What changed in this filing

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Item 1. Financial Statements

2026-05-12 compared with 2025-11-12 · 192 added, 413 removed, 314 unchanged (66% of the section changed)

3 unchanged sentences

(In Thousands)

September 30,

2026 December 31,

8 unchanged sentences

Other assets 4,644 4,691

Assets held for sale — 37,102

Total assets $ 532,493 $ 563,428

6 unchanged sentences

Other liabilities 1,541 4,432

Liabilities held for sale — 33,387

Total liabilities 182,065 216,349

12 unchanged sentences

STRATUS PROPERTIES INC.

CONSOLIDATED STATEMENTS OF COMPREHENSIVE (LOSS) INCOME (Unaudited)

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) (Unaudited)

(In Thousands, Except Per Share Amounts)

Three Months Ended Nine Months Ended

September 30, September 30,

2025 2024 2025 2024

Three Months Ended

Real estate operations $ 82 $ 25

7 unchanged sentences

General and administrative expenses 5,590 4,051

H-E-B profit participation 78 —

Gain on sale of assets ( 22,976 ) ( 200 )

Total ( 11,611 ) 8,638

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

Operating income (loss) 15,402 ( 3,595 )

Interest expense, net ( 60 ) —

1 unchanged sentence

Loss on extinguishment of debt ( 383 ) ( 183 )

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 (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

Other income, net 666 64

Income (loss) before income taxes 15,625 ( 3,727 )

Provision for income taxes ( 2,116 ) ( 30 )

Net income (loss) and total comprehensive income (loss) 13,509 ( 3,757 )

Total comprehensive (income) loss attributable to noncontrolling interests ( 6,882 ) 882

Net income (loss) and total comprehensive income (loss) attributable to common stockholders $ 6,627 $ ( 2,875 )

Basic net income (loss) per share attributable to common stockholders $ 0.83 $ ( 0.36 )

Diluted net income (loss) per share attributable to common stockholders $ 0.82 $ ( 0.36 )

Weighted-average shares of common stock outstanding:

8,033 8,080 8,051 8,059

Diluted 8,055 8,037

4 unchanged sentences

(In Thousands)

Nine Months Ended

September 30,

Three Months Ended

Cash flow from operating activities:

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

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

Net income (loss) $ 13,509 $ ( 3,757 )

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

Depreciation and amortization 1,449 1,394

Cost of real estate sold 5,790 19,115

Loss on interest rate cap agreements — 13

3 unchanged sentences

Gain on sale of assets ( 22,976 ) ( 200 )

H-E-B profit participation 78 —

Purchases and development of real estate properties ( 7,729 ) ( 7,212 )

Write-off capitalized project costs 2,869 721

Decrease in other assets 299 792

4 unchanged sentences

Proceeds from sale of assets, net of selling costs 59,980 —

Municipal utility district (MUD) reimbursements

Payments on master lease obligations ( 140 ) ( 166 )

2 unchanged sentences

Borrowings from credit facility — 4,000

Payments on credit facility ( 4,000 ) —

Borrowings from project and term loans 366 57,969

4 unchanged sentences

Noncontrolling interest distributions ( 10,762 ) ( 856 )

Noncontrolling interest contributions 50,755 3,600

Purchases of treasury stock ( 489 ) ( 410 )

Financing costs ( 113 ) ( 1,220 )

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

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

Net cash (used in) provided by financing activities ( 44,530 ) 9,991

Net decrease in cash, cash equivalents and restricted cash ( 327 ) ( 8,197 )

Cash, cash equivalents and restricted cash at beginning of year 74,623 21,154

6 unchanged sentences

Stockholders’ Equity

Retained Earnings (Accumulated Deficit) Common Stock

Held in Treasury Total Noncontrolling Interests in Subsidiaries

Common Stock Capital in Excess of Par Value

Held in Treasury Total

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

of Shares At Par

3 unchanged sentences

Stock-based compensation — — 317 — — — 317 — 317

Grant of restricted stock units (RSUs) under the Profit Participation Incentive Plan (PPIP) — — 1,146 — — — 1,146 — 1,146

Tender of shares for stock-based awards

2 unchanged sentences

Noncontrolling interest distributions — — — — — — — ( 10,762 ) ( 10,762 )

Total comprehensive loss — — — ( 2,875 ) — — ( 2,875 ) ( 882 ) ( 3,757 )

Total comprehensive income — — — 6,627 — — 6,627 6,882 13,509

Balance at March 31, 2026 9,847 $ 98 $ 203,725 $ 47,210 1,864 $ ( 39,318 ) $ 211,715 $ 138,713 $ 350,428

Vested stock-based awards 16 — — — — — — — —

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

Stock-based compensation — — 299 — — — 299 — 299

Common stock repurchases — — — — 6 ( 116 ) ( 116 ) — ( 116 )

Noncontrolling interest contributions — — — — — — — 47,847 47,847

Total comprehensive income (loss) — — — 260 — — 260 ( 2,555 ) ( 2,295 )

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.

