STRATUS PROPERTIES INCSTRS
STRATUS PROPERTIES INC Segments Disclosure
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 (undeveloped land for additional retail space or pad sites and multi-family development at Jones Crossing); and in Magnolia, Texas (potential development of approximately 11 acres planned for future multi-family use), New Caney, Texas (New Caney) and Kingwood, Texas (a vacant retail pad site prior to
its sale in first-quarter 2026), each located in the greater Houston area. As discussed in Note 11, the New Caney land is under contract to sell, subject to satisfaction or waiver of closing conditions. As discussed below, an offer has been received for the retail component of Jones Crossing, including undeveloped commercial land.
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 reclassified from the Real Estate Operations segment to the Leasing Operations segment), The Saint June, the completed retail portion of Jones Crossing, and retail pad sites subject to ground leases at Jones Crossing. The segment also included Kingwood Place (including the retail pad sites subject to ground leases) prior to its sale in first-quarter 2026, the retail portion and retail pad sites subject to ground leases at Lantana Place – Retail prior to its sale in fourth-quarter 2025, 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 11, in March 2026 Stratus received an offer for the retail component, including undeveloped commercial acreage, of Jones Crossing and is negotiating a sales contract.
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):
| Year Ended December 31, | |||||||||||
| 2025 | 2024 | ||||||||||
| Real Estate Operations: | |||||||||||
| Developed property sales | $ | 10,460 | $ | 20,348 | |||||||
| Undeveloped property sales | — | 14,500 | |||||||||
| Commissions and other | 138 | 39 | |||||||||
| 10,598 | 34,887 | ||||||||||
| Leasing Operations: | |||||||||||
| Rental revenue | 19,316 | 19,296 | |||||||||
| 19,316 | 19,296 | ||||||||||
| Total revenues from contracts with customers | $ | 29,914 | $ | 54,183 | |||||||
Financial Information by Reportable Segment. Summarized financial information by reportable segment for the year ended December 31, 2025, follows (in thousands):
Real Estate Operations a | Leasing Operations | Total | |||||||||||||||
| Revenue from unaffiliated customers | $ | 10,598 | $ | 19,316 | $ | 29,914 | |||||||||||
| Segment expenses: | |||||||||||||||||
| Cost of real estate sold | (9,595) | (9,595) | |||||||||||||||
| Property taxes and insurance | (1,244) | (3,925) | (5,169) | ||||||||||||||
| Lease expense | (1,140) | (1,140) | |||||||||||||||
Professional fees b | (4,557) | (4,557) | |||||||||||||||
| Maintenance and repairs | (2,031) | (2,031) | |||||||||||||||
| Allocated overhead costs | (2,221) | (2,221) | |||||||||||||||
| Property management fees and payroll | (1,202) | (1,202) | |||||||||||||||
| Utilities | (666) | (666) | |||||||||||||||
Other segment items c | (2,363) | (1,154) | (3,517) | ||||||||||||||
| Depreciation and amortization | (200) | (6,770) | (6,970) | ||||||||||||||
Gain on sale of assets d | — | 32,730 | 32,730 | ||||||||||||||
| Segment (loss) profit | (10,722) | 36,298 | 25,576 | ||||||||||||||
| General and administrative expenses | (14,786) | ||||||||||||||||
| Operating income | 10,790 | ||||||||||||||||
| Interest expense, net | (1,515) | ||||||||||||||||
| Loss on interest rate cap agreements | (23) | ||||||||||||||||
| Loss on extinguishment of debt | (549) | ||||||||||||||||
| Other loss, net | (618) | ||||||||||||||||
| Net income before income taxes | $ | 8,085 | |||||||||||||||
Capital expenditures and purchases and development of real estate properties | $ | 24,811 | $ | 8,145 | $ | 32,956 | |||||||||||
MUD reimbursements applied to real estate under development e | $ | — | $ | 409 | $ | 409 | |||||||||||
a.Includes sales commissions and other revenues together with related expenses.
b.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. 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 $27.5 million pre-tax gain on the sale of Lantana Place – Retail, an approximately $5.0 million pre-tax gain on the sale of West Killeen Market and a portion of previously deferred gain of $0.2 million related to The Oaks at Lakeway.
