Limited Partnerships (Tables)

6 Months Ended

Jun. 30, 2023

Schedule of Assets and Liabilities of the VIE Partnerships

Stratus’ consolidated balance sheets include the following assets and liabilities of the partnerships, net of intercompany balances (including the operating loans), which are eliminated (in thousands):


	June 30, 2023 a		December 31, 2022
Assets: b
Cash and cash equivalents	$	4,745	$	7,744
Real estate under development	156,499		107,968
Land available for development	4,116		3,927
Real estate held for investment	33,389		31,415
Other assets	4,383		4,503
Total assets	203,132		155,557
Liabilities: c
Accounts payable and accrued liabilities	13,131		12,247
Debt	71,368		55,305
Total liabilities	84,499		67,552
Net assets	$	118,633	$	88,005

a.Includes the assets and liabilities of the Holden Hills partnership, which was formed in January 2023.

b.Substantially all of the assets are available to settle only obligations of the partnerships.

c.All of the debt is guaranteed by Stratus until certain conditions are met as provided in the applicable loan agreements. The creditors for the remaining liabilities do not have recourse to the general credit of Stratus.

Schedule of Assets and Liabilities of the VIE Partnerships

Potential Returns. The following table presents the distribution percentages for the limited partnerships in which Stratus’ potential returns may increase above its relative equity interest if certain hurdles are achieved.


	Distribution Percentages
	The Saint George Apartments, L.P.				The Saint June, L.P.				Holden Hills, L.P.				Stratus Kingwood Place, L.P.
	Stratus		Third-party Class B Limited Partner		Stratus		Third-party Class B Limited Partner		Stratus		Third-party Class B Limited Partner		Stratus		Third-party Class B Limited Partners
Until all partners have received a return of their capital contributions and a 9.0 percent cumulative return;	10.00	%	90.00	%	34.13	%	65.87	%	50.00	%	50.00	%	60.00	%	40.00	%
Until all partners have received an 11.0 percent cumulative return;	—		—		—		—		—		—		68.00		32.00
Until the Class B limited partner has received a 12.0 percent cumulative return;	20.00		80.00		44.13		55.87		55.00		45.00		—		—
Until the Class B limited partner has received an 18.0 percent cumulative return;	30.00		70.00		—		—		—		—		—		—
Thereafter	50.00		50.00		54.13		45.87		65.00		35.00		76.00		24.00

- Definition

Tabular disclosure of the significant judgments and assumptions made in determining whether a variable interest (as defined) held by the entity requires the variable interest entity (VIE) (as defined) to be consolidated and (or) disclose information about its involvement with the VIE, individually or in aggregate (as applicable); the nature of restrictions, if any, on the consolidated VIE's assets and on the settlement of its liabilities reported by an entity in its statement of financial position, including the carrying amounts of such assets and liabilities; the nature of, and changes in, the risks associated with involvement in the VIE; how involvement with the VIE affects the entity's financial position, financial performance, and cash flows; the lack of recourse if creditors (or beneficial interest holders) of the consolidated VIE have no recourse to the general credit of the primary beneficiary (if applicable); the terms of arrangements, giving consideration to both explicit arrangements and implicit variable interests, if any, that could require the entity to provide financial support to the VIE, including events or circumstances that could expose the entity to a loss; the methodology used by the entity for determining whether or not it is the primary beneficiary of the variable interest entity; the significant factors considered and judgments made in determining that the power to direct the activities of a VIE that most significantly impact the VIE's economic performance are shared (as defined); the carrying amounts and classification of assets and liabilities of the VIE included in the statement of financial position; the entity's maximum exposure to loss, if any, as a result of its involvement with the VIE, including how the maximum exposure is determined and significant sources of the entity's exposure to the VIE; a comparison of the carrying amounts of the assets and liabilities and the entity's maximum exposure to loss; information about any liquidity arrangements, guarantees, and (or) other commitments by third parties that may affect the fair value or risk of the entity's variable interest in the VIE; whether or not the entity has provided financial support or other support (explicitly or implicitly) to the VIE that it was not previously contractually required to provide or whether the entity intends to provide that support, including the type and amount of the support and the primary reasons for providing the support; and supplemental information the entity determines necessary to provide.

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