Exhibit 99.1
STRATUS PROPERTIES INC. ANNOUNCES
COMPLETION OF PREFERRED STOCK REDEMPTION AND
ACQUISITIONS AND SALE OF CERTAIN PROPERTIES
AUSTIN, TX, March 1, 2002 - Stratus Properties Inc. (NASDAQ:
STRS) announced today it has completed previously announced
transactions with Olympus Real Estate Corporation (Olympus)
resulting in the conclusion of its business relationship with
Olympus. A summary of the transactions, which closed on February
27, 2002, follows:
* Stratus redeemed its $10 million mandatorily redeemable
convertible preferred stock held by Olympus for $7.6 million.
Stratus will record the $2.4 million discount as additional paid
in capital. The redemption avoids a potential 12 percent
dilution to Stratus' shareholders from a conversion of the
preferred stock to common stock. No dividend had ever been paid
or accrued on the preferred stock, which was issued in May 1998.
* Stratus sold its 49.9 percent ownership interest in Oly
Walden General Partnership to Olympus for $3.1 million. The
partnership owns the remaining unsold lots and undeveloped real
estate in the Walden on Lake Houston development. Stratus will
record a gain of approximately $0.3 million associated with this
sale.
* Stratus purchased Olympus' 50.01 percent ownership interest
in Oly Stratus Barton Creek Joint Venture for $2.4 million. The
joint venture currently owns 22 multi-acre homesites in the
exclusive Barton Creek community near Austin, Texas. At the
time of the acquisition, the joint venture also held cash of $0.3
million, $1.9 million in municipal utility district reimbursables
and no debt.
* Stratus acquired Olympus' 50.1 percent ownership interest in
Stratus 7000 West Joint Venture for $1.5 million. The joint
venture owns a 140,000 square foot office complex in Austin,
consisting of two office buildings that are currently more than
95 percent leased, generating approximately $2 million per year
in net operating income before considering depreciation and debt
service. Stratus received the $0.7 million cash on hand held by
the joint venture and consolidated the joint venture's $12.9
million debt.
The total cash cost to Stratus for these transactions, net
of the cash acquired with the 7000 West and Barton Creek joint
ventures, was $7.4 million which Stratus funded through
borrowings on its Comerica Bank credit facility. At February 28,
2002, Stratus' outstanding borrowings under its credit facility
totaled $20 million, including the funding of these transactions,
and its remaining availability under the facility totaled $8.4
million. Stratus' total debt outstanding immediately following
these transactions is $46.9 million. In connection with the
completion of these transactions, Stratus also announced the
resignation of Mr. Robert L. Adair III from its Board of
Directors. Mr. Adair was appointed to the Board in 1998 in
connection with the original Olympus agreement that provided for
representation on Stratus' Board.
William H. Armstrong, Chairman and Chief Executive Officer of
Stratus said, "These transactions have added significant value
to our shareholders, both through the favorably-priced
acquisition of Barton Creek residential properties and southwest
Austin office space, and through the $2.4 million discount we
were able to realize by redeeming our $10 million preferred stock
for $7.6 million. Olympus has been a great partner and we have
enjoyed a mutually successful business relationship. We would
also like to express our appreciation and gratitude to Rob Adair
for his services on our Board over the past four years."
Stratus is a diversified real estate company engaged in the
development, marketing and management of real estate in the
Austin, Houston, and San Antonio, Texas areas.
____________________________
CAUTIONARY STATEMENT. This press release contains certain
forward-looking statements including the expected gain on the
sale of the Walden Partnership. Important factors that might
cause future results to differ from these projections are
described in STRS' 2000 Form 10-K filed with the Securities and
Exchange Commission.
A