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Debt | 6 Months Ended
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Jun. 30, 2023
Capitalization, Long-Term Debt and Equity [Abstract] |
Debt | DEBT AND EQUITY The components of Stratus' debt follow (in thousands):
| June 30, 2023 |  | December 31, 2022 |
Comerica Bank revolving credit facility | $ | — |  |  | $ | — |  |
Jones Crossing loan | 22,289 |  |  | 24,143 |  |
The Annie B land loan | 13,950 |  |  | 13,969 |  |
New Caney land loan | — |  |  | 4,047 |  |
Construction loans: a |  |  |  |
Kingwood Place | 28,044 |  |  | 27,507 |  |
The Saint June | 24,617 |  |  | 13,829 |  |
Lantana Place | 21,792 |  |  | 21,782 |  |
Amarra Villas revolving credit facility | 10,951 |  |  | 5,366 |  |
Magnolia Place | 8,006 |  |  | 6,816 |  |
West Killeen Market | 5,276 |  |  | 5,306 |  |
The Saint George | 2,507 |  |  | — |  |
Total debt b | $ | 137,432 |  |  | $ | 122,765 |  |
a.The Holden Hills construction loan had no outstanding balance at June 30, 2023. b.Includes net reductions for unamortized debt issuance costs of $2.0 million at June 30, 2023, and $1.1 million at December 31, 2022. Comerica Bank revolving credit facility. As of June 30, 2023, Status had $42.7 million available under the Comerica Bank revolving credit facility net of letters of credit totaling $11.0 million issued to secure Stratus’ obligation to build certain roads and utilities facilities benefiting Holden Hills and Section N. In March 2023, Stratus entered into a modification of the revolving credit facility, which extended the maturity date of the revolving credit facility to March 27, 2025, and increased the floor of the one-month BSBY Rate. As amended, advances under the revolving credit facility bear interest at the one-month BSBY Rate (with a floor of 0.50 percent) plus 4.00 percent. In May 2023, Stratus entered into a modification of the revolving credit facility to increase the maximum amount of letters of credit that may be issued under the revolving credit facility from $11.5 million to $13.3 million. In July 2023, Stratus entered into a $2.3 million letter of credit to secure its obligations, which are subject to certain conditions, to construct and pay for certain utility infrastructure in Lakeway, Texas, estimated to cost approximately $2.3 million. The amount available under the revolving credit facility, net of letters of credit issued, was $40.4 million as of August 9, 2023. Jones Crossing loan. The Jones Crossing loan requires the Jones Crossing project to meet a debt service coverage ratio (DSCR) test of 1.15 to 1.00 measured quarterly and, starting June 30, 2023, on a rolling 12 month basis. If the DSCR falls below 1.15 to 1.00, it is not an event of default, but a “Cash Sweep Period” (as defined in the Jones Crossing loan) results, which limits Stratus’ ability to receive cash from its Jones Crossing subsidiary, unless a principal payment is made on the loan to restore the DSCR to the required threshold. The DSCR fell below 1.15 to 1.00 in each of fourth-quarter 2022 and first-quarter 2023, and the Jones Crossing subsidiary made principal payments of $231 thousand and $1.7 million in February 2023 and May 2023, respectively, to bring the DSCR back above 1.15 to 1.00 and a Cash Sweep Period did not occur. The DSCR fell below 1.15 to 1.00 in second-quarter 2023 and the Jones Crossing subsidiary must make an additional principal payment of approximately $1.2 million in August 2023 or allow a Cash Sweep Period to commence. The Annie B land loan. In February 2023, Stratus Block 150, L.P. entered into a modification agreement that extended the maturity date of The Annie B land loan to March 1, 2024, and changed the interest rate to the one-month BSBY Rate (with a floor of 0.50 percent) plus 3.00 percent. In connection with the modification agreement, Stratus Block 150, LP, escrowed an interest reserve of $0.6 million with the lender. New Caney land loan. In March 2023, the New Caney land loan was repaid. The Saint June construction loan. In January 2023, The Saint June construction loan was amended to change the interest rate for the loan to SOFR with a floor of 0.75 percent plus 2.85 percent, subject to an overall 3.50 percent floor. Amarra Villas revolving credit facility. In March 2023, Stratus made a $2.2 million principal payment on the Amarra Villas revolving credit facility upon the closing of a sale of one of the Amarra Villas homes. Magnolia Place construction loan. In May 2023, the Magnolia Place construction loan was amended to change the interest rate for the loan to Term SOFR with a floor of 0.00 percent plus 3.36 