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The results of operations reported and summarized below are not necessarily indicative of future operating results, and future results could differ materially from those anticipated in forward-looking statements (refer to “Cautionary Statement” and Part I, Item 1A.
−Removed: “Risk Factors” of our 2023 Form 10-K for further discussion).
+Added: “Risk Factors” of our 2024 Form 10-K and Part II, Item 1A.
+Added: “Risk Factors” herein for further discussion).
All subsequent references to “Notes” refer to Notes to Consolidated Financial Statements (Unaudited) located in Part I, Item 1.
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From time to time, when deemed appropriate by our Board of Directors (the Board) and permitted pursuant to the terms of our debt agreements, we may return capital to stockholders, as we did in 2022 and 2017 with special cash dividends totaling approximately $40 million and $8 million, respectively, and as we did during 2022 and 2023 through our $10.0 million share repurchase program, which was completed in October 2023.
−Removed: In November 2023, our Board approved a new $5.0 million share repurchase program.
+Added: In November 2023, our Board approved a new $5.0 million share repurchase program, and as of March 31, 2025, we had repurchased $2.0 million of our shares under the program.
Our investment strategy focuses on projects that we believe will provide attractive long-term returns, while limiting our financial risk.
1 unchanged sentence
Refer to Note 3.
−Removed: We expect to continue to limit use of our revolving credit facility and to retain sufficient cash to operate our business, taking into account risks associated with changing market conditions and the variability in cash flows from our business.
+Added: We expect to continue our limited use of our revolving credit facility and to retain sufficient cash to operate our business, taking into account risks associated with changing market conditions and the variability in cash flows from our business.
Our main sources of revenue and cash flow are expected to be 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.
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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
−Removed: 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.
+Added: However, we believe that the unique nature and location of our assets, and
+Added: 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 2021 and Block 21 in 2022, the cash distribution from the Holden Hills Phase 1 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.
−Removed: 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: As of September 30, 2024, the Holden Hills partnership had $4.4 million remaining to complete the Tecoma Improvements.
−Removed: However, during 2023 and the first nine months of 2024, we made operating loans totaling $3.3 million and $3.9 million, respectively, to the limited partnerships for The Annie B and for The Saint June.
−Removed: The Class B limited partner also made operating loans of $250 thousand and $504 thousand during 2023 and the first nine months of 2024, respectively, to the limited partnership for The Saint June.
−Removed: In third-quarter 2024, we contributed additional capital of $400 thousand in cash representing our 10 percent equity share, and the Class B limited partner contributed additional capital of $3.6 million in cash, each to the limited partnership for The Saint George.
−Removed: We anticipate making future operating loans to the limited partnership for The Annie B totaling up to $2.6 million over the next 12 months.
−Removed: Our estimates of future operating loans are based on estimates of future costs of the partnership.
+Added: 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 Phase 1 partnership and our share (related to Holden Hills Phase 2) of the cost of the Tecoma Improvements (as defined below).
+Added: As of March 31, 2025, the Holden Hills Phase 1 partnership had $3.0 million remaining to complete the Tecoma Improvements, of which our share totaled $1.8 million.
+Added: However, over the past two years and in first-quarter 2025, we made operating loans and a capital contribution to our joint ventures.
+Added: Refer to Note 3 herein and Note 2 of the 2024 Form 10-K for further discussion.
+Added: We anticipate making future operating loans to the limited partnership for The Annie B totaling up to $2.1 million and a capital contribution to the limited partnership for The Saint George of $370 thousand over the next 12 months, including potential costs of water leak remediation and repairs to be borne by the partnership as described in Note 10.
+Added: Our estimates of future operating loans and capital contributions are based on estimates of future costs of the partnerships.
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: As of September 30, 2024, consolidated cash totaled $19.6 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.
−Removed: We were challenged by difficult conditions in the real estate business in 2023.
−Removed: Interest rates, which began rising in 2022, continued to increase, and costs remained elevated.
−Removed: During the first nine months of 2024, interest rates stabilized but costs remain elevated.
+Added: As of March 31, 2025, consolidated cash totaled $12.0 million and we had $34.5 million available under our revolving credit facility, net of $15.6 million of letters of credit committed against the facility and borrowings of $4.0 million.
+Added: In March 2025, our revolving credit facility was amended to extend the maturity and lower the interest rate.
+Added: We were challenged by difficult conditions in the real estate business over the past two years and in first-quarter 2025.
+Added: Interest rates, which began rising in 2022, continued to increase during 2023, and costs remained elevated.
+Added: During 2024, interest rates stabilized, and in the latter part of 2024 and first-quarter 2025, interest rates generally declined;
+Added: however, costs remained elevated.
We saw limited opportunities for transactions on favorable terms.
−Removed: 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 and the first nine months 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.
−Removed: In addition, during 2023 and the first nine months of 2024, we sold five Amarra Villas homes for a total of $17.7 million, 47 acres of undeveloped land at Magnolia Place for $14.5 million and Magnolia Place – Retail for $8.9 million, described further below.
−Removed: As of September 30, 2024, our retail and multi-family portfolio consisted of five stabilized projects, namely The Saint June, Jones Crossing – Retail, Kingwood Place, Lantana Place – Retail and West Killeen Market.
−Removed: As previously disclosed, we had been testing the market for potential sales of West Killeen Market, Magnolia Place – Retail, Lantana Place – Retail and Kingwood Place.
−Removed: In first-quarter 2024, we entered into a contract to sell West Killeen Market for $12.8 million;
−Removed: however, in June 2024 the buyer failed to close and we elected to terminate the contract.
−Removed: In third-quarter 2024, we closed on the sale of Magnolia Place – Retail for $8.9 million.
−Removed: The sale generated pre-tax net cash proceeds of approximately $8.6 million and a pre-tax gain of $1.6 million.
−Removed: We have paused exploring the sales of West Killeen Market, Lantana Place – Retail and Kingwood Place, deciding to retain these cash-flowing properties at this time.
−Removed: Although 2023 and the first nine months of 2024 were challenging, we see reasons for optimism regarding improving real estate market conditions in our markets over the next 12 months.
−Removed: Among other things, the Federal Reserve lowered interest rates in September 2024 for the first time in four years, lowered interest rates again in November 2024, and there could be additional cuts in the future.
−Removed: In October 2024, we extended the maturity of The Saint June construction loan at a lower rate and with additional proceeds of approximately $1.5 million after closing costs.
−Removed: We are currently discussing options to refinance the Kingwood Place construction loan, the Lantana Place construction loan and the Jones Crossing loan, with the expectation of tighter spreads and with potential additional proceeds.
−Removed: We expect to refinance the Kingwood Place construction loan on or before the December 6, 2024 maturity date.
−Removed: We also expect that, if market rates continue to decline, interest on our outstanding debt, all of which is variable rate, will continue to decline.
−Removed: We believe we have sufficient liquidity and access to capital to sell properties when market conditions are favorable to us and to hold or refinance our properties or to continue to
−Removed: develop our properties, as applicable, through the market cycle.
+Added: Nevertheless, we made important progress executing our business strategy during 2024 and first-quarter 2025.
+Added: The Federal Reserve lowered interest rates in September 2024 for the first time in four years, and lowered interest rates again in November and December 2024.
+Added: We took advantage of lower interest rates and the success of our projects to refinance or amend certain of our project loans.
+Added: In fourth-quarter 2024, we extended the maturity of The Saint June construction loan for one year at a lower rate and generated additional cash proceeds of approximately $1.5 million after closing costs.
+Added: We also refinanced the Kingwood Place construction loan with a three-year term loan at a lower rate and generated additional cash proceeds of approximately $2.0 million after partnership expenses, closing costs and distributions to noncontrolling interest holders.
+Added: In January 2025, we refinanced the Lantana Place construction loan with a four-year term loan at a lower rate and generated additional cash proceeds of approximately $3.0 million after property taxes and closing costs.
+Added: In March 2025, we refinanced the Jones Crossing loan with a three-year term loan at a lower rate and generated additional cash proceeds of approximately $1.2 million after closing costs.
+Added: In March 2025, we also amended our revolving credit facility, extending the term and lowering the interest rate.
+Added: During 2024, we sold 47 acres of undeveloped land at Magnolia Place for $14.5 million and also sold Magnolia Place – Retail for $8.9 million.
+Added: We sold five homes at Amarra Villas for a total of $18.9 million and one Amarra Drive Phase III lot for $1.4 million.
+Added: Also, in 2024, among other things, we completed the lease-up of The Saint June multi-family project, completed construction of six Amarra Villas homes, continued construction on The Saint George multi-family project and advanced road and utility infrastructure construction on Holden Hills Phase 1.
+Added: During first-quarter 2025, we also advanced construction on The Saint George, the last two Amarra Villas homes and the road and utility infrastructure for Holden Hills Phase 1.
+Added: The first units of The Saint George were available for occupancy in April 2025.
+Added: All of these projects are expected to be completed in second-quarter 2025.
+Added: We have been focusing intently on the development of Holden Hills Phase 1 and on the development plans and future financing of Holden Hills Phase 2.
+Added: During the quarter, we entered into a contract to sell our stabilized West Killeen Market retail property for $13.3 million.
+Added: After repaying the project loan, we expect the sale to generate approximately $7.7 million of pre-tax net cash proceeds.
+Added: We continued to advance entitlements on our other development projects and to operate our four stabilized retail projects.
+Added: We also took steps to advance relationships and opportunities to position us to capture value when market conditions improve.
+Added: In addition, during 2024 and first-quarter 2025, we returned $2.0 million to our stockholders through our share repurchase program.
+Added: Changes to U.S.
+Added: tariffs and trade policies during first-quarter 2025 have introduced additional uncertainties regarding future U.S.
+Added: real estate market conditions.
+Added: Refer to Part II, Item 1A.
+Added: “Risk Factors” herein.
