Stratus Properties Inc. (NASDAQ:STRS), a real estate development firm, has amended its existing loan agreement with Texas Capital Bank, extending the maturity date and increasing the loan amount for its luxury multi-family project, The Saint June. This move was disclosed in a recent SEC filing.
According to the 8-K filing, the amendment occurred on October 8, 2024, and involved The Saint June, L.P., a subsidiary of Stratus Properties, as the borrower. The amendment extends the loan's maturity to October 2, 2025, and increases the loan commitment by $2 million, bringing the total to $32.3 million. Additionally, the interest rate margin has been reduced from 2.85% to 2.35%, with an exit fee of 1.0% for prepayments, subject to certain conditions.
The Saint June is a 182-unit luxury garden-style apartment complex within the Amarra development in Barton Creek, Austin, Texas, with construction completed in the fourth quarter of 2023. The additional loan proceeds are intended for operating reserves and partial repayment of operating loans from Stratus and the Class B limited partner.
The loan terms include a monthly payment of approximately $40,000 on principal and interest, with the full principal due at the loan's maturity. As of the closing of the amendment, the outstanding principal amount on the loan was $31.8 million.
The amended loan reflects Stratus Properties' ongoing commitment to its development projects and financial agility in managing its capital structure. The company plans to file copies of the full text of the amendments as exhibits to its next periodic report.
InvestingPro Insights
Stratus Properties' recent loan amendment for The Saint June project aligns with some key financial metrics and trends highlighted by InvestingPro. The company's market cap stands at $194.18 million, with a revenue of $42.94 million over the last twelve months as of Q2 2024. Notably, Stratus has shown significant revenue growth, with a 140.51% increase in quarterly revenue for Q2 2024.
However, InvestingPro Tips reveal that Stratus is "quickly burning through cash" and "not profitable over the last twelve months." These insights shed light on why the company might be seeking to amend its loan terms, potentially to improve its cash position and operational flexibility for The Saint June project.
Another relevant InvestingPro Tip indicates that Stratus' "liquid assets exceed short-term obligations," which could provide some reassurance regarding the company's ability to manage its debt commitments, including the newly amended loan.
For investors seeking a more comprehensive analysis, InvestingPro offers additional tips and insights that could be valuable in assessing Stratus Properties' financial health and future prospects.
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