.3 million in first-quarter 2024 compared to $4.5 million in first-quarter 2023, primarily reflecting the sale of undeveloped property at Magnolia Place and the sales of two Amarra Villas homes in first-quarter 2024 compared with no undeveloped property sales and the sale of one Amarra Villas home in first-quarter 2023.
+Added: Cost of sales increased to $4.4 million in second-quarter 2024, compared to $2.7 million in second-quarter 2023, primarily reflecting the sale of one Amarra Villas home in second-quarter 2024 while there were no property sales in second-quarter 2023.
+Added: Cost of sales increased to $19.7 million for the first six months of 2024, compared to $7.2 million for the first six months of 2023, primarily reflecting the sale of undeveloped property at Magnolia Place and the sales of three Amarra Villas homes in the first six months of 2024 compared with no undeveloped property sales and the sale of one Amarra Villas home in the first six months of 2023.
In addition, the average cost of the Amarra Villas homes sold increased by approximately 40 percent.
1 unchanged sentence
The following table summarizes our Leasing Operations segment results (in thousands):
−Removed: Three Months Ended
+Added: Three Months Ended Six Months Ended
+Added: June 30, June 30,
+Added: 2024 2023 2024 2023
Rental revenue $ 4,861 $ 3,472 $ 9,245 $ 6,781
Rental cost of sales, excluding depreciation (1,742)
+Added: (1,144) (3,420) (2,405)
Depreciation (1,374) (924) (2,747) (1,830)
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Rental Revenue.
−Removed: In first-quarter 2024 and first-quarter 2023, rental revenue primarily included revenue from our retail and mixed-use projects Lantana Place – Retail, Kingwood Place, Jones Crossing, West Killeen Market and Magnolia Place – Retail.
−Removed: In first-quarter 2024, rental revenue also included revenue from our multi-family project, The Saint June.
−Removed: The increase in rental revenue in first-quarter 2024, compared with first-quarter 2023, primarily reflects revenue from The Saint June, which had no rental revenue in first-quarter 2023, as well as increased revenue from Lantana Place – Retail and Kingwood Place, primarily due to new leases.
+Added: In the 2024 periods, rental revenue primarily included revenue from Lantana Place – Retail, Kingwood Place, Jones Crossing – Retail, West Killeen Market, Magnolia Place and The Saint June.
+Added: In the 2023 periods, rental revenue primarily included revenue from Lantana Place – Retail, Jones Crossing – Retail, Kingwood Place and West Killeen Market.
+Added: The increase in rental revenue in the 2024 periods, compared with the 2023 periods, primarily reflects revenue from The Saint June, which had no rental revenue in the 2023 periods, as well as increased revenue at Kingwood Place, Lantana Place – Retail and Magnolia Place – Retail, primarily due to new leases.
Rental Cost of Sales and Depreciation.
−Removed: Rental cost of sales and depreciation expense increased in first-quarter 2024 compared with first-quarter 2023, primarily as a result of The Saint June, which had no operating expenses or depreciation expense in first-quarter 2023, partially offset by the costs of landscaping repairs and replacements at retail properties following the Texas winter storm in February 2023.
+Added: Rental cost of sales and depreciation expense increased in the 2024 periods compared with the 2023 periods, primarily as a result of The Saint June, which had minimal operating expenses in the 2023 periods, partially offset by the costs of landscaping repairs and replacements at retail properties following the Texas winter storm in February 2023.
Corporate, Eliminations and Other
Corporate, eliminations and other (refer to Note 9) includes consolidated general and administrative expenses, which primarily consist of employee compensation and other costs.
−Removed: Consolidated general and administrative expenses decreased to $4.5 million in first-quarter 2024 compared to $4.7 million in first-quarter 2023 primarily as a result of lower compensation costs for estimated cash incentive awards for 2024.
−Removed: In first-quarter 2023 we also had fees related to a consulting arrangement to help raise third-party equity capital.
+Added: Consolidated general and administrative expenses were $3.8 million in second-quarter 2024 and $8.3 million for the first six months of 2024, compared to $4.1 million in second-quarter 2023 and $8.8 million for the first six months of 2023.
