AUSTIN, TX – (BUSINESS WIRE) – Sep 21, 2021–
Stratus Properties Inc. (NASDAQ: STRS) (“Stratus” or the “Company”) today announced an agreement to sell The Sandalwood for $ 152 million, or approximately $ 339,000 per unit, in cash. The Sandalwood is a 100% Stratus-owned, 448-unit garden-style multi-family luxury apartment complex located in the N section of the upscale Barton Creek community in Austin.
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Sandalwood (Photo: Business Wire)
The sale price represents a premium of approximately 96% over Stratus’ estimated net asset value for The Sandalwood (after tax and net of loan prepayment charges and other costs) as of December 31, 2020, as stated in Stratus’ investor presentation dated March 15. 2021, available on the Stratus website. The Sandalwood sales agreement contains a 30 day due diligence period during which the buyer can terminate the transaction for any reason. The transaction is expected to close in the fourth quarter of 2021, subject to the satisfaction of customary closing conditions.
William H. Armstrong III, Chairman of the Board and Chief Executive Officer of Stratus, said: “This is another clear example of our strategy to maximize shareholder value by developing high quality properties and by owning or monetizing them depending on market conditions. We had opportunities to sell The Santal in 2019, but chose to keep and refinance it at the time. The refinancing allowed us to reduce both our investment in The Sandalwood and our exposure to recourse debt while increasing the rate of return on invested capital. Since then, we have embarked on a process that has generated multiple high quality competitive offers. We are convinced that this sale represents a tremendous opportunity for our shareholders. “
Mr. Armstrong continued, “The Stratus team designed and developed this project to meet the continued strong demand for high quality residential properties located near downtown Austin. We believe our success with The Santal further supports our plan for the adjacent environmentally friendly Holden Hills residential development and the N Section mixed-use development projects planned for Barton Creek.
Mr. Armstrong concluded, “We estimate that the sale of The Santal will produce pre-tax cash proceeds of approximately $ 72 million after payment of project debt. As part of the early closing of the sale, our board of directors is evaluating options, including returning liquidity to shareholders, repaying additional debt and reinvesting in our portfolio of opportunities. Our strong portfolio of projects includes other multi-family projects such as the recently announced luxury high rise tower The Annie B as part of Block 150 in downtown Austin, and The Saint June in the Amarra section of Barton Creek. , which is currently under construction. . We also have plans for multi-family components in several of our mixed-use projects, including Lantana Place, construction of which is expected to begin next year.
Construction of the first phase of the Sandalwood began in January 2015 and was completed in August 2016. Stratus completed construction of the second phase of the Sandalwood during the first quarter of 2019. The Sandalwood is fully leased and stabilized.
Following the company’s refinancing of the initial construction loans for The Sandalwood in the third quarter of 2019, in the second quarter of 2021, Stratus entered into an endorsement to the Sandalwood loan that reduced the company’s annual interest charges.
As part of the conclusion of the Sandalwood sales agreement, Stratus amended the loan agreement with the project lender to allow early repayment of the loan, subject to a prepayment commission.
About Stratus Properties Inc.
Stratus is a diversified real estate company engaged primarily in the acquisition, allocation, development, management and sale of commercial, multi-family and single-family residential real estate properties, real estate leasing and the operation of hotel and entertainment businesses located in the Austin, Texas area, and other select, fast growing Texas markets.
This press release contains forward-looking statements in which Stratus discusses factors that it believes could affect its future performance. Forward-looking statements are all statements other than statements of historical fact, including the estimated pre-tax net cash proceeds of Stratus from the sale of The Santal and statements as to whether and when the sale of The Santal will be completed. The words “foresees”, “may”, “may”, “could”, “plans”, “believes”, “potential”, “possible”, “estimates”, “expects”, “projects”, “ targets ”,“ intends ”,“ likely ”,“ will ”,“ should ”,“ be ”and similar expressions are intended to identify such statements as forward-looking statements. Stratus cautions readers that forward-looking statements are not guarantees of future performance and that its actual results may differ materially from those anticipated, expected, projected or assumed in the forward-looking statements. Important factors that may cause Stratus ‘actual results to differ materially from those anticipated in forward-looking statements include, without limitation, Stratus’ ability to continue to develop and effectively execute its strategies, including its ability to develop, finance, build and sell properties on schedule and at prices its board deems acceptable, changes in demand for real estate in certain markets in Texas where Stratus operates, changes in economic conditions, market and commercial, the results of the Stratus Board’s assessment of the potential conversion of Stratus to FPI, the uncertain and continuing impact of the COVID-19 pandemic and other factors described in more detail under the “Risk Factors” section in Stratus Annual Report on Form 10-K for the year ended December 31, 2020, filed with Secur ities and Exchange Commission of the United States.
Investors are cautioned that many of the assumptions upon which Stratus’ forward-looking statements are based are subject to change after the date on which the forward-looking statements are made. In addition, Stratus may make changes to its business plans that could affect its results. Stratus cautions investors that it makes no commitment to update any forward-looking statements, which speak only as of the date they are posted, notwithstanding any change in its assumptions, business plans, actual experience or other changes.
A copy of this press release is available on the Stratus website, stratusproperties.com.
View source version on businesswire.com:https://www.businesswire.com/news/home/20210921006070/en/
CONTACT: Financial and media contact:
William H. Armstrong III
KEYWORD: UNITED STATES NORTH AMERICA TEXAS
INDUSTRY KEYWORD: RESIDENTIAL BUILDING AND REAL ESTATE COMMERCIAL AND REAL ESTATE BUILDING CONSTRUCTION AND PROPERTY
SOURCE: Stratus Properties Inc.
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PUB: 09/21/2021 16:08 / DISC: 09/21/2021 16:08