CONSOLIDATED STATEMENTS OF EQUITY (Unaudited) (Continued)

(In Thousands)

Stockholders’ Equity

Retained Earnings (Accumulated Deficit) Common Stock

Held in Treasury Total Noncontrolling Interests in Subsidiaries

Common Stock Capital in Excess of Par Value

Held in Treasury Total

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

of Shares At Par

3 unchanged sentences

Stock-based compensation — — 369 — — — 369 — 369

Grant of restricted stock units (RSUs) under the Profit Participation Incentive Plan (PPIP) — — 1,492 — — — 1,492 — 1,492

Tender of shares for stock-based awards

1 unchanged sentence

Common stock repurchases — — — — 21 ( 410 ) ( 410 ) — ( 410 )

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

Balance at March 31, 2024 9,664 97 199,674 31,197 1,599 ( 33,395 ) 197,573 102,271 299,844

Vested stock-based awards 12 — — — — — — — —

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

Stock-based compensation — — 434 — — — 434 — 434

Total comprehensive loss — — — ( 1,725 ) — — ( 1,725 ) ( 1,053 ) ( 2,778 )

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

Noncontrolling interest distributions — — — — — — — ( 856 ) ( 856 )

Total comprehensive loss — — — ( 2,875 ) — — ( 2,875 ) ( 882 ) ( 3,757 )

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

Balance at March 31, 2025 9,773 $ 98 $ 201,346 $ 25,726 1,700 $ ( 35,711 ) $ 191,459 $ 101,124 $ 292,583

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

3 unchanged sentences

The unaudited condensed consolidated financial statements and the accompanying notes are prepared in accordance with accounting principles generally accepted in the United States (U.S.

GAAP) and should be read in conjunction with the consolidated financial statements and notes thereto for the year ended December 31, 2024, included in Stratus Properties Inc.’s (Stratus) Annual Report on Form 10-K for the year ended December 31, 2024 (Stratus 2024 Form 10-K) filed with the United States (U.S.) Securities and Exchange Commission (SEC) on March 28, 2025.

GAAP) and should be read in conjunction with the consolidated financial statements and notes thereto for the year ended December 31, 2025, included in Stratus Properties Inc.’s (Stratus) Annual Report on Form 10-K for the year ended December 31, 2025 (Stratus 2025 Form 10-K) filed with the United States (U.S.) Securities and Exchange Commission on March 27, 2026.

The information furnished herein reflects all adjustments that are, in the opinion of management, necessary for a fair statement of the results for the interim periods reported and consist of normal recurring adjustments.

1 unchanged sentence

Related Party Transactions.

In April 2022, Stratus hired the son of Stratus’ President and Chief Executive Officer as an employee.

As an employee, he received the same health and retirement benefits provided to all Stratus employees, annual incentive awards and two awards under the Profit Participation Incentive Plan (PPIP).

In first-quarter 2024, he received $ 22 thousand as an annual incentive award for 2023, and his annual salary was $ 124 thousand.

In September 2024, the employee resigned from employment with Stratus, resulting in the forfeiture of his two outstanding awards under the PPIP.

Refer to Note 7 for discussion of the PPIP.

For additional information regarding Stratus’ related parties, including LCHM Holdings, LLC and JBM Trust, refer to Notes 1 and 2 in the Stratus 2024 Form 10-K.

For additional information regarding Stratus’ related parties, including LCHM Holdings, LLC and JBM Trust, refer to Notes 1 and 2 in the Stratus 2025 Form 10-K and Note 3 herein.

Plan of Liquidation.

On March 24, 2026, after concluding the strategic alternatives review announced in December 2025, Stratus’ Board of Directors (Board) approved a plan of complete liquidation and dissolution of Stratus (Plan of Liquidation) and determined to submit it to Stratus’ stockholders for approval.

If Stratus’ stockholders approve the Plan of Liquidation, Stratus will be dissolved and will conduct an orderly sale of all or substantially all of Stratus’ assets and distribute the net proceeds over time to Stratus’ stockholders, after payment of or reasonable provision for Stratus’ liabilities and obligations.

The Plan of Liquidation remains subject to stockholder approval and other contingencies, including obtaining lender, partner and other third-party consents.

Because the Plan of Liquidation remains subject to stockholder approval, Stratus continues to prepare its financial statements on a going-concern basis, and the results presented do not reflect liquidation basis accounting.

EARNINGS PER SHARE

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

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 income (loss) 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

Net income (loss) and total comprehensive income (loss) $ 13,509 $ ( 3,757 )

Total comprehensive (income) loss attributable to noncontrolling interests ( 6,882 ) 882

Net income (loss) and total comprehensive income (loss) attributable to common stockholders $ 6,627 $ ( 2,875 )

Basic weighted-average shares of common stock outstanding

8,033 8,080 8,051 8,059

Add shares issuable upon vesting of dilutive restricted stock units (RSUs) a

Diluted weighted-average shares of common stock outstanding

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

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.

Basic net income (loss) per share attributable to common stockholders $ 0.83 $ ( 0.36 )

Diluted net income (loss) per share attributable to common stockholders $ 0.82 $ ( 0.36 )

For the first three months of March 31, 2026, excludes 14 thousand shares of common stock associated with RSUs that were anti-dilutive.

For the first three months of March 31, 2025, excludes 161 thousand shares of common stock associated with RSUs that were anti-dilutive as a result of a net loss.

Table of Conten ts

2 unchanged sentences

Stratus, through its subsidiaries, is a partner in the following limited partnerships:

Partnership a

Indirect Equity Interest

Partnership Indirect Equity Interest

Holden Hills, L.P.

4 unchanged sentences

The Saint June, L.P.

Holden Hills Phase 2, L.P.

was formed in second-quarter 2025 – see discussion below.

For additional information regarding Stratus' other partnerships, refer to Note 2 in the Stratus 2024 Form 10-K.

Holden Hills Phase 2, L.P.

