Stratus Properties: Q3 Earnings Snapshot
Wednesday, Nov 13, 2024 8:36 am ET
4min read Stratus Properties Inc. (NASDAQ: STRS), a residential and retail focused real estate company operating in the Austin, Texas area and other select markets in Texas, reported its third-quarter and nine-month 2024 results on November 13, 2024. The company's earnings snapshot provides valuable insights into its performance and growth prospects.
Key drivers of Stratus Properties' Q3 earnings performance included the sale of Amarra Villas homes and the increase in rental revenue, particularly from The Saint June. The sale of one Amarra Villas home in Q3 2024 for $4.0 million contributed significantly to the company's revenue growth, accounting for approximately 45% of its total Q3 revenues. Additionally, the average sales price of the Amarra Villas homes in Q3 2024 was substantially higher than the prior-year period, indicating strong demand for these luxury properties.
The Saint June, a 182-unit luxury garden-style multi-family project in Barton Creek, contributed to Stratus Properties' revenue growth in the third quarter. As of November 8, 2024, occupancy at The Saint June was approximately 97 percent, indicating strong demand for the property. The increase in rental revenue from The Saint June, combined with the sale of one Amarra Villas home in Q3 2024, contributed to the overall revenue increase compared to the same period in 2023.
Stratus Properties' revenue and earnings growth compared to the previous quarter and the same quarter last year were notable. The company's third-quarter 2024 revenue of $8.9 million marked a significant increase from $3.7 million in Q3 2023, driven by the sale of an Amarra Villas home and higher rental revenue from The Saint June. This represents a 140% year-over-year (YoY) increase. Compared to Q2 2024, revenue grew 24%. Earnings before interest, taxes, depreciation, and amortization (EBITDA) totaled $3.9 million, a substantial improvement from $(9.9) million in Q3 2023 and $(1.5) million in Q2 2024. This reflects a 400% YoY increase and a 160% quarter-over-quarter (QoQ) increase.
The sale of undeveloped land at Magnolia Place also had a significant impact on Stratus Properties' Q3 revenue. The company reported revenues of $8.9 million in Q3 2024, compared to $3.7 million in Q3 2023. The increase was primarily due to the sale of one Amarra Villas home in Q3 2024 for $4.0 million, compared to none sold in Q3 2023, as well as an increase in rental revenue primarily related to The Saint June, which had minimal rental revenue in Q3 2023 as it commenced operations in mid-2023.
The Magnolia Place - Retail sale was a significant driver of Stratus Properties' Q3 revenue growth, contributing $8.9 million to the total revenue of $8.9 million for the quarter. This sale generated pre-tax net cash proceeds of approximately $8.6 million and a pre-tax gain of $1.6 million, indicating a positive impact on the company's cash flow and profitability. The sale also marked a key milestone in the development of the Magnolia Place project, with property sales totaling approximately $30.0 million as of November 8, 2024. Following the sale, Stratus retained potential development of approximately 11 acres planned for 275 multi-family units and approximately $12 million of potential future reimbursements from the municipal utility district (MUD), with no project debt. This retention of development rights and potential future reimbursements suggests a long-term strategic vision for the Magnolia Place project, which is expected to contribute to Stratus' future revenue growth and value creation.
In conclusion, Stratus Properties' Q3 earnings snapshot demonstrates the company's strong performance and growth prospects. The sale of Amarra Villas homes, the increase in rental revenue from The Saint June, and the Magnolia Place - Retail sale were key drivers of the company's revenue growth. As the company continues to execute its strategic vision, investors should monitor its progress and consider its potential for long-term growth and value creation.
Key drivers of Stratus Properties' Q3 earnings performance included the sale of Amarra Villas homes and the increase in rental revenue, particularly from The Saint June. The sale of one Amarra Villas home in Q3 2024 for $4.0 million contributed significantly to the company's revenue growth, accounting for approximately 45% of its total Q3 revenues. Additionally, the average sales price of the Amarra Villas homes in Q3 2024 was substantially higher than the prior-year period, indicating strong demand for these luxury properties.
The Saint June, a 182-unit luxury garden-style multi-family project in Barton Creek, contributed to Stratus Properties' revenue growth in the third quarter. As of November 8, 2024, occupancy at The Saint June was approximately 97 percent, indicating strong demand for the property. The increase in rental revenue from The Saint June, combined with the sale of one Amarra Villas home in Q3 2024, contributed to the overall revenue increase compared to the same period in 2023.
STRS Total Revenue YoY, Total Revenue
Stratus Properties' revenue and earnings growth compared to the previous quarter and the same quarter last year were notable. The company's third-quarter 2024 revenue of $8.9 million marked a significant increase from $3.7 million in Q3 2023, driven by the sale of an Amarra Villas home and higher rental revenue from The Saint June. This represents a 140% year-over-year (YoY) increase. Compared to Q2 2024, revenue grew 24%. Earnings before interest, taxes, depreciation, and amortization (EBITDA) totaled $3.9 million, a substantial improvement from $(9.9) million in Q3 2023 and $(1.5) million in Q2 2024. This reflects a 400% YoY increase and a 160% quarter-over-quarter (QoQ) increase.
The sale of undeveloped land at Magnolia Place also had a significant impact on Stratus Properties' Q3 revenue. The company reported revenues of $8.9 million in Q3 2024, compared to $3.7 million in Q3 2023. The increase was primarily due to the sale of one Amarra Villas home in Q3 2024 for $4.0 million, compared to none sold in Q3 2023, as well as an increase in rental revenue primarily related to The Saint June, which had minimal rental revenue in Q3 2023 as it commenced operations in mid-2023.
The Magnolia Place - Retail sale was a significant driver of Stratus Properties' Q3 revenue growth, contributing $8.9 million to the total revenue of $8.9 million for the quarter. This sale generated pre-tax net cash proceeds of approximately $8.6 million and a pre-tax gain of $1.6 million, indicating a positive impact on the company's cash flow and profitability. The sale also marked a key milestone in the development of the Magnolia Place project, with property sales totaling approximately $30.0 million as of November 8, 2024. Following the sale, Stratus retained potential development of approximately 11 acres planned for 275 multi-family units and approximately $12 million of potential future reimbursements from the municipal utility district (MUD), with no project debt. This retention of development rights and potential future reimbursements suggests a long-term strategic vision for the Magnolia Place project, which is expected to contribute to Stratus' future revenue growth and value creation.
In conclusion, Stratus Properties' Q3 earnings snapshot demonstrates the company's strong performance and growth prospects. The sale of Amarra Villas homes, the increase in rental revenue from The Saint June, and the Magnolia Place - Retail sale were key drivers of the company's revenue growth. As the company continues to execute its strategic vision, investors should monitor its progress and consider its potential for long-term growth and value creation.
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