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Business Segments | 9 Months Ended
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Sep. 30, 2025
Segment Reporting [Abstract] |
Business Segments | BUSINESS SEGMENTS Stratus is engaged primarily in the entitlement, development, management, leasing and sale of multi-family and single-family residential and commercial real estate properties in the Austin, Texas area and other select markets in Texas. Stratus generates revenues primarily from the sale of developed lots or homes and undeveloped land and the lease of developed retail, mixed-use and multi-family properties. Stratus has two operating segments, which are also its two reportable segments: Real Estate Operations and Leasing Operations. The Real Estate Operations segment includes properties under various stages of development: developed for sale, under development and available for development. In this segment, Stratus entitles, develops and sells properties. Properties that Stratus develops and then holds for investment become part of the Leasing Operations segment. Decisions about whether to continue to hold a property for investment or to sell it depend on various factors, including conditions in the real estate markets in which Stratus operates and the estimated fair value of the property, and are primarily driven by the objective of maximizing overall asset value. The Real Estate Operations segment is comprised of Stratus’ real estate assets, which consists of its properties in Austin, Texas (including the Barton Creek Community, which includes Holden Hills Phases 1 and 2, Amarra multi-family and commercial land, Amarra Villas homes, an Amarra Drive lot and other vacant land; the Circle C community; the Lantana community, which includes a portion of Lantana Place planned for a multi-family phase known as The Saint Julia; and the land for The Annie B); in Lakeway, Texas, located in the greater Austin area (Lakeway); in College Station, Texas (land for future phases of retail and multi-family development and retail pad sites at Jones Crossing); and in Magnolia, Texas (potential development of approximately 11 acres planned for future multi-family use), Kingwood, Texas (a retail pad site) and New Caney, Texas (New Caney), each located in the greater Houston area. The Leasing Operations segment is comprised of Stratus’ real estate assets held for investment that are leased or available for lease and includes The Saint George (which was completed in second-quarter 2025 and moved from the Real Estate Operations segment to the Leasing Operations segment), The Saint June, Kingwood Place, the retail portion of Lantana Place, the completed retail portion of Jones Crossing, and retail pad sites subject to ground leases at Lantana Place, Kingwood Place and Jones Crossing. The segment also included West Killeen Market prior to its sale in second-quarter 2025 and the retail portion of Magnolia Place prior to its sale in third-quarter 2024. As discussed in Note 10, Lantana Place – Retail is under contract to sell. Subject to satisfaction of closing conditions, the sale is expected to close in fourth-quarter 2025. Stratus’ chief operating decision maker (CODM) is the chief executive officer. The CODM primarily uses segment profit (loss), which is operating income (loss) excluding general and administrative expenses, determined consistent with the measurement principles of U.S. GAAP, to measure the performance of Stratus’ reportable segments. The segment measure of profit (loss) provides a comprehensive view of the segments’ financial performance. The CODM makes decisions about the allocation of operating and capital resources to each segment based on assessment of the performance of the two segments and considering the capital needs for new and existing projects and the objectives of Stratus’ overall business strategy. General and administrative expenses, which primarily consist of employee salaries, wages and other costs, are managed on a consolidated basis and are not allocated to Stratus’ operating segments. The following segment information reflects management determinations that may not be indicative of what the actual financial performance of each segment would be if it were an independent entity. Revenues from Contracts with Customers. Stratus’ revenues from contracts with customers follow (in thousands):
| Three Months Ended |  | Nine Months Ended
| September 30, |  | September 30,
| 2025 |  | 2024 |  | 2025 |  | 2024
Real Estate Operations: |  |  |  |  |  |  |
Developed property sales | $ | — |  |  | $ | 3,950 |  |  | $ | 6,760 |  |  | $ | 15,198 |
Undeveloped property sales | — |  |  | — |  |  | — |  |  | 14,500 |
Commissions and other | 45 |  |  | 21 |  |  | 108 |  |  | 25 |
| 45 |  |  | 3,971 |  |  | 6,868 |  |  | 29,723 |
Leasing Operations: |  |  |  |  |  |  |
Rental revenue | 4,924 |  |  | 4,920 |  |  | 14,749 |  |  | 14,165 |
| 4,924 |  |  | 4,920 |  |  | 14,749 |  |  | 14,165 |