+Added: The decreases in the 2024 periods were primarily related to lower compensation costs for estimated cash incentive awards for 2024.
+Added: In 2023, we also had fees related to a consulting arrangement to help raise third-party equity capital.
Non-Operating Results
Interest Expense, Net.
−Removed: Interest costs (before capitalized interest) totaled $4.0 million in first-quarter 2024 compared with $2.4 million in first-quarter 2023.
−Removed: Interest costs in first-quarter 2024 were higher, compared to first-quarter 2023, primarily reflecting higher interest rates as well as an increase in average debt balances.
−Removed: As of March 31, 2024, all of our debt was variable-rate debt, and for all of such debt, the interest rates have increased over the past year, including for first-quarter 2024, and may continue to rise in the future if prevailing market interest rates increase.
−Removed: All of our interest costs in first-quarter 2024 and first-quarter 2023 were capitalized.
−Removed: Capitalized interest is primarily related to development activities at Barton Creek (primarily Holden Hills, Section N and The Saint June), The Saint George and The Annie B for both periods presented.
+Added: Interest costs (before capitalized interest) totaled $3.9 million in second-quarter 2024 and $7.9 million for the first six months of 2024, compared with $2.9 million in second-quarter 2023 and $5.3 million for the first six months of 2023.
+Added: Interest costs in the 2024 periods were higher, compared to the 2023 periods, primarily reflecting higher interest rates as well as an increase in average debt balances.
+Added: As of June 30, 2024, all of our debt was variable-rate debt, and for all of such debt, the interest rates have increased over the past year, including the first six months of 2024.
+Added: All of the interest costs were capitalized for all periods presented.
+Added: Capitalized interest is primarily related to development activities at our Barton Creek properties (primarily Holden Hills, Section N and The Saint June) and The Saint George for all periods presented.
Provision for Income Taxes.
−Removed: We recorded a provision for income taxes of $0.1 million in first-quarter 2024 compared to $1.2 million in first-quarter 2023.
+Added: We recorded a provision for income taxes of $44 thousand in second-quarter 2024 and $0.1 million for the first six months of 2024, compared to $0.5 million in second-quarter 2023 and $1.7 million for the first six months of 2023.
Refer to Note 8 for further discussion of income taxes.
Total Comprehensive Loss Attributable to Noncontrolling Interests in Subsidiaries .
−Removed: Our partners' share of losses totaled $0.9 million in first-quarter 2024 compared to $0.5 million in first-quarter 2023.
+Added: Our partners’ share of losses totaled $1.1 million in second-quarter 2024 and $1.9 million for the first six months of 2024, compared to $8 thousand in second-quarter 2023 and $0.5 million for the first six months of 2023.
CAPITAL RESOURCES AND LIQUIDITY
1 unchanged sentence
However, we believe that the unique nature and location of our assets will provide us positive cash flows over time.
−Removed: Comparison of Cash Flows for the Three Months Ended March 31, 2024 and 2023
+Added: Comparison of Cash Flows for the Six Months Ended June 30, 2024 and 2023
Operating Activities.
−Removed: Cash provided by operating activities totaled $6.5 million in first-quarter 2024, compared with cash used in operating activities of $18.4 million in first-quarter 2023.
−Removed: The increase in operating cash flow is primarily due to property sales in first-quarter 2024.
−Removed: Expenditures for purchases and development of real estate properties totaled $9.0 million in first-quarter 2024, primarily related to development of our Barton Creek properties, particularly Holden Hills and Amarra Villas, and $9.0 million in first-quarter 2023, primarily related to development of our Barton Creek properties, particularly Amarra Villas and, to a lesser extent, Holden Hills.
−Removed: The cash outflow resulting from the decrease in accounts payable, accrued liabilities and other in first-quarter 2024 and first-quarter 2023 is primarily related to the timing of property tax payments.
+Added: Cash used in operating activities totaled $1.7 million for the first six months of 2024, compared with $26.8 million for the first six months of 2023.
