Stratus Properties Goes All In

California-based Canyon-Johnson Urban Fund II, L.P. decided it was time to break apart from its joint venture partner, the Austin-based Stratus Properties. In May this year the firm took legal action and a last week the process was finalized.

Stratus Properties is on track to become the sole owner of Block 21, a major downtown Austin mixed-use project.

Austin-based Stratus decided to buy out its partner, Canyon-Johnson Urban Fund L.P. II, which co-owns in the 36-story mixed-use development. Anchored by the 252-key W Hotel and the 159-unit W Residences, Block 21 also features the Austin City Limits Studio Theatre and 25,000 square feet of retail.

 Canyon-Johnson holds a 58 percent stake in the joint venture, dubbed CJUF II Stratus Block 21 L.L.C.. Stratus owns the remaining 42 percent and manages the W Hotel and W Residences.

Under the terms of the agreement, Status could choose between selling its stake for $44.5 million or buying out its partner for $60.9 million. The deal is schedule to close by Nov. 10.

“We believe the W Austin Hotel & Residences project is a proven asset in a strong market that provides dependable cash flow from diverse sources. Sole ownership of this property by Stratus simplifies operations and will add value. This transaction, together with the sales of Parkside Village and 5700 Slaughter, (is) consistent with our recently communicated five-year plan to create value for our shareholders,” said William Armstrong, chairman, president & CEO of Stratus.