What changed in this filing

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Item 1. Financial Statements

2025-11-12 compared with 2025-08-12 · 210 added, 111 removed, 517 unchanged (38% of the section changed)

3 unchanged sentences

(In Thousands)

September 30,

2025 December 31,

28 unchanged sentences

The accompanying Notes to Consolidated Financial Statements (Unaudited) are an integral part of these consolidated financial statements.

Table of Conten ts

STRATUS PROPERTIES INC.

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) (Unaudited)

CONSOLIDATED STATEMENTS OF COMPREHENSIVE (LOSS) INCOME (Unaudited)

(In Thousands, Except Per Share Amounts)

Three Months Ended Six Months Ended

June 30, June 30,

Three Months Ended Nine Months Ended

September 30, September 30,

2025 2024 2025 2024

10 unchanged sentences

Total 13,062 10,410 34,064 44,642

Operating (loss) income ( 759 ) ( 2,920 ) ( 4,354 ) 765

Operating loss ( 8,093 ) ( 1,519 ) ( 12,447 ) ( 754 )

Interest expense, net ( 749 ) — ( 1,026 ) —

1 unchanged sentence

Loss on extinguishment of debt ( 33 ) — ( 216 ) ( 59 )

Other (loss) income, net ( 793 ) 186 ( 729 ) 359

(Loss) income before income taxes ( 1,838 ) ( 2,734 ) ( 5,565 ) 1,065

Provision for income taxes ( 457 ) ( 44 ) ( 487 ) ( 146 )

Net (loss) income and total comprehensive (loss) income ( 2,295 ) ( 2,778 ) ( 6,052 ) 919

Other income (loss), net 548 163 ( 181 ) 522

Loss before income taxes ( 8,328 ) ( 1,356 ) ( 13,893 ) ( 291 )

Benefit from (provision for) income taxes 321 ( 58 ) ( 166 ) ( 204 )

Net loss and total comprehensive loss ( 8,007 ) ( 1,414 ) ( 14,059 ) ( 495 )

Total comprehensive loss attributable to noncontrolling interests 3,029 1,050 6,466 2,958

Net income (loss) and total comprehensive income (loss) attributable to common stockholders $ 260 $ ( 1,725 ) $ ( 2,615 ) $ 2,827

Net income (loss) per share attributable to common stockholders (basic and diluted) $ 0.03 $ ( 0.21 ) $ ( 0.32 ) $ 0.35

Net (loss) income and total comprehensive (loss) income attributable to common stockholders $ ( 4,978 ) $ ( 364 ) $ ( 7,593 ) $ 2,463

Basic net (loss) income per share attributable to common stockholders $ ( 0.62 ) $ ( 0.05 ) $ ( 0.94 ) $ 0.31

Diluted net (loss) income per share attributable to common stockholders $ ( 0.62 ) $ ( 0.05 ) $ ( 0.94 ) $ 0.30

Weighted-average shares of common stock outstanding:

2 unchanged sentences

The accompanying Notes to Consolidated Financial Statements (Unaudited) are an integral part of these consolidated financial statements.

Table of Conten ts

STRATUS PROPERTIES INC.

1 unchanged sentence

(In Thousands)

Six Months Ended

Nine Months Ended

September 30,

Cash flow from operating activities:

Net (loss) income $ ( 6,052 ) $ 919

Adjustments to reconcile net (loss) income to net cash used in operating activities:

Net loss $ ( 14,059 ) $ ( 495 )

Adjustments to reconcile net loss to net cash used in operating activities:

Depreciation and amortization 4,842 4,168

6 unchanged sentences

Purchases and development of real estate properties ( 20,543 ) ( 22,925 )

Write-off capitalized project costs 2,869 721

Decrease in other assets 2,220 233

3 unchanged sentences

Capital expenditures ( 8,075 ) ( 22,962 )

Proceeds from sale of assets, net of fees 12,979 —

Proceeds from sale of assets, net of selling costs 12,979 8,586

Municipal utility district (MUD) reimbursements

4 unchanged sentences

Payments on credit facility ( 4,000 ) —

Borrowings from project loans 59,886 21,754

Borrowings from project and term loans 64,084 27,672

Payments on project and term loans ( 56,075 ) ( 25,058 )

6 unchanged sentences

Financing costs ( 1,476 ) ( 139 )

Net cash provided by (used in) financing activities 48,597 ( 213 )

Net cash provided by financing activities 53,864 5,331

Net increase (decrease) in cash, cash equivalents and restricted cash 34,369 ( 12,096 )

2 unchanged sentences

The accompanying Notes to Consolidated Financial Statements (Unaudited), which include information regarding noncash transactions, are an integral part of these consolidated financial statements.

Table of Conten ts

STRATUS PROPERTIES INC.