+Added: We believe we have sufficient liquidity and access to capital to sell properties when market conditions are favorable to us and to hold or refinance our properties or to continue to develop our properties, as applicable, through the market cycle.
We expect to re-evaluate our strategy as sales and development progress on the projects in our portfolio and as market conditions continue to evolve.
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Sources of revenue and income.
−Removed: Our Real Estate Operations segment encompass our activities associated with our entitlement, development, and sale of real estate.
+Added: Stratus has two operating segments:
+Added: Real Estate Operations and Leasing Operations.
+Added: We operate primarily in Austin, Texas and in other select markets in Texas.
+Added: Our Real Estate Operations segment encompasses our activities associated with our entitlement, development, and sale of real estate.
The current focus of our real estate operations is multi-family and single-family residential properties and residential-centric mixed-use properties.
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In addition to our developed properties, we have a development portfolio that consists of approximately 1,500 acres of commercial and multi-family and single-family residential projects under development or undeveloped land held for future use.
−Removed: 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 Real Estate Operations segment does not have exposure to office space.
+Added: Revenue in our Leasing Operations segment is generated from leasing space at retail and mixed-use properties and residences in the multi-family properties that we developed.
Our Leasing Operations segment does not have exposure to office space.
We also generate income from the sale of our leased properties from time to time, depending on market conditions.
−Removed: Summary financial results for the third-quarter and first nine months of 2024.
−Removed: Our revenues totaled $8.9 million in third-quarter 2024 and $43.9 million for the first nine months of 2024, compared with $3.7 million in third-quarter 2023 and $13.0 million for the first nine months of 2023.
−Removed: The $27.2 million increase in revenues from our Real Estate Operations segment in the first nine months of 2024, compared to the first nine 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 four Amarra Villas homes for an aggregate of $15.2 million in the first nine months of 2024, compared with the sale of one Amarra Villas home in the first nine months of 2023 for $2.5 million.
−Removed: The $4.0 million in revenues in our Real Estate Operations segment in third-quarter 2024, compared to no revenues in third-quarter 2023, is primarily a result of the sale of one Amarra Villas home in the third quarter of 2024 for $4.0 million compared to no sales in the prior period.
−Removed: In addition, revenues from our Leasing Operations segment increased in both the three and nine-month 2024 periods, primarily reflecting new revenue from The Saint June, which had minimal rental revenue in the 2023 periods as it commenced operations in mid-2023, as well as increased revenue from Kingwood Place and Lantana Place – Retail primarily due to new leases.
−Removed: During the three and nine months ended September 30, 2024, we recorded a $1.6 million pre-tax gain on the sale of Magnolia Place – Retail.
−Removed: Refer to “Results of Operations” below for further discussion of our segments.
−Removed: Our net loss attributable to common stockholders totaled $0.4 million, or $0.05 per diluted share in third-quarter 2024, compared to $2.8 million, or $0.36 per diluted share, in third-quarter 2023.
−Removed: During the first nine months of 2024 our net income attributable to common stockholders totaled $2.5 million, or $0.30 per diluted share, compared to net loss attributable to common stockholders of $13.9 million, or $1.74 per diluted share, during the first nine months of 2023.
+Added: Summary financial results for first-quarter 2025.
+Added: Our revenues totaled $5.0 million in first-quarter 2025 compared with $26.5 million in first-quarter 2024.
+Added: The $22.1 million decrease in revenues from our Real Estate Operations segment in first-quarter 2025, compared to first-quarter 2024, was primarily a result of the sales of 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 to no sales in first-quarter 2025.
+Added: Revenues from our Leasing Operations segment increased by $634 thousand in first-quarter 2025, primarily reflecting increased revenue from The Saint June, which was in the process of leasing up in first-quarter 2024, partially offset by a decrease in revenue from Magnolia Place – Retail, which was sold in third-quarter 2024.
+Added: Refer to “Results of Operations” below for further discussion of the results of operations of our segments.
+Added: Our net loss attributable to common stockholders totaled $(2.9) million, or $(0.36) per diluted share in first-quarter 2025, compared to net income attributable to common stockholders of $4.6 million, or $0.56 per diluted share, in first-quarter 2024.
RECENT DEVELOPMENT ACTIVITIES
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The Villas at Amarra Drive (Amarra Villas) project is a 20-unit development in Barton Creek.
−Removed: 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.
−Removed: In second-quarter 2024, we sold another Amarra Villas home for $3.6 million.
−Removed: In third-quarter 2024, we sold one Amarra Villas home for $4.0 million, leaving one completed home in inventory as of September 30, 2024.
−Removed: In November 2024, we sold one Amarra Villas home
−Removed: for $3.8 million.
−Removed: Construction on the last four homes continues to progress and is expected to be completed in fourth-quarter 2024.
−Removed: As of November 8, 2024, five homes remain available for sale.
+Added: In first-quarter 2024, we sold two of the homes for a total of $7.6 million.
+Added: As of March 31, 2025, we have three completed homes in inventory and construction on the last two homes continues to progress and is expected to be completed in second-quarter 2025.
+Added: As of May 9, 2025, five homes remain available for sale.
The Saint June.
In third-quarter 2021, we began construction on The Saint June, a 182-unit luxury garden-style multi-family project within the Amarra development.
−Removed: The Saint June is comprised of multiple buildings featuring one-, two- and three- bedroom units for lease with amenities that include a resort-style clubhouse, fitness center, pool and extensive green space.
The first units were available for occupancy in July 2023, and construction was completed in fourth-quarter 2023.
−Removed: As of November 8, 2024, occupancy of The Saint June was approximately 97 percent.
−Removed: Holden Hills.
−Removed: 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 luxury residences to be developed in multiple phases with a focus on health and wellness, sustainability and energy conservation.
−Removed: 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.
−Removed: Construction is progressing well for Holden Hills’ road and utility infrastructure.
−Removed: We are currently continuing development of Phase I of our Holden Hills project according to our previously disclosed plans and anticipate that we could start building homes and/or selling home sites in late 2025, assuming regulators timely fulfill their permit processing obligations.
−Removed: As a result of the ETJ (as defined below) process described below, our development plans for Holden Hills are under review.
+Added: We completed the lease-up of The Saint June during 2024.
+Added: Holden Hills Phase 1.
+Added: Our final large residential development within the Barton Creek community, Holden Hills Phase 1, consists of 495 acres.
+Added: The community has been designed to feature unique luxury residences to be developed in multiple sections with a focus on health and wellness, sustainability and energy conservation.
+Added: We entered into a limited partnership agreement with a third-party equity investor for Holden Hills Phase 1 in January 2023, and in February 2023 obtained construction financing for road and utility infrastructure of Holden Hills Phase 1.
+Added: Construction on the road and utility infrastructure is expected to be completed in second-quarter 2025.
+Added: As a result of the removal of Holden Hills Phase 1 from Austin’s extraterritorial jurisdiction (ETJ) pursuant to Texas Senate Bill 2038 (the ETJ Law), as described below, our development plans for portions of Holden Hills Phase 1 are being adjusted to benefit from the new regulatory scheme.
+Added: We anticipate being in a position to start building homes and/or selling home sites in late 2025, assuming regulators timely fulfill their permit processing obligations and there are no further changes in the regulatory environment.
For additional discussion, refer to Items 1.
“Business and Properties” in our 2024 Form 10-K.
−Removed: 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 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.
−Removed: In addition, due to the ETJ process described below, our development plans for Section N are under review.
+Added: Further, we entered into a development agreement with the Holden Hills Phase 1 partnership (Development Agreement) that provides that, as part of the road and utility infrastructure, the Holden Hills Phase 1 partnership will construct certain street, drainage, water, sidewalk, electric and gas improvements in order to extend the Tecoma Circle roadway on Holden Hills Phase 2 land owned by us from its current terminus to Southwest Parkway, estimated to cost approximately $15.6 million (the Tecoma Improvements).
+Added: As of March 31, 2025, the remaining costs to complete the Tecoma Improvements totaled $3.0 million, of which our share totaled $1.8 million.
+Added: Holden Hills Phase 2.
+Added: Using an entitlement strategy similar to that used for Holden Hills Phase 1, we continue to progress the development plans and future financing for Holden Hills Phase 2, our approximately 570-acre tract located along Southwest Parkway in the southern portion of the Barton Creek community adjacent to Holden Hills Phase 1.
+Added: We have removed the majority of Holden Hills Phase 2 from Austin’s ETJ pursuant to the ETJ Law, as described below, and are adjusting our development plans to benefit from the new regulatory scheme.
+Added: Holden Hills Phase 2 is being designed as a mixed-use project, with extensive residential uses, coupled with limited entertainment and hospitality uses, surrounded by extensive outdoor recreational and greenspace amenities.
+Added: The new regulatory scheme is expected to result in a significant increase in development density as compared to our prior plans.
ETJ Process .
−Removed: Texas Senate Bill 2038 (the ETJ Law) became effective September 1, 2023.
−Removed: We have completed the statutory process to remove all of our relevant land subject to development, including primarily Holden Hills and Section N from the extraterritorial jurisdiction (ETJ) of the City of Austin, as permitted by the ETJ Law.
−Removed: We have also made filings with Travis County to grandfather the Holden Hills and Section N projects under most laws in effect in Travis County at the time of the filings.
+Added: The ETJ Law became effective September 1, 2023.
+Added: We have completed the statutory process to remove all of our relevant land subject to development, including primarily Holden Hills Phases 1 and 2, from the extraterritorial jurisdiction (ETJ) of the City of Austin, as permitted by the ETJ Law.
+Added: We have also made filings with Travis County to grandfather Holden Hills Phases 1 and 2 under most laws in effect in Travis County at the time of the filings.
A number of cities in Texas have brought lawsuits challenging the ETJ Law.
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.
−Removed: In light of the ETJ Law, we have begun work on assessing potential revisions to our development plans for Holden Hills and Section N.
