Beau Armstrong | President & Chief Executive Officer |
Erin Pickens | Chief Financial Officer |
Good morning and welcome to the Stratus Properties Third Quarter 2021 Conference Call. Today, Stratus issued a press release announcing its third quarter 2021 results. The press release is available on Stratus' website at stratusproperties.com.
Following management's remarks, we will host a question-and-answer session. Please note, this call is being recorded and will be available for replay on Stratus' website through November 29, 2021. of replay of that and today, considered only the is information should to valid as current November as listening should all note presented be Anyone date. this XX, XXXX,
made of projected included today's materially reminder, and in from may forward-looking statements, certain will include release to As the or made, that language press XXXX Please release in the by and on only cautionary statements. actual and a differ call review XX-Q today as press Stratus' risk this projected those Stratus' speak differ Stratus. issued the expected, assumed results date comments Form from cause could in XXXX those third and described that materially factors anticipated, be the Form which results forward-looking XX-K quarter actual
will amortization, and as a U.S. management referred principles, taxes, addition, which also measure also referred discuss generally not earnings interest, is as recognized under EBITDA, accounting financial before depreciation In accepted GAAP. to to
As supplemental conference SEC comparable Armstrong, in to would the to like measure reconciled Mr. GAAP to Chief press financial financial Properties. its the non-GAAP required now measure Chairman, Stratus rules, to issued today. President most Stratus' turn release I Officer by Beau and Executive over schedule is this of
Thank our quarter third for you, joining everyone, conference call today.
today. Our Pickens, also me Chief Erin with Officer, Financial here is
would like our on to provide our speak will results. from of financial call on provide thoughts updates those Erin the an third use our discuss the status to and XXXX segments proceeds activities, of to Then I operational the business I and I and quarter pass associated recently transactions. Before and overview for projects announced of our to X opportunities our transactions development
about outlook our Lastly, close the remarks of our some markets. the call and Texas strength exciting I final will with
the pandemic, in we recently is optimizing The through XX. REIT. or sell, and exciting a and continued an acquire, will now Block potential more the attractive million Stratus potential a of impact properties the of markets of cash demonstrated releases, project the different. and will to transaction long-term cash streamlined proceeds, related planning of in further continuously in business properties lease, conditions. the our consideration of dedicated have returning opportunity our Stratus of seen proceeds Throughout near-term in which of provide has you've recent process, Block These substantial XX engaged Stratus us includes and our and sales in no receiving most our The million our including strategic Board market are future in to our team evaluation Santal; I estimate $XX approximately after to escrowed. to result XX, These X conversion than address one robust deleveraging, and to use have Santal estate to XX operations $X.X include be follow real be to several our quarter with our The quarters, ability across the this where approximately Santal team of stabilize country and to The sales, cash may strategy. reinvesting for value we if the $XXX the million operated the shape in past potential press factors relating uses million sales proceeds for combination which to a $XX management Block completed, from a we As Throughout and may and of on to to most shareholders Stratus' proceeds pipeline. successfully years. develop commitment of hold tax: each refinance Potential announced
million an Santal Creek community. in on million agreement XX, before December XXX-unit, XXXX, fourth Barton or Section expects satisfaction quarter stabilized. First, we is project the pretax wholly is September garden-style, of Santal and million. XXXX customary multifamily Construction proceeds for Stratus' gain into is of the The sale of is payment costs property approximately After The to fully today, of closing in transaction complex approximately the conditions. close Stratus $XXX generate the pretax to XX, on entered leased a cash. N net luxury sell record to The XXXX. located in Santal subject of outstanding the of on the XXXX, commenced of the sale loan, to and $XX owned and $XX to January expected The closing expected in
closing the for Second, we existing our that on the Austin, is agreements is $XXX closing $X XX new approximately Austin subject and pretax net of assumption the and retail, costs Ryman million into downward sale close adjustments and After sell of of October mortgage closing million. outstanding the to Austin is satisfaction XX, assumption generate consent proceeds The $XXX debt to loan the to to to expected space, of XX Ryman's targeted XXXX, is near mixed-use loan, Properties million. up expects to to Hotel upon million includes approximately for including Hospitality purchase office $XXX The to downtown and XX announced transaction gain approximately and Limits including the comprising million of certain record in prorations million entertainment entered including be a City of development price XXXX, pretax Block after W Live. before months to $XXX servicer. of the escrowed subject sale. conditions, Stratus of closing. Block $X.X we year-end
COVID-XX build company this entertainment resort a is respects for and we'll that by announced and previously May for great The of million. to I'm throughout XXXX Block the As terminated the XX, $XXX is you as may its and due Ryman Stratus in media sell uncertainties strong Ryman XX's that associated pandemic, XXXX were result, with also travel around company agreements the between hotel Block have to we from adding partner significant hosts in XX understands Ryman XX appreciate music exists prominent challenges its Austin's in new when reach agreements to a ability its and to connection Austin XX to hub recall, earnest national-based $XX team's faced dedication Block the live confident the cultural and the value with I'm Austin continue and right for to Ryman music hotel community that the music agreements is space. scene. of maintain million to events, and that and We most portfolio. proud of industries to on money legacy in pleased Ryman's were and our the Block entertainment pandemic Ryman. received Block world a challenges.