2 unchanged sentences

Stockholders’ Equity

Held in Treasury Total

Common Stock Capital in Excess of Par Value Retained Earnings Noncontrolling Interests in Subsidiaries

Retained Earnings (Accumulated Deficit) Common Stock

Held in Treasury Total Noncontrolling Interests in Subsidiaries

Common Stock Capital in Excess of Par Value

of Shares At Par

16 unchanged sentences

Balance at June 30, 2025 9,789 98 201,651 25,986 1,706 ( 35,827 ) 191,908 146,416 338,324

Vested stock-based awards 3 — — — — — — — —

Director fees paid in shares of common stock — — 6 — — — 6 — 6

Stock-based compensation — — 302 — — — 302 — 302

Common stock repurchases — — — — 74 ( 1,447 ) ( 1,447 ) — ( 1,447 )

Noncontrolling interest contributions — — — — — — — 2,908 2,908

Total comprehensive loss — — — ( 4,978 ) — — ( 4,978 ) ( 3,029 ) ( 8,007 )

Balance at September 30, 2025 9,792 $ 98 $ 201,959 $ 21,008 1,780 $ ( 37,274 ) $ 185,791 $ 146,295 $ 332,086

Table of Conten ts

STRATUS PROPERTIES INC.

2 unchanged sentences

Stockholders’ Equity

Held in Treasury Total

Common Stock Capital in Excess of Par Value Retained Earnings (Accumulated Deficit) Noncontrolling Interests in Subsidiaries

Retained Earnings (Accumulated Deficit) Common Stock

Held in Treasury Total Noncontrolling Interests in Subsidiaries

Common Stock Capital in Excess of Par Value

of Shares At Par

6 unchanged sentences

— — — — 16 ( 376 ) ( 376 ) — ( 376 )

Excises tax on 2023 common stock repurchases — — — — — ( 22 ) ( 22 ) — ( 22 )

Common stock repurchases — — — — — ( 22 ) ( 22 ) — ( 22 )

Total comprehensive income (loss) — — — 4,552 — — 4,552 ( 855 ) 3,697

5 unchanged sentences

Balance at June 30, 2024 9,676 97 200,114 29,472 1,599 ( 33,395 ) 196,288 101,218 297,506

Vested stock-based awards 9 — — — — — — — —

Director fees paid in shares of common stock — — 6 — — — 6 — 6

Stock-based compensation — — 437 — — — 437 — 437

Noncontrolling interest contributions — — — — — — — 3,600 3,600

Total comprehensive loss — — — ( 364 ) — — ( 364 ) ( 1,050 ) ( 1,414 )

Balance at September 30, 2024 9,685 $ 97 $ 200,557 $ 29,108 1,599 $ ( 33,395 ) $ 196,367 $ 103,768 $ 300,135

The accompanying Notes to Consolidated Financial Statements (Unaudited) are an integral part of these consolidated financial statements.

Table of Conten ts

STRATUS PROPERTIES INC.

12 unchanged sentences

EARNINGS PER SHARE

Stratus’ basic net income (loss) per share of common stock was calculated by dividing the net income (loss) attributable to common stockholders by the weighted-average shares of common stock outstanding during the period.

A reconciliation of net (loss) income and weighted-average shares of common stock outstanding for purposes of calculating diluted net income (loss) per share follows (in thousands, except per share amounts):

Three Months Ended Six Months Ended

June 30, June 30,

Stratus’ basic net (loss) income per share of common stock was calculated by dividing the net (loss) income attributable to common stockholders by the weighted-average shares of common stock outstanding during the periods.

A reconciliation of net (loss) income and weighted-average shares of common stock outstanding for purposes of calculating diluted net (loss) income per share follows (in thousands, except per share amounts):

Three Months Ended Nine Months Ended

September 30, September 30,

2025 2024 2025 2024

Net (loss) income and total comprehensive (loss) income $ ( 2,295 ) $ ( 2,778 ) $ ( 6,052 ) $ 919

Net loss and total comprehensive loss $ ( 8,007 ) $ ( 1,414 ) $ ( 14,059 ) $ ( 495 )

Total comprehensive loss attributable to noncontrolling interests 3,029 1,050 6,466 2,958

Net income (loss) and total comprehensive income (loss) attributable to common stockholders $ 260 $ ( 1,725 ) $ ( 2,615 ) $ 2,827

Net (loss) income and total comprehensive (loss) income attributable to common stockholders $ ( 4,978 ) $ ( 364 ) $ ( 7,593 ) $ 2,463

Basic weighted-average shares of common stock outstanding

3 unchanged sentences

8,033 8,080 8,051 8,186

Net income (loss) per share attributable to common stockholders (basic and diluted) $ 0.03 $ ( 0.21 ) $ ( 0.32 ) $ 0.35

Excludes 31 thousand shares for second-quarter 2025 of common stock associated with RSUs that were anti-dilutive.

Excludes 187 thousand shares for second-quarter 2024 of common stock associated with RSUs that were anti-dilutive as a result of a net loss.

Excludes 156 thousand shares for the first six months of 2025 of common stock associated with RSUs that were anti-dilutive as a result of a net loss.

Excludes 23 thousand shares for the first six months of 2024 of common stock associated with RSUs that were anti-dilutive.

Basic net (loss) income per share attributable to common stockholders $ ( 0.62 ) $ ( 0.05 ) $ ( 0.94 ) $ 0.31

Diluted net (loss) income per share attributable to common stockholders $ ( 0.62 ) $ ( 0.05 ) $ ( 0.94 ) $ 0.30

Excludes 159 thousand shares for third-quarter 2025 of common stock associated with RSUs that were anti-dilutive as a result of a net loss.

Excludes 185 thousand shares for third-quarter 2024 of common stock associated with RSUs that were anti-dilutive as a result of a net loss.

Excludes 157 thousand shares for the first nine months of 2025 of common stock associated with RSUs that were anti-dilutive as a result of a net loss.

