Austin-Based REIT Stratus Properties To Liquidate
Stratus Properties, a developer of multifamily, residential and retail properties, has decided to call it quits, selling its remaining assets and returning the money to its investors.
The Austin-based REIT wrapped up a strategic review of alternative options that it launched in December, with the board unanimously deciding that Stratus should liquidate and wind down operations, the company announced Wednesday.
The plan will allow the company to maximize its portfolio’s remaining value and return it to stockholders in a “tax-efficient” manner, Stratus CEO and Chairman William Armstrong III said in a statement.
“Given our history of property sales at premium valuations, in addition to our strong cash position as a result of recent sales, we believe now is the right time to realize the best value of our portfolio and return it to our stockholders in a tax-efficient plan,” Armstrong said.
The company has secured permits and entitlements for its early-stage development projects, in addition to leasing or selling the majority of its completed properties, he added.
The company had $572M in assets and $240M in liabilities at the end of the third quarter, according to its most recent earnings report.
Stratus lists 20 retail and residential properties on its website, split into 11 it has already sold and nine it still owns.
But that webpage doesn’t appear to have been updated since at least last month and still lists Kingswood Place, a grocery-anchored mixed-use development in the Houston area, as a property owned by Stratus.
The company announced in early February that it had sold Kingswood Place for $60.8M. The deal brought in $27.1M in pretax net cash proceeds for the firm, which had a 60% stake in the property through a limited partnership.
Stratus also sold the retail component of Lantana Place in Barton Creek, Austin, in November for $57.5M, generating roughly $26.9M in pretax net cash proceeds.
Stratus is still evaluating its liquidation and dissolution plan to estimate what its distributions will look like, and it still needs to get its lender and some third parties to sign off, according to the release.
It hasn’t yet filed with the Securities and Exchange Commission, but the company plans to prepare its proxy statement and file as it meets with stockholders to get their approval.
Three law firms — Jones Walker LLP, Sidley Austin LLP and Morris, Nichols, Arsht & Tunnell LLP — are serving as Stratus’ legal advisers, while Eastdil Secured, soon to be a Savills subsidiary, is serving as the company’s financial adviser.