−Removed: For additional discussion, refer to Item 1A.
+Added: In light of the ETJ Law, our development plans for portions of Holden Hills Phases 1 and 2 are being adjusted.
+Added: For additional discussion, refer to Part I, Item 1A.
“Risk Factors” in our 2024 Form 10-K.
The Saint George
−Removed: In fourth-quarter 2021, we purchased the land for The Saint George, a 316-unit luxury wrap-style, multi-family project in north-central Austin.
+Added: The Saint George is a 316-unit luxury wrap-style, multi-family project in north-central Austin.
+Added: We purchased the land and entered into third-party equity financing for the project in December 2021.
We entered into a construction loan for this project and began construction in third-quarter 2022.
−Removed: We currently expect to achieve substantial completion in fourth-quarter 2024.
+Added: The first units were available for occupancy in April 2025 and the project is expected to be completed in second-quarter 2025.
+Added: Refer to Note 10 for information regarding remediation and repairs for a water leak at the project that occurred in April 2025.
Lakeway Multi-Family
After extensive negotiation with the City of Lakeway, utility suppliers and neighboring property owners, during 2023 we secured the right to develop a multi-family project on approximately 35 acres of undeveloped property in Lakeway, Texas located in the greater Austin area.
−Removed: The multi-family project is expected to utilize the road, drainage and utility infrastructure we are required to build, subject to certain conditions, which is secured by a $2.3 million letter of credit under our revolving credit facility.
−Removed: Our goal is to commence construction on the multi-family project or to sell the site, as soon as infrastructure construction, which has not yet started, is complete and market conditions warrant.
+Added: The multi-family project is expected to utilize the road, drainage and utility infrastructure we are required to build, subject to certain conditions, which is secured by a $2.3 million
+Added: letter of credit under our revolving credit facility.
Refer to Note 6 and “Capital Resources and Liquidity – Revolving Credit Facility and Other Financing Arrangements” below for additional discussion.
−Removed: In third-quarter 2021, we purchased the land and announced plans for The Annie B, a proposed luxury high-rise project in downtown Austin to be developed as a 400-foot tower, consisting of approximately 420,000 square feet
−Removed: with 316 luxury residential units.
+Added: In third-quarter 2021, we purchased the land and announced plans for The Annie B, a proposed luxury high-rise project in downtown Austin to be developed as a 400-foot tower, consisting of approximately 420,000 square feet with 316 luxury residential units.
+Added: Stratus Block 150, L.P.
+Added: raised third-party equity capital and entered into a loan to finance part of the costs of land acquisition and budgeted pre-development costs for The Annie B.
We continue to work to finalize our development plans and to evaluate whether the project is most profitable as a for rent or for sale product.
1 unchanged sentence
Magnolia Place
−Removed: In February 2024, we completed the sale of approximately 47 acres of undeveloped land in Magnolia, Texas planned for a second phase of retail development, all remaining pad sites and up to 600 multi-family units, for $14.5 million.
+Added: In first-quarter 2024, we completed the sale of 47 acres of undeveloped land in Magnolia, Texas planned for a second phase of retail development, all remaining pad sites and up to 600 multi-family units, for $14.5 million.
In connection with the sale, the Magnolia Place construction loan, which had a balance of $8.8 million was repaid.
4 unchanged sentences
We continue to evaluate options for the 21-acre multi-family component of Jones Crossing, an H-E-B grocery anchored, mixed-use development located in College Station, Texas.
−Removed: During 2023, we separated the ground lease for the multi-family parcel from the primary ground lease.
Recent Commercial Activities
2 unchanged sentences
“Business and Properties” and to “Recent Development Activities” in MD&A in our 2024 Form 10-K.
−Removed: As described above under the heading “Recent Residential Activities,” our Section N project has been envisioned to include a significant commercial component.
−Removed: Due to the ETJ process, our development plans for Section N are under review.
+Added: Holden Hills Phase 2
+Added: As described above under the heading “Recent Residential Activities,” Holden Hills Phase 2 has been envisioned to include a significant commercial component.
+Added: Due to the ETJ process, we are adjusting our development plans for Holden Hills Phase 2.
Stabilized Retail Projects
−Removed: As of September 30, 2024, we also owned and operated the following stabilized retail projects that we developed:
+Added: As of March 31, 2025, 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 September 30, 2024, we had signed leases for approximately 74 percent of the 44,493-square-foot retail space.
−Removed: • 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.
−Removed: As of September 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.
+Added: As of March 31, 2025, we had signed leases for approximately 74 percent of the 44,493-square-foot retail space.
+Added: In first-quarter 2025, we entered into a contract to sell West Killeen Market for $13.3 million, which we expect to close in second-quarter 2025.
+Added: After repaying the project loan, we expect the sale to generate approximately $7.7 million of pre-tax net cash proceeds.
+Added: • Jones Crossing 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 March 31, 2025, 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.
−Removed: The Jones Crossing site has additional commercial development potential of approximately 104,750 square feet of commercial space.
−Removed: • 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 September 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.
+Added: The Jones Crossing site has additional commercial development potential of approximately 104,750 square feet of commercial space on approximately 22 undeveloped acres.
+Added: • Lantana Place is part of our mixed-use development project within the Lantana community south of Barton Creek in Austin, Texas.
+Added: As of March 31, 2025, 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 September 30, 2024, we had signed leases for substantially all of the retail space, including the H-E-B grocery store.
+Added: As of March 31, 2025, we had signed leases for substantially all of the retail space,
+Added: 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: As previously disclosed, we had been testing the market for potential sales of West Killeen Market, Magnolia Place – Retail, Lantana Place – Retail and Kingwood Place.
−Removed: In first-quarter 2024, we entered into a contract to sell West Killeen Market for $12.8 million;
−Removed: however, in June 2024 the buyer failed to close and we elected to terminate the contract.
−Removed: In third-quarter 2024, we closed on the sale of Magnolia Place – Retail for $8.9 million.
−Removed: The sale generated pre-tax net cash proceeds of approximately $8.6 million and a pre-tax gain of $1.6 million.
−Removed: We have paused
−Removed: exploring the sales of West Killeen Market, Lantana Place – Retail and Kingwood Place, deciding to retain these cash-flowing properties at this time.
Potential Development Projects and Pipeline
−Removed: Our development plans for The Annie B, Section N and The Saint Julia will require significant additional capital, which we currently intend to pursue through project-level debt and third-party equity capital arrangements through joint ventures in which we receive development management fees and asset management fees and with our potential returns increasing above our relative equity interest in each project as negotiated return hurdles are achieved.
−Removed: We anticipate seeking additional debt to finance the development of Phase II of Holden Hills.
+Added: Our development plans for The Annie B, Holden Hills Phase 2, The Saint Julia and multi-family projects at Lakeway and College Station will require significant additional capital, which we currently intend to pursue through project-level debt and third-party equity capital arrangements through joint ventures in which we receive development management fees and asset management fees and with our potential returns increasing above our relative equity interest in certain projects as negotiated return hurdles are achieved.
+Added: We anticipate seeking additional debt to finance the future development in Holden Hills Phase 1.
We are also pursuing other development projects.
2 unchanged sentences
Market Conditions
−Removed: Our industry has been experiencing inflation, higher borrowing costs, tightened bank credit, more limited availability of equity capital, increased construction costs, higher labor costs, labor shortages, and supply chain constraints.
−Removed: Inflation in the U.S.
−Removed: increased rapidly during 2021 through June 2022.
−Removed: Since June 2022, the rate of inflation generally has declined;
−Removed: however, it has remained above the U.S.
−Removed: Federal Reserve’s target inflation rate of two percent through October 2024.
−Removed: 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 (although in September and November 2024, the Federal Reserve lowered the federal funds target rate by 50 basis points and 25 basis points, respectively).
−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 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: Our industry has been experiencing construction and labor cost increases, supply chain constraints, labor shortages, higher borrowing costs and tightening bank credit.
+Added: Inflation increased rapidly during 2021 through June 2022.
+Added: Since June 2022, the rate of inflation generally has declined but has generally remained higher than the Federal Reserve’s target rate of inflation of two percent.
+Added: 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.
+Added: As inflation began to decline, the Federal Reserve began to focus on improving the labor market and price stability.
+Added: Between September 2024 and December 2024, the Federal Reserve lowered the federal funds target rate by 100 basis points on a cumulative basis.
+Added: Elevated inflation and interest rates increase our costs of materials, services, labor and capital.
+Added: Changing U.S.
+Added: tariffs and trade policies commencing in first-quarter 2025 present additional risks to our business.
+Added: Refer to Part II, Item 1A.
+Added: “Risk Factors” herein.
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.
1 unchanged sentence
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 and project delays have required us to make operating loans and an equity contribution 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 and an equity contribution to some of our joint ventures, and we expect to make additional operating loans and capital contributions during the next 12 months.
Refer to Part I, Item 1A.
−Removed: “Risk Factors” of our 2023 Form 10-K for more information regarding our risk factors.
+Added: “Risk Factors” of our 2024 Form 10-K and Part II, Item 1A.
+Added: “Risk Factors” herein for more information regarding our risk factors.
Austin, our primary market, has experienced significant growth in demand for residential projects in recent years, particularly due to growth in the technology-related sector in the region and, during 2020 and 2021 related in part to COVID-19 pandemic-influenced in-migration.
−Removed: Although prices and demand for residential real estate in the Austin area generally moderated and in some submarkets declined during 2023 and the first nine months of 2024, we believe the residential market in Austin remains attractive compared to other U.S.
−Removed: urban markets.
−Removed: Federal Reserve lowered rates by 50 basis points in September 2024 and by 25 basis points in November 2024, and there could be additional cuts in the future, 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 over the next 12 months.
+Added: The expanding economy resulted in rising demand for residential housing and retail services.