Excludes 17 thousand shares for the first nine months of 2024 of common stock associated with RSUs that were anti-dilutive.

Table of Conten ts

LIMITED PARTNERSHIPS

37 unchanged sentences

Any partner can initiate a buy-sell at any time by written notice to the other partner, specifying the buyout price.

Table of Conten ts

The Holden Hills Phase 2 partnership has agreed to pay Stratus an asset management fee of $ 39,875 per month for the first 12 months following the formation of the partnership and thereafter subject to an adjustment as agreed by the partners, plus 4.0 percent of the hard costs of landscaping and site clearing approved in the initial operating budget.

The Holden Hills Phase 2 partnership is working to establish a separate revolving credit facility for the Holden Hills Phase 2 Project, which is expected to be sized as needed for future operating costs.

The Holden Hills Phase 2 partnership intends to use the facility to reimburse the Class A limited partner for the approximately $ 0.8 million initial project costs, as described above, fund the approved operating budget for 2025 and fund future partnership activities approved by the partners.

The Holden Hills Phase 2 partnership intends to use the facility to reimburse the Class A limited partner for approximately $ 1.6 million of project costs, including certain initial project costs as described above, fund the approved operating budget for 2025 and fund future partnership activities, as approved by the partners.

Amendment to the Holden Hills, L.P.

2 unchanged sentences

partnership agreement, relating to Holden Hills Phase 1, entered into an amendment thereto that changed certain provisions to more closely align with the Holden Hills Phase 2 partnership agreement, primarily that any partner can initiate a buy-sell at any time by written notice to the other partner.

Operating Loans to Partnerships.

Amendment to The Saint June, L.P.

Partnership Agreement.

In third-quarter 2025, the parties to The Saint June, L.P.

partnership agreement entered into an amendment to allow for up to $ 3.0 million of distributions to the partners between September 1, 2025 through September 30, 2027 prior to the partnership’s repayment of the operating loans discussed below.

Operating Loans, Advances and Capital Contributions to Partnerships;

Distributions from Partnerships.

Stratus has made operating loans to Stratus Block 150, L.P.

2 unchanged sentences

In first-quarter 2024, Stratus made an operating loan of $ 2.4 million.

In third-quarter 2024, Stratus made an operating loan of $ 1.1 million.

In first-quarter 2025, Stratus made an operating loan of $ 1.5 million.

No loans were made in second-quarter 2025 or 2024.

As of June 30, 2025, Stratus’ operating loans outstanding to Stratus Block 150, L.P.

In third-quarter 2025, Stratus made an operating loan of $ 1.1 million.

As of September 30, 2025, Stratus’ operating loans outstanding to Stratus Block 150, L.P.

totaled $ 8.3 million.

Stratus and the Class B limited partner in The Saint June partnership have made operating loans to The Saint June, L.P.

to support the partnership’s ability to pay its construction loan interest, which has exceeded the amount anticipated because of interest rate increases.

to support the partnership’s ability to pay its construction loan interest, which has exceeded the amount anticipated because of prior interest rate increases.

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 operating loans are repaid.

In third-quarter 2025, The Saint June partnership was amended to allow for up to $ 3.0 million of distributions to the partners prior to the repayment of the operating loans.

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 to The Saint June, L.P.

In second-quarter 2024, Stratus made an operating loan of $ 85 thousand, and the Class B limited partner made an operating loan of $ 165 thousand to The Saint June, L.P.

No loans were made in the first six months of 2025 .

As of June 30, 2025, Stratus’ and the Class B limited partner’s operating loans outstanding to The Saint June, L.P.

No loans were made in third-quarter 2024 or the first nine months of 2025 .

As of September 30, 2025, Stratus’ and the Class B limited partner’s operating loans outstanding to The Saint June, L.P.

totaled $ 962 thousand and $ 493 thousand, respectively.

In third-quarter 2025, Stratus contributed additional capital of $ 323 thousand in cash to The Saint George Apartments, L.P., representing its 10 percent equity share, and the Class B Limited Partner contributed additional capital of $ 2.9 million in cash to The Saint George Apartments, L.P.

to support the partnership’s ability to pay debt service and project costs, including costs related to damage remediation and repairs for a water leak that occurred in April 2025.

In third-quarter 2024, Stratus contributed additional capital of $ 400 thousand in cash to The Saint George Apartments, L.P., representing its 10 percent equity share, and the Class B Limited Partner contributed additional capital of $ 3.6 million in cash to The Saint George Apartments, L.P.

to support the partnership’s ability to pay its construction loan interest.

As of September 30, 2025, Stratus has advanced $ 1.3 million to Holden Hills, L.P.

to fund costs not included in the original project budget.

The partnership is in discussions to modify the construction loan to increase the loan commitment amount and then expects to use these funds to reimburse Stratus, as approved by the partners.

As described above, as of September 30, 2025, Stratus has advanced approximately $ 1.6 million to the Holden Hills Phase 2 partnership to fund certain project costs.

Table of Conten ts

In October 2025, The Saint June, L.P.

made distributions of approximately $ 435 thousand and $ 225 thousand to the Class B limited partner in The Saint June partnership and Stratus, respectively.

Potential Returns.

19 unchanged sentences

Stratus will continue to re-evaluate which entity is the primary beneficiary of these partnerships in accordance with applicable accounting guidance.