+Added: Expenditures for purchases and development of real estate properties totaled $16.3 million for the first six months of 2024 and $21.1 million for the first six months of 2023, both primarily related to development of our Barton Creek properties, particularly Amarra Villas and Holden Hills.
Investing Activities.
−Removed: Cash used in investing activities totaled $8.4 million in first-quarter 2024 and $10.2 million in first-quarter 2023.
−Removed: Capital expenditures totaled $8.1 million in first-quarter 2024, primarily for The Saint George and to a lesser extent for tenant improvements at Lantana Place – Retail, and $10.0 million in first-quarter 2023, primarily for The Saint June and The Saint George.
+Added: Cash used in investing activities totaled $16.5 million for the first six months of 2024 and $24.0 million for the first six months of 2023.
+Added: Capital expenditures totaled $16.1 million for the first six months of 2024, primarily for The Saint George and to a lesser extent for tenant improvements at Lantana Place – Retail, and $23.5 million for the first six months of 2023, primarily for The Saint George and The Saint June.
Financing Activities.
−Removed: Cash used in financing activities totaled $9.1 million in first-quarter 2024 and cash provided by financing activities totaled $42.7 million in first-quarter 2023.
−Removed: In both the first-quarter 2024 and first-quarter 2023, we
−Removed: had no net borrowings on the Comerica Bank revolving credit facility.
−Removed: In first-quarter 2024, net payments on project and term loans totaled $8.3 million, primarily reflecting the payoff of the Magnolia Place construction loan and paydowns on the Amarra Villas credit facility and the Annie B land loan, partially offset primarily by borrowings on The Saint George and Holden Hills construction loans and the Amarra Villas credit facility.
−Removed: In first-quarter 2023 net borrowings on project and term loans totaled $5.1 million, primarily reflecting borrowings on The Saint June construction loan and the Amarra Villas revolving credit facility, partially offset by the payoff of the New Caney land loan.
−Removed: Refer to “Revolving Credit Facility and Other Financing Arrangements” and “Debt Maturities and Other Contractual Obligations” below for a discussion of our outstanding debt at March 31, 2024.
−Removed: In first-quarter 2023, we received a contribution from a noncontrolling interest owner of $40.0 million, related to the Holden Hills partnership.
−Removed: On September 1, 2022, with written consent from Comerica Bank, our Board declared a special cash dividend of $4.67 per share (totaling $40.0 million) on our common stock, which was paid on September 29, 2022 to stockholders of record as of September 19, 2022.
−Removed: During first-quarter 2023, $0.2 million of accrued dividends for unvested restricted stock units (RSUs) were paid to the holders upon the vesting of the RSUs, and during first-quarter 2024, $0.4 million of accrued dividends for unvested RSUs were paid to the holders upon the vesting of the RSUs, leaving $0.3 million of dividends accrued for unvested RSUs presented in accrued liabilities as of March 31, 2024.
+Added: Cash (used in) provided by financing activities totaled $(0.2) million for the first six months of 2024 and $50.1 million for the first six months of 2023.
+Added: During both the first six months of 2024 and 2023, we had no net borrowings on the Comerica Bank revolving credit facility.
+Added: During the first six months of 2024, net borrowings on other project and term loans totaled $0.5 million, primarily reflecting borrowings on The Saint George and Holden Hills construction loans and the Amarra Villas credit facility partially offset primarily by the payoff of the Magnolia Place construction loan and paydowns on the Amarra Villas credit facility and the Annie B land loan.
+Added: During the first six months of 2023, net borrowings on other project and term loans totaled $14.5 million, primarily reflecting borrowings on The Saint June construction loan and the Amarra Villas credit facility, partially offset by the payoff of the New Caney land loan.
+Added: Refer to “Revolving Credit Facility and Other Financing Arrangements” below for a discussion of our outstanding debt at June 30, 2024.
+Added: During the first six months of 2023, we received a contribution from a noncontrolling interest owner of $40.0 million, related to the Holden Hills partnership.
+Added: On September 1, 2022, after receiving written consent from Comerica Bank, our Board declared a special cash dividend of $4.67 per share (totaling $40.0 million) on our common stock, which was paid on September 29, 2022 to shareholders of record as of September 19, 2022.