In second-quarter 2025, Holden Hills Phase 2, L.P.

(the Holden Hills Phase 2 partnership), a Texas limited partnership and subsidiary of Stratus, was formed for the development of Holden Hills Phase 2 (Holden Hills Phase 2 Project).

The Holden Hills Phase 2 Project is Stratus’ approximately 570-acre mixed-use development located along Southwest Parkway in the southern portion of the Barton Creek community in Austin, Texas adjacent to Holden Hills Phase 1, Stratus’ 495-acre residential development.

The Holden Hills Phase 2 partnership is governed by a limited partnership agreement between a wholly owned subsidiary of Stratus as Class A limited partner and an unaffiliated equity investor as Class B limited partner, and another wholly owned subsidiary of Stratus which serves as general partner (the Phase 2 general partner).

In second-quarter 2025, the partners made the following initial capital contributions to the Holden Hills Phase 2 partnership:

(i) Stratus contributed the Holden Hills Phase 2 land and related personal property at an agreed value of $ 95.7 million, which reflects an agreed land value of $ 86.9 million and Stratus’ Tecoma Circle infrastructure investment of approximately $ 8.8 million, and (ii) The Class B limited partner contributed $ 47.8 million in cash.

Following the Class B limited partner’s initial capital contribution, $ 47.8 million of cash was distributed by the Holden Hills Phase 2 partnership to Stratus.

Further, the Holden Hills Phase 2 partnership will reimburse Stratus for certain initial project costs of approximately $ 0.8 million.

As a result of these transactions, Stratus holds, indirectly through its wholly owned subsidiaries, a 50.0 percent equity interest in the Holden Hills Phase 2 partnership, and the Class B limited partner holds the remaining 50.0 percent equity interest in the Holden Hills Phase 2 partnership.

Generally, after the initial distribution described above, distributions will be made to the partners in accordance with their relative equity capital interests.

Stratus consolidates the Holden Hills Phase 2 partnership;

therefore, its contribution of the Holden Hills Phase 2 land and related personal property was recorded at historical cost and the contribution from the Class B limited partner was accounted for as a noncontrolling interest contribution.

The initial purposes of the Holden Hills Phase 2 partnership do not include the development or construction of horizontal or vertical improvements (each, a future project) and the commencement of any future project will require the approval of all partners.

In addition to each partner’s initial capital contribution, upon the call of the Phase 2 general partner from time to time, the partners are obligated to make additional capital contributions for certain Holden Hills Phase 2 partnership costs and expenses defined as “mandatory,” such as property taxes and debt service payments, within available unused reserves in the then-current approved budget or as otherwise approved by the partners.

Stratus guaranteed the additional capital contribution obligations of the Phase 2 general partner and the Class A limited partner.

The Phase 2 general partner has the authority to manage the day-to-day operations of the Holden Hills Phase 2 partnership, subject to approval rights given to the partners for specified “major decisions,” including but not limited to operating and future project budgets, the business plan and amendments thereto;

commencement of any future project;

sales, leases or transfers of any portion of the Holden Hills Phase 2 Project or any future project to any partner, affiliate of any partner, or to any unaffiliated third party other than as contemplated in the business plan;

payments, transactions or agreements between the Holden Hills Phase 2 partnership and any partner or its affiliates not already approved;

incurring any debt, mortgage or guaranty;

capital calls in excess of the initial capital commitment;

admitting a new partner;

and certain transfers of direct or indirect interests in the Holden Hills Phase 2 partnership.

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 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.

Partnership Agreement .

In second-quarter 2025, the parties to the Holden Hills, L.P.

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.

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;

Kingwood Place was sold in January 2026.

Refer to Note 4 for further discussion.

Stratus Kingwood Place, L.P.

As discussed further in Note 4, the Stratus Kingwood Place, L.P.

(Kingwood L.P.) sold Kingwood Place in January 2026.

In connection with the sale, Stratus received $ 16.2 million from Kingwood L.P.

and $ 10.6 million of the net proceeds were distributed to the noncontrolling interest holders, including $ 1.8 million to each of LCHM Holdings, LLC and JBM Trust, which are related parties.

Refer to Notes 1 and 2 in the Stratus 2025 Form 10-K.

Operating Loans and Advances;

Distributions from Partnerships.

2 unchanged sentences

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.

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 2026, Stratus made an operating loan of $ 550 thousand, and one of the Class B limited partners made an operating loan of $ 250 thousand.

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

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.

As of March 31, 2026, Stratus’ and one of the Class B limited partners’ operating loans outstanding to Stratus Block 150, L.P.

totaled $ 8.9 million and $ 250 thousand, respectively.

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

2 unchanged sentences

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 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.

As of March 31, 2026, 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.

As of March 31, 2026, Stratus had advanced $ 1.6 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.

In first-quarter 2026, Stratus modified the Holden Hills Phase 1 construction loan to provide a short-term extension of the maturity date to June 8, 2026, while a longer-term extension is negotiated with the lender.

As of March 31, 2026, Stratus had advanced approximately $ 3.0 million to the Holden Hills Phase 2, L.P.

(the Holden Hills Phase 2 partnership) to fund certain project costs.

The Holden Hills Phase 2 partnership is working to establish an approximately $ 10.0 million revolving credit facility for the development of Holden Hills Phase 2 and expects to use these funds to reimburse Stratus, as approved by the partners.

In first-quarter 2026, Stratus advanced $ 2.1 million 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.