At June 30, 2025, cash and cash equivalents totaling $ 2.4 million held at certain of these limited partnerships are subject to restrictions on distribution to Stratus pursuant to the individual partnership loan agreements.

As of September 30, 2025, cash and cash equivalents totaling $ 3.8 million held at certain of these limited partnerships are subject to restrictions on distribution to Stratus pursuant to the individual partnership loan agreements.

Table of Conten ts

Stratus’ consolidated balance sheets include the following assets and liabilities of the partnerships, net of intercompany balances (including the operating loans made by Stratus), which are eliminated (in thousands):

September 30,

2025 December 31,

20 unchanged sentences

Stratus has remaining lease obligations pursuant to a Pad Sites Master Lease entered into in connection with the sale of The Oaks at Lakeway, as described in Note 9 of the Stratus 2024 Form 10-K under the heading “Deferred Gain on Sale of The Oaks at Lakeway.” In first-quarter 2025, one of the pad sites subject to the master lease was sub-leased and resulted in recognition of a portion of the previously deferred gain of $ 200 thousand due to the expected savings in the master lease rent over the remaining term.

The remaining deferred gain representing the related contract liability is presented in the consolidated balance sheets in the amount of $ 1.3 million at June 30, 2025 and $ 1.8 million at December 31, 2024.

The remaining deferred gain representing the related contract liability is presented in the consolidated balance sheets in the amount of $ 1.1 million at September 30, 2025 and $ 1.8 million at December 31, 2024.

The reduction in the deferred gain balance also reflects Pad Sites Master Lease payments.

6 unchanged sentences

In connection with these sales, the Amarra Villas credit facility, which had a balance of $ 1.7 million, was repaid.

In October 2025, Stratus sold one Amarra Villas home for $ 3.7 million.

In third-quarter 2024, Stratus sold one Amarra Villas home for $ 4.0 million.

In second-quarter 2024, Stratus sold one Amarra Villas home for $ 3.6 million.

1 unchanged sentence

Magnolia Place.

In first-quarter 2024, Stratus 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 third-quarter 2024, Stratus completed the sale of Magnolia Place – Retail for $ 8.9 million, generating pre-tax net cash proceeds of approximately $ 8.6 million and a pre-tax gain of $ 1.6 million.

In first-quarter 2024, Stratus completed the sale of 47 acres of undeveloped land in Magnolia, Texas planned for a second phase

Table of Conten ts

of retail development, all remaining pad sites and up to 600 multi-family units, for $ 14.5 million.

In connection with this sale, the Magnolia Place construction loan, which had a balance of $ 8.8 million, was repaid.

4 unchanged sentences

A summary of the carrying amount and fair value of Stratus’ interest rate caps follows (in thousands):

September 30,

2025 December 31,

17 unchanged sentences

The fair value of debt does not represent the amounts that will ultimately be paid upon the maturities of the loans.

Table of Conten ts

DEBT AND EQUITY

The components of Stratus’ debt follow (in thousands):

September 30,

2025 December 31,

9 unchanged sentences

The Saint George 52,239 47,741

The Saint June 31,925 32,109

The Saint June e

33,178 32,109

Holden Hills Phase 1 20,980 15,265

West Killeen Market e

Amarra Villas credit facility f

West Killeen Market f

Amarra Villas credit facility g

$ 203,898 $ 194,853

In January and March 2025, the Comerica Bank revolving credit facility was amended, and in June 2025, the borrowing base was reduced pursuant to the terms of the loan agreement – see discussion below.

In January, March and October 2025, the Comerica Bank revolving credit facility was amended, and in June 2025, the borrowing base was reduced pursuant to the terms of the loan agreement.

See discussion below.

In January 2025, the Lantana Place construction loan was refinanced with a four-year term loan.

1 unchanged sentence

In July 2025, The Annie B land loan was amended and the maturity date was extended to September 1, 2027.

In September 2025, The Saint June construction loan was amended and the maturity date was extended to October 2, 2027.

In May 2025, Stratus repaid this loan in connection with the sale of the project.

In June 2025, Stratus repaid this credit facility and the credit facility was terminated.

Includes net reductions for unamortized debt issuance costs of $ 1.9 million at June 30, 2025, and $ 1.8 million at December 31, 2024.

Includes net reductions for unamortized debt issuance costs of $ 1.8 million at September 30, 2025, and $ 1.8 million at December 31, 2024.

Comerica Bank revolving credit facility.

As of June 30, 2025, the maximum amount that could be borrowed under the Comerica Bank revolving credit facility was $ 29.3 million, resulting in availability of $ 17.7 million, net of $ 11.6 million of letters of credit.

As of September 30, 2025, the maximum amount that could be borrowed under the Comerica Bank revolving credit facility was $ 29.1 million, resulting in availability of $ 17.5 million, net of $ 11.6 million of letters of credit.

In June 2025, the Holden Hills Phase 2 property was removed from the borrowing base for the revolving credit facility, in anticipation of a potential separate revolving credit facility for the property, and the maximum amount that could be borrowed was reduced.

Also, in June 2025, after the Amarra Villas credit facility was fully repaid and terminated, the remaining three Amarra Villas homes were added to the borrowing base for the Comerica Bank revolving credit facility.

The net effect of these changes was a decrease of $ 24.8 million to the maximum amount that could be borrowed .