+Added: During the first six months of 2024, $0.4 million of accrued dividends for unvested RSUs were paid to the holders upon the vesting of the RSUs, leaving $0.3 million of dividends accrued for unvested RSUs presented in accrued liabilities as of June 30, 2024.
The remaining accrued dividends will be paid to the holders of the RSUs as the RSUs vest.
−Removed: In 2022, with written consent from Comerica Bank, our Board also approved a share repurchase program, which authorized repurchases of up to $10.0 million of our common stock.
−Removed: During first-quarter 2023, we spent $0.9 million on share repurchases under the program.
+Added: In 2022, after receiving written consent from Comerica Bank, our Board also approved a share repurchase program, which authorized repurchases of up to $10.0 million of our common stock.
+Added: During the first six months of 2023, we spent $1.6 million on share repurchases under the program.
In October 2023, we completed the share repurchase program.
−Removed: In total, under the completed share repurchase program, we acquired 389,378 shares of our common stock for a total cost of $10.0 million at an average price of $25.68 per share.
−Removed: In November 2023, with written consent from Comerica Bank, our Board approved a new share repurchase program, which authorizes repurchases of up to $5.0 million of our common stock.
+Added: In total, under the completed share repurchase program, we acquired 389,378 shares of our common stock for a cost of $10.0 million at an average price of $25.68 per share.
+Added: In November 2023, after receiving written consent from Comerica Bank, our Board approved a new share repurchase program, which authorizes repurchases of up to $5.0 million of our common stock.
The repurchase program authorizes us, in management’s and the Capital Committee of the Board’s discretion, to repurchase shares from time to time, subject to market conditions and other factors.
2 unchanged sentences
The share repurchase program does not obligate us to repurchase any specific amount of shares, does not have an expiration date, and may be suspended, modified or discontinued at any time without prior notice.
−Removed: As of March 31, 2024, we had not repurchased any shares under the new program.
+Added: As of June 30, 2024, we had not repurchased any shares under the new program.
Revolving Credit Facility and Other Financing Arrangements
−Removed: As of March 31, 2024, we had $20.7 million in cash and cash equivalents and restricted cash of $0.8 million, and no amount was borrowed under our revolving credit facility.
−Removed: Of the $20.7 million in consolidated cash and cash equivalents at March 31, 2024, $2.8 million held at certain consolidated subsidiaries is subject to restrictions on distribution to the parent company pursuant to project loan agreements.
−Removed: As of March 31, 2024, we had total debt of $170.1 million based on the principal amounts outstanding compared with $177.4 million at December 31, 2023.
−Removed: As of March 31, 2024, the maximum amount that could be borrowed under the Comerica Bank revolving credit facility was $52.9 million, resulting in availability of $39.6 million, net of letters of credit totaling $13.3 million issued under the revolving credit facility, $11.0 million of which secure our obligation to build certain roads and utilities facilities benefiting Holden Hills and Section N and $2.3 million of which secure our obligation to construct and pay for certain utility infrastructure in Lakeway, Texas.
−Removed: Refer to “Debt Maturities and Other Contractual Obligations” below for a table illustrating the timing of principal payments due on our outstanding debt as of March 31, 2024.
+Added: As of June 30, 2024, we had $13.5 million in cash and cash equivalents and restricted cash of $0.5 million, and no amount was borrowed under our revolving credit facility.
+Added: Of the $13.5 million in consolidated cash and cash equivalents at June 30, 2024, $2.9 million held at certain consolidated subsidiaries is subject to restrictions on distribution to the parent company pursuant to project loan agreements.
+Added: As of June 30, 2024, we had total debt of $180.0 million based on the principal amounts outstanding compared with $177.4 million at December 31, 2023.
+Added: As of June 30, 2024, the maximum amount that could be borrowed under the Comerica Bank revolving credit facility was $52.9 million, resulting in availability of $39.6 million, net of letters of credit totaling $13.3 million issued under the revolving credit facility, $11.0 million of which secure our obligation to build certain roads and utilities facilities benefiting Holden Hills and Section N and $2.3 million of which secure our obligation to construct and pay for certain utility infrastructure in Lakeway, Texas.