The Saint George Apartments, L.P.

will pay $ 1.0 million of the costs of remediation and repairs, and the remainder will be covered by insurance and the general contractor.

In first-quarter 2026, The Saint June, L.P.

made distributions of approximately $ 118 thousand and $ 61 thousand to the Class B limited partner in The Saint June partnership and Stratus, respectively.

Table of Conten ts

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.

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.

As of March 31, 2026, cash and cash equivalents totaling $ 1.7 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,

Stratus’ consolidated balance sheets include the following assets and liabilities of the partnerships (in thousands) except those related to Kingwood Place that are presented as held for sale in Stratus’ consolidated balance sheet as of December 31, 2025.

All intercompany balances are eliminated.

Refer to Note 4 for further details of the Kingwood Place sale and assets and liabilities held for sale.

2026 December 31,

4 unchanged sentences

Real estate held for investment 147,354 148,494

Lease right-of-use assets — 148

Other assets 770 779

3 unchanged sentences

Debt 120,062 119,296

Lease liabilities — 148

Other liabilities 179 313

2 unchanged sentences

Substantially all of the assets are available to settle obligations of the partnerships only.

All of the debt is guaranteed by Stratus until certain conditions are met as provided in the applicable partnership loan agreements except for The Saint June construction loan, for which Stratus has a 50 percent repayment guaranty obligation, The Saint George construction loan, for which Stratus has a 25 percent repayment guaranty obligation, and the Kingwood Place loan, for which Stratus has customary non-recourse carve-out obligations and an environmental indemnification.

All of the debt is guaranteed by Stratus until certain conditions are met as provided in the applicable partnership loan agreements except for The Saint June construction loan, for which Stratus has a 50 percent repayment guaranty obligation, and The Saint George construction loan, for which Stratus has a 25 percent repayment guaranty obligation.

The creditors for the remaining liabilities do not have recourse to the general credit of Stratus.

See Note 6 of the Stratus 2025 Form 10-K for additional information.

Kingwood Place.

In January 2026, Kingwood, L.P.

sold Kingwood Place for $ 60.8 million.

The sale generated pre-tax net cash proceeds of approximately $ 27.0 million, after selling costs and payment of the $ 33.0 million project loan, and a pre-tax gain of approximately $ 23.0 million ($ 13.4 million, net of noncontrolling interests).

After establishing a reserve for remaining costs of the partnership, Stratus received $ 16.2 million from the partnership in connection with the sale, and $ 10.6 million of the net proceeds were distributed to the noncontrolling interest holders.

In connection with the sale, H-E-B earned a profit participation of $ 78 thousand.

See Notes 2 and 9 of the Stratus 2025 Form 10-K for further discussion of Kingwood, L.P., Kingwood Place and H-E-B profit participation.

Table of Conten ts

The assets and liabilities of Kingwood Place have been reported as held for sale in the consolidated balance sheet as of December 31, 2025.

The carrying amounts of the major classes of assets and liabilities for Kingwood Place presented in assets held for sale as of December 31, 2025, follow (in thousands):

Land available for development $ 1,967

Real estate held for investment, net 32,468

Other assets 2,667

Total assets held for sale $ 37,102

Accrued liabilities $ 460

Other liabilities 327

Total liabilities held for sale $ 33,387

Kingwood Place had rental revenue of $ 0.3 million in first-quarter 2026 prior to the sale and $ 1.1 million in first-quarter 2025.

Operating income was $ 0.2 million in first-quarter 2026 and $ 0.6 million in first-quarter 2025.

Interest expense on the Kingwood Place loan was $ 0.2 million in first-quarter 2026 and $ 0.5 million in first-quarter 2025.

The Oaks at Lakeway.

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 $ 1.1 million at September 30, 2025 and $ 1.8 million at December 31, 2024.

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 2025 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, which 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 $ 0.7 million at March 31, 2026 and $ 0.8 million at December 31, 2025.

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

The remaining deferred gain balance is expected to be reduced primarily by future Pad Sites Master Lease payments.

West Killeen Market.

In second-quarter 2025, Stratus completed the sale of the West Killeen Market retail project for $ 13.3 million, generating pre-tax net cash proceeds of approximately $ 7.8 million, after transaction expenses and payment of the remaining project loan, and a pre-tax gain of approximately $ 5.0 million.

In connection with this sale, the West Killeen Market construction loan, which had a balance of $ 5.2 million, was repaid.

Amarra Villas.

In second-quarter 2025, Stratus sold two Amarra Villas homes for a total of $ 6.8 million .

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.

In first-quarter 2024, Stratus sold two Amarra Villas homes for a total of $ 7.6 million.

Magnolia Place.

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

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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.

FAIR VALUE MEASUREMENTS

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

September 30,

2026 December 31,

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Interest Rate Cap Agreements.

In November 2024, Stratus Kingwood Place, L.P.

paid $ 27,400 to enter into an interest rate cap agreement, with a Term SOFR strike rate equal to 6.00 percent, a notional amount of $ 33.0 million (the principal amount of the Kingwood Place loan) and an expiration date of December 1, 2026.

In November 2024, Kingwood, L.P.

In March 2025, College Station 1892 Properties, L.L.C.

paid $ 4,800 to enter into an interest rate cap agreement, with a Term SOFR strike rate equal to 5.00 percent, a notional amount of $ 24.0 million (the principal amount of the Jones Crossing loan) and an expiration date of April 1, 2026.

paid $ 4,800 to enter into an interest rate cap agreement, with a Term SOFR

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strike rate equal to 5.00 percent, a notional amount of $ 24.0 million (the principal amount of the Jones Crossing loan) and an expiration date of April 1, 2026.

