SECURITIES AND EXCHANGE COMMISSION
                     Washington, D.C. 20549

                           FORM 10-Q

    QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
                SECURITIES EXCHANGE ACT OF 1934

              For the Quarter Ended June 30, 2002



                Commission File Number:  0-19989



                    Stratus Properties Inc.



    Incorporated in Delaware                    72-1211572
                                     (IRS Employer Identification No.)


       98 San Jacinto Blvd., Suite 220, Austin, Texas  78701


 Registrant's telephone number, including area code: (512) 478-5788


     Indicate by check mark whether the registrant (1) has filed
all reports required to be filed by Section 13 or 15(d) of the
Securities Exchange Act of 1934 during the preceding 12 months
(or for such shorter period that the registrant was required to
file such reports), and (2) has been subject to such filing
requirements for the past 90 days. Yes X  No _


     On June 30, 2002, there were issued and outstanding
7,115,995 shares of the registrant's Common Stock, par value
$0.01 per share.


THIS FILING INCLUDES UNAUDITED FINANCIAL STATEMENTS THAT HAVE
NOT BEEN REVIEWED IN ACCORDANCE WITH RULE 10-01(D) OF REGULATION
S-X PROMULGATED BY THE SECURITIES AND EXCHANGE COMMISSION.  SEE
"INFORMATION WITH RESPECT TO FINANCIAL STATEMENTS" IN THIS
FILING FOR MORE INFORMATION.



                    STRATUS PROPERTIES INC.
                       TABLE OF CONTENTS

                                                            Page

          Part I.  Financial Information

            Financial Statements:

              Condensed Balance Sheets                        3

              Statements of Income                            4

              Statements of Cash Flows                        5

              Notes to Financial Statements                   6

            Remarks                                          10

            Management's Discussion and Analysis
              of Financial Condition and Results of
              Operations                                     11

          Part II.  Other Information                        16

          Signature                                          17

          Exhibit Index                                     E-1

<PAGE>                         2

                     STRATUS PROPERTIES INC.
                 Part I.  FINANCIAL INFORMATION

Information with Respect to Financial Statements.
This filing includes unaudited financial statements that have not
been reviewed by the Company's independent public accountants in
accordance with Rule 10-01(d) of Regulation S-X promulgated by
the Securities and Exchange Commission.

On July 22, 2002, the Company announced that it had dismissed
Arthur Andersen as the Company's independent accountants.  The
Company has appointed PricewaterhouseCoopers LLP as independent
accountants to replace Andersen.  As a result of delays in the
transition from Andersen, PricewaterhouseCoopers has not yet
completed their review of the Company's interim financial
statements for the quarter ended June 30, 2002.  The Company
will file an amended Form 10-Q upon completion of
PricewaterhouseCoopers' review.

Item 1.   Financial Statements

<TABLE>
<CAPTION>

                     STRATUS PROPERTIES INC.
        CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited)

                                            June 30,     December 31,
                                              2002           2001
                                           -----------    ----------
                                                  (In Thousands)
<S>                                        <C>            <C>
ASSETS
Current assets:
Cash and cash equivalents, including
  restricted cash of $2.0 million and
  $0.2 million, respectively               $     2,754    $    3,705
Accounts receivable                              1,289           670
Current portion of notes receivable
  from property sales                            1,789            70
Prepaid expenses                                    79            73
                                           -----------    ----------
     Total current assets                        5,911         4,518
Real estate and facilities, net                109,723       110,042
Rental properties, net                          22,109           -
Investments in and advances to
  unconsolidated affiliates                        191         8,005
Notes receivable from property sales,
  net of current position                        1,943         4,083
Other assets                                     2,351         2,830
                                           -----------    ----------
Total assets                               $   142,228    $  129,478