+Added: Refer to “Debt Maturities and Other Contractual Obligations” below for a table illustrating the timing of principal payments due on our outstanding debt as of June 30, 2024.
In April 2023, we made an operating loan of $1.5 million to Stratus Block 150, L.P.
10 unchanged sentences
The loans bear interest at the one-month Term SOFR plus 5.00 percent, are subordinate to The Saint June construction loan and must be repaid before distributions may be made to the partners.
−Removed: In February 2024, The Annie B land loan was modified to extend the maturity to September 1, 2025, and change the interest rate to the Term SOFR Rate plus 3.00 percent.
−Removed: Under The Annie B land loan, the Term SOFR Rate is defined as one-month Term SOFR plus 0.10 percent and is subject to a floor of 0.50 percent.
+Added: In February 2024, The Annie B land loan was modified to extend the maturity to September 1, 2025, and change the interest rate to Term SOFR Rate plus 3.00 percent.
+Added: Under The Annie B land loan, Term SOFR Rate is defined as one-month Term SOFR plus 0.10 percent and is subject to a floor of 0.50 percent.
In connection with the modification, we made a $1.4 million principal payment on the loan and are required to make another principal payment of $630 thousand in February 2025.
−Removed: During first-quarter 2024, we paid off the $8.8 million Magnolia Place construction loan in connection with our sale of approximately 47 acres of undeveloped land, and we made principal payments of $7.2 million on our Amarra Villas revolving credit facility in connection with our sales of two Amarra Villas homes.
−Removed: During the quarter, we increased borrowings under The Saint George, The Saint June and Holden Hills construction loans.
+Added: In June 2024, the Amarra Villas credit facility was modified to, among other things, extend the maturity date to June 19, 2026, change the interest rate to Term SOFR Rate plus 3.00 percent (subject to a floor of 5.00 percent) and lower the commitment amount from $18.0 million to $10.5 million.
+Added: Under the Amarra Villas credit facility, Term SOFR Rate is defined as one-month Term SOFR plus 0.10 percent and is subject to a floor of 0.50 percent.
+Added: Principal paydowns occur as homes are sold, and amounts are borrowed as homes are constructed.
+Added: Paydowns made in connection with a sale of an Amarra Villas home reduce the commitment amount by the amount of the payment, and such amounts may not be re-borrowed.
+Added: During first-quarter 2024, we paid off the $8.8 million Magnolia Place construction loan in connection with our sale of approximately 47 acres of undeveloped land, and we made principal payments of $7.2 million on our Amarra Villas credit facility in connection with our sales of two Amarra Villas homes.
+Added: During second-quarter 2024, we made a principal payment of $3.5 million on our Amarra Villas credit facility in connection with the sale of one Amarra Villas home.
+Added: During the first six months of 2024, we increased borrowings under The Saint George, The Saint June and Holden Hills construction loans.
Refer to Note 6 for further discussion.
1 unchanged sentence
Refer to Note 6 and MD&A in our 2023 Form 10-K for a discussion of the financial covenants in our debt agreements.
−Removed: As of March 31, 2024, we were in compliance with all of our financial covenants.
+Added: As of June 30, 2024, we were in compliance with all of our financial covenants.
Stratus’ and its subsidiaries’ debt arrangements, including Stratus’ guaranty agreements contain significant limitations that may restrict Stratus’ and its subsidiaries’ ability to, among other things:
8 unchanged sentences
and engage in mergers, consolidations or other business combinations.
−Removed: Our Comerica Bank revolving credit facility, Amarra Villas revolving credit facility, The Annie B land loan, The Saint George construction loan, Kingwood Place construction loan and the Holden Hills construction loan require Comerica Bank’s prior written consent for any common stock repurchases in excess of $1.0 million or any dividend payments, which was obtained in connection with the special cash dividend and share repurchase programs.
+Added: Our Comerica Bank revolving credit facility, Amarra Villas credit facility, The Annie B land loan, The Saint George construction loan, Kingwood Place construction loan and the Holden Hills construction loan require Comerica Bank’s prior written consent for any common stock repurchases in excess of $1.0 million or any dividend payments, which was obtained in connection with the special cash dividend and share repurchase programs.