after As the sales Block approximately The to relating escrowed. us proceeds mentioned the in earlier, $X.X completed, approximately Santal; Santal if receiving be cash I The to and and million $XXX XX, be result million million million of XX to including relating $XX Block $XX tax: estimated to would
opportunities the from presents plan by market company and excited to right our reflect are opportunities our achievements our advantage We at long-term value this and our the of strategic shareholders. high-quality These ability take time for shareholders for increase, robust retail region the In properties. in which by generate in execute city continued influx our moving residential remain mixed-use the population reflected development. of Austin and to particular, in growth operate. headquarters as markets companies corporate the new confident to and of the remains we We
our be and for the several a with in proposed in as city contribute now announced we quarter. downtown are unobstructed growth and have luxury both the XXXX, XXX-degree I our pleased want views Annie near Texas to supporting to that, a University residential through XXX-foot markets with this projects Austin. campus of B portfolio, where expected the of tower real With B, is Capitol. turn estate opportunities West properties I enjoy development for Central of Block The Texas high-rise and September rental We downtown of residential projects start XXX, The the and Austin will for of the Texas. In to Annie thriving Austin, and third State known compelling capitol, strongest one development impressive now plans project we to activities discuss to projects. the in many property
units renovation The also As planned, approximately consists residence, offer feet A.O. historic B Watson to luxury retail. XXX,XXX project neighborhood. lease residences and The the the adjacent planned Annie multifamily per XXX for amenities the with ground-level is project includes of which of square and the
the to months. We XX one development XX focused over plans developments next sustainability. Annie B is expect of on to finalize The our many
and We are working Austin's expect property and dedicated a Green Building the rating. to more city Energy Austin an position future to Austin the to to make positively generations, Energy the sustainable achieve for contribute goals place environmental we property with to the
Creek Barton June, Saint began project quarter, subdivision construction multifamily after in completion Amarra financing, Austin. The This we within the the a XXX-unit the of on in
completion The the of to third in of expected the first first in project XXXX. the completed expected with are units quarter quarter currently be of XXXX
first permits sustainability of construction to this utility, residences commitment its Energy Phase issuance and wellness, property in and our to coverage to approximately designed our feature environmentally Austin X, work also complete press attracted We is acquired to construction achieve Creek anticipate XXXX final Holden has to good and securing rating. months the infrastructure, conservation. which residential start quarter being road final community, It unique site Barton We within final permit. expect health includes for the of currently drainage the development energy expect other which and the friendly. for XXX-acre XX Hills is from XXX of Green focused an also Building on
financing development. We continue to move forward on Hills our Holden for securing
financing Holden Our and sales conditions. or We projections build or sell homes the build early sell of anticipate begin in may on would homesites XXXX. in XXXX we the market and that on some depending all late to elect Hills or developed may lease or and homesites
Our for up a multifamily units. of Lantana development XXX rezoned potential Place was to project
construction We plans finalizing XXXX. quarter process second in are the and to the begin in of expect of our
located aspects including the in that in Overall, N, mixed-use under also to believe near the construction the from significant pipeline discuss Creek. tremendous with term, benefit begin redesign a in multifamily those component and moment. I position the area. of units immediate we on properties acres currently a construction XXX in our project this We forward to Stratus the move expected with to of will multifamily of growth Barton commercial Section Austin, our in continue
by encouraged mixed-use and are our and the Our performing valued well, relationships. continued projects retail and we tenant Austin commercial of growth very are
regularly rent paying are All granted COVID-XX were pandemic deferral payments applicable, leases, tenants as of the peak the we which their during per of and XXXX. our rent currently are receiving in
have projects and of strong stabilization. pipeline development a in stages various of We exciting
loan you development of phase shadow-anchored As of announced into million mixed-use plans August grocery development in construction entered to Place, the $XX.X Magnolia complete new a H-E-B first know, for we Magnolia, and in XXXX, project financing Texas. our
this on construction necessary phase, which all is the retail buildings totaling drainage initiated to road, entire development. the also have expected XX,XXX first square feet, and support X approximately We X utility infrastructure of consist sites, pad to and
sale of H-E-B-anchored are evaluating metropolitan Kingwood the We land area. mixed-use greater single-family currently for our the the project in is residential Place Houston a component.