+Added: This surge in population growth spurred a rapid increase in multi-family construction which caused rental rates in 2024 to drop from the previous year while occupancy rates have remained high.
+Added: Despite macroeconomic challenges, we continue to see reasons for optimism regarding real estate market conditions in our Texas markets over the next 12 months, as rents have been strong at The Saint June, absorption of new downtown Austin multi-family units has been encouraging and we continue to see some opportunities for sales transactions for our properties.
RESULTS OF OPERATIONS
−Removed: We are continually evaluating the development and sale potential of our properties and will continue to consider opportunities to enter into transactions involving our properties, including possible sales, joint ventures, refinancings or other arrangements.
+Added: We are continually evaluating the development and sale potential of our properties and will continue to consider opportunities to enter into transactions involving our properties, including possible joint ventures, refinancings or other arrangements.
As a result, and because of numerous factors affecting our business activities as described herein and in our 2024 Form 10-K, our past operating results are not necessarily indicative of our future results.
−Removed: We use operating income or loss to measure the performance of our operating segments.
−Removed: 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 Nine Months Ended
−Removed: September 30, September 30,
−Removed: 2024 2023 2024 2023
+Added: Three Months Ended
Operating (loss) income:
2 unchanged sentences
Leasing Operations 1,958 1,349
−Removed: Corporate, eliminations and other b
+Added: General and administrative expenses b
(4,051) (4,465)
−Removed: Operating loss (1,519) (3,329) (754) (14,274)
−Removed: Total comprehensive loss attributable to noncontrolling interests 1,050 373 2,958 853
+Added: Operating (loss) income $ (3,595) $ 3,685
+Added: Net (loss) income $ (3,757) $ 3,697
Net (loss) income attributable to common stockholders $ (2,875) $ 4,552
−Removed: $ (364) $ (2,844) $ 2,463 $ (13,946)
Includes sales commissions and other revenues together with related expenses.
−Removed: Includes consolidated general and administrative expenses and eliminations of intersegment amounts.
+Added: Includes employee compensation and other costs.
We have two operating segments:
1 unchanged sentence
The following is a discussion of our operating results by segment.
+Added: We use operating (loss) income before general and administrative expenses to measure the performance of our business segments.
+Added: General and administrative expenses, which primarily consist of employee salaries, wages and other costs, are managed on a consolidated basis and are not allocated to Stratus’ operating segments.
+Added: The following segment information reflects management determinations that may not be indicative of what the actual financial performance of each segment would be if it were an independent entity.
Real Estate Operations
The following table summarizes our Real Estate Operations segment results (in thousands):
−Removed: Three Months Ended Nine Months Ended
−Removed: September 30, September 30,
−Removed: 2024 2023 2024 2023
+Added: Three Months Ended
Developed property sales $ — $ 7,623
2 unchanged sentences
Total revenues 25 22,123
−Removed: Cost of sales, excluding depreciation and amortization (5,344) (1,467) (25,046) (8,651)
+Added: Cost of real estate sold — (13,949)
+Added: Property taxes and insurance (357) (315)
+Added: Lease expense (285) (285)
+Added: Professional fees (363) (266)
+Added: Allocated overhead costs (285) (249)
+Added: Other segment items (190) (214)
Depreciation and amortization (47) (44)
1 unchanged sentence
Developed Property Sales.
−Removed: The following tables summarize our developed property sales (dollars in thousands):
−Removed: Three Months Ended September 30,
−Removed: Homes Revenues Average Cost Per Home Homes Revenues Average Cost Per Home
−Removed: Amarra Drive:
−Removed: Amarra Villas homes 1 $ 3,950 $ 3,266 — $ — $ —
−Removed: Total Residential 1 $ 3,950 — $ —
−Removed: Nine Months Ended September 30,
+Added: The following table summarizes our developed property sales (dollars in thousands):
+Added: Three Months Ended March 31,
Homes Revenues Average Cost Per Home Homes Revenues Average Cost Per Home
1 unchanged sentence
Amarra Villas homes — $ — $ — 2 $ 7,623 $ 3,130
−Removed: Total Residential 4 $ 15,198 1 $ 2,493
−Removed: The increase in revenues from developed property sales for third-quarter 2024, compared to third-quarter 2023, reflects the sale of one Amarra Villas home in third-quarter 2024 for $4.0 million compared to no sales in third-quarter 2023.
−Removed: The increase in revenues for the first nine months of 2024 compared to the first nine months of 2023, reflects the sales of four Amarra Villas homes in the 2024 period compared to the sale of one Amarra Villas home in the 2023 period, as well as an increase in average sales price by approximately 52 percent, from $2.5 million per home in the first nine months of 2023 to $3.8 million per home in the first nine months of 2024.
−Removed: In November 2024, we sold another Amarra Villas home for $3.8 million.
−Removed: No assurances can be given that future sale prices will be as high as sale prices to date in 2024.
+Added: Total — $ — 2 $ 7,623
+Added: The decrease in revenues from developed property sales for first-quarter 2025, compared to first-quarter 2024, reflects the sale of two Amarra Villas homes in first-quarter 2024 compared to no sales in first-quarter 2025.
Undeveloped Property Sales.
−Removed: In first-quarter 2024, we completed the sale of approximately 47 acres of undeveloped land at Magnolia Place that was planned for a second phase of retail development, all remaining pad sites and up to 600 multi-family units, for $14.5 million.
−Removed: Real Estate Cost of Sales.
−Removed: 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 $5.3 million in third-quarter 2024, compared to $1.5 million in third-quarter 2023, primarily reflecting the sale of one Amarra Villas home in third-quarter 2024 while there were no property sales in third-quarter 2023.
−Removed: Cost of sales increased to $25.0 million for the first nine months of 2024, compared to $8.7 million for the first nine months of 2023, primarily reflecting the sale of undeveloped property at Magnolia Place and the sales of four Amarra Villas homes in the first nine months of 2024 compared with no undeveloped property sales and the sale of one Amarra Villas home in the first nine months of 2023.
−Removed: In addition, the average cost of the Amarra Villas homes sold increased by approximately 41 percent.
−Removed: Cost of sales for the three and nine-month periods in 2024 include a $721 thousand charge to write off previously capitalized costs related to a change in development plans for one of our properties.
+Added: In first-quarter 2024, we completed the sale of 47 acres of undeveloped land at Magnolia Place that was planned for a second phase of retail development, all remaining pad sites and up to 600 multi-family units, for $14.5 million.
+Added: There were no undeveloped property sales in first-quarter 2025.
+Added: Real Estate Operations Expenses.
+Added: Real Estate Operations expenses include cost of real estate sold, property taxes and insurance, lease expense, professional fees, allocated overhead costs, other segment items and depreciation and amortization.
+Added: Other segment items primarily include advertising, property owner association fees, maintenance and utilities.
+Added: Cost of real estate sold is directly related to property sales.
+Added: Cost of real estate sold decreased $13.9 million in first-quarter 2025, compared to first-quarter 2024, primarily due to the sale of undeveloped property at Magnolia Place and the sales of two Amarra Villas homes in first-quarter 2024 compared to no property sales in first-quarter 2025.
Leasing Operations
The following table summarizes our Leasing Operations segment results (in thousands):
−Removed: Three Months Ended Nine Months Ended
−Removed: September 30, September 30,
−Removed: 2024 2023 2024 2023
+Added: Three Months Ended
Rental revenue $ 5,018 $ 4,384
−Removed: Rental cost of sales, excluding depreciation (1,964)
−Removed: (1,381) (5,384) (3,786)
+Added: Property taxes and insurance (807) (724)
+Added: Maintenance and repairs (509) (362)
+Added: Property management fees and payroll (285) (203)
+Added: Utilities (40) (159)
+Added: Other segment items (272) (230)
Depreciation (1,347) (1,357)
1 unchanged sentence
Operating income
+Added: $ 1,958 $ 1,349
Rental Revenue.
−Removed: In the 2024 periods, rental revenue primarily included revenue from Lantana Place – Retail, Kingwood Place, The Saint June, Jones Crossing – Retail, West Killeen Market and Magnolia Place – Retail.
−Removed: In the 2023 periods, rental revenue primarily included revenue from Lantana Place – Retail, Kingwood Place, Jones Crossing – Retail, West Killeen Market, Magnolia Place – Retail and The Saint June.
−Removed: The increase in rental revenue in the 2024 periods, compared with the 2023 periods, primarily reflects revenue from The Saint June, which had minimal rental revenue in the 2023 periods as it commenced operations in mid-2023, as well as increased revenue at Kingwood Place and Lantana Place – Retail, primarily due to new leases.
−Removed: Rental Cost of Sales and Depreciation.
−Removed: 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.
−Removed: Gain on Sale of Assets.
−Removed: In third-quarter 2024, we closed on the sale of Magnolia Place – Retail for $8.9 million.
−Removed: The sale generated pre-tax net cash proceeds of approximately $8.6 million and a pre-tax gain of $1.6 million.
−Removed: Corporate, Eliminations and Other
−Removed: 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 were $3.4 million in third-quarter 2024 and $11.7 million for the first nine months of 2024, compared to $3.2 million in third-quarter 2023 and $12.0 million for the first nine months of 2023.
+Added: In first-quarter 2025 and first-quarter 2024, rental revenue primarily included revenue from our retail and mixed-use projects Lantana Place – Retail, Kingwood Place, Jones Crossing – Retail and West Killeen Market and our multi-family property, The Saint June.
+Added: In first-quarter 2024, rental revenue also included revenue from Magnolia Place – Retail, which was sold in third-quarter 2024.
+Added: The increase in rental revenue in first-quarter 2025, compared with first-quarter 2024, primarily reflects increased revenue from The Saint June, which was in the process of leasing up in first-quarter 2024, partially offset by a decrease in revenue from Magnolia Place – Retail, which was sold in third-quarter 2024.