Any future declaration of dividends or decision to repurchase our common stock is at the discretion of our Board, subject to restrictions under our Comerica Bank debt agreements, and will depend on our financial results, cash requirements, projected compliance with covenants in our debt agreements, outlook and other factors deemed relevant by our Board.
1 unchanged sentence
Our project loans are generally secured by all or substantially all of the assets of the projects, and our Comerica Bank revolving credit facility is secured by substantially all of our assets other than those encumbered by separate project financing.
−Removed: In addition, we are typically required to guarantee all or part of the payment of our project loans, in some cases until certain development milestones and/or financial conditions are met, except for the Jones Crossing loan guaranty, which has generally been limited to non-recourse carve-out obligations since inception of the loan.
+Added: In addition, we are typically required to guarantee all or part of the payment of our project loans, in some cases until certain development milestones and/or financial conditions are met, except for the Jones Crossing
+Added: loan guaranty, which has generally been limited to non-recourse carve-out obligations since inception of the loan.
We were released as guarantor under the Lantana Place construction loan guaranty in 2022 and the guaranty of The Saint June construction loan was changed to a 50.0 percent repayment guaranty upon completion of The Saint June in fourth-quarter 2023.
1 unchanged sentence
The Holden Hills construction loan has a completion guaranty and a full repayment guaranty.
−Removed: The Annie B land loan, the Amarra Villas revolving credit facility and the West Killeen Market construction loan each have a full repayment guaranty.
+Added: The Annie B land loan, the Amarra Villas credit facility and the West Killeen Market construction loan each have a full repayment guaranty.
Refer to Note 6 to our consolidated financial statements in our 2023 Form 10-K for additional discussion.
2 unchanged sentences
The inability to satisfy a condition to receive advances for a specified time period after lender’s refusal, or the failure to complete a project by a specified completion date, may be an event of default, subject to exceptions for force majeure.
−Removed: Debt Maturities and Other Contractual Obligations
−Removed: The following table summarizes our debt maturities based on the principal amounts outstanding as of March 31, 2024 (in thousands):
+Added: Debt Maturities
+Added: The following table summarizes our debt maturities based on the principal amounts outstanding as of June 30, 2024 (in thousands):
2024 2025 2026 2027 2028 Thereafter Total
6 unchanged sentences
The Saint George — — 38,946 — — — 38,946
−Removed: — — 32,378 — — — 32,378
The Saint June a
3 unchanged sentences
Lantana Place 161 348 376 21,999 — — 22,884
−Removed: Amarra Villas revolving credit facility c
−Removed: 9,888 — — — — — 9,888
+Added: Holden Hills — — 10,750 — — — 10,750
+Added: Amarra Villas credit facility
— — 7,743 — — — 7,743
−Removed: West Killeen Market d
+Added: West Killeen Market
30 5,197 — — — — 5,227
3 unchanged sentences
We have options to extend the maturity for two additional 12-month terms if certain conditions are met.
+Added: We expect to extend the loan on or before the maturity date and the extension may require a paydown on the loan.
The maturity date is December 6, 2024.
−Removed: The maturity date for this credit facility is June 19, 2024, and we are in discussions with the lender about extending the loan.
−Removed: We expect to pay off this loan in full in connection with the closing of the sale of the property, which is expected to occur in second-quarter 2024.
+Added: We expect to refinance the loan on or before the maturity date.
The following table summarizes the weighted-average interest rate of each loan, all of which have variable rates, for the periods presented:
−Removed: Three Months Ended
+Added: Three Months Ended Six Months Ended
+Added: June 30, June 30,
+Added: 2024 2023 2024 2023
Comerica Bank revolving credit facility a
+Added: — % — % — % — %
Jones Crossing loan
+Added: 7.69 7.19 7.69 6.97
The Annie B land loan 8.42 7.90 8.41 7.65
1 unchanged sentence
The Saint George b
+Added: 7.70 7.41 7.72 7.41
The Saint June 8.17 7.82 8.18 7.54
1 unchanged sentence
Lantana Place 7.73 7.40 7.73 7.17
−Removed: Amarra Villas revolving credit facility 8.39 7.45
Holden Hills c
−Removed: West Killeen Market d
−Removed: Magnolia Place e
−Removed: We did not have an outstanding balance during first-quarter 2024 or 2023.
