Limited Partnerships (Tables)

6 Months Ended

Jun. 30, 2024

Schedule of Potential Returns 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 9.00 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 11.00 percent cumulative return;	—		—		—		—		—		—		68.00		32.00
Until the Class B limited partner has received a 12.00 percent cumulative return;	20.00		80.00		44.13		55.87		55.00		45.00		—		—
Until the Class B limited partner has received an 18.00 percent cumulative return;	30.00		70.00		—		—		—		—		—		—
Thereafter	50.00		50.00		54.13		45.87		65.00		35.00		76.00		24.00

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 made by Stratus), which are eliminated (in thousands):


	June 30, 2024		December 31, 2023
Assets: a
Cash and cash equivalents	$	2,895	$	5,531
Restricted cash	150		193
Real estate under development	162,469		140,347
Land available for development	1,912		1,911
Real estate held for investment	82,772		87,005
Lease right-of-use assets	286		420
Other assets	3,082		3,122
Total assets	253,566		238,529
Liabilities: b
Accounts payable	8,099		12,751
Accrued liabilities, including taxes	2,205		1,793
Debt	120,155		100,205
Lease liabilities	288		421
Other liabilities	276		391
Total liabilities	131,023		115,561
Net assets	$	122,543	$	122,968

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

b.The Kingwood Place construction loan has a 25.0 percent repayment guaranty and The Saint George construction loan has a completion guaranty and a 25.0 percent repayment guaranty. The guaranty of The Saint June construction loan converted to a 50.0 percent repayment guaranty upon completion of the project in fourth-quarter 2023. All of the rest of the debt is subject to a full repayment guaranty. Certain of the guaranties terminate if the project meets specified financial and other conditions. The creditors for the remaining liabilities do not have recourse to the general credit of Stratus. See Note 6 of the Stratus 2023 Form 10-K for additional information.

- 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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