On November 13, 2024, Stratus Properties Inc (NASDAQ: STRS) released its 8-K filing detailing the financial results for the third quarter and the first nine months of 2024. Stratus Properties Inc is a diversified real estate company operating primarily in the Austin, Texas area and other select markets in Texas, focusing on the acquisition, development, management, and sale of residential and commercial real estate properties.
Performance Overview
Stratus Properties Inc reported a net loss attributable to common stockholders of $0.4 million, or $0.05 per diluted share, for the third quarter of 2024. This marks a significant improvement from the net loss of $2.8 million, or $0.36 per diluted share, reported in the same period of 2023. For the first nine months of 2024, the company achieved a net income of $2.5 million, or $0.30 per diluted share, compared to a net loss of $13.9 million, or $1.74 per diluted share, in the first nine months of 2023.
Revenue Growth and Key Achievements
Revenues for the third quarter of 2024 surged to $8.9 million, up from $3.7 million in the third quarter of 2023. This increase was primarily driven by the sale of an Amarra Villas home for $4.0 million and increased rental revenue from The Saint June, which began operations in mid-2023. For the first nine months of 2024, revenues totaled $43.9 million, a substantial increase from $13.0 million in the same period of 2023, largely due to significant property sales, including undeveloped land at Magnolia Place and multiple Amarra Villas homes.
Financial Position and Liquidity
As of September 30, 2024, Stratus Properties Inc had $19.6 million in cash and cash equivalents, with no amounts drawn on its revolving credit facility, which had $39.6 million available. The company's consolidated debt stood at $181.5 million, up from $175.2 million at the end of 2023, primarily due to project construction loans.
Segment Performance
| Segment | Revenue (Q3 2024) | Operating Income (Q3 2024) |
|---|---|---|
| Real Estate Operations | $3.97 million | $(1.42) million |
| Leasing Operations | $4.92 million | $3.25 million |
Strategic Developments and Future Outlook
During the third quarter, Stratus Properties Inc completed the sale of Magnolia Place – Retail for $8.9 million, generating pre-tax net cash proceeds of approximately $8.6 million and a pre-tax gain of $1.6 million. The company continues to focus on its development projects, including The Saint George and the remaining Amarra Villas homes.
William H. Armstrong III, Chairman and CEO, stated, “Our retail projects are performing well, and it bears repeating that our stabilized and under-construction projects and future development plans have no exposure to commercial office space. Although the real estate business remains challenging, we see reasons for optimism that real estate market conditions will improve in our markets over the next 12 months.”
Conclusion
Stratus Properties Inc's third-quarter results reflect a strong recovery with significant revenue growth and reduced losses. The company's strategic focus on residential and retail real estate in Texas, coupled with its robust financial position, positions it well for future growth despite ongoing challenges in the real estate market. Investors and stakeholders will be keenly watching how Stratus navigates the evolving market conditions in the coming months.
Explore the complete 8-K earnings release (here) from Stratus Properties Inc for further details.