+Added: Leasing Operations Expenses.
+Added: Leasing Operations expenses include property taxes and insurance, maintenance and repairs, property management fees and payroll, utilities, other segment items and depreciation.
+Added: Other segment items primarily includes amortization of leasing costs, property owner association fees, professional and consulting fees, and office and computer equipment.
Non-Operating Results
Interest Expense, Net.
−Removed: Interest costs (before capitalized interest) totaled $4.0 million in third-quarter 2024 and $11.9 million for the first nine months of 2024, compared with $3.4 million in third-quarter 2023 and $8.7 million for the first nine months of 2023.
−Removed: 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.
−Removed: As of September 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 nine months of 2024, although interest rates on our loans have declined slightly since the Federal Reserve lowered interest rates by 50 basis points in September 2024.
−Removed: In November 2024, the Federal Reserve further lowered interest rates by 25 basis points.
−Removed: All of the interest costs were capitalized for all periods presented.
−Removed: Capitalized interest is primarily related to development activities at our Barton Creek properties (primarily Amarra Villas, Holden Hills and Section N) and The Saint George for the 2024 periods.
−Removed: Capitalized interest was primarily related to development activities at our Barton Creek properties (primarily Holden Hills, Section N and The Saint June), The Saint George and The Annie B for the 2023 periods.
+Added: Interest costs (before capitalized interest) totaled $3.8 million in first-quarter 2025 compared with $4.0 million in first-quarter 2024.
+Added: Interest costs in first-quarter 2025 were lower, compared to first-quarter 2024, primarily reflecting lower interest rates partially offset by an increase in average debt balances.
+Added: As of March 31, 2025, all of our debt was variable-rate debt, and for all of such debt, the interest rates have decreased over the past year primarily from amending or refinancing loans with lower rates over the last six months as well as overall interest rates declining.
+Added: All of our interest costs in first-quarter 2025 and first-quarter 2024 were capitalized.
+Added: Capitalized interest in first-quarter 2025 is primarily related to development activities at Barton Creek (primarily Holden Hills Phases 1 and 2) and The Saint George.
+Added: Capitalized interest in first-quarter 2024 is primarily related to development activities at Barton Creek (primarily Holden Hills Phases 1 and 2 and The Saint June), The Saint George and The Annie B.
Provision for Income Taxes.
−Removed: We recorded a provision for income taxes of $58 thousand in third-quarter 2024 and $0.2 million for the first nine months of 2024, compared to $0.4 million in third-quarter 2023 and $2.0 million for the first nine months of 2023.
+Added: We recorded provisions for income taxes of $30 thousand in first-quarter 2025 and $102 thousand in first-quarter 2024.
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 $1.1 million in third-quarter 2024 and $3.0 million for the first nine months of 2024, compared to $0.4 million in third-quarter 2023 and $0.9 million for the first nine months of 2023.
−Removed: The increases in both periods were primarily
−Removed: due to increased interest expense for Stratus Block 150, L.P., and The Saint June, L.P., and initial operating expenses for The Saint George Apartments, L.P., which is expected to be substantially completed in fourth-quarter 2024.
+Added: Our partners' share of losses totaled $0.9 million in both first-quarter 2025 and first-quarter 2024.
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 Nine Months Ended September 30, 2024 and 2023
+Added: Comparison of Cash Flows for the Three Months Ended March 31, 2025 and 2024
Operating Activities.
−Removed: Cash used in operating activities totaled $2.4 million for the first nine months of 2024, compared with $39.3 million for the first nine months of 2023.
−Removed: Operating cash flow improved as a result of higher revenue from property sales in the first nine months of 2024.
−Removed: Expenditures for purchases and development of real estate properties totaled $22.9 million for the first nine months of 2024 and $34.7 million for the first nine months of 2023, both primarily related to development of our Barton Creek properties, particularly Amarra Villas and Holden Hills.
+Added: Cash (used in) provided by operating activities totaled $(13.5) million in first-quarter 2025, compared with $6.5 million in first-quarter 2024.
+Added: The decrease in operating cash flow is primarily due to property sales in first-quarter 2024 compared to no property sales in first-quarter 2025.
+Added: Expenditures for purchases and development of real estate properties totaled $7.2 million in first-quarter 2025, primarily related to development of Holden Hills Phase 1, and $9.0 million in first-quarter 2024, primarily related to development of our Barton Creek properties, particularly Holden Hills Phase 1 and Amarra Villas.
+Added: The cash outflow resulting from the decrease in accounts payable, accrued liabilities and other in first-quarter 2025 and first-quarter 2024 is primarily related to the timing of property tax payments.
Investing Activities.
−Removed: Cash used in investing activities totaled $15.0 million for the first nine months of 2024 and $36.9 million for the first nine months of 2023.
−Removed: Capital expenditures totaled $23.0 million for the first nine months of 2024, primarily for The Saint George and to a lesser extent for tenant improvements at Lantana Place – Retail, and $36.2 million for the first nine months of 2023, primarily for The Saint George and The Saint June.
−Removed: These uses of cash in the first nine months of 2024 were partially offset by $8.6 million in proceeds from the sale of Magnolia Place – Retail.
+Added: Cash used in investing activities totaled $4.7 million in first-quarter 2025 and $8.4 million in first-quarter 2024.
+Added: Capital expenditures totaled $4.5 million in first-quarter 2025, primarily for The Saint George, and $8.1 million in first-quarter 2024, primarily for The Saint George and to a lesser extent for tenant improvements at Lantana Place – Retail.
Financing Activities.
−Removed: Cash provided by financing activities totaled $5.3 million for the first nine months of 2024 and $66.9 million for the first nine months of 2023.
−Removed: During both the first nine months of 2024 and 2023, we had no net borrowings on the Comerica Bank revolving credit facility.
−Removed: During the first nine months of 2024, net borrowings on other project and term loans totaled $2.6 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.
−Removed: During the first nine months of 2023, net borrowings on other project and term loans totaled $33.2 million, primarily reflecting borrowings on The Saint George construction loan, The Saint June construction loan and the Amarra Villas credit facility, partially offset by the payoff of the New Caney land loan.
−Removed: Refer to “Revolving Credit Facility and Other Financing Arrangements” below for a discussion of our outstanding debt at September 30, 2024.
−Removed: During the first nine months of 2024, we contributed additional capital of $400 thousand in cash, and the Class B limited partner contributed additional capital of $3.6 million in cash, each to The Saint George Apartments, L.P.
−Removed: to support the partnership’s ability to pay its construction loan interest, which had exceeded the amount budgeted due to interest rate increases over the past two years.
−Removed: During the first nine months of 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, 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.
−Removed: During the first nine months of 2024 and 2023, $0.4 million and $0.7 million, respectively, 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 September 30, 2024.
+Added: Cash provided by (used in) financing activities totaled $10.0 million in first-quarter 2025 and $(9.1) million in first-quarter 2024.
+Added: In first-quarter 2025, we had borrowings of $4.0 million on the Comerica Bank revolving credit facility and we had no borrowings on the facility in first-quarter 2024.
+Added: In first-quarter 2025, net borrowings on project and term loans totaled $9.1 million, primarily reflecting borrowings from The Saint George and Holden Hills Phase 1 construction loans and the refinancing of the Lantana Place construction loan and the Jones Crossing loan, partially offset by paydowns on The Annie B land loan.
+Added: In first-quarter 2024 net borrowings 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 Phase 1 construction loans and the Amarra Villas credit facility.
+Added: 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, 2025.
+Added: In first-quarter 2025, in connection with the refinancing of the Kingwood Place construction loan in November 2024, which generated additional cash proceeds, we paid distributions of $856 thousand to noncontrolling interest holders.
+Added: 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.
+Added: During first-quarter 2024, $0.4 million of accrued dividends for
+Added: unvested restricted stock units (RSUs) were paid to the holders upon the vesting of the RSUs, and during first-quarter 2025, $236 thousand of accrued dividends for unvested RSUs were paid to the holders upon the vesting of the RSUs, leaving $28 thousand of dividends accrued for unvested RSUs presented in accrued liabilities as of March 31, 2025.
The remaining accrued dividends will be paid to the holders of the RSUs as the RSUs vest.
−Removed: 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.
−Removed: During the first nine months of 2023, we spent $2.1 million on share repurchases under the program.
−Removed: 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 cost of $10.0 million at an average price of $25.68 per share.
−Removed: 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.
+Added: 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.
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.
−Removed: The timing, price and number of shares that may
−Removed: be repurchased under the program will be based on market conditions, applicable securities laws and other factors considered by management and the Capital Committee of the Board.
+Added: The timing, price and number of shares that may be repurchased under the program will be based on market conditions, applicable securities laws and other factors considered by management and the Capital Committee of the Board.
Share repurchases under the program may be made from time to time through solicited or unsolicited transactions in the open market, in privately negotiated transactions or by other means in accordance with securities laws.
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 September 30, 2024, we had not repurchased any shares under the new program.
+Added: In first-quarter 2025, we acquired 20,694 shares of our common stock for a total cost of $0.4 million at an average price of $19.78 per share.
+Added: As of March 31, 2025, we have acquired 83,380 shares of our common stock for a total cost of $2.0 million at an average price of $23.98 per share, and $3.0 million remains available for repurchases under the program.
Revolving Credit Facility and Other Financing Arrangements
−Removed: As of September 30, 2024, we had $19.6 million in cash and cash equivalents and restricted cash of $0.7 million, and no amount was borrowed under our revolving credit facility.
−Removed: Of the $19.6 million in consolidated cash and cash equivalents at September 30, 2024, $7.8 million held at certain consolidated subsidiaries is subject to restrictions on distribution to the parent company pursuant to project loan agreements.
−Removed: As of September 30, 2024, we had total debt of $182.9 million based on the principal amounts outstanding compared with $177.4 million at December 31, 2023.