The net effect of these changes was a decrease of $ 24.8 million to the maximum amount that could be borrowed at that time .

Letters of credit have been issued under the revolving credit facility, $ 9.0 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.

3 unchanged sentences

In March 2025, Stratus entered into an amendment to its 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.

Table of Conten ts

In October 2025, Stratus entered into an amendment to its revolving credit facility that further reduced the maximum loan amount to the lesser of $ 35.0 million or the borrowing base limit, in order to reduce Stratus’ fees associated with the facility.

Kingwood Place loan.

11 unchanged sentences

After paying off the prior Lantana Place construction loan and paying property taxes and closing costs, Stratus received approximately $ 3.0 million in net cash proceeds.

Refer to Note 10 for discussion of the pending sale of Lantana Place – Retail.

Jones Crossing loan.

12 unchanged sentences

In July 2025, The Annie B land loan was modified to extend the maturity date to September 1, 2027.

Monthly principal payments of $ 49,875 in addition to interest will be required during the extended term.

Monthly principal payments of $ 49,875 in addition to interest are required during the extended term.

The Saint June construction loan.

In September 2025, The Saint June construction loan was modified to (i) extend the maturity date of the loan to October 2, 2027;

(ii) provide for advances of an additional $ 1.5 million, bringing the outstanding principal balance of the loan to $ 32.9 million with no funds remaining available for additional principal advances;

(iii) decrease the interest rate applicable margin from 2.35 percent to 2.00 percent;

(iv) eliminate the requirement to make monthly principal payments prior to maturity;

and (v) add a new property-level minimum debt yield financial covenant, which replaced a property-level debt service coverage ratio.

If the debt yield financial covenant is not met, the principal balance of the loan must be paid down in an amount sufficient to achieve the minimum debt yield.

The amendments permit the partnership to distribute up to $ 1.5 million to the partners.

Accordingly, the loan bears interest at the one-month Term SOFR plus 2.00 percent, subject to a 3.50 percent floor.

Payments of interest only on the Loan are due monthly with the outstanding principal due at maturity.

After closing costs, the partnership used the remaining portion of the $ 1.3 million proceeds of the loan to establish reserves for partnership expenses and make cash distributions to the partners.

In October 2025, The Saint June, L.P.

made distributions of approximately $ 435 thousand and $ 225 thousand to the Class B limited partner in The Saint June partnership and Stratus, respectively.

Amarra Villas credit facility.

Under the Amarra Villas credit facility, principal paydowns occur as homes are sold, and additional amounts are borrowed as construction costs are incurred.

Paydowns made in connection with the sale of an Amarra Villas home reduce the commitment amount by the amount of the payment, and such amounts may not be re-borrowed.

In second-quarter 2025, Stratus made a $ 1.7 million principal payment on the credit facility upon the closing of a sale of one of the Amarra Villas homes, which fully repaid the credit facility, and the credit facility was terminated.

In second-quarter 2025, Stratus made a $ 1.7 million principal payment on the Amarra Villas credit facility upon the closing of a sale of one of the Amarra Villas homes, which fully repaid the credit facility, and the credit facility was terminated.

West Killeen Market construction loan.

In May 2025, this loan was repaid in full in connection with the sale of the West Killeen Market retail project.

Table of Conten ts

For additional information regarding Stratus’ debt, refer to Note 6 in the Stratus 2024 Form 10-K.

Interest Expense and Capitalization.

Interest costs (before capitalized interest) totaled $ 3.9 million in second-quarter 2025, $ 3.9 million in second-quarter 2024, $ 7.6 million for the first six months of 2025 and $ 7.9 million for the first six months of 2024.

Stratus’ capitalized interest totaled $ 3.6 million in second-quarter 2025 and $ 7.4 million for the first six months of 2025.

All of Stratus’ interest costs were capitalized for first-quarter 2025 and both 2024 periods.

Capitalized interest is primarily related to development activities at Stratus’ Barton Creek properties (primarily Holden Hills Phases 1 and 2) and The Saint George for the 2025 periods.

Capitalized interest was primarily related to development activities at Stratus’ Barton Creek properties (primarily Holden Hills Phases 1 and 2 and The Saint June) and The Saint George for the 2024 periods.

Interest costs (before capitalized interest) totaled $ 3.8 million in third-quarter 2025, $ 4.0 million in third-quarter 2024, $ 11.5 million for the first nine months of 2025 and $ 11.9 million for the first nine months of 2024.

Stratus’ capitalized interest totaled $ 3.1 million in third-quarter 2025 and $ 10.4 million for the first nine months of 2025.

All of Stratus’ interest costs were capitalized for both 2024 periods.

Capitalized interest for the 2025 periods is primarily related to development activities at Holden Hills Phases 1 and 2.

The first nine months of 2025 also included capitalized interest related to the development of The Saint George, before it was completed in second-quarter 2025.

Capitalized interest for the 2024 periods was primarily related to development activities at Stratus’ Barton Creek properties (primarily Amarra Villas and Holden Hills Phases 1 and 2) and The Saint George.

The Comerica Bank revolving credit facility, The Annie B land loan, and The Saint George and Holden Hills Phase 1 construction loans require Comerica Bank’s prior written consent for any common stock repurchases in excess of $ 1.0 million or any dividend payments.