e.Reflects receipt of $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 year ended December 31, 2024, follows (in thousands):
Real Estate Operations a | Leasing Operations | Total | |||||||||||||||
| Revenue from unaffiliated customers | $ | 34,887 | $ | 19,296 | $ | 54,183 | |||||||||||
| Segment expenses | |||||||||||||||||
| Cost of real estate sold | (23,894) | (23,894) | |||||||||||||||
| Property taxes and insurance | (1,145) | (3,066) | (4,211) | ||||||||||||||
| Lease expense | (1,140) | (1,140) | |||||||||||||||
Professional fees b | (2,134) | (2,134) | |||||||||||||||
| Maintenance and repairs | (2,024) | (2,024) | |||||||||||||||
| Allocated overhead costs | (977) | (977) | |||||||||||||||
| Property management fees and payroll | (918) | (918) | |||||||||||||||
| Utilities | (478) | (478) | |||||||||||||||
Other segment items c | (689) | (984) | (1,673) | ||||||||||||||
| Depreciation and amortization | (181) | (5,382) | (5,563) | ||||||||||||||
Gain on sale of assets d | — | 1,626 | 1,626 | ||||||||||||||
| Segment profit | 4,727 | 8,070 | 12,797 | ||||||||||||||
| General and administrative expenses | (14,952) | ||||||||||||||||
| Operating loss | (2,155) | ||||||||||||||||
| Loss on extinguishment of debt | (69) | ||||||||||||||||
| Other income, net | 758 | ||||||||||||||||
| Net loss before income taxes | (1,466) | ||||||||||||||||
Capital expenditures and purchases and development of real estate properties | $ | 29,525 | $ | 29,136 | $ | 58,661 | |||||||||||
a.Includes sales commissions and other revenues together with related expenses.
b.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.Reflects a pre-tax gain on the sale of Magnolia Place – Retail of approximately $1.6 million.
Total assets by segment were as follows (in thousands):
| December 31, | |||||||||||
| 2025 | 2024 | ||||||||||
| Real Estate Operations | $ | 275,538 | $ | 359,296 | |||||||
Leasing Operations a | 216,051 | 154,370 | |||||||||
Corporate and other b | 71,839 | 18,940 | |||||||||
| Total assets | $ | 563,428 | $ | 532,606 | |||||||
a.Includes assets held for sale at Kingwood Place, which totaled $37.1 million at December 31, 2025, and $37.1 million at December 31, 2024. Kingwood Place was sold in January 2026.
b.Corporate and other includes cash and cash equivalents and restricted cash of $72.9 million and $18.9 million at December 31, 2025 and 2024, respectively. The remaining cash and cash equivalents and restricted cash are reflected in the operating segments’ assets. Corporate and other also includes elimination of intersegment balances.
Historical Timeline
| Fiscal Year | Filed | |
|---|---|---|
| 2025 | Mar 27, 2026 | Showing above |
| 2024 | Mar 28, 2025 | |
| 2023 | Mar 28, 2024 | |
| 2022 | Mar 31, 2023 | |
| 2021 | Mar 31, 2022 | |
| 2020 | Mar 15, 2021 | |
| 2019 | Mar 16, 2020 | |
| 2018 | Mar 18, 2019 | |
| 2017 | Mar 16, 2018 | |
| 2016 | Mar 16, 2017 | |
| 2015 | Mar 15, 2016 | |
About Segments Disclosures
Segment disclosures break a company into its reportable operating units, revealing revenue, profit, and asset allocation that consolidated financial statements obscure. Under ASC 280, segments must match how the chief operating decision maker views the business, providing a window into internal management structure and resource allocation priorities.
Key signals: compare segment margins to identify which units drive profitability and which destroy value. Watch for changes in the number of reportable segments — segment aggregation or disaggregation often coincides with strategic shifts or attempts to obscure declining performance. Intersegment elimination patterns reveal internal pricing practices. The reconciliation between segment totals and consolidated figures exposes corporate overhead allocation and unallocated items. Geographic revenue concentration highlights regulatory and currency exposure. Compare segment-level capital expenditure against segment revenue to assess where management is investing for future growth versus harvesting existing assets.