STRATUS PROPERTIES INC Q2 FY2021 earnings call

• The impacts of the COVID-19 pandemic lessened in the second quarter, with hotel and entertainment businesses improving. Retail development projects performed well with all tenants open and paying rent. Residential property demand in Texas is strong, exceeding supply. Started construction on The Saint June multifamily property, worked on Holden Hills and mixed-use projects. Board appointed Laurie Dotter with real estate investment experience.

Real estate operations segment revenue in the second quarter of 2021 totaled $779,000 compared to $1.9 million in the second quarter of 2020. Leasing operations segment revenue in Q2 2021 was $5.5 million versus $5.9 million in Q2 2020. Credit hotel revenues were approximately $4 million in Q2 2021, with an operating loss of $776,000. Entertainment revenues increased to $1.7 million in Q2 2021 from $289,000 in Q2 2020, and the segment's operating loss was $359,000 in Q2 2021 compared to $1.4 million in Q2 2020.

• Continue to monitor the impact of the Delta variant of COVID-19. Overall optimistic about the future with a robust pipeline of opportunities and seeing strong momentum and growth ahead.

• Need to monitor the impact of the recent increase in COVID-19 cases due to the Delta variant, as it could impact future events.

Q: As you've geared up with more projects, how much financing is theoretically available from limited partners?

A: We've always had a robust pipeline of development opportunities. Success of The Saint Mary and Kingwood Place has allowed access to additional limited partner capital. Optimistic about sourcing limited partner capital from equity and debt markets considering market conditions.

Q: As you're gearing up with more projects, is there resurfacing of potential buyers who might want to invest in Block 21?

A: There has been inbound interest, but the hotel is not making money yet, being at or close to breakeven. Austin market is hot, but need more normalization before transacting.