square date, store. retail of We space have XXX,XXX feet approximately to H-E-B an grocery constructed including
this We we targeted to entered which into on our partially for operator, sites located the pad to a the for and of tract available has project is Kingwood Lantana at have The X September by multifamily X ground lease. later development a is retail the $X.X and hotel Southwest contract close in the pad million, XXXX, remain with to signed mixed-use Austin. open On sell of hotel leases is land Place lease expected Place sites, ground project week. mid-XXXX. XX, developed
September leases tenant, approximately in XX, space Moviehouse anchor retail the first of for XX% Eatery. signed had As the XXXX, phase, we including & the of
we XXXX, located of of the space Station, September have Texas. the phase College Jones for Crossing, H-E-B-anchored all of in mixed-use As substantially first retail our leases signed for development
for the for XXXX, our West sites of of leases $XXX,XXX. remaining space third our retail we the in at Killeen an signed West had pad quarter X store. grocery adjacent H-E-B Market, located Killeen also retail We sold of shadow-anchored approximately in Market project by Killeen, Texas, X the XX% In
as Section these mid-rise N designed projects, continued will Stratus our extensive a a compared success surrounded result and shareholders. projects to mixed-use plans. In significant looking remarkable its to the for largely space amenity, in increase multifamily addition also potential an we in prior forward to dense are green resulting density as a Overall as development component, be of and by
these to and on XXXX you. in We growth. to third financial Erin? to our will continue And are confident team's quarter drive I capitalize Pickens, operational results. ability now our the Erin to turn opportunities call and CFO, our discuss Thank over
in Net third to our to stockholders reported XXXX totaled revenues $XX.X the million quarter primarily results loss million Stratus share on XXXX $X.X million in quarter of deferred we consolidated to third of due a a for record to hotel from net this quarter increased XXXX million the share per entertainment the common charge in compared loss results the $X.X compared per year. financial allowance last Beau. and $X.XX issued third tax The attributable noncash to you, our press of or of $X.XX the our the in third XXXX $XX.X Thank Stratus Today, quarter of tax XXXX, third morning. assets. in included $XX.X a million valuation quarter or segments. in release revenues recovery of to
available of segments if our we segments. and real will of from primarily decrease million $X.X third include provide hotel the The the now quarter Operations to the reflect may to brief and sell quarter $X.X Paycheck EBITDA forgiveness million with the of $X XXXX of million addition contract. in Development of our commentary by in the in related of of in sale quarter segments. year. included a in XXXX to compared third debt our Stratus' leasing XXXX. would of an loss operating proposed a quarter with in of moving XXXX land million of totaled portfolio of in number to $XXX,XXX The Place inventory in during of Kingwood on the tract Real undeveloped quarter decrease our will transaction, segment at quarter operating would add The Protection was the segment's land the we Holden totaled in our Estate residential third Hills charge that Place. $X XXXX offset million for the entertainment the of partly quarter as $X income last of all the million loss compared when inventory available and the no $X.X Program X and longer $X.X multifamily impairment under of results XXXX, we gain thereafter Revenue our close increase a substantially of tract breakeven. year operating Block currently below Note of third have lots third third multifamily in sold our compared revenue only was million estate decreased. and loan, which third I third some the land pending totaled extinguishment EBITDA on the forward, the Kingwood XX continuing last operations operating of quarter
XX, only Stratus developed III unsold lots. X of As September Drive Amarra had XXXX, Phase
year. leasing offset in The $X.X this The quarter pad earlier, XXXX. XXXX. revenue reflects at increase primarily XXXX. after a third segment West the the As $X with of quarter XXXX, and quarter the the in totaled third under Saint operating rental first property Killeen last of the of million The Mary the $X.X XXXX, at associated the Stratus third by Mary from an third from quarter $X.X costs operating in for This Place. of third the of from quarter in The was Market which the depreciation Beau remaining income million in had decrease site XXXX, Lantana Saint mentioned Saint in primarily XXXX leaving up quarter slight sold site sold quarter increase of Operations sale in the pad relatively of partly of Leasing only one in totaled $XXX,XXX, The this reflects just of million income of of first project. revenue our in Mary results quarter Revenue the million, line in segment's third retail with remains in revenue absence in
