Stratus Properties Inc., a diversified real estate company focusing on the Austin, Texas area and other select, fast-growing markets in Texas, released its first-quarter 2021 results today. Stratus continues to profit from pandemic-driven home-centric developments as well as increased awareness of Austin, Texas as a desirable place to live in its residential real estate sales and leasing. Stratus had only three unsold created lots at Amarra Drive as of March 31, 2021, one of which was under contract.
Highlights and Recent Developments
- The Saint Mary, a 240-unit luxury garden-style apartment project in the Circle C neighbourhood, was sold for $60.0 million in January 2021, or $250,000 per unit. The sales price, according to Stratus, is the highest per unit sales price for comparable properties ever reported in the Austin MSA. In conjunction with the transaction, Stratus received $20.9 million from its affiliate, and the noncontrolling interest owners received $12.9 million of the net proceeds. Stratus made a $22.9 million gain on the sale in the first quarter of 2021 ($16.2 million net of noncontrolling interests).
- Net income attributable to common stockholders was $8.9 million, or $1.08 per share, in the first quarter of 2021, compared to a net loss of $1.1 million, or $0.13 per share, in the same quarter of 2020. The gain on the sale of The Saint Mary is partially offset by operating losses in Stratus’ hotel and entertainment divisions in the first quarter as a result of the ongoing COVID-19 pandemic.
- In the first quarter of 2021, earnings before interest, taxes, depreciation, and amortization (EBITDA), which includes the gain on the selling of The Saint Mary, totaled $15.2 million, up from $4.0 million in the first quarter of 2020.
- Stratus amended The Santal loan in April 2021, resulting in an annual interest savings of approximately $1.1 million based on current rates. The Jones Crossing construction loan can be refinanced by Stratus.
“Our deliberate approach has placed Stratus well, as shown by our success this quarter and ability to persevere through the difficulties of the COVID-19 pandemic,” said William H. Armstrong III, Chairman, President, and Chief Executive Officer. The strength of the Austin housing market, as well as pandemic-driven demand, continue to support our real estate and residential leasing operations.
The Saint Mary’s selling also took advantage of existing market opportunities and shows the value that our approach generates. While the development of The Saint June and our recently announced Holden Hills project is still in its early stages, we are optimistic about the long-term value creation these projects can bring, particularly given the increased emphasis on sustainability, health, and social responsibility.
Lower room reservations and food and beverage revenues as a result of the COVID-19 pandemic, which had a less substantial effect on the first quarter of 2020 prior to the pandemic being announced in mid-March 2020, contributed to the declines in revenue and operating income from the Hotel segment in first-quarter 2021 compared to first-quarter 2020. The Entertainment segment’s sales and operating income decreased in the first quarter of 2021 compared to the first quarter of 2020, owing to the COVID-19 pandemic, which prevented a full show schedule and limited flexibility at events that could be held.