On September 1, 2022, with written consent from Comerica Bank, Stratus’ Board of Directors (Board) declared a special cash dividend of $ 4.67 per share (totaling $ 40.0 million) on Stratus’ common stock, which was paid on September 29, 2022 to stockholders of record as of September 19, 2022.

Accrued liabilities included $ 28 thousand as of June 30, 2025, and $ 0.3 million as of December 31, 2024, representing dividends accrued for unvested RSUs in accordance with the terms of the awards.

Accrued liabilities included $ 18 thousand as of September 30, 2025, and $ 0.3 million as of December 31, 2024, representing dividends accrued for unvested RSUs in accordance with the terms of the awards.

The accrued dividends are paid to the holders of the RSUs as the RSUs vest.

3 unchanged sentences

The repurchase program authorizes Stratus, 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.

In the first six months of 2025, Stratus acquired 26,819 shares of its common stock for a total cost of $ 0.5 million at an average price of $ 19.59 per share.

Through August 8, 2025, Stratus has acquired 135,620 shares of its common stock for a total cost of $ 3.0 million at an average price of $ 22.13 per share, and $ 22.0 million remains available for repurchases under the program.

In the first nine months of 2025, Stratus acquired 100,967 shares of its common stock for a total cost of $ 2.0 million at an average price of $ 19.50 per share.

Through November 7, 2025, Stratus has acquired 180,899 shares of its common stock for a total cost of $ 3.9 million at an average price of $ 21.59 per share, and $ 21.1 million remains available for repurchases under the program.

PROFIT PARTICIPATION INCENTIVE PLAN AND LONG-TERM INCENTIVE PLAN

7 unchanged sentences

Under the terms of the PPIP and LTIP, the number of RSUs granted in connection with settlement of approved projects is determined by reference to the 12-month trailing average stock price for the year the project reaches a payment event, whereas the grant date fair value of the RSUs for accounting purposes is based on the grant date closing price.

Table of Conten ts

A summary of PPIP/LTIP costs follows (in thousands):

Three Months Ended Six Months Ended

June 30, June 30,

Three Months Ended Nine Months Ended

September 30, September 30,

2025 2024 2025 2024

Charged to general and administrative expense

(Credited) charged to general and administrative expense

$ ( 102 ) $ 9 $ ( 4 ) $ 168

Capitalized to project development costs 8 2 16 113

Capitalized (credited) to project development costs ( 83 ) ( 71 ) ( 67 ) 42

Total PPIP/LTIP costs

$ ( 185 ) $ ( 62 ) $ ( 71 ) $ 210

At June 30, 2025, outstanding awards under the PPIP included Amarra Villas, Jones Crossing – Retail, Magnolia Place and The Saint June, and outstanding awards under the LTIP included The Saint George.

The accrued liability for the PPIP and LTIP totaled $ 2.0 million at June 30, 2025, and $ 1.9 million at December 31, 2024 (included in other liabilities).

At September 30, 2025, outstanding awards under the PPIP included Amarra Villas, Jones Crossing – Retail, Magnolia Place and The Saint June, and outstanding awards under the LTIP included The Saint George.

The accrued liability for the PPIP and LTIP totaled $ 1.8 million at September 30, 2025, and $ 1.9 million at December 31, 2024 (included in other liabilities).

Stratus’ accounting policy for and other information regarding its income taxes are further described in Notes 1 and 7 in the Stratus 2024 Form 10-K.

Stratus has a full valuation allowance against its U.S.

Federal net deferred tax assets as of both June 30, 2025 and December 31, 2024.

Stratus has recorded a deferred tax asset totaling $ 153 thousand at both June 30, 2025 and December 31, 2024 related to state income taxes.

Federal net deferred tax assets as of both September 30, 2025 and December 31, 2024.

Stratus has recorded a deferred tax asset totaling $ 153 thousand at both September 30, 2025 and December 31, 2024 related to state income taxes.

In evaluating the recoverability of the remaining deferred tax assets, management considered available positive and negative evidence, giving greater weight to the uncertainty regarding projected future financial results.

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Stratus’ future results of operations may be negatively impacted by an inability to realize a tax benefit for future tax losses or for items that will generate additional deferred tax assets that are not more likely than not to be realized.

During 2025, Stratus expects to incur current state income taxes in addition to U.S.

Federal current income taxes primarily associated with taxable income generated from cash received in the Holden Hills Phase 2 transaction discussed in Note 3.

The difference between Stratus’ consolidated effective income tax rate of ( 9 ) percent for the first six months of 2025 and the U.S.

During 2025, Stratus expects to incur current state income taxes primarily associated with taxable income generated from cash received in the Holden Hills Phase 2 transaction, as discussed in Note 3.

The difference between Stratus’ consolidated effective income tax rate of ( 1 ) percent for the first nine months of 2025 and the U.S.

Federal statutory income tax rate of 21 percent was primarily attributable to state income taxes, noncontrolling interests in subsidiaries, the presence of a valuation allowance against its U.S.

Federal net deferred tax assets as of June 30, 2025, the Holden Hills Phase 2 transaction discussed in Note 3 and the executive compensation limitation.

The difference between Stratus’ consolidated effective income tax rate of 14 percent for the first six months of 2024 and the U.S.

Federal net deferred tax assets as of September 30, 2025, the Holden Hills Phase 2 transaction discussed in Note 3 and the executive compensation limitation.

