UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
Washington,
D.C. 20549
FORM
8-K
CURRENT
REPORT
Pursuant
to Section 13 OR 15(d) of The Securities Exchange Act of 1934
Date
of Report (Date of earliest event reported): June 26,
2009
Stratus
Properties Inc.
(Exact
name of registrant as specified in its charter)
|
Delaware
|
0-19989
|
72-1211572
|
||
|
(State
or other jurisdiction of incorporation)
|
(Commission
File Number)
|
(IRS
Employer Identification Number)
|
|
98
San Jacinto Blvd., Suite 220
|
|
|
Austin,
Texas
|
78701
|
|
(Address
of principal executive offices)
|
(Zip
Code)
|
Registrant's
telephone number, including area code: (512) 478-5788
Check the
appropriate box below if the Form 8-K filing is intended to simultaneously
satisfy the filing obligation of the registrant under any of the following
provisions:
[ ]
Written communications pursuant to Rule 425 under the Securities Act (17 CFR
230.425)
[ ]
Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR
240.14a-12)
[ ]
Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act
(17 CFR 240.14d-2(b))
[ ]
Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act
(17 CFR 240.13e-4(c))
Item
1.01 Entry into a
Material Definitive Agreement.
As previously disclosed by Stratus
Properties Inc. ( the “Company”), on May 2, 2008, CJUF II Stratus Block 21 LLC
(the “Joint Venture”), a joint venture between the Company and Canyon-Johnson
Urban Fund II, L.P. (“Canyon-Johnson”), entered into a Construction Loan
Agreement with Corus Bank, N.A. (“Corus”) (the “Loan
Agreement”). Under the terms of the Loan Agreement, the Joint Venture
could borrow up to $165.0 million to be used for development costs in connection
with the Joint Venture’s W Austin Hotel & Residences project. Upon the
execution of the Loan Agreement, the Joint Venture borrowed approximately $2.0
million, evidenced by a Promissory Note (the “Note”) secured by a first priority
lien. The Joint Venture would be permitted to make additional borrowings for
project costs under the Loan Agreement upon satisfaction of certain conditions,
including each of the Company and Canyon-Johnson making certain required capital
contributions to the Joint Venture. Also as previously disclosed, on
February 18, 2009, Corus entered into a written agreement with the Federal
Reserve Bank of Chicago and a consent order with the Office of the Comptroller
of the Currency, to maintain the financial soundness of Corus. As
a result, Corus’ ability to meet its future funding commitments under
the Loan Agreement has been uncertain.
In light of the foregoing, on June 26,
2009, Stratus Partnership Investments, L.P., a subsidiary of the Company that is
jointly managed by the Company and Canyon-Johnson (“Stratus Partnership
Investments”), entered into an Assignment and Assumption of Note, Mortgage and
Other Loan Documents (the “Assignment”) with Corus whereby Corus assigned to
Stratus Partnership Investments the Loan Agreement, the Note, and the related
priority lien Mortgage and other related documents (collectively, the “Loan
Documents”) along with the outstanding balance under the Loan Documents of
approximately $2.2 million. As consideration for the Assignment,
Stratus Partnership Investments paid to Corus an amount equal to $250,000. No
further amounts are owed to Corus.
In connection with the Assignment,
Stratus Partnership Investments and the Joint Venture entered into an Agreement
Regarding Corus Bank Loan, providing that Stratus Partnership Investments, as
the holder of the Loan Documents, shall not lend funds to the Joint
Venture pursuant to the terms of the Loan Documents, and that the Joint Venture,
as borrower under the Loan Documents, shall not request to borrow
funds or exercise any of its rights that entitle it to borrow funds under the
Loan Documents, without the consent of both Stratus Partnership Investments and
the Joint Venture.
The Joint
Venture is actively pursuing an agreement with a third party lender to finance
the future construction costs of the W Austin Hotel & Residences
project. In connection with obtaining financing from a third party
lender, Stratus Partnership Investments will assign the first priority lien
mortgage and any of the other Loan Documents, in present form or as may be
amended, all as agreed to by and between the Joint Venture and such third party
lender, to such third party lender. If the Joint Venture does not
timely secure project financing from a third party lender, or if the Company or
Canyon-Johnson is unable to make required additional future capital
contributions to the Joint Venture, the Joint Venture may be required to delay
further construction of the project until an additional source of financing is
available.
SIGNATURE
Pursuant
to the requirements of the Securities Exchange Act of 1934, the registrant has
duly caused this report to be signed on its behalf by the undersigned hereunto
duly authorized.
Stratus
Properties Inc.
By: /s/
Erin D. Pickens
----------------------------------------
Erin D.
Pickens
Senior
Vice President and
Chief
Financial Officer
(authorized
signatory and
Principal
Financial Officer)
Date: July
2, 2009