AUSTIN, TX – Stratus Properties announced that its subsidiary The Saint Mary, LP has completed the sale of The Saint Mary, a 240-unit, luxury garden-style apartment development in the Circle C community of Austin, Texas for $ 60 million or Has completed $ 250,000 per unit.
William H. Armstrong III, Chairman of the Board, President and Chief Executive Officer of Stratus said, “The sale of The Saint Mary is another example of the significant value we add to our shareholders through our proven approach to developing and owning wells create. Properties in strong Texas markets. In fact, we believe the unit sales price for The Saint Mary is the highest ever recorded in the Austin MSA for traditional, surface-parked, garden-style apartment products. "
Mr. Armstrong continued, “I am proud of our team for managing the highly complex authorization, design and leasing processes that have maximized this development opportunity to meet market demand. Our team's knowledge and close relationships in the marketplace have enabled Stratus to raise third-party equity, arrange bank financing, oversee construction, expedite rentals, and manage and close sales during a pandemic – all in less than three years. We look forward to reinvesting the proceeds of the sale in our robust pipeline of opportunities. "
Upon completion of the cost and payment of the outstanding home loan, the sale generated net proceeds of approximately $ 34 million. Stratus expects to receive approximately $ 21.3 million from the subsidiary in connection with the sale. Stratus expects pre-tax income on the sale, net of income attributable to non-controlling interests, of approximately $ 14 million.
The sale generated an IRR to Stratus of approximately 62% calculated based on the company's book value for the project, resulting in an equity multiple of 3.55x. The sale price reflects a premium of 28% over the gross value for The Saint Mary used in the calculation of the estimated net asset value of Stratus as of December 31, 2019, as per the March 25th Stratus investor presentation available on the Stratus website 2020 shown.
The Saint Mary, a one- and two-bedroom apartment, has a contemporary design that is meant to appeal to the tech-driven workforce in southwest Austin. Amenities include a fitness center, resort-style infinity pool, and nearby dining, retail, entertainment and recreational opportunities, including popular hiking areas such as the Barton Creek Green Belt and Slaughter Creek Trail. The project has been approved for the Austin Energy Green Building Program. Construction began in June 2018 and was completed in December 2019. The first tenants were occupied in July 2019 and the project was approximately 85% let at the time of sale.