The difference between Stratus’ consolidated effective income tax rate of ( 70 ) percent for the first nine months of 2024 and the U.S.

Federal statutory income tax rate of 21 percent was primarily attributable to state income taxes, noncontrolling interests in subsidiaries, the presence of a valuation allowance against its U.S.

Federal net deferred tax assets as of June 30, 2024, and the executive compensation limitation.

Federal net deferred tax assets as of September 30, 2024, and the executive compensation limitation.

On July 4, 2025, the One Big Beautiful Bill Act (OBBB) was enacted into law.

Key tax components of OBBB include extension of certain expiring tax provisions from the 2017 Tax Cuts and Jobs Act, the reinstatement of immediate expensing of qualifying business property, full expensing of domestic research and experimental expenditures and changes to interest expense limitations.

In accordance with Accounting Standards Codification 740, Income Taxes , Stratus has recognized the effects of the new tax law in the period of enactment.

The impact of OBBB for the quarter ended September 30, 2025 did not result in a material impact on Stratus’ consolidated financial statements.

Stratus continues to evaluate the impact of OBBB on its consolidated financial statements but does not expect a material impact to its financial statements.

BUSINESS SEGMENTS

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Real Estate Operations and Leasing Operations.

The Real Estate Operations segment includes properties under various stages of development:

The Real Estate Operations

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segment includes properties under various stages of development:

developed for sale, under development and available for development.

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The segment also included West Killeen Market prior to its sale in second-quarter 2025 and the retail portion of Magnolia Place prior to its sale in third-quarter 2024.

As discussed in Note 10, Lantana Place – Retail is under contract to sell.

Subject to satisfaction of closing conditions, the sale is expected to close in fourth-quarter 2025.

Stratus’ chief operating decision maker (CODM) is the chief executive officer.

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The segment measure of profit (loss) provides a comprehensive view of the segments’ financial performance.

CODM makes decisions about the allocation of operating and capital resources to each segment based on assessment of the performance of the two segments and considering the capital needs for new and existing projects and the objectives of Stratus’ overall business strategy.

The CODM makes decisions about the allocation of operating and capital resources to each segment based on assessment of the performance of the two segments and considering the capital needs for new and existing projects and the objectives of Stratus’ overall business strategy.

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.

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Stratus’ revenues from contracts with customers follow (in thousands):

Three Months Ended Six Months Ended

June 30, June 30,

Three Months Ended Nine Months Ended

September 30, September 30,

2025 2024 2025 2024

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Total revenues from contracts with customers $ 4,969 $ 8,891 $ 21,617 $ 43,888

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Financial Information by Business Segment.

Summarized financial information by reportable segment for the three months ended June 30, 2025, follows (in thousands):

Summarized financial information by reportable segment for the three months ended September 30, 2025, follows (in thousands):

Leasing Operations Total

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Segment expenses:

Cost of real estate sold ( 6,244 ) ( 6,244 )

Property taxes and insurance ( 354 ) ( 1,197 ) ( 1,551 )

Lease expense ( 285 ) ( 285 )

Professional fees ( 806 ) ( 806 )

Professional fees b

( 3,191 ) ( 3,191 )

Maintenance and repairs ( 530 ) ( 530 )

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Utilities ( 228 ) ( 228 )

Other segment items b

Other segment items c

( 374 ) ( 298 ) ( 672 )

Depreciation and amortization ( 48 ) ( 2,024 ) ( 2,072 )

Gain on sale of assets c

— 5,000 5,000

Segment (loss) profit ( 4,544 ) 317 ( 4,227 )

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Loss on interest rate cap agreements ( 1 )

Other (loss) income, net ( 793 )

Loss on extinguishment of debt ( 33 )

Other income (loss), net 548

Net loss before income taxes $ ( 8,328 )

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$ 6,146 $ 914 $ 7,060

MUD reimbursements applied to real estate under development d

$ — $ 409 $ 409

Includes sales commissions and other revenues together with related expenses.

In third-quarter 2025, Stratus terminated a lease for a potential development project and recorded a charge of approximately $ 2.8 million representing previously capitalized architectural, engineering and consulting fees incurred in connection with planning and evaluating the potential project.

For Real Estate Operations, primarily includes advertising, property owner association fees, maintenance and utilities.

In second-quarter 2025, Stratus recorded a $ 1.0 million charge to write off receivables, included in other assets on the consolidated balance sheet, from owners of properties previously sold by Stratus for a share of historical costs incurred to develop the land .

For Leasing Operations, primarily includes amortization of leasing costs, property owner association fees, professional fees and office and computer equipment.

Reflects an approximately $ 5.0 million pre-tax gain on the sale of the West Killeen Market retail project.

In second-quarter 2025, Stratus received $ 409 thousand of proceeds related to MUD reimbursements of infrastructure costs incurred for development of The Saint June.

This was recorded as a reduction of real estate under development on the consolidated balance sheet.