−Removed: At March 31, 2024, the interest rate for the revolving credit facility was 9.38 percent.
−Removed: We did not have an outstanding balance during first-quarter 2023.
+Added: 8.36 — 8.37 —
+Added: Amarra Villas credit facility
+Added: 8.36 7.98 8.38 7.74
+Added: West Killeen Market
+Added: 8.07 7.71 8.08 7.47
+Added: Magnolia Place d
+Added: — 8.27 — 8.04
+Added: We did not have an outstanding balance during any of the periods presented.
+Added: At June 30, 2024, the interest rate for the revolving credit facility was 9.37 percent.
We did not have an outstanding balance during first-quarter 2023.
−Removed: We expect to pay off this loan in full in connection with the closing of the sale of the property, which is expected to occur in second-quarter 2024.
+Added: We did not have an outstanding balance during first-quarter and second-quarter 2023.
In February 2024, this loan was repaid with proceeds from the sale of approximately 47 acres of undeveloped land.
−Removed: We had firm commitments totaling approximately $33.0 million at March 31, 2024 primarily related to construction of The Saint George, Holden Hills and Amarra Villas.
+Added: Liquidity Outlook
+Added: We had firm commitments totaling approximately $22.3 million at June 30, 2024 primarily related to construction of The Saint George, Holden Hills and Amarra Villas.
We have construction loans to fund these projected cash outlays for the projects over the next 12 months, except for anticipated operating loans to Stratus Block 150, L.P.
−Removed: and The Saint George Apartments, L.P.
+Added: and capital contribution to The Saint George Apartments, L.P.
described below and 60 percent of the costs of the Tecoma Improvements for which we have agreed to reimburse the Holden Hills partnership.
−Removed: As of March 31, 2024, the Holden Hills partnership had $6.4 million remaining to complete the Tecoma Improvements.
+Added: As of June 30, 2024, the Holden Hills partnership had $5.2 million remaining to complete the Tecoma Improvements.
Also, we anticipate making future operating loans to Stratus Block 150, L.P.
−Removed: and The Saint George Apartments, L.P.
−Removed: totaling up to $3.6 million over the next 12 months to enable the partnerships to pay debt service and project costs.
−Removed: The operating loans would bear interest at the one-month SOFR Rate plus 5.00 percent and the one-month BSBY Rate plus 5.00 percent, respectively, would be subordinate to the project loans and would be repaid before distributions may be made to the partners.
+Added: totaling up to $3.9 million over the next 12 months to enable the partnership to pay debt service and project costs.
+Added: The operating loans would bear interest at the one-month SOFR Rate plus 5.00 percent, would be subordinate to the project loans and would be repaid before distributions may be made to the partners.
+Added: We also anticipate contributing additional capital of $400 thousand to The Saint George Apartments, L.P.
+Added: representing our 10 percent equity share needed by the partnership to cover interest on the construction loan.
We project that we will be able to meet our debt service and other cash obligations for at least the next 12 months.
−Removed: Our stabilized commercial properties (West Killeen Market, Jones Crossing, Lantana Place – Retail, Kingwood Place and Magnolia Place – Retail) are projected to generate positive cash flow after debt service over the next 12 months.
−Removed: In first-quarter 2024, we entered into a contract to sell West Killeen Market for $12.8 million, which we expect to close in second-quarter 2024.
−Removed: After repaying the project loan, we expect the sale to generate approximately $7.2 million of pre-tax net cash proceeds.
−Removed: For other projected pre-development costs, much of which are discretionary, and for our costs of the Tecoma Improvements and projected general and administrative expenses, we have cash on hand of $20.7 million at March 31, 2024 and availability under our revolving credit facility (which matures on March 27, 2025) of approximately $39.6 million as of March 31, 2024 which is expected to be sufficient to fund these cash requirements for the next 12 months.
