STRATUS PROPERTIES INC: The "Big Picture" Update

I have updated our cheat sheet for Stratus Properties. A major development has changed the company’s entire story. If you are an investor, this is the most important thing you need to know.

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1. The Big News: The Company is Liquidating

In December 2025, leadership began looking for ways to maximize value for stockholders. By March 2026, they officially decided to liquidate and dissolve the company. The Board of Directors adopted a formal plan to wind down the business, and shareholders will vote on this plan at the 2026 Annual Meeting. This marks a clear shift from a growth-focused developer to a company focused on selling assets and returning cash to you.

2. What does this company do?

Stratus is an Austin, Texas-based developer. They specialize in buying, developing, and selling high-end residential and commercial properties. Their portfolio is concentrated in the Austin area, especially in high-growth spots like Barton Creek. They turn raw land into master-planned communities, luxury villas, and premium retail centers. Their only goal now is to sell everything and distribute the cash to shareholders.

3. How did they perform this year?

They have aggressively "cashed out" throughout 2025 and early 2026. Key moves include:

• Forming a Joint Venture: They partnered with an investor to develop "Holden Hills Phase 2," bringing in $47.8 million.
• Selling Assets: They sold the "Lantana Place" retail center for $57.5 million, "West Killeen Market" for $13.3 million, and several "Amarra Villas" homes for $10.5 million.
• Continued Momentum: They kept selling into early 2026, offloading "Kingwood Place" for $60.8 million.
• Revenue Context: These sales now drive their revenue, reflecting their move away from long-term property management.

4. Financial Health: The "Cashing Out" Strategy

Stratus is currently paying off its debts. They are using money from asset sales to clear project loans and corporate credit lines. By selling the portfolio, they are cutting interest costs and administrative expenses. The company has stopped spending on new developments to focus entirely on selling their remaining land and buildings to maximize the final cash payout per share.

5. What should you watch for?

• The Liquidation Plan: Your stock price is now tied to the "Net Liquidation Value." Watch the gap between the current stock price and the estimated cash left after all debts, taxes, and wind-down costs are paid.
• Market Timing: The remaining properties are sensitive to interest rates and Austin’s real estate demand. If the Texas market cools, it could lower the final sale prices and reduce your payout.
• Stockholder Approval: The plan needs a two-thirds majority vote. Check the upcoming proxy statement for the timeline of cash payouts, which may arrive in several installments.
• Hidden Costs: Watch for news on environmental or warranty issues from past sales. These could create unexpected costs and delay the final closing.

6. The Bottom Line

Stratus Properties is no longer a "buy and hold" stock. It is now a "liquidation play." Your return depends on successful property sales, efficient debt repayment, and the final cash payout. The company’s future is now defined by the final value of its remaining assets, not by growth.

Investor Tip: Before making a move, check the company's latest proxy statement for the specific timeline of the liquidation vote. Understanding the projected schedule for cash distributions is the most important step in evaluating your potential return.