−Removed: As of September 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.
−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 September 30, 2024.
−Removed: In 2023, we made operating loans totaling $2.3 million to Stratus Block 150, L.P.
−Removed: to facilitate the partnership’s ability to pay ongoing costs of The Annie B project during the pre-construction period.
−Removed: In February 2024 and August 2024, we made additional operating loans of $2.4 million and $1.1 million, respectively, to Stratus Block 150, L.P.
−Removed: The loans are subordinate to The Annie B land loan and must be repaid before distributions may be made to the partners.
−Removed: Until February 2024, the interest rate on the loans was the one-month Bloomberg Short Term Bank Yield Index (BSBY) Rate plus 5.00 percent.
−Removed: In February 2024, the interest rate on the loans was changed to the one-month Term Secured Overnight Financing Rate (SOFR) plus 5.00 percent.
−Removed: In June 2023, we made an operating loan of $750 thousand to The Saint June, L.P.
−Removed: to support the partnership’s ability to pay its construction loan interest, which had risen above the amount budgeted due to interest rate increases over the past two years.
−Removed: In October 2023 and January 2024, we made additional operating loans of $250 thousand and $339 thousand, respectively, to The Saint June, L.P., and the Class B Limited Partner made operating loans of $250 thousand and $339 thousand, respectively, to The Saint June, L.P.
−Removed: In April 2024, we made an additional operating loan of $85 thousand to The Saint June, L.P., and the Class B Limited Partner made an additional operating loan of $165 thousand to The Saint June, L.P.
−Removed: 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 third-quarter 2024, we contributed additional capital of $400 thousand in cash, and the Class B limited partner contributed additional capital of $3.6 million in cash, each to The Saint George Apartments, L.P.
−Removed: to support the partnership’s ability to pay its construction loan interest, which had exceeded the amount budgeted due to interest rate increases over the past two years.
−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 Term SOFR Rate plus 3.00 percent.
−Removed: 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.
−Removed: 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: 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.
−Removed: 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.
−Removed: Principal paydowns occur as homes are sold, and amounts are borrowed as homes are constructed.
−Removed: 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.
−Removed: In October 2024, The Saint June construction loan was modified to (i) extend the maturity date of the loan to October 2, 2025;
−Removed: (ii) increase the aggregate commitment under the loan by $2.0 million to $32.3 million;
−Removed: (iii) decrease the interest rate applicable margin from 2.85 percent to 2.35 percent;
−Removed: and (iv) require payment of an exit fee for prepayments and repayments of the loan of 1.00 percent of the principal amount of such amounts repaid, subject to certain exceptions.
−Removed: Accordingly, the loan bears interest at the one-month Term SOFR plus 2.35 percent, subject to a 3.50 percent floor.
−Removed: The loan is payable in monthly installments of principal and interest of approximately $40,000, with the outstanding principal due at maturity.
−Removed: The Saint June, L.P.
−Removed: has an option to extend the maturity of the loan for an additional 12-month term if certain conditions are met.
−Removed: After closing costs, The Saint June, L.P.
−Removed: intends to use the remaining portion of the $1.5 million proceeds of the loan primarily for partial repayment of operating loans to the partnership from Stratus and the Class B Limited Partner.
−Removed: During the first nine months of 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 $14.4 million on our Amarra Villas credit facility in connection with our sales of four Amarra Villas homes.
−Removed: We also increased borrowings under The Saint George, Holden Hills and The Saint June construction loans.
+Added: As of March 31, 2025, we had $12.0 million in cash and cash equivalents and restricted cash of $1.0 million.
+Added: We had borrowings of $4.0 million under our revolving credit facility.
+Added: Of the $12.0 million in consolidated cash and cash equivalents at March 31, 2025, $2.7 million held at certain consolidated subsidiaries is subject to restrictions on distribution to the parent company pursuant to project loan agreements.
+Added: In first-quarter 2025 and first-quarter 2024, development and asset management fees of $299 thousand and $580 thousand, respectively, were paid by the limited partnerships to Stratus.
+Added: The payments of these intercompany fees resulted in increases in cash available to the parent company, and the income to Stratus and cost to the partnerships have been eliminated in the consolidated financial statements.
+Added: As of March 31, 2025, we had total debt of $210.0 million based on the principal amounts outstanding compared with $196.7 million at December 31, 2024.
+Added: As of March 31, 2025, the maximum amount that could be borrowed under the Comerica Bank revolving credit facility was $54.1 million, resulting in availability of $34.5 million, net of letters of credit totaling $15.6 million issued under the revolving credit facility and borrowings of $4.0 million.
+Added: Letters of credit have been issued under the revolving credit facility, $13.3 million of which secure Stratus’ obligation to build certain roads and utilities facilities benefiting Holden Hills Phases 1 and 2 and $2.3 million of which secure Stratus’ obligations, which are subject to certain conditions, to construct and pay for certain utility infrastructure in Lakeway, Texas, which is expected to be utilized by the planned multi-family project on Stratus’ remaining land in Lakeway.
+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 March 31, 2025.
+Added: In January 2025, we entered into a modification of the Comerica Bank revolving credit facility to increase the aggregate amount of letters of credit that may be committed against the facility from $13.3 million to $15.6 million.
+Added: In February 2025, we entered into an additional $2.3 million letter of credit to secure our obligation to build certain roads and utilities facilities benefiting Holden Hills Phases 1 and 2.
+Added: In March 2025, we entered into an amendment to our revolving credit facility, which (i) extended the maturity date to March 27, 2027, (ii) lowered the interest rate to one-month Term SOFR plus 0.10 percent (with a floor of 0.50 percent), plus 3.00 percent and (iii) lowered the maximum loan amount to the lesser of $55.0 million or the borrowing base limit.
+Added: Stratus has made operating loans to Stratus Block 150, L.P.
+Added: to facilitate the partnership’s ability to pay ongoing costs, including debt service, of The Annie B project during the pre-construction period.
+Added: The loans bear interest at one-month Term Secured Overnight Financing Rate (SOFR) plus 5.00 percent, are subordinate to The Annie B land loan and must be repaid before distributions may be made to the partners.
+Added: In first-quarter 2024, Stratus made an operating loan of $2.4 million.
+Added: In first-quarter 2025, Stratus made an operating loan of $1.5 million.
+Added: As of March 31, 2025, Stratus’ operating loans outstanding to Stratus Block 150, L.P.
+Added: totaled $7.2 million.
+Added: Stratus and the Class B limited partner have made operating loans to The Saint June, L.P.
+Added: to support the partnership’s ability to pay its construction loan interest, which has exceeded the amount budgeted due to interest rate increases.
+Added: The loans bear interest at one-month Term SOFR plus 5.00 percent, are subordinate to The Saint June construction loan and, unless approved by all partners, no distributions may be made to the partners until the
+Added: operating loans are repaid.
+Added: In first-quarter 2024, Stratus made an operating loan of $339 thousand, and the Class B limited partner made an operating loan of $339 thousand.
+Added: No loans were made in first-quarter 2025.
+Added: As of March 31, 2025, Stratus’ and the Class B limited partner’s operating loans outstanding to The Saint June, L.P.
+Added: totaled $962 thousand and $493 thousand, respectively.
+Added: In January 2025, the Lantana Place construction loan was refinanced.
+Added: The new loan has a principal amount of $29.8 million and matures February 1, 2029.
+Added: The loan bears interest at one-month Term SOFR plus 2.35 percent, with a floor of 0.00 percent.
+Added: Payments of interest only on the loan are due monthly through January 31, 2026.
+Added: Thereafter, principal and interest payments are due monthly based on a 30-year amortization with the remaining unpaid principal and interest due at maturity.
+Added: After paying off the prior loan and paying property taxes and closing costs, Stratus received approximately $3.0 million in net cash proceeds.
+Added: In March 2025, the Jones Crossing loan was refinanced.
+Added: The new loan has a principal amount of $24.0 million and matures April 1, 2028.
+Added: The loan bears interest at one-month Term SOFR plus 1.95 percent, with a floor of 3.00 percent.
+Added: As required by the loan, College Station 1892 Properties, L.L.C.
+Added: purchased an interest rate cap with a Term SOFR strike rate equal to 5.00 percent, a notional amount of $24.0 million and an expiration date of April 1, 2026.
+Added: Upon expiration, as required by the loan, College Station 1892 Properties, L.L.C.
+Added: will enter into two subsequent, consecutive interest rate cap agreements, each with a one-year term, a notional amount of the maximum loan amount and a strike price commensurate to the then-current interest rate.
+Added: Payments of interest only on the loan are due monthly with the outstanding principal due at maturity.
+Added: College Station 1892 Properties, L.L.C.
+Added: may prepay all, but not a portion, of the loan;
+Added: provided that a prepayment prior to April 1, 2026 is subject to a yield maintenance premium payment.
+Added: After paying off the prior loan and closing costs, Stratus received approximately $1.2 million in net cash proceeds.
+Added: During first-quarter 2025, we increased borrowings under our revolving credit facility, and The Saint George and Holden Hills Phase 1 construction loans.
+Added: We also increased the principal amounts outstanding in connection with refinancing the Lantana Place construction loan and the Jones Crossing loan.
Refer to Note 6 for further discussion.
−Removed: We are currently discussing options to refinance the Kingwood Place construction loan, the Lantana Place construction loan and the Jones Crossing loan, with the expectation of tighter spreads and with potential additional proceeds.
−Removed: We expect to refinance the Kingwood Place construction loan on or before the December 6, 2024 maturity date.
−Removed: We also expect that, if market rates continue to decline, interest on our outstanding debt, all of which is variable rate, will continue to decline.
−Removed: Our debt agreements require compliance with specified financial covenants.
+Added: Most of our debt agreements require compliance with specified financial covenants.
Refer to Note 6 and MD&A in our 2024 Form 10-K for a discussion of the financial covenants in our debt agreements.