percent, subject to an overall 3.50 percent floor. Holden Hills construction loan. In February 2023, the Holden Hills partnership entered into a loan agreement with Comerica Bank to finance the development of Phase I of the Holden Hills Project. The loan agreement provides for a senior secured construction loan in the aggregate principal amount of the least of (i) $26.1 million, (ii) 23 percent of the total development costs for Phase I or (iii) the amount that would result in a maximum loan-to-value ratio of 28 percent. The loan has a maturity date of February 8, 2026. Advances under the loan bear interest at the one-month BSBY Rate (with a floor of 0.50 percent), plus 3.00 percent. Payments of interest only on the loan are due monthly until the maturity date with the outstanding principal due at maturity. The Holden Hills partnership may prepay all or any portion of the loan without premium or penalty. Amounts repaid under the loan may not be reborrowed. The loan is secured by the Holden Hills Project, including the land related to both Phase I and Phase II, and the Phase I improvements. After completion of construction of Phase I, the Holden Hills partnership may sell and obtain releases of the liens on single-family platted home sites, individual pods or the Phase II land, subject to specified conditions, and upon payment to the lender of specified amounts related to the parcel to be released. The Holden Hills partnership is not permitted to make distributions to its partners, including Stratus, while the loan is outstanding. The Holden Hills partnership must apply all Municipal Utility District (MUD) reimbursements it receives and is entitled to retain as payments of principal on the loan. Stratus has entered into a guaranty for the benefit of the lender pursuant to which Stratus has guaranteed the payment of the loan and the completion of Phase I, including the Tecoma Improvements (which benefit both the Holden Hills Project and Section N). Stratus is also liable for customary carve-out obligations and an environmental indemnity. Stratus must maintain, on a consolidated basis, a net asset value not less than $125.0 million, and a debt-to-gross-asset value not more than 50 percent (in each case as defined in the guaranty). For additional information regarding Stratus' debt, refer to Note 6 in the Stratus 2022 Form 10-K. Interest Expense and Capitalization. Interest costs (before capitalized interest) totaled $2.9 million in second-quarter 2023, $1.5 million in second-quarter 2022, $5.3 million for the first six months of 2023 and $2.6 million for the first six months of 2022. Substantially all of these interest costs were capitalized for the periods presented. Capitalized interest is primarily related to development activities at Barton Creek (primarily Holden Hills, Section N and The Saint June), The Saint George and The Annie B for the periods presented. Equity. The Comerica Bank revolving credit facility, Amarra Villas revolving credit facility, The Annie B land loan, The Saint George construction loan, Kingwood Place construction loan and Holden Hills construction loan require Comerica Bank’s prior written consent for any common stock repurchases in excess of $1.0 million or any dividend payments. On September 1, 2022, after receiving written consent from Comerica Bank, Stratus’ Board of Directors (Board) declared a special cash dividend of $4.67 per share (totaling $40.0 million) on Stratus’ common stock, which was paid on September 29, 2022 to shareholders of record as of September 19, 2022. Accrued liabilities included $0.7 million as of June 30, 2023, and $1.3 million as of December 31, 2022, representing dividends accrued for unvested RSUs in accordance with the terms of the awards. The accrued dividends are paid to the holders of the RSUs as the RSUs vest. In 2022, with written consent from Comerica Bank, Stratus’ Board also approved a share repurchase program, which authorizes repurchases of up to $10.0 million of Stratus’ common stock. The repurchase program authorizes Stratus, in management’s discretion, to repurchase shares from time to time, subject to market conditions and other factors. During the first six months of 2023, Stratus acquired 74,306 shares of its common stock under the share repurchase program for a total cost of $1.6 million at an average price of $21.36 per share. Through August 9, 2023, Stratus has acquired 381,889 shares of its common stock for a total cost of $9.8 million at an average price of $25.65 per share, and $0.2 million remains available for repurchases under the program.

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