+Added: Our stabilized retail and multi-family properties (West Killeen Market, Jones Crossing – Retail, Magnolia Place – Retail, Lantana Place – Retail, Kingwood Place and The Saint June) are projected to generate sufficient cash flow to cover debt service over the next 12 months.
+Added: In June 2024, we entered into a contract to sell Magnolia Place – Retail for $8.9 million.
+Added: The sale is expected to close in mid-August 2024 and generate pre-tax net cash proceeds of approximately $8.7 million.
+Added: We also expect to sell additional Amarra Villas homes and may sell certain lots or tracts of undeveloped land.
+Added: For other projected pre-development costs, much of which are discretionary, and for our costs of the Tecoma Improvements and projected general and administrative expenses, we have cash on hand of $13.5 million at June 30, 2024 and availability under our revolving credit facility (which matures on March 27, 2025) of approximately $39.6 million as of June 30, 2024 which is expected to be sufficient to fund these cash requirements for the next 12 months.
We expect to successfully extend the maturities of, or to refinance, our debt that matures in the next 12 months.
For future potential significant development projects, we would not plan to enter into commitments to incur material costs for the projects until we obtain what we project to be adequate financing to cover anticipated cash outlays.
−Removed: As discussed under “Business Strategy” above, our main source of revenue and cash flow is expected to come from sales of our properties to third parties or distributions from joint ventures, the timing of and proceeds from which are difficult to predict and depend on market conditions and other factors.
−Removed: We also generate cash flow from rental
−Removed: revenue in our leasing operations and from development and asset management fees received from our properties.
+Added: As discussed under “Business Strategy” above, our main source of revenue and cash flow is expected to come from
+Added: sales of our properties to third parties or distributions from joint ventures, the timing of and proceeds from which are difficult to predict and depend on market conditions and other factors.
+Added: We also generate cash flow from rental revenue in our leasing operations and from development and asset management fees received from our properties.
Due to the nature of our development-focused business, we do not expect to generate sufficient recurring cash flow to cover our general and administrative expenses each period.
27 unchanged sentences
This Quarterly Report on Form 10-Q contains forward-looking statements in which we discuss factors we believe may affect our future performance.
−Removed: Forward-looking statements are all statements other than statements of historical fact, such as plans, projections or expectations related to inflation, interest rates, supply chain constraints, availability of bank credit, our ability to meet our future debt service and other cash obligations, future cash flows and liquidity, the Austin and Texas real estate markets, the planning, financing, development, construction, completion and stabilization of our development projects, plans to sell, recapitalize, or refinance properties, future operational and financial performance, MUD reimbursements for infrastructure costs, regulatory matters, including the expected impact of the ETJ Law and related ongoing litigation, leasing activities, tax rates, future capital
−Removed: expenditures and financing plans, possible joint ventures, partnerships, or other strategic relationships, other plans and objectives of management for future operations and development projects, and potential future cash returns to stockholders, including the timing and amount of repurchases under our share repurchase program.
+Added: Forward-looking statements are all statements other than statements of historical fact, such as plans, projections or expectations related to inflation, interest rates, supply chain constraints, availability of bank credit, our ability to meet our future debt service and other cash obligations, future cash flows and liquidity, the Austin and Texas real estate markets, the planning, financing, development, construction, completion and stabilization of our development projects, plans to sell, recapitalize, or refinance properties, future
+Added: operational and financial performance, MUD reimbursements for infrastructure costs, regulatory matters, including the expected impact of the ETJ Law and related ongoing litigation, leasing activities, tax rates, future capital expenditures and financing plans, possible joint ventures, partnerships, or other strategic relationships, other plans and objectives of management for future operations and development projects, and potential future cash returns to stockholders, including the timing and amount of repurchases under our share repurchase program.
The words “anticipate,” “may,” “can,” “plan,” “believe,” “potential,” “estimate,” “expect,” “project,” “target,” “intend,” “likely,” “will,” “should,” “to be” and any similar expressions or statements are intended to identify those assertions as forward-looking statements.
12 unchanged sentences
Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.