Total revenues from contracts with customers | $ | 4,969 |  |  | $ | 8,891 |  |  | $ | 21,617 |  |  | $ | 43,888 |
Financial Information by Business Segment. Summarized financial information by reportable segment for the three months ended September 30, 2025, follows (in thousands):
| Real Estate Operations a |  | Leasing Operations |  | Total
Revenue from unaffiliated customers | $ | 45 |  |  | $ | 4,924 |  |  | $ | 4,969 |
Segment expenses: |  |  |  |  |
Property taxes and insurance | (354) |  |  | (1,197) |  |  | (1,551) |
Lease expense | (285) |  |  |  |  | (285) |
Professional fees b | (3,191) |  |  |  |  | (3,191) |
Maintenance and repairs |  |  | (530) |  |  | (530) |
Allocated overhead costs | (337) |  |  |  |  | (337) |
Property management fees and payroll |  |  | (330) |  |  | (330) |
Utilities |  |  | (228) |  |  | (228) |
Other segment items c | (374) |  |  | (298) |  |  | (672) |
Depreciation and amortization | (48) |  |  | (2,024) |  |  | (2,072) |
Segment (loss) profit | (4,544) |  |  | 317 |  |  | (4,227) |
General and administrative expenses |  |  |  |  | (3,866) |
Operating loss |  |  |  |  | (8,093) |
Interest expense, net |  |  |  |  | (749) |
Loss on interest rate cap agreements |  |  |  |  | (1) |
Loss on extinguishment of debt |  |  |  |  | (33) |
Other income (loss), net |  |  |  |  | 548 |
Net loss before income taxes |  |  |  |  | $ | (8,328) |
Capital expenditures and purchases and development of real estate properties | $ | 6,146 |  |  | $ | 914 |  |  | $ | 7,060 |
a.Includes sales commissions and other revenues together with related expenses. b.In third-quarter 2025, Stratus terminated a lease for a potential development project and recorded a charge of approximately $2.8 million representing previously capitalized architectural, engineering and consulting fees incurred in connection with planning and evaluating the potential project. c.For Real Estate Operations, primarily includes advertising, property owner association fees, maintenance and utilities. For Leasing Operations, primarily includes amortization of leasing costs, property owner association fees, professional fees and office and computer equipment. Summarized financial information by reportable segment for the three months ended September 30, 2024, follows (in thousands):
| Real Estate Operations a |  | Leasing Operations |  | Total
Revenue from unaffiliated customers | $ | 3,971 |  |  | $ | 4,920 |  |  | $ | 8,891 |
Segment expenses |  |  |  |  |
Cost of real estate sold | (3,266) |  |  |  |  | (3,266) |
Property taxes and insurance | (303) |  |  | (770) |  |  | (1,073) |
Lease expense | (285) |  |  |  |  | (285) |
Professional fees b | (1,074) |  |  |  |  | (1,074) |
Maintenance and repairs |  |  | (522) |  |  | (522) |
Allocated overhead costs | (239) |  |  |  |  | (239) |
Property management fees and payroll |  |  | (259) |  |  | (259) |
Utilities |  |  | (162) |  |  | (162) |
Other segment items c | (177) |  |  | (251) |  |  | (428) |
Depreciation and amortization | (48) |  |  | (1,317) |  |  | (1,365) |
Gain on sale of assets d | — |  |  | 1,626 |  |  | 1,626 |
Segment (loss) profit | (1,421) |  |  | 3,265 |  |  | 1,844 |
General and administrative expenses |  |  |  |  | (3,363) |
Operating loss |  |  |  |  | (1,519) |
Other income (loss), net |  |  |  |  | 163 |
Net loss before income taxes |  |  |  |  | $ | (1,356) |
Capital expenditures and purchases and development of real estate properties | $ | 6,608 |  |  | $ | 6,820 |  |  | $ | 13,428 |
a.Includes sales commissions and other revenues together with related expenses. b.In third-quarter 2024, Stratus recorded a charge of $721 thousand to write off previously capitalized costs related to a change in development plans for one property. c.For Real Estate Operations, primarily includes advertising, property owner association fees, maintenance and utilities. For Leasing Operations, primarily includes amortization of leasing costs, property owner association fees, professional fees and office and computer equipment. d.Represents a pre-tax gain on the sale of Magnolia Place – Retail in third-quarter 2024 for $1.6 million. Summarized financial information by reportable segment for the nine months ended September 30, 2025, follows (in thousands):
| Real Estate Operations a |  | Leasing Operations |  | Total
Revenue from unaffiliated customers | $ | 6,868 |  |  | $ | 14,749 |  |  | $ | 21,617 |
Segment expenses: |  |  |  |  |
Cost of real estate sold | (6,244) |  |  |  |  | (6,244) |
Property taxes and insurance | (1,096) |  |  | (2,927) |  |  | (4,023) |
Lease expense | (855) |  |  |  |  | (855) |
Professional fees b | (4,360) |  |  |  |  | (4,360) |
Maintenance and repairs |  |  | (1,536) |  |  | (1,536) |
Allocated overhead costs | (1,883) |  |  |  |  | (1,883) |
Property management fees and payroll |  |  | (904) |  |  | (904) |
Utilities |  |  | (452) |  |  | (452) |
Other segment items c | (1,868) |  |  | (823) |  |  | (2,691) |