−Removed: As of September 30, 2024, we were in compliance with all of our financial covenants.
+Added: As of March 31, 2025, 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:
borrow additional money or issue guarantees;
−Removed: pay dividends, repurchase equity or make other distributions to equityholders;
+Added: pay dividends, repurchase equity or make other distributions to equity holders;
make loans, advances or other investments;
5 unchanged sentences
and engage in mergers, consolidations or other business combinations.
−Removed: 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.
+Added: Our Comerica Bank revolving credit facility, Amarra Villas credit facility, The Annie B land loan, The Saint George construction loan and the Holden Hills Phase 1 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 our current $5.0 million share repurchase program.
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.
Our future debt agreements, future refinancings of or amendments to existing debt agreements or other future agreements may restrict our ability to declare dividends or repurchase shares.
−Removed: 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.
−Removed: 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.
−Removed: The Kingwood Place construction loan has a 25.0 percent repayment guaranty, and The Saint George construction loan has a completion guaranty and a 25.0 percent repayment guaranty.
−Removed: The Holden Hills construction loan has a completion guaranty and a full repayment guaranty.
−Removed: The Annie B land loan, the Amarra Villas credit facility and the West Killeen Market construction loan each have a full repayment guaranty.
+Added: Our project loans are generally secured by all or substantially all of the assets of the project, and our Comerica Bank revolving credit facility is secured by substantially all of our assets other than those encumbered by separate project level financing.
+Added: In addition, we, as the parent company, are typically required to guarantee all or a significant portion of the payment of our project loans, in some cases until certain development milestones and/or financial conditions are met, in some cases on a full recourse basis and in other cases on a more limited recourse basis.
+Added: As of March 31, 2025, we, as the parent company, guaranteed the payment of all of the project loans, except for the Kingwood Place loan, the Jones Crossing loan, the Lantana Place loan and the West Killeen Market construction loan.
+Added: Our guarantees of the Kingwood Place loan, the Jones Crossing loan and the Lantana Place loan are generally limited to non-recourse carve-out obligations.
+Added: Our payment guarantee on The Saint June construction loan is limited to 50.0 percent and on The Saint George construction loan is limited to 25.0 percent, in each case
+Added: until certain conditions are met.
Refer to Note 6 to our consolidated financial statements in our 2024 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
−Removed: The following table summarizes our debt maturities based on the principal amounts outstanding as of September 30, 2024 (in thousands):
+Added: Debt Maturities and Other Contractual Obligations
+Added: The following table summarizes our debt maturities based on the principal amounts outstanding as of March 31, 2025 (in thousands):
2025 2026 2027 2028 2029 Thereafter Total
1 unchanged sentence
$ — $ — $ 4,000 $ — $ — $ — $ 4,000
+Added: Kingwood Place loan — — 33,000 — — — 33,000
+Added: Lantana Place loan
+Added: — 293 365 385 28,757 — 29,800
Jones Crossing loan
— — — 24,000 — 24,000
−Removed: The Annie B land loan — 12,600 — — — — 12,600
+Added: The Annie B land loan a
+Added: 11,970 — — — — — 11,970
Construction loans:
The Saint George
−Removed: The Saint June a
— 51,247 — — — — 51,247
−Removed: Kingwood Place b
+Added: The Saint June b
32,080 — — — — — 32,080
−Removed: Lantana Place 86 355 384 21,982 — — 22,807
−Removed: Holden Hills — — 12,395 — — — 12,395
−Removed: West Killeen Market
+Added: Holden Hills Phase 1 — 17,107 — — — — 17,107
+Added: West Killeen Market c
5,177 — — — — — 5,177
Amarra Villas credit facility — 1,662 — — — — 1,662
−Removed: — — 4,654 — — — 4,654
Total $ 49,227 $ 70,309 $ 37,365 $ 24,385 $ 28,757 $ — $ 210,043
+Added: The maturity date is September 1, 2025.
Includes operating loans from our third-party partner of $493 thousand.
−Removed: The maturity date of The Saint June construction loan was October 2, 2024.
−Removed: In October 2024, The Saint June construction loan was modified to extend the maturity to October 2, 2025.
−Removed: We have the option to extend the maturity for an additional 12-month terms if certain conditions are met.
−Removed: The maturity date is December 6, 2024.
−Removed: We are currently discussing options to refinance the loan and expect to extend the loan on or before the maturity date.
−Removed: 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 Nine Months Ended
−Removed: September 30, September 30,
−Removed: 2024 2023 2024 2023
+Added: The maturity date of The Saint June construction loan is October 2, 2025.
+Added: The maturity date is July 31, 2025.
+Added: In first-quarter 2025, we entered into a contract to sell West Killeen Market for $13.3 million, which we expect to close in second-quarter 2025 and to use a portion of the proceeds to repay the project loan.
+Added: The following table summarizes the weighted-average interest rate of each loan, all of which have variable rates, for the periods presented, and reflects the interest rate terms of loan agreements as in effect during the periods presented, as described in Note 6 of this report and in our 2024 Form 10-K:
+Added: Three Months Ended
Comerica Bank revolving credit facility a
−Removed: — % — % — % — %
+Added: Kingwood Place loan
+Added: Lantana Place loan
Jones Crossing loan
−Removed: 7.68 7.57 7.69 7.16
The Annie B land loan 7.45 8.41
Construction loans:
−Removed: The Saint George b
−Removed: 7.69 7.66 7.70 7.63
+Added: The Saint George 6.79 7.73
The Saint June 6.71 8.19
−Removed: Kingwood Place 8.16 7.87 8.18 7.56
−Removed: Lantana Place 7.67 7.66 7.71 7.33
−Removed: Holden Hills c
−Removed: 8.34 8.36 8.36 8.36
+Added: Holden Hills Phase 1 7.44 8.39
West Killeen Market
−Removed: 8.01 7.98 8.06 7.64
Amarra Villas credit facility
−Removed: 8.40 8.27 8.38 7.95
−Removed: Magnolia Place d
−Removed: — 8.63 — 7.89
−Removed: We did not have an outstanding balance during any of the periods presented.
−Removed: At September 30, 2024, the interest rate for the revolving credit facility was 8.88 percent.
We did not have an outstanding balance during first-quarter 2024.
−Removed: We did not have an outstanding balance during first-quarter and second-quarter 2023.
−Removed: In February 2024, this loan was repaid with proceeds from the sale of approximately 47 acres of undeveloped land.
−Removed: Liquidity Outlook
−Removed: We had firm commitments totaling approximately $15.3 million at September 30, 2024 primarily related to construction of The Saint George and Holden Hills.
−Removed: We have construction loans to fund these projected cash outlays for the projects over the next 12 months.
−Removed: However, we anticipate making operating loans to Stratus Block 150, L.P.
−Removed: and paying 60 percent of the costs of the Tecoma Improvements for which we have agreed to reimburse the Holden Hills partnership.
−Removed: As of September 30, 2024, the Holden Hills partnership had $4.4 million remaining to complete the Tecoma Improvements.
+Added: We had firm commitments totaling approximately $8.3 million at March 31, 2025 primarily related to construction of The Saint George and Holden Hills Phase 1.
+Added: Except as noted below, we have construction loans, as well as remaining equity capital, to fund these projected cash outlays for these projects over the next 12 months following this filing.
+Added: We expect to make a capital contribution to The Saint George partnership of $370 thousand over the next 12 months to enable the partnership to pay debt service and project costs, including potential costs of water leak remediation and repairs to be borne by the partnership as described in Note 10.
+Added: With respect to Holden Hills Phase 1, we have agreed to reimburse the Holden Hills Phase 1 partnership for 60 percent of the costs of the Tecoma Improvements.
+Added: As of March 31, 2025, the remaining costs to complete the Tecoma Improvements totaled $3.0 million, of which our share totaled $1.8 million.
Also, we anticipate making future operating loans to Stratus Block 150, L.P.
totaling up to $2.1 million over the next 12 months to enable the partnership to pay debt service and project costs.
−Removed: The operating loans would bear interest at the one-month SOFR Rate plus 5.00 percent, would be subordinate to The Annie B land loan and would be repaid before distributions may be made to the partners.
+Added: The operating loans would bear interest at one-month Term SOFR plus 5.00 percent, would be subordinate to The Annie B land loan and required to be repaid before distributions may be made to the partners.
We project that we will be able to meet our debt service and other cash obligations for at least the next 12 months.
Our stabilized retail and multi-family properties (West Killeen Market, Jones Crossing – 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.
−Removed: We expect to sell additional Amarra Villas homes and may sell certain lots or tracts of undeveloped land.
−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 $19.6 million at September 30, 2024 and availability under our revolving credit facility (which matures on March 27, 2025) of approximately $39.6 million as of September 30, 2024 which is expected to be sufficient to fund these cash requirements for the next 12 months.
−Removed: We expect to successfully extend the maturities of, or to refinance, our outstanding debt that matures in the next 12 months, and to successfully extend or refinance our revolving credit facility prior to maturity.
+Added: In first-quarter 2025, we entered into a contract to sell West Killeen Market for $13.3 million, which we expect to close in second-quarter 2025.
+Added: After repaying the project loan, we expect the sale to generate approximately $7.7 million of pre-tax net cash proceeds.
+Added: We expect to sell additional Amarra Villas homes and may sell other properties.
+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 had cash and cash equivalents of $12.0 million at March 31, 2025 and availability under our revolving credit facility (which matures on March 27, 2027) of approximately $34.5 million, net of letters of credit and borrowings, which is expected to be sufficient to fund these cash requirements for the next 12 months.
+Added: We expect to successfully extend the maturities of, or to refinance, our outstanding debt that matures in the next 12 months, and to repay the West Killeen Market project loan upon the closing of that transaction.
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.
+Added: As discussed under “Business Strategy” above, our main sources of revenue and cash flow are expected to be 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.
