Q2 2021 Stratus Properties Inc Earnings Call
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I'm here for Q2 Stratus properties earnings call.
Okay May I have your name please.
Yes. This is Rachel Smith.
And your company please.
And with ore that's AI E R E.
Okay. Let me go ahead and join you suddenly into the college was head of the call is being recorded significantly.
Revenue per available room, or Revpar was $95 in the second quarter of 2021.
Compared to $29 in the second quarter of last year.
The hotel's average occupancy was 33% for the second quarter of 2021, which is an increase from the 12% occupancy rate in the second quarter of last year.
Yeah.
Entertainment revenues increased to $1.7 million in the second quarter of 2021 from $289000 in the second quarter of last year.
The segment's operating loss was $359000 in the second quarter of 2021, compared with an operating loss of $1.4 million in the second quarter of last year.
This increase in revenue and reduced operating loss primarily reflect increases in the number of events hosted at ACL live in three Tennessee alive as the impacts of the COVID-19 pandemic lessened during the second quarter of 2021.
However, we are monitoring the situation as an increase in COVID-19 cases could impact future events.
Turning now to capital management at June 30th 2021, consolidated debt totaled $352.1 million and consolidated cash totaled $15.3 million.
Compared with consolidated debt of $351.1 million and consolidated cash of $12.4 million at December 31, 2020.
As of June 30th 2021, we had $14.3 million available under our $60 million of Comerica Bank credit facility.
As previously announced we entered into an amendment to the Santal loan in April 2021 to among other items extend the maturity date from October 2022 to October 2024, and reduced the floor of the variable interest rate.
In June 2021, we entered into a $24.5 million dollar loan maturing in June 2026 to refinance the Jones crossing project to improve the loan terms and take advantage of the low interest rate market.
Proceeds were used to repay the original construction loan in full.
Also in June 2021, we entered into a construction loan to borrow up to $33 million.
To finance approximately 55% of the estimated $55 million cost of the St. Jude.
As of June 30th 2021, no amounts were outstanding under this loan which matures in October 2024.
On July <unk>, 2021, and unrelated equity investor contributed $16.3 million to the St. Jude partnership in exchange for 65.87% interest we have a 34.13% interest in the partnership following our contribution of land development to date and cash of 1.1.
Dollars.
Earlier this month, we entered into a $14.8 million three year construction loan to finance the first phase of development of Magnolia place.
Purchases and development of real estate properties reflected in operating cash flows and capital expenditures reflected in investing cash flows totaled $7.3 million for the first six months of 2021.
Primarily related to the development of Barton Creek properties, including Tomorrow villas.
And the Lantana place and Magnolia place project.
This compares with $13.1 million for the first six months of 2020, primarily related to the development of Kingwood place Lantana place Jones crossing and Barton Creek properties.
We continue to believe that we'll be able to meet our debt service and other cash obligations for at least the next 12 months.
Thank you and I'll now turn the call back to Bob for his closing remarks.
Thank you Erin.
The momentum we have built during the second quarter and with the improving performance of our portfolio.
Business remained strong as Texas, particularly Austin continued to experience outsized growth.
Demand for residential properties continues to be especially strong throughout Texas, our properties are well positioned to benefit from this growth and our development experience and market relationships will continue to be important assets prescribes.
Austin was certainly buzzing in the second quarter as people increasingly left their homes to enjoy larger events as businesses continue.
Continue to move to Austin and his travel picked up.
We will of course continue to monitor the impact of the recent increase in COVID-19 cases due to the Delta variance, although we remain hopeful that this uptick will be short lived.
We maintained our focus during the worst of the pandemic last year and believe we are starting to see our efforts pay off.
We will continue to pursue our strong pipeline of opportunities in future quarters.
Thank you all for listening at this time I'll ask the operator to open the line for questions.
We will now begin the question and answer session.
To ask a question you May press Star then one on your telephone keypad if.
If you were using a speakerphone please pick up your handset before pressing the keys to withdraw your question. Please press Star then two at.
At this time, we will pause momentarily to assemble our roster.
Okay.
Again, if you have a question. Please press Star then one.
Our first question comes from Fred Burtner, a private Investor. Please go ahead.
Hi, Beau.
I just had one or two questions.
Youre gearing up with more projects as you as you come up with more future projects startup how much financing is theoretically available from our limited partners.
Good morning, Brad much your voice, thank you for participating.
We are we have we have always had a fairly robust.
<unk> pipeline of development opportunities as you are aware of.
And.
Given the success.
St Mary for one.
And also the ongoing success of our Kingwood place project, we have been able to access additional will recall L. P limited partner capital as evidenced by the St June so.
And then couple that with just the interest in Austin, Texas as well as our we've got some extraordinary assets there as we're all aware so I think when you add all those factors together I think that we will continue to be able to source L. P capital to the extent that we can continue to to kind of put forth.
Attractive opportunities. So I guess generally I'm optimistic in our ability to do that both from a.
And equity side L P side as well as through the debt markets.
As evidenced by the St Jim, but again, we're all.
We're all subject to the same market conditions that can change that but you know even through this pandemic awesome has performed very well both from the.
The certainly the housing side and to a lesser extent the retail side.
As Aaron pointed out in our call.
The hospitality business has been challenged for reasons, we all know, but generally Austin is and is expected to continue to be a good market. We're in a good space. There. So I think to answer your question I think we'll be able to continue to raise capital for good projects.
Thank you my other question is in the second quarter when when business was coming back at slide 21.
Is there a resurfacing of potential buyers who might want to.
Invest in block 21.
That's that's a great question Fred.
Characterized it as.
The interest.
During that period or were prior to the second quarter I would say it would be more opportunistic buyers and our.
Our board made a decision that we were not going we didn't that didn't need to entertain.
Pricing or offers at what we would call opportunistic levels. So we decided that we were going to fight through it and you'll get.
When things normalize we would again revisit the idea of selling the hotel I think we've made it clear that it's not core to what we do and we would like to sell at the right time much like we did with Ryman. So.
As things started to rebound.
Certainly we've had some <unk>.
<unk> inbound interest.
And I think it has shifted a little bit just because the market has picked up Austin So hot.
But again, all the things you'd expect so I don't think it's to the level yet where.
We were able to transact I think we're still we're still not making money at the hotel.
I guess breaking even at the property level or close to it and are expected to is that you know again. This is a very fluid situation, but we're expecting to be at a breakeven level at the property level.
Perhaps this quarter, so we really feel like that needs to normalize a bit more before we're going to be able to attract the kind of capital and the kind of pricing, where we would we would like to transact.
But we do it but Fred the market is Austin is hot there hasnt been a you know I think when we were selling the ryman a couple of years ago. There was a lot of concern about new supply I think supply was one of the big factors that.
That I guess was a bit of a mitigating factor, but obviously theres been very little happening in the hospitality space and it takes a long time to get a new project off the ground. So hopefully that limit our supply will be helpful. When things do pick up and we see.
The hotel performing where it was in 2019.
Okay, well, thank you for answering my questions and keep up the good work. Thank.
Craig.
This concludes our question and answer session and the conference is also now concluded. Thank you for attending today's presentation. You may now disconnect.
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