Summarized financial information by reportable segment for the three months ended June 30, 2024, follows (in thousands):

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Summarized financial information by reportable segment for the three months ended September 30, 2024, follows (in thousands):

Leasing Operations Total

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Lease expense ( 285 ) ( 285 )

Professional fees ( 362 ) ( 362 )

Professional fees b

( 1,074 ) ( 1,074 )

Maintenance and repairs ( 522 ) ( 522 )

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Utilities ( 162 ) ( 162 )

Other segment items b

Other segment items c

( 177 ) ( 251 ) ( 428 )

Depreciation and amortization ( 48 ) ( 1,317 ) ( 1,365 )

Gain on sale of assets d

— 1,626 1,626

Segment (loss) profit ( 1,421 ) 3,265 1,844

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Operating loss ( 1,519 )

Other (loss) income, net 186

Other income (loss), net 163

Net loss before income taxes $ ( 1,356 )

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Includes sales commissions and other revenues together with related expenses.

In third-quarter 2024, Stratus recorded a charge of $ 721 thousand to write off previously capitalized costs related to a change in development plans for one property.

For Real Estate Operations, primarily includes advertising, property owner association fees, maintenance and utilities .

For Leasing Operations, primarily includes amortization of leasing costs, property owner association fees, professional fees and office and computer equipment .

Summarized financial information by reportable segment for the six months ended June 30, 2025, follows (in thousands):

Represents a pre-tax gain on the sale of Magnolia Place – Retail in third-quarter 2024 for $ 1.6 million.

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Summarized financial information by reportable segment for the nine months ended September 30, 2025, follows (in thousands):

Leasing Operations Total

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Lease expense ( 855 ) ( 855 )

Professional fees ( 1,169 ) ( 1,169 )

Professional fees b

( 4,360 ) ( 4,360 )

Maintenance and repairs ( 1,536 ) ( 1,536 )

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Utilities ( 452 ) ( 452 )

Other segment items b

Other segment items c

( 1,868 ) ( 823 ) ( 2,691 )

Depreciation and amortization ( 144 ) ( 4,698 ) ( 4,842 )

Gain on sale of assets c

Gain on sale of assets d

— 5,200 5,200

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$ 20,543 $ 8,075 $ 28,618

MUD reimbursements applied to real estate under development d

MUD reimbursements applied to real estate under development e

$ — $ 409 $ 409

Includes sales commissions and other revenues together with related expenses.

For Real Estate Operations, primarily includes advertising, property owner association fees, maintenance and utilities.

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This was recorded as a reduction of real estate under development on the consolidated balance sheet.

Summarized financial information by reportable segment for the six months ended June 30, 2024, follows (in thousands):

Table of Conten ts

Summarized financial information by reportable segment for the nine months ended September 30, 2024, follows (in thousands):

Leasing Operations Total

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Lease expense ( 855 ) ( 855 )

Professional fees ( 628 ) ( 628 )

Professional fees b

( 1,702 ) ( 1,702 )

Maintenance and repairs ( 1,376 ) ( 1,376 )

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Utilities ( 343 ) ( 343 )

Other segment items b

Other segment items c

( 435 ) ( 725 ) ( 1,160 )

Depreciation and amortization ( 136 ) ( 4,032 ) ( 4,168 )

Gain on sale of assets d

— 1,626 1,626

Segment profit 4,541 6,375 10,916

General and administrative expenses ( 11,670 )

Operating income 765

Operating loss ( 754 )

Loss on extinguishment of debt ( 59 )

Other (loss) income, net 359

Net income before income taxes $ 1,065

Other income (loss), net 522

Net loss before income taxes $ ( 291 )

Capital expenditures and purchases and development of real estate properties $ 22,925 $ 22,962 $ 45,887

Includes sales commissions and other revenues together with related expenses.

In third-quarter 2024, Stratus recorded a charge of $ 721 thousand to write off previously capitalized costs related to a change in development plans for one property.

For Real Estate Operations, primarily includes advertising, property owner association fees, maintenance and utilities.

For Leasing Operations, primarily includes amortization of leasing costs, property owner association fees, professional fees and office and computer equipment .

Represents a pre-tax gain on the sale of Magnolia Place – Retail in third-quarter 2024 for $ 1.6 million.

Total assets by segment were as follows (in thousands):

September 30,

Real Estate Operations $ 275,227 $ 349,701

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Total assets $ 572,562 $ 523,180

Corporate and other includes cash and cash equivalents and restricted cash of $ 59.2 million and $ 12.6 million at June 30, 2025 and 2024, respectively.

Corporate and other includes cash and cash equivalents and restricted cash of $ 54.0 million and $ 18.7 million at September 30, 2025 and 2024, respectively.

The remaining cash and cash equivalents and restricted cash is reflected in the operating segments’ assets.

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SUBSEQUENT EVENTS

Subsequent to June 30, 2025, the One Big Beautiful Bill Act (OBBB) was enacted into law.

Stratus is currently evaluating the tax provisions of OBBB and does not expect a material impact to its financial statements.

Subsequent to September 30, 2025, Stratus entered into an agreement, as amended, to sell Lantana Place – Retail for approximately $ 57.4 million.

Subject to satisfaction of closing conditions, the sale is expected to close in fourth-quarter 2025.

Using the proceeds from the sale, Stratus expects to repay the project loan with an approximately $ 29.8 million principal balance as of September 30, 2025.

As a result of this transaction, Stratus estimates an income tax liability of approximately $ 6.7 million, which would be recognized after the sale has closed.

Following the

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sale, Stratus will retain The Saint Julia, the approximately 210-unit multi-family development project that is part of Lantana Place.

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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.

What changed 10-Q

Item 1. Financial Statements