Depreciation and amortization | (144) |  |  | (4,698) |  |  | (4,842) |
Gain on sale of assets d | — |  |  | 5,200 |  |  | 5,200 |
Segment (loss) profit | (9,582) |  |  | 8,609 |  |  | (973) |
General and administrative expenses |  |  |  |  | (11,474) |
Operating loss |  |  |  |  | (12,447) |
Interest expense, net |  |  |  |  | (1,026) |
Loss on interest rate cap agreements |  |  |  |  | (23) |
Loss on extinguishment of debt |  |  |  |  | (216) |
Other (loss) income, net |  |  |  |  | (181) |
Net loss before income taxes |  |  |  |  | $ | (13,893) |
Capital expenditures and purchases and development of real estate properties | $ | 20,543 |  |  | $ | 8,075 |  |  | $ | 28,618 |
MUD reimbursements applied to real estate under development e | $ | — |  |  | $ | 409 |  |  | $ | 409 |
a.Includes sales commissions and other revenues together with related expenses. b.In third-quarter 2025, Stratus terminated a lease for a potential development project and recorded a charge of approximately $2.8 million representing previously capitalized architectural, engineering and consulting fees incurred in connection with planning and evaluating the potential project. c.For Real Estate Operations, primarily includes advertising, property owner association fees, maintenance and utilities. In second-quarter 2025, Stratus recorded a $1.0 million charge to write off receivables, included in other assets on the consolidated balance sheet, from owners of properties previously sold by Stratus for a share of historical costs incurred to develop the land. For Leasing Operations, primarily includes amortization of leasing costs, property owner association fees, professional fees and office and computer equipment. d.Reflects an approximately $5.0 million pre-tax gain on the sale of the West Killeen Market retail project in second-quarter 2025 and a portion of a previously deferred gain of $0.2 million related to The Oaks at Lakeway in first-quarter 2025. Refer to Note 4 for further discussion. e.In second-quarter 2025, Stratus received $409 thousand of proceeds related to MUD reimbursements of infrastructure costs incurred for development of The Saint June. This was recorded as a reduction of real estate under development on the consolidated balance sheet. Summarized financial information by reportable segment for the nine months ended September 30, 2024, follows (in thousands):
| Real Estate Operations a |  | Leasing Operations |  | Total
Revenue from unaffiliated customers | $ | 29,723 |  |  | $ | 14,165 |  |  | $ | 43,888 |
Segment expenses |  |  |  |  |
Cost of real estate sold | (20,388) |  |  |  |  | (20,388) |
Property taxes and insurance | (925) |  |  | (2,268) |  |  | (3,193) |
Lease expense | (855) |  |  |  |  | (855) |
Professional fees b | (1,702) |  |  |  |  | (1,702) |
Maintenance and repairs |  |  | (1,376) |  |  | (1,376) |
Allocated overhead costs | (741) |  |  |  |  | (741) |
Property management fees and payroll |  |  | (672) |  |  | (672) |
Utilities |  |  | (343) |  |  | (343) |
Other segment items c | (435) |  |  | (725) |  |  | (1,160) |
Depreciation and amortization | (136) |  |  | (4,032) |  |  | (4,168) |
Gain on sale of assets d | — |  |  | 1,626 |  |  | 1,626 |
Segment profit | 4,541 |  |  | 6,375 |  |  | 10,916 |
General and administrative expenses |  |  |  |  | (11,670) |
Operating loss |  |  |  |  | (754) |
Loss on extinguishment of debt |  |  |  |  | (59) |
Other income (loss), net |  |  |  |  | 522 |
Net loss before income taxes |  |  |  |  | $ | (291) |
Capital expenditures and purchases and development of real estate properties | $ | 22,925 |  |  | $ | 22,962 |  |  | $ | 45,887 |
a.Includes sales commissions and other revenues together with related expenses. b.In third-quarter 2024, Stratus recorded a charge of $721 thousand to write off previously capitalized costs related to a change in development plans for one property. c.For Real Estate Operations, primarily includes advertising, property owner association fees, maintenance and utilities. For Leasing Operations, primarily includes amortization of leasing costs, property owner association fees, professional fees and office and computer equipment. d.Represents a pre-tax gain on the sale of Magnolia Place – Retail in third-quarter 2024 for $1.6 million. Total assets by segment were as follows (in thousands):
| September 30,
| 2025 |  | 2024
Real Estate Operations | $ | 275,227 |  |  | $ | 349,701 |
Leasing Operations | 245,441 |  |  | 154,257 |
Corporate and other a | 51,894 |  |  | 19,222 |
Total assets | $ | 572,562 |  |  | $ | 523,180 |
a.Corporate and other includes cash and cash equivalents and restricted cash of $54.0 million and $18.7 million at September 30, 2025 and 2024, respectively. The remaining cash and cash equivalents and restricted cash is reflected in the operating segments’ assets. Corporate and other also includes elimination of intersegment balances.

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