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.
−Removed: However, we believe that the unique nature and location of our assets, and our team’s ability to execute successfully on development projects, will provide us with positive cash flows and net income over time.
+Added: However, we believe that the unique nature and location of our assets, and our team’s ability to execute successfully on development projects, will provide us with positive cash
+Added: flows and net income over time.
No assurances can be given that the results anticipated by our projections will occur.
−Removed: Refer to Note 6 in this report and in our 2023 Form 10-K and “Risk Factors” included in Part I, Item 1A.
−Removed: of our 2023 Form 10-K for further discussion.
+Added: Refer to Note 6 in this report and in our 2024 Form 10-K and Part I, Item 1A.
+Added: “Risk Factors” of our 2024 Form 10-K and Part II, Item 1A.
+Added: “Risk Factors” herein for further discussion.
Our ability to meet our cash obligations over the longer term will depend on our future operating and financial performance and cash flows, including our ability to sell or lease properties profitably and extend or refinance debt as it becomes due, which is subject to economic, financial, competitive and other factors beyond our control.
2 unchanged sentences
RECENT ACCOUNTING STANDARDS
−Removed: In August 2023, the Financial Accounting Standards Board (the FASB) issued Accounting Standards Update (ASU), No.
−Removed: 2023-05, “Business Combinations – Joint Venture Formations.” This ASU addresses the accounting for contributions made to a joint venture, upon formation, in a joint venture’s separate financial statements.
−Removed: The pronouncement requires a joint venture to initially measure contributions at fair value upon formation, which is more relevant than the carrying amounts of the contributed net assets and would reduce equity method basis differences.
−Removed: The ASU is effective prospectively for all joint venture formations with a formation date on or after January 1, 2025.
−Removed: We do not expect the pronouncement to have a material effect on our consolidated financial statements.
−Removed: In November 2023, the FASB issued ASU No.
−Removed: 2023-07, “Segment Reporting – Improvements to Reportable Segments Disclosures”, which enhances disclosures of significant segment expenses regularly provided to the chief operating decision maker, extends certain annual disclosures to interim periods and permits more than one measure of segment profit or loss to be reported under certain conditions.
−Removed: The amendments are effective for fiscal years beginning after December 15, 2023 and early adoption of the amendment is permitted.
−Removed: We expect adoption of the pronouncement will lead to additional segment disclosure in our consolidated financial statements beginning with our annual report for 2024.
−Removed: In December 2023, the FASB issued ASU No.
−Removed: 2023-09, “Income Taxes (Topic 740) – Improvements to Income Tax Disclosures”.
−Removed: This ASU requires public business entities to disclose a tabular rate reconciliation of both percentages and reporting currency amounts on an annual basis.
−Removed: The ASU also requires disclosure of information on amount of income taxes paid disaggregated by federal, state and foreign taxes.
−Removed: This ASU is effective for annual periods beginning after December 15, 2024.
−Removed: We do not expect the pronouncement to have a material effect on our consolidated financial statements.
+Added: In November 2024, the Financial Accounting Standards Board (the FASB) issued Accounting Standards Update (ASU) No.
+Added: 2024-03, “Income Statement – Reporting Comprehensive Income – Expense Disaggregation Disclosures:
+Added: Disaggregation of Income Statement Expenses.” This ASU requires disaggregated disclosure in the notes to the financial statements of certain costs and expenses presented on the face of the income statement, on an interim and annual basis.
+Added: This ASU also requires additional footnote disclosure about selling expenses.
+Added: The amendments are effective for fiscal years beginning after December 15, 2026 and interim periods beginning after December 15, 2027 and early adoption is permitted.
+Added: Stratus is currently assessing adoption timing and the effect that the updated standard will have on its financial statement disclosures.
OFF-BALANCE SHEET ARRANGEMENTS
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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, our ability to pay or refinance our debt obligations as they become due, availability of bank credit, our ability to meet our future debt service and other cash obligations, projected future operating loans or capital contributions to our joint ventures, 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 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, tariffs and trade policies, supply chain constraints, our ability to pay or refinance our debt obligations as they become due, availability of bank credit, our ability to meet our future debt service and other cash obligations, projected future operating loans or capital contributions to our joint ventures, potential costs and timing to remediate and repair the water leak at The Saint George and the potential costs for which The Saint George Apartments, L.P.
+Added: may be responsible, future cash flows and liquidity, the Austin and Texas real estate markets, the planning, financing, development, construction, completion and stabilization of our development projects, including projected costs and estimated times to complete construction, plans to sell, recapitalize or refinance properties and estimated timing for closing properties under contract, 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 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.
−Removed: Under our Comerica Bank debt agreements, we are not permitted to repurchase our common stock in excess of $1.0 million or pay dividends on our common stock without Comerica Bank's prior written consent, which was obtained in connection with our current $5.0 million share repurchase program.
+Added: Under our Comerica Bank debt agreements, we are not permitted to repurchase our common stock in excess of $1.0 million or pay dividends on our common stock without Comerica Bank's prior written consent, which we obtained in connection with our current $5.0 million share repurchase program.
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.
−Removed: Our future debt agreements, future refinancings of or amendments to existing debt agreements or other future agreements may restrict our ability to declare dividends or repurchase shares.
+Added: Our future debt
+Added: agreements, future refinancings of or amendments to existing debt agreements or other future agreements may restrict our ability to declare dividends or repurchase shares.
We caution readers that forward-looking statements are not guarantees of future performance, and our actual results may differ materially from those anticipated, expected, projected or assumed in the forward-looking statements.
−Removed: Important factors that can cause our actual results to differ materially from those anticipated in the forward-looking statements include, but are not limited to, our ability to implement our business strategy successfully, including our ability to develop, construct and sell or lease properties on terms our Board considers acceptable, increases in operating and construction costs, including real estate taxes, maintenance and insurance costs, and the cost of building materials and labor, increases in inflation and interest rates, supply chain constraints, our ability to pay or refinance our debt, extend maturity dates of our loans or comply with or obtain waivers of financial and other covenants in debt agreements and to meet other cash obligations, availability of bank credit, defaults by contractors and subcontractors, declines in the market value of our assets, market conditions or
−Removed: corporate developments that could preclude, impair or delay any opportunities with respect to plans to sell, recapitalize or refinance properties, a decrease in the demand for real estate in select markets in Texas where we operate, particularly in Austin, changes in economic, market, tax, business and geopolitical conditions, potential U.S.
−Removed: or local economic downturn or recession, the availability and terms of financing for development projects and other corporate purposes, our ability to collect anticipated rental payments and close projected asset sales, loss of key personnel, our ability to enter into and maintain joint ventures, partnerships, or other strategic relationships, including risks associated with such joint ventures, any major public health crisis, eligibility for and potential receipt and timing of receipt of MUD reimbursements, industry risks, changes in buyer preferences, potential additional impairment charges, competition from other real estate developers, our ability to obtain various entitlements and permits, changes in laws, regulations or the regulatory environment affecting the development of real estate, opposition from special interest groups or local governments with respect to development projects, weather- and climate-related risks, environmental risks, litigation risks, including the timing and resolution of the ongoing litigation challenging the ETJ Law and our ability to implement any revised development plans in light of the ETJ Law, the failure to attract buyers or tenants for our developments or such buyers’ or tenants’ failure to satisfy their purchase commitments or leasing obligations, cybersecurity incidents and other factors described in more detail under the heading “Risk Factors” in Part I, Item 1A.
−Removed: of our 2023 Form 10-K, filed with the SEC.
+Added: Important factors that can cause our actual results to differ materially from those anticipated in the forward-looking statements include, but are not limited to, our ability to implement our business strategy successfully, including our ability to develop, construct and sell or lease properties on terms our Board considers acceptable, increases in operating and construction costs, including real estate taxes, maintenance and insurance costs, and the cost of building materials and labor, elevated inflation and interest rates, the effect of changes in tariffs and trade policies, including threatened tariffs, supply chain constraints, our ability to pay or refinance our debt, extend maturity dates of our loans or comply with or obtain waivers of financial and other covenants in debt agreements and to meet other cash obligations, availability of bank credit, defaults by contractors and subcontractors, the outcome of our analysis and discussions with the insurance company and general contractor regarding responsibility for payment of costs to remediate and repair the water leak at The Saint George, declines in the market value of our assets, market conditions or corporate developments that could preclude, impair or delay any opportunities with respect to plans to sell, recapitalize or refinance properties, a decrease in the demand for real estate in select markets in Texas where we operate, particularly in Austin, changes in economic, market, tax, business and geopolitical conditions, potential U.S.
+Added: or local economic downturn or recession, the availability and terms of financing for development projects and other corporate purposes, our ability to collect anticipated rental payments and close projected asset sales, loss of key personnel, our ability to enter into and maintain joint ventures, partnerships or other strategic relationships, including risks associated with such joint ventures, any major public health crisis, eligibility for and potential receipt and timing of receipt of MUD reimbursements, industry risks, changes in buyer preferences, potential additional impairment charges, competition from other real estate developers, our ability to obtain various entitlements and permits, changes in laws, regulations or the regulatory environment affecting the development of real estate, opposition from special interest groups or local governments with respect to development projects, weather- and climate-related risks, environmental and litigation risks, including the timing and resolution of the ongoing litigation challenging the ETJ Law and our ability to implement revised development plans in light of the ETJ Law, the failure to attract buyers or tenants for our developments or such buyers’ or tenants’ failure to satisfy their purchase commitments or leasing obligations, cybersecurity incidents and other factors described in more detail in Part I, Item 1A.
+Added: “Risk Factors” of our 2024 Form 10-K, filed with the SEC, and Part II, Item 1A.
+Added: “Risk Factors” of this report.
Investors are cautioned that many of the assumptions upon which our forward-looking statements are based are likely to change after the date the forward-looking statements are made.
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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.