The interest rate caps are derivative instruments that do not qualify for hedge accounting treatment.

Therefore, changes in the instruments’ fair values are recorded in the consolidated statements of comprehensive (loss) income.

Therefore, changes in the instruments’ fair values are recorded in the consolidated statements of comprehensive income (loss).

Stratus uses an interest rate pricing model that relies on market observable inputs such as Term SOFR to measure the fair value of the agreements.

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Therefore, the interest rate caps are classified within Level 2 of the fair value hierarchy.

The fair value of the interest rate caps is presented as part of other assets in the consolidated balance sheets.

The fair value of Stratus’ debt also approximates fair value, as the interest rates are variable and approximate prevailing market interest rates available for similar mortgage debt.

The fair value of the interest rate caps is presented in other assets in the consolidated balance sheets.

The fair value of Stratus’ debt approximates fair value, as the interest rates are variable and approximate prevailing market interest rates available for similar mortgage debt.

Stratus’ debt is recorded at cost and is not actively traded.

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Accordingly, Stratus’ debt is classified within Level 2 of the fair value hierarchy.

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

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DEBT AND EQUITY

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

September 30,

2026 December 31,

Comerica Bank revolving credit facility a

Kingwood Place loan 32,550 32,408

Lantana Place loan b

29,451 25,509

Jones Crossing loan c

23,624 22,428

The Annie B land loan d

11,876 12,568

Fifth Third Bank revolving credit facility $ — $ —

Jones Crossing loan 23,697 23,661

The Annie B land loan 11,839 11,732

Construction loans:

The Saint George 52,416 52,327

The Saint June e

33,178 32,109

The Saint June 33,225 33,202

Holden Hills Phase 1 22,582 22,035

West Killeen Market f

Amarra Villas credit facility g

$ 143,759 $ 142,957

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.

In March 2025, the Jones Crossing loan was refinanced with a three-year term loan.

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 $ 1.8 million at September 30, 2025, and $ 1.8 million at December 31, 2024.

Comerica Bank revolving credit facility.

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 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.

In January 2025, the Comerica Bank revolving credit facility was modified to increase the aggregate amount of letters of credit that may be committed against the facility from $ 13.3 million to $ 15.6 million.

In February 2025, Stratus entered into an additional $ 2.3 million letter of credit to secure Stratus’ obligation to build certain roads and utilities facilities benefiting Holden Hills Phases 1 and 2, resulting in outstanding letters of credit totaling $ 15.6 million.

In May 2025, a $ 4.0 million letter of credit relating to Holden Hills Phase 1 was terminated upon completion of the related obligations and the aggregate amount of letters of credit committed against the facility was reduced to $ 11.6 million.

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.

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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.

In first-quarter 2025, in connection with the refinancing of the Kingwood Place construction loan in November 2024, which generated additional cash proceeds, Stratus paid distributions of $ 856 thousand to noncontrolling interest holders.

Lantana Place loan.

In January 2025, Lantana Place, L.L.C.

entered into a loan with Broadway National Bank (the Lantana Place loan) to refinance the prior Lantana Place construction loan.

The Lantana Place loan has a principal amount of $ 29.8 million and matures February 1, 2029, with an option to extend the maturity for an additional 12 months, subject to satisfying certain conditions.

The Lantana Place loan bears interest at one-month Term SOFR plus 2.35 percent, with a floor of 0.00 percent .

Payments of interest only on the Lantana Place loan are due monthly through January 31, 2026.

Thereafter, principal and interest payments are due monthly based on a 30-year amortization with the remaining unpaid principal and interest due at maturity.

The Lantana Place loan is secured by the Lantana Place – Retail project.

Stratus has provided a guaranty limited to certain non-recourse carve-out obligations.

The Lantana Place loan agreement contains a financial covenant that the Lantana Place project maintain a debt service coverage ratio of at least 1.30 to 1.00 measured by reference to a trailing 12-month period for each fiscal year beginning with the year ending December 31, 2025.

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.

In March 2025, College Station 1892 Properties, L.L.C.

entered into a loan with Brighthouse Life Insurance Company (the Jones Crossing loan) to refinance the prior Jones Crossing loan.

The Jones Crossing loan has a principal amount of $ 24.0 million and matures April 1, 2028.

The Jones Crossing loan bears interest at one-month Term SOFR plus 1.95 percent, with a floor of 3.00 percent.

Payments of interest only on the Jones Crossing loan are due monthly with the outstanding principal due at maturity.

College Station 1892 Properties, L.L.C.

may prepay all, but not a portion, of the Jones Crossing loan;

provided that a prepayment prior to April 1, 2026 is subject to a yield maintenance premium payment.

The Jones Crossing loan is secured by the Jones Crossing – Retail project.

Stratus has provided a guaranty limited to certain non-recourse carve-out obligations and an environmental indemnification.

After paying off the prior Jones Crossing loan and closing costs, Stratus received approximately $ 1.2 million in net cash proceeds.

The Annie B land loan.

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 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.

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.

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Includes net reductions for unamortized debt issuance costs of $ 0.6 million at March 31, 2026, and $ 0.8 million at December 31, 2025.

Excludes debt related to Kingwood Place which was presented in liabilities held for sale at December 31, 2025.

Kingwood Place was sold in January 2026 (refer to Note 4).

