Stratus Properties Inc. Reports First-Quarter 2021 Results
Stratus Properties reported strong first-quarter 2021 results, including a net income of $8.9 million ($1.08 per share), compared to a net loss of $1.1 million in Q1 2020. The net income was significantly boosted by a $22.9 million gain from the sale of The Saint Mary apartment project, which sold for a record $60 million. EBITDA increased to $15.2 million from $4 million a year earlier. Stratus cleared the site for The Saint June project, anticipates further developments like Holden Hills, and has seen improvements in its hotel operations despite pandemic challenges.
- Net income rose to $8.9 million in Q1 2021 from a loss of $1.1 million in Q1 2020.
- The Saint Mary sale generated a $22.9 million gain, contributing significantly to net income.
- EBITDA increased to $15.2 million compared to $4 million in the prior year.
- Stratus has ongoing development plans for The Saint June and Holden Hills projects.
- Operating losses from hotel and entertainment segments due to the ongoing COVID-19 pandemic.
- The hospitality sector remains depressed, impacting overall performance.
Stratus Properties Inc. (NASDAQ: STRS), a diversified real estate company with holdings, interests and operations focused in the Austin, Texas area and other select, fast-growing markets in Texas, today reported first-quarter 2021 results.
Highlights and Recent Developments:
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In January 2021, Stratus sold The Saint Mary, a 240-unit luxury garden-style apartment project in the Circle C community, for
$60.0 million , or$250,000 per unit. Stratus believes the sales price is the highest per unit sales price ever recorded in the Austin MSA for similar properties. Stratus received$20.9 million from its subsidiary in connection with the sale and$12.9 million of the net proceeds were distributed to the noncontrolling interest owners. Stratus recognized a gain on the sale of$22.9 million ($16.2 million net of noncontrolling interests) in the first quarter of 2021. -
Net income attributable to common stockholders totaled
$8.9 million ,$1.08 per share, in first-quarter 2021, compared to a net loss of$1.1 million ,$0.13 per share, in first-quarter 2020. The first-quarter 2021 results include the gain on the sale of The Saint Mary, partially offset by operating losses from Stratus' hotel and entertainment segments as a result of the ongoing COVID-19 pandemic. -
Earnings Before Interest, Taxes, Depreciation and Amortization (EBITDA) totaled
$15.2 million in first-quarter 2021 and includes the gain on the sale of The Saint Mary, compared to$4.0 million in first-quarter 2020. For a reconciliation of net income (loss) attributable to common stockholders to EBITDA, see the supplemental schedule, "EBITDA," on page V. -
Sold two Amarra Drive Phase III lots, a five-acre multi-family tract of land in Amarra Drive, and Stratus' last condominium unit at the W Austin Residences for a total of
$6.5 million during first-quarter 2021. - In the first quarter of 2021, Stratus completed site clearing on The Saint June, a 182-unit multi-family project within the Amarra subdivision in Barton Creek. Construction is expected to begin later in second-quarter 2021, subject to completion of financing. In April 2021, Stratus announced the development plans for Holden Hills, a new residential development formerly known as Section KLO, in the Barton Creek community. The project consists of 495 acres and the community is designed to feature 475 unique residences to be developed in multiple phases with a focus on sustainability and energy conservation. Stratus anticipates securing final permits in the second or third quarter of 2021. The project is subject to financing and market conditions.
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In April 2021, Stratus entered into an amendment to The Santal loan, resulting in annual interest savings of approximately
$1.1 million based on current rates. Stratus is considering a refinancing of its Jones Crossing construction loan. - Stratus’ W Austin Hotel has remained open during the COVID-19 pandemic, and while the pandemic continues to negatively impact the hospitality industry, the W Austin Hotel has begun to see improvement in some of its key metrics. Stratus’ team continues to create innovative programming at Stratus’ ACL Live and 3TEN ACL Live entertainment venues, and currently expects to see improved results as schedules are filled and capacity increases over time.
William H. Armstrong III, Chairman, President and Chief Executive Officer, stated, “Our deliberate strategy has positioned Stratus well, as reflected in our performance this quarter and ability to persevere through the challenges of the COVID-19 pandemic. Our real estate and residential leasing operations continue to benefit from the strength of the Austin housing market, as well as pandemic-driven home-centric trends. Although the entertainment and travel industries remain depressed due to the COVID-19 pandemic, we are encouraged by early signs of the recovery in our hotel and entertainment businesses. We are seeing increased occupancy at the hotel and improvement at our venues as consumer confidence grows.
The sale of The Saint Mary also capitalized on opportunities in the current market and demonstrates the value that our strategy creates. While we are in the early stages for the development of The Saint June and our recently announced Holden Hills project, we are optimistic about the long-term value creation these projects bring, especially given the increased focus on sustainability, wellness and community. We will continue to progress our pipeline of projects and evaluate opportunities to capture value.”
Summary Financial Results
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Three Months Ended March 31, |
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2021 |
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2020 |
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(In Thousands, Except Per Share Amounts) (Unaudited) |
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Revenues |
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Real Estate Operations |
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$ |
6,625 |
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$ |
12,340 |
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Leasing Operations |
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5,397 |
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5,959 |
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