Stratus Properties (STRS) Q3 2024 earnings summary

Executive summary

• Revenues rose to $8.9M in Q3 2024 and $43.9M for the first nine months, driven by property sales and increased leasing income, especially from The Saint June and Amarra Villas.

• Net loss attributable to common stockholders narrowed to $0.4M in Q3 2024 from $2.8M in Q3 2023; YTD net income was $2.5M versus a $13.9M loss last year.

• Property sales in the first nine months of 2024 totaled $38.6M, including Magnolia Place Retail ($8.9M, pre-tax gain $1.6M), Magnolia Place land ($14.5M), and four Amarra Villas homes ($15.2M).

• The Saint June, a 182-unit luxury multi-family project, reached 97% occupancy as of November 8, 2024.

• Maintained strong liquidity with $19.6M in cash and $39.6M available under the revolving credit facility as of September 30, 2024.

Financial highlights

• Q3 2024 revenues: $8.9M (up from $3.7M in Q3 2023); nine-month revenues: $43.9M (up from $13.0M year-over-year).

• Q3 2024 net loss: $0.4M ($0.05/share); nine-month net income: $2.5M ($0.30/share).

• Operating loss improved to $1.5M in Q3 2024 from $3.3M in Q3 2023; nine-month operating loss was $0.8M versus $14.3M last year.

• EBITDA for the first nine months of 2024 was $3.9M, compared to $(9.9)M in the prior year period.

• Capital expenditures and real estate development spending totaled $45.9M for the first nine months of 2024, down from $70.9M in 2023.

Outlook and guidance

• Management expects to meet debt service and cash obligations for at least the next 12 months, supported by cash flow from stabilized properties and available credit.

• Management anticipates improvement in real estate market conditions in its markets over the next 12 months, despite ongoing challenges.

• Plans to sell additional Amarra Villas homes and may sell certain lots or undeveloped land.

• Stratus is exploring refinancing options for several construction loans, expecting tighter spreads and potential additional proceeds.

• Expects to continue development of key projects (Holden Hills, Section N, The Annie B, The Saint Julia) as market conditions allow.