Fifth Third Bank revolving credit facility.

As of March 31, 2026, the maximum amount that could be borrowed under the Fifth Third Bank (formerly Comerica Bank) revolving credit facility was $ 28.1 million, resulting in availability of $ 24.7 million, net of $ 3.4 million of letters of credit.

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

In first-quarter 2026, Stratus entered into an amendment to its revolving credit facility that extended the maturity date to March 27, 2028.

Holden Hills Phase 1 construction loan.

In first-quarter 2026, Stratus modified the loan to provide a short-term extension of the maturity date to June 8, 2026, while a longer-term extension is negotiated with the lender.

For additional information regarding Stratus’ debt, refer to Note 6 in the Stratus 2025 Form 10-K.

Interest Expense and Capitalization.

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 $ 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.

Interest costs (before capitalized interest) totaled $ 2.6 million in first-quarter 2026 and $ 3.8 million in first-quarter 2025.

Substantially all interest costs were capitalized in both periods.

Capitalized interest in first-quarter 2026 was primarily related to development activities at Holden Hills Phases 1 and 2.

Capitalized interest in first-quarter 2025 was primarily related to development activities at Holden Hills Phases 1 and 2 and The Saint George.

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

Share Repurchase Program.

In November 2023, with written consent from Comerica Bank, Stratus’ Board approved a new share repurchase program, which authorized repurchases of up to $ 5.0 million of Stratus’ common stock.

In June 2025, with written consent from Comerica Bank, Stratus’ Board approved an increase in the share repurchase program, authorizing repurchases of up to $ 25.0 million of Stratus’ common stock.

In November 2023, with written consent from Fifth Third Bank, Stratus’ Board approved a new share repurchase program, which authorized repurchases of up to $ 5.0 million of Stratus’ common stock.

In June 2025, with written consent from Fifth Third Bank, Stratus’ Board approved an increase in the share repurchase program, authorizing repurchases of up to $ 25.0 million of Stratus’ common stock.

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 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.

In first-quarter 2026, Stratus acquired 18,886 shares of its common stock for a total cost of $ 0.5 million at an average price of $ 25.88 per share.

As of March 31, 2026, Stratus has acquired 235,421 shares of its common stock for a total cost of $ 5.2 million at an average price of $ 22.14 per share, and $ 19.8 million remains available for repurchases under the program.

PROFIT PARTICIPATION INCENTIVE PLAN AND LONG-TERM INCENTIVE PLAN

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Refer to Notes 1 and 8 of the Stratus 2025 Form 10-K for further discussion.

In July 2023, Kingwood Place reached a valuation event under the PPIP and Stratus obtained an appraisal of the property to determine the payout under the PPIP.

The accrued liability under the PPIP related to Kingwood Place was reduced to $ 1.6 million at December 31, 2023, and was settled in RSUs with a three-year vesting period awarded to eligible participants in first-quarter 2024.

In August 2025, Magnolia Place reached a valuation event under the PPIP and Stratus obtained an appraisal of the property to determine the payout under the PPIP.

The accrued liability under the PPIP related to Magnolia Place was $ 1.3 million at December 31, 2025, and $ 1.1 million of the liability was settled in RSUs with a three-year vesting period awarded to eligible participants in first-quarter 2026.

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.

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

Three Months Ended Nine Months Ended

September 30, September 30,

2025 2024 2025 2024

The RSUs awarded for Magnolia Place had a grant date value $ 570 thousand greater than the accrued liability.

Stratus transferred $ 1.1 million of the accrued liability under the PPIP for Magnolia Place to capital in excess of par value and is amortizing the $ 570 thousand balance of the grant-date value with a charge to general and administrative expenses and a credit to capital in excess of par value over the three-year vesting period of the RSUs.

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

Three Months Ended

(Credited) charged to general and administrative expense

$ ( 89 ) $ 68

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

Total PPIP/LTIP costs

Capitalized to project development costs — 8

Total PPIP and LTIP costs

$ ( 89 ) $ 76

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).

At March 31, 2026, outstanding awards under the PPIP included Amarra Villas, Jones Crossing – Retail, and The Saint June, and the only outstanding awards under the LTIP related to The Saint George.

The accrued liability for the PPIP and LTIP totaled $ 0.4 million at March 31, 2026, and $ 1.7 million at December 31, 2025 (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 2025 Form 10-K.

Table of Conten ts

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

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.

Federal net deferred tax assets as of both March 31, 2026 and December 31, 2025.

Stratus has recorded a deferred tax asset totaling $ 206 thousand at both March 31, 2026 and December 31, 2025 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 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.

During 2026, Stratus expects to incur current U.S.

Federal income taxes and state income taxes primarily associated with income generated from the sale of Kingwood Place, as discussed in Note 4, partially offset by available operating losses and other tax attributes, subject to valuation allowance considerations.

The difference between Stratus’ consolidated effective income tax rate of 14 percent for the first three months of 2026 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 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 net deferred tax assets as of March 31, 2026, the sale of Kingwood Place discussed in Note 4 and the executive compensation limitation.

The difference between Stratus’ consolidated effective income tax rate of ( 1 ) percent for the first three 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 September 30, 2024, and the executive compensation limitation.

Federal net deferred tax assets as of March 31, 2025, 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.

Key corporate tax provisions of OBBB include the restoration of 100 percent bonus depreciation, immediate expensing for domestic research and experimental expenditures, changes to Section 163(j) interest limitations, amendments to energy credits, and expanded Section 162(m) aggregation requirements.

