Stratus Properties Inc. (NASDAQ: STRS) announced today that on
September 30, 2019, Santal, L.L.C., a wholly owned subsidiary of
Stratus, closed a $75 million loan with ACRC Lender LLC to
refinance The Santal, a 448-unit, garden-style, multi-family
property located in the upscale Barton Creek community. The new
loan has a three-year primary term, with the possibility of two
12-month extensions, bears interest at LIBOR plus 2.85 percent with
a 4.80 percent floor, and is non-recourse to Stratus, except for
customary carve-outs including environmental liabilities. Net
proceeds, after payoff of the existing Santal construction loans
with Comerica Bank and payment of transaction costs, were
approximately $18 million, inclusive of cash reserves. The
refinancing enabled Stratus to reduce both its investment in The
Santal and its recourse debt exposure while increasing the rate of
return on invested equity.
William H. Armstrong III, Chairman of the Board, President
and Chief Executive Officer of Stratus stated, “We are pleased to
announce that after successfully constructing and stabilizing The
Santal, we have now refinanced the project, recouping a substantial
portion of our initial investment through a non-recourse
refinancing. We believe that maintaining full ownership of this
best in class asset, which generates a significant return on our
investment and is a key component of our Section N mixed-use
development, will benefit Stratus.”
The Santal, located near the core of Stratus' Section N
mixed-use project in planning in Barton Creek, is currently
approximately 99 percent leased at strong rental rates.
Stratus is a diversified real estate company engaged primarily
in the acquisition, entitlement, development, management, operation
and sale of commercial, and 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 markets in
Texas.
____________________________
CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING
STATEMENTS.
This press release contains forward-looking statements in which
Stratus discusses factors it believes may affect its future
performance. Forward-looking statements are all statements other
than statements of historical fact, such as statements regarding
projections or expectations related to the planning, financing,
development, construction, completion and stabilization of Stratus’
development projects, operational and financial performance,
leasing activities, rental rates, timeframes for development and
stabilization of properties, and other plans and objectives of
management for future operations and development projects. The
words “anticipates,” “may,” “can,” “plans,” “believes,”
“potential,” “estimates,” “expects,” “projects,” “targets,”
“intends,” “likely,” “will,” “should,” “to be” and any similar
expressions are intended to identify those assertions as
forward-looking statements.
Stratus cautions readers that forward-looking statements are not
guarantees of future performance, and its actual results may differ
materially from those anticipated, expected, projected or assumed
in the forward-looking statements. Important factors that can cause
Stratus’ actual results to differ materially from those anticipated
in the forward-looking statements include, but are not limited to,
Stratus’ ability to refinance and service its debt, the
availability and terms of financing for development projects and
other corporate purposes, Stratus’ ability to enter into and
maintain joint venture, partnership, strategic relationships or
other arrangements, Stratus’ ability to effect its business
strategy successfully, including its ability to sell properties at
prices its Board considers acceptable, market conditions or
corporate developments that could preclude, impair or delay any
opportunities with respect to plans to sell or refinance
properties, Stratus’ ability to obtain various entitlements and
permits, a decrease in the demand for real estate in the Austin,
Texas area and other select markets in Texas where Stratus
operates, changes in economic, market and business conditions,
reductions in discretionary spending by consumers and businesses,
competition from other real estate developers, hotel operators
and/or entertainment venue operators and promoters, challenges
associated with booking events and selling tickets and event
cancellations at Stratus’ entertainment venues, the termination of
sales contracts or letters of intent due to, among other factors,
the failure of one or more closing conditions or market changes,
Stratus’ ability to secure qualifying tenants for the space subject
to the master lease agreements entered into in connection with the
sale of The Oaks at Lakeway in 2017 and to assign such leases to
the purchaser and remove the corresponding property from the master
leases, the failure to attract customers or tenants for its
developments or such customers’ or tenants’ failure to satisfy
their purchase commitments or leasing obligations, increases in
interest rates and the phase out of the London Interbank Offered
Rate, declines in the market value of Stratus’ assets, increases in
operating costs, including real estate taxes and the cost of
building materials and labor, changes in external perception of the
W Austin Hotel, unanticipated issues experienced by the third-party
operator of the W Austin Hotel, changes in consumer preferences,
industry risks, changes in laws, regulations or the regulatory
environment affecting the development of real estate, opposition
from special interest groups or local governments with respect to
development projects, weather-related risks, loss of key personnel,
cybersecurity incidents and other factors described in more detail
under the heading “Risk Factors” in Stratus’ Annual Report on Form
10-K for the year ended December 31, 2018, filed with the U.S.
Securities and Exchange Commission (SEC).
Investors are cautioned that many of the assumptions upon which
Stratus' forward-looking statements are based are likely to change
after the forward-looking statements are made. Further, Stratus may
make changes to its business plans that could affect its results.
Stratus cautions investors that it does not intend to update its
forward-looking statements more frequently than quarterly
notwithstanding any changes in its assumptions, business plans,
actual experience, or other changes, and Stratus undertakes no
obligation to update any forward-looking statements.
A copy of this release is available on Stratus'
website, www.stratusproperties.com.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20191004005234/en/
Financial and Media Contact: William H. Armstrong III
(512) 478-5788
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