Stratus Properties Inc. Completes Sale of Block 21 to Ryman Hospitality Properties, Inc. for $260 Million
01 Junho 2022 - 9:30AM
Business Wire
Stratus Properties Inc. (NASDAQ: STRS) (“Stratus” or the
“Company”) announced that yesterday it completed the previously
announced sale of Block 21 to Ryman Hospitality Properties, Inc.
(“Ryman”) and its affiliates (collectively, the “Purchaser”) for a
purchase price, subject to certain purchase price adjustments, of
approximately $260 million, which includes the Purchaser’s
assumption of approximately $136 million of existing mortgage debt,
with the remainder paid in cash. Stratus’ net cash proceeds were
approximately $117 million pre-tax (before prorations, but
including $6.9 million of post-closing escrow amounts) and are
expected to be approximately $90 million after prorations and
income taxes. Stratus expects to record a pre-tax gain on the sale
of approximately $120 million in the second quarter of 2022
(approximately $94 million after-tax).
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Block 21 (Photo: Business Wire)
Block 21 was Stratus’ wholly owned mixed-use real estate
property in downtown Austin, Texas. Block 21 contains the 251-room
W Austin Hotel and is home to Austin City Limits Live at the Moody
Theater, a 2,750-seat entertainment venue that serves as the
location for the filming of Austin City Limits, the longest running
music series in American television history. Block 21 also includes
Class A office space, retail space and the 3TEN ACL Live
entertainment venue and business, which has a capacity of
approximately 350 people. Stratus completed the development of
Block 21 in 2010.
William H. Armstrong III, Chairman of the Board and Chief
Executive Officer of Stratus, said, “We are pleased to conclude the
sale of Block 21. I want to thank Colin Reed and the entire Ryman
team for their expertise and diligence throughout the transaction
process. Ryman has demonstrated its leadership and innovation in
both the music and hospitality industries and I believe they are
the ideal buyer for this asset. I am confident that Block 21 will
continue to thrive as an Austin icon within the Ryman portfolio. I
am proud of our team, who have stayed focused on this transaction
as we pursue many other exciting opportunities in Austin and other
Texas markets, and who have again delivered significant value for
our company and shareholders.”
Mr. Armstrong continued, “Our Board and management team
expect to meet soon to make decisions regarding the uses of
proceeds from the sale of Block 21 and the recent sale of The
Santal. We will carefully explore several compelling opportunities,
which will be based on evolving market conditions and may include a
combination of further deleveraging, reinvesting in Stratus’
project pipeline and returning cash to shareholders. We look
forward to providing our shareholders with an update on our
strategic planning process.”
About Stratus Properties Inc.
Stratus is a diversified real estate company engaged primarily
in the acquisition, entitlement, development, management, leasing
and sale of multi-family and single-family residential real estate
properties and commercial properties in the Austin, Texas area and
other select markets in Texas.
Forward-Looking Statements
This press release contains forward-looking statements in which
Stratus discusses factors it believes may affect its future
performance. Forward-looking statements are all statements other
than statements of historical fact, such as plans, projections or
expectations related to Stratus’ estimated gain and net cash
proceeds from the sale of Block 21 and potential uses of such
proceeds, and potential results of Stratus’ strategic planning
process. The words “anticipates,” “may,” “can,” “could,” “plans,”
“believes,” “potential,” “possible,” “estimates,” “expects,”
“projects,” “targets,” “intends,” “likely,” “will,” “should,” “to
be” and any similar expressions are intended to identify those
assertions as forward-looking statements. Stratus cautions readers
that forward-looking statements are not guarantees of future
performance, and its actual results may differ materially from
those anticipated, expected, projected or assumed in the
forward-looking statements. Important factors that can cause
Stratus’ actual results to differ materially from those anticipated
in the forward-looking statements include, but are not limited to,
the possibility that anticipated benefits from the Block 21 sale
will not be fully realized or may take longer to realize than
expected, the results of Stratus’ strategic planning process,
changes in the demand for real estate in the select markets in
Texas where Stratus operates, changes in economic, market and
business conditions, and other factors described in more detail
under the heading “Risk Factors” in Stratus’ Annual Report on Form
10-K for the year ended December 31, 2021, and Quarterly Report on
Form 10-Q for the quarter ended March 31, 2022, each filed with the
U.S. Securities and Exchange Commission.
Under Stratus’ Comerica Bank credit facility, Stratus is not
permitted to repurchase its common stock in excess of $1.0 million
or pay dividends on its common stock without Comerica Bank’s prior
written consent. The declaration of dividends or decision to
repurchase Stratus’ common stock is at the discretion of Stratus’
Board, subject to restrictions under Stratus’ Comerica Bank credit
facility, and will depend on Stratus’ financial results, cash
requirements, projected compliance with covenants in its debt
agreements, outlook and other factors deemed relevant by the
Board.
Investors are cautioned that many of the assumptions upon which
Stratus’ forward-looking statements are based are likely to change
after the date the forward-looking statements are made. Further,
Stratus may make changes to its business plans that could affect
its results. Stratus cautions investors that it undertakes no
obligation to update any forward-looking statements, which speak
only as of the date made, notwithstanding any changes in its
assumptions, business plans, actual experience, or other
changes.
____________________________
A copy of this release is available on Stratus’
website, stratusproperties.com.
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version on businesswire.com: https://www.businesswire.com/news/home/20220531005964/en/
Financial and Media Contact: William H. Armstrong III
(512) 478-5788
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