In accordance with ASC 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 March 31, 2026 did not have a material impact on Stratus’ consolidated financial statements.

BUSINESS SEGMENTS

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Real Estate Operations and Leasing Operations.

The Real Estate Operations

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segment includes properties under various stages of development:

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

developed for sale, under development and available for development.

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Properties that Stratus develops and then holds for investment become part of the Leasing Operations segment.

Decisions about whether to continue to hold a property for investment or to sell it depend on various factors, including conditions in the real estate markets in which Stratus operates and the estimated fair value of the property, and are primarily driven by the objective of maximizing overall asset value.

The Real Estate Operations segment is comprised of Stratus’ real estate assets, which consists of its properties in Austin, Texas (including the Barton Creek Community, which includes Holden Hills Phases 1 and 2, Amarra multi-family and commercial land, Amarra Villas homes, an Amarra Drive lot and other vacant land;

Historically, decisions about whether to continue to hold a property for investment or to sell it have depended on various factors, including conditions in the real estate markets in which Stratus operates and the estimated fair value of the property, and have been primarily driven by the objective of maximizing overall asset value.

The Real Estate Operations segment is comprised of Stratus’ real estate assets, which consist of its properties in Austin, Texas (including the Barton Creek Community, which includes Holden Hills Phases 1 and 2, Amarra multi-family and commercial land, Amarra Villas homes, an Amarra Drive lot and other vacant land;

the Circle C community;

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and the land for The Annie B);

in Lakeway, Texas, located in the greater Austin area (Lakeway);

in College Station, Texas (land for future phases of retail and multi-family development and retail pad sites at Jones Crossing);

and in Magnolia, Texas (potential development of approximately 11 acres planned for future multi-family use), Kingwood, Texas (a retail pad site) and New Caney, Texas (New Caney), each located in the greater Houston area.

The Leasing Operations segment is comprised of Stratus’ real estate assets held for investment that are leased or available for lease and includes The Saint George (which was completed in second-quarter 2025 and moved from the Real Estate Operations segment to the Leasing Operations segment), The Saint June, Kingwood Place, the retail portion of Lantana Place, the completed retail portion of Jones Crossing, and retail pad sites subject to ground leases at Lantana Place, Kingwood Place and Jones Crossing.

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.

in Lakeway, Texas, located in the greater Austin area;

in College Station, Texas (undeveloped land for additional retail space or pad sites and multi-family development at Jones Crossing);

and in Magnolia, Texas (potential development of approximately 11 acres planned for future multi-family use), New Caney, Texas and Kingwood, Texas (a vacant retail pad site prior to its sale in first-quarter 2026), each located in the greater Houston area.

The New Caney land is under contract to sell, subject to satisfaction or waiver of closing conditions.

As discussed below, an offer has been received for the retail component of Jones Crossing, including the undeveloped commercial land.

Table of Conten ts

from the Real Estate Operations segment to the Leasing Operations segment), The Saint June, the completed retail portion of Jones Crossing, and retail pad sites subject to ground leases at Jones Crossing.

The segment also included Kingwood Place (including retail pad sites subject to ground leases) prior to its sale in first-quarter 2026, the retail portion and a hotel pad site subject to a ground lease at Lantana Place – Retail prior to its sale in fourth-quarter 2025 and West Killeen Market prior to its sale in second-quarter 2025.

In March 2026, Stratus received an offer for the retail component, including undeveloped commercial acreage, of Jones Crossing and is negotiating a sales contract.

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

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

Three Months Ended Nine Months Ended

September 30, September 30,

2025 2024 2025 2024

Three Months Ended

Real Estate Operations:

Developed property sales $ — $ 3,950 $ 6,760 $ 15,198

Undeveloped property sales — — — 14,500

Commissions and other $ 82 $ 25

45 3,971 6,868 29,723

Leasing Operations:

Rental revenue 3,709 5,018

4,924 4,920 14,749 14,165

Total revenues from contracts with customers $ 3,791 $ 5,043

Table of Conten ts

Financial Information by Business Segment.

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

Leasing Operations Total

Revenue from unaffiliated customers $ 45 $ 4,924 $ 4,969

Segment expenses:

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

Lease expense ( 285 ) ( 285 )

Professional fees b

( 3,191 ) ( 3,191 )

Maintenance and repairs ( 530 ) ( 530 )

Allocated overhead costs ( 337 ) ( 337 )

Property management fees and payroll ( 330 ) ( 330 )

Utilities ( 228 ) ( 228 )

Other segment items c

( 374 ) ( 298 ) ( 672 )

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

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

General and administrative expenses ( 3,866 )

Operating loss ( 8,093 )

Interest expense, net ( 749 )

Loss on interest rate cap agreements ( 1 )

Loss on extinguishment of debt ( 33 )

Other income (loss), net 548

Net loss before income taxes $ ( 8,328 )

Capital expenditures and purchases and development of real estate properties

$ 6,146 $ 914 $ 7,060

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.

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

Table of Conten ts

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

Financial Information by Reportable Segment.

