AUSTIN, TEXAS — Stratus Properties Inc. (NASDAQ: STRS) has completed the $150 million refinancing of its mixed-use development in downtown Austin, which includes W Austin Hotel & Residences and Austin City Limits Live at the Moody Theater.
The W Austin Hotel is a high-rise luxury hotel located in downtown Austin’s Second Street District and a half-mile from the Austin Convention Center. Amenities at the hotel include a spa, business center and multi-room lobby bar.
The hotel is also located next door to Austin City Limits Live at the Moody Theater, a music venue and production facility with a 2,700-seat capacity. Concerts at the theater are taped and aired each year on PBS affiliates nationwide.
Goldman Sachs Mortgage Co. provided the 10-year, non-recourse term loan with interest fixed at 5.58 percent and payable monthly based on a 30-year amortization.
In September, Stratus purchased the interest in the property of its former partner, Canyon-Johnson Urban Fund II. The purchase was based on a net price of approximately $187.2 million.
The trailing 12-month net operating income (NOI) for the W Austin Property at the time Stratus purchased Canyon’s interest was $15.6 million, which equates to a capitalization rate of 8.33 percent.
Stratus refinanced the existing Bank of America term loan for the W Austin property, increasing proceeds from $100 million to $130 million, and obtained $20 million of bridge financing from Comerica Bank. Stratus concurrently began sourcing long-term, non-recourse fixed-rate debt for the W Austin property, which culminated with the Goldman Sachs refinance.
Approximately $130 million of the proceeds from the new term loan were used to fully repay Stratus’ existing obligations under the Bank of America term loan, which was terminated Jan. 5, 2016. In addition, the $20 million Comerica bridge financing was paid in full on Jan. 7, using proceeds from the new term loan.
Stratus is a real estate company engaged primarily in the acquisition, entitlement, development, management, operation and sale of commercial, hotel, entertainment, and multi- and single-family residential real estate properties in the Austin area and other select markets in Texas.
Stratus’ stock price closed on Monday, Jan. 11, at $19.82 per share, up from $13.90 per share a year ago.
— Scott Reid