STRATUS PROPERTIES INC Q4 FY2021 earnings call

• 2021 was a record year for Stratus with record net earnings, total stockholders' equity increased 60% to $158.1 million. - Executed sales of Saint Mary and The Santal for combined $212 million and $106 million pre-tax gain. - Sourced institutional equity for new projects like The Saint June, The Annie B, etc. - Board refreshment with three new directors. - Updates on residential projects: The Annie B, The Saint George, The Saint June progress; Holden Hills and Section N developments. - Retail projects: Kingwood Place, Lantana Place, West Killeen Market, Jones Crossing leasing up well; Magnolia Place development underway.

For the Real Estate Operations segment in 2021, revenue totaled $8.5 million, accounting for 30% of total revenue, and the operating loss was $3.3 million. For the Leasing Operations segment, revenue was $19.8 million, making up 70% of total revenue, and the operating income was $111.4 million.

• Expect to provide additional info after Block 21 transaction concludes. - Board concluded converting to REIT not best path. - Austin and other select markets have strong housing demand. - Flexible strategy to pursue opportunities like holding, selling, or refinancing properties.

• Block 21 closing involves CMBS loan process with multiple parties, which is a process-related risk. - Uncertainties with land rezoning in Lakeway and Circle C, as city reactions are discretionary. - Potential issues with development costs and market reception for new projects.

Q: First on Block 21, is there a particular issue holding up closing?

A: Not really, it's a process with CMBS loan, involves multiple parties but no major issue.

Q: Why did company waste time trying to sell The Santal in 2019 when did better in 2021?

A: Refinanced in 2019, then COVID happened, Austin attracted more capital, leading to better price in 2021.

Q: On NAV calculation and $5 million set aside for Block 21?

A: $5 million set aside for retail spaces with moving tenants, $6.9 million set aside as customary for reps and warranties.

Q: Update on activity in Lakeway or Circle C?

A: Lakeway has discussions on road construction and possible multi-family rezoning; Circle C has office site marketed, considering mixed use rezoning for housing.