Summarized financial information by reportable segment for the three months ended March 31, 2026, follows (in thousands):

Leasing Operations Total

1 unchanged sentence

Segment expenses:

Cost of real estate sold ( 3,266 ) ( 3,266 )

Property taxes and insurance ( 349 ) ( 1,024 ) ( 1,373 )

Lease expense ( 285 ) ( 285 )

Professional fees b

( 1,074 ) ( 1,074 )

Professional fees ( 722 ) ( 722 )

Maintenance and repairs ( 404 ) ( 404 )

2 unchanged sentences

Utilities ( 168 ) ( 168 )

Other segment items c

Other segment items b

( 431 ) ( 235 ) ( 666 )

Depreciation and amortization ( 50 ) ( 1,399 ) ( 1,449 )

Gain on sale of assets d

— 1,626 1,626

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

General and administrative expenses ( 3,363 )

Operating loss ( 1,519 )

Other income (loss), net 163

Net loss before income taxes $ ( 1,356 )

Capital expenditures and purchases and development of real estate properties $ 6,608 $ 6,820 $ 13,428

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.

Table of Conten ts

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

Leasing Operations Total

Revenue from unaffiliated customers $ 6,868 $ 14,749 $ 21,617

Segment expenses:

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

Property taxes and insurance ( 1,096 ) ( 2,927 ) ( 4,023 )

Lease expense ( 855 ) ( 855 )

Professional fees b

( 4,360 ) ( 4,360 )

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

Allocated overhead costs ( 1,883 ) ( 1,883 )

Property management fees and payroll ( 904 ) ( 904 )

Utilities ( 452 ) ( 452 )

Other segment items c

H-E-B profit participation c

( 78 ) ( 78 )

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

Gain on sale of assets d

2 unchanged sentences

General and administrative expenses ( 5,590 )

Operating loss ( 12,447 )

Operating income 15,402

Interest expense, net ( 60 )

Loss on interest rate cap agreements ( 23 )

Loss on extinguishment of debt ( 383 )

Other (loss) income, net ( 181 )

Net loss before income taxes $ ( 13,893 )

Other income 666

Net income before income taxes $ 15,625

Capital expenditures and purchases and development of real estate properties

$ 7,729 $ 42 $ 7,771

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.

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 and a portion of a previously deferred gain of $ 0.2 million related to The Oaks at Lakeway in first-quarter 2025.

Refer to Note 4 for further discussion.

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.

H-E-B earned a profit participation of $ 78 thousand in connection with the sale of Kingwood Place.

Reflects an approximately $ 23.0 million pre-tax gain on the sale of Kingwood Place ($ 13.4 million, net of noncontrolling interests).

Table of Conten ts

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

Summarized financial information by reportable segment for the three months ended March 31, 2025, follows (in thousands):

Leasing Operations Total

1 unchanged sentence

Segment expenses:

Cost of real estate sold ( 20,388 ) ( 20,388 )

Property taxes and insurance ( 357 ) ( 807 ) ( 1,164 )

Lease expense ( 285 ) ( 285 )

Professional fees b

( 1,702 ) ( 1,702 )

Professional fees ( 363 ) ( 363 )

Maintenance and repairs ( 509 ) ( 509 )

2 unchanged sentences

Utilities ( 40 ) ( 40 )

Other segment items c

Other segment items b

( 190 ) ( 272 ) ( 462 )

Depreciation and amortization ( 47 ) ( 1,347 ) ( 1,394 )

Gain on sale of assets d

— 1,626 1,626

Segment profit 4,541 6,375 10,916

Gain on sale of assets c

Segment (loss) profit ( 1,502 ) 1,958 456

General and administrative expenses ( 4,051 )

Operating loss ( 3,595 )

Loss on interest rate cap agreements ( 13 )

Loss on extinguishment of debt ( 183 )

Other income (loss), net 522

Other income 64

Net loss before income taxes $ ( 3,727 )

1 unchanged sentence

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.

Reflects a portion of previously deferred gain of $ 0.2 million related to The Oaks at Lakeway.

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

September 30,

Real Estate Operations $ 281,634 $ 371,355

3 unchanged sentences

Total assets $ 532,493 $ 534,581

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.

Corporate and other includes cash and cash equivalents and restricted cash of $ 73.0 million and $ 11.1 million at March 31, 2026 and 2025, respectively.

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

1 unchanged sentence

SUBSEQUENT EVENTS

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

In April 2026, Stratus sold one Amarra Villas home for $ 3.6 million.

In May 2026, Stratus entered into a contract to sell the last Amarra Villas home for $ 3.6 million, which is subject to satisfaction of closing conditions.

In April 2026, one of the Barton Creek Municipal Utility Districts (MUDs) sold bonds that resulted in reimbursements of costs incurred in connection with the Holden Hills Phase 1 project and the Tecoma Improvements of approximately $ 13.0 million and payment of interest of $ 1.4 million to the Holden Hills Phase 1 partnership and Stratus.

Of the total, $ 10.5 million was paid to the Holden Hills Phase 1 partnership, and $ 3.9 million (including Stratus’ share of the Tecoma Improvement costs) was paid to Stratus.

From this bond offering, Stratus also received payment of interest, including interest deferred from previous bond offerings, totaling $ 1.1 million and

Table of Conten ts

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

reimbursement of other costs of $ 200 thousand.

The Holden Hills Phase 1 partnership used its $ 10.5 million share of the reimbursement and interest to pay down the Holden Hills Phase 1 construction loan.

Also, in April 2026, the Magnolia MUD sold bonds and Stratus was reimbursed costs totaling $ 1.6 million and was paid interest of $ 186 thousand.

Stratus evaluated events after March 31, 2026, and through the date the financial statements were issued, and determined any events or transactions occurring during this period that would require recognition or disclosure are appropriately addressed in these financial statements.

Table of Conten ts

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