Stratus Properties Inc. has sold a 448-unit community in Austin, Texas, two years after the company had an initial opportunity to sell. The company sold The Santal for $152 million to an undisclosed buyer, initially reaching an agreement to sell the community in September.
The Santal offers one-, two- and three-bedroom units ranging from 806 to 1,462 square feet in a garden-style luxury apartment complex in Section N of Austin’s Barton Creek neighborhood. The community’s amenities include a dog park, electric vehicle charging station, two pools, two fitness centers, two lounges, parking garages, bike racks and storage closets. According to Stratus, The Santal was fully leased and stabilized.
As the developer, Stratus started construction on The Santal in the first quarter of 2015, completing the first phase of construction in the third quarter of 2016. The community was later fully completed after the second phase wrapped up in the first quarter of 2019.
According to Stratus, the sale of The Santal brought approximately $74 million of pre-tax cash proceeds, after transaction expenses and the payment of the project’s loan. The sale’s post-tax net cash proceeds is estimated at approximately $51 million, following payment of profit participation incentive plan amounts, according to Stratus. Alongside The Santal, Stratus also sold The Saint Mary, a 240-unit community in Austin, to Velocis in January.
STRONG PIPELINE OF DEVELOPMENTS
William Armstrong III, CEO of Stratus & chair of the board, said in prepared remarks from September that the company could’ve sold The Santal in 2019 for a substantially lower price but instead chose to hold and refinance the community at the time.
Armstrong said in prepared remarks that the company’s board is currently reviewing how to use the proceeds from the sale of The Santal, which may be joined by the proceeds from the pending sale of its mixed-use development, Block 21, that’s also in Austin.
Armstrong also said in prepared remarks that Stratus’ pipeline of development opportunities includes The Annie B, The Saint June and other developments in the Barton Creek area. Stratus announced plans for its Block 150 luxury high-rise rental project in downtown Austin that includes The Annie B in September. In June, Stratus also received construction financing for The Saint June, a 182-unit community with one-, two- and three-bedroom units throughout multiple buildings.