events million of an attendance of with the and operating third the with revenues well-attended pandemic. those ACL hosted before increased $X.X quarter Live at room and an quarter third operating applicable. operating the The of as sales hosted of our third lessened tenants hotel's increase As higher rent primarily and XXXX, payments operating to quarter in in which impacts XXXX. of to the average average the this in currently revenues the quarter over the arrangements third last last operating the an was quarter disclosed segment's a $XXX,XXX increased $XX,XXX the positive XXXX XX% The Stratus loss quarter events from is The year. of of last compared an a XX% a of $XXX,XXX $XX food sales the year as concerts experienced increase Beau XTEN year. over quarter million year third increase as and positive was compared quarter income significant occupancy in room, deferral the base the $X.X income in from of of beverage experienced Revenue last to from quarter the all reflect third in The Stratus revenue XXXX for per returning in in occupancy a reservations of well and totaled income impacts Live. XXXX or million as COVID-XX when monthly pandemic year. year. of and their result revenue ACL $X.X was rent the second during series hotel of pandemic. income of summer mentioned, loss $X.X $X.X are third greater third operating recent reflects the The the with third third quarter at pursuant levels quarter paying average in quarter to per million increase and the million the year. XX% quarter the previously ticket increased available the XXXX, occupancy grew number in last Entertainment RevPAR, $XXX leases in third in in the the of hotel last of of of segment's of compared to
capacity. Our venues at are operating full now
Our administrative to of in increased in compared primarily costs Participation $X.X Plan, for $X.X increased Stratus' $X.X quarter general in from Incentive XXXX last third and increase expenses associated of valuation Profit year, reflecting the million to employee the third resulting compensation with an quarter Santal. million incentive The a million primarily
may the up Additional of the sale the be closing $X to million property. recognized expense of upon of
at $XXX.X XX, million September consolidated $XXX.X of totaled XXXX. debt At management. of both approximately $XX Mary loan million December held-for-sale December at million compared consolidated classified at these million $XX.X of XX, capital our loan and as dates being Consolidated consolidated to exclude and cash $XX.X The dates. Saint XXXX, debt Santal $XX million XXXX, of with consolidated million debt also Turning approximately of totaled excludes cash those amounts and a result XX, as properties The at
$XXX Bank As XX estimated development XX, The and including approximately of sales escrowed $XX.X our XX noted as closing. the the available million substantial X-year of be facility. September Block price purchase to credit XXXX, completed, into to August a had be of we of Comerica the million Magnolia and $XX loan of cash million Place. Santal phase for will receiving million $X.X proceeds us And XX after in entered we XXXX, result million construction first to Beau earlier, tax $X.X finance under In months after if Block
of to predevelopment proceeds September were used land loan. proceeds were These amounts months $XX.X in capital estate will portion transactions XXXX, used to including for development a and the land The other financing the the of XXXX, months financing flows the of Lantana under which from project. purchase cash B. operating X properties, the properties related be flows fund no of for Barton Stratus. and holds and million to reflected June; investing The Creek In this totaled interest owned for of in and with closing call Magnolia The primarily completed Annie B XXXX, Amarra purchase XX, placement costs the in land included expenditures and Beau million transactions real of Thank September properties Stratus the XX% to of costs now of As a Annie XXXX, the offering, pursuit of a reflected limited and Saint first equity we Villas; the for outstanding turn partnership. for cash along Place related also first contributed The primarily and Purchases wholly private offering, Place, for completion I'll from Creek cash in the in the an $XX.X placement $X.X you. Place. Upon to million aggregate $XX.X This purchase million Kingwood the Place of in X Austin. office subsidiaries by development $XX remarks. compares loan and million his Lantana Barton back the indirect of private and with a building capital development
I relationships to success. this Thank attention call performance pleased drive community with the skill team's our you, want to and and Erin. that set knowledge, am within our quarter our specifically
for have have to right portfolio, We create to and pipeline combined selected improved and we business. high-performing people outlook into we as with opportunities the high-quality confidence able expertise move our to be across increased of The forward our momentum head contributes and and XXXX. value carefully projects right built the this these development our the quarter,
projects as well select as events vaccinations which drive Our residential by we as in operate and consumer in Austin activities. of development travel, and and continued retail confidence and Texas an other supported for markets demand increasing growth increase are
Santal at pending projects leased large XX, sales X Block construction with of fully projects have development. several various fully and nearly and stages We several or or stabilized and under
the the at for deliver to properties, determining you all have realize to that joining. to that continue for value we we operator to how open our questions. value And to this shareholders. I focused created our are line in ask would As the time, like on we best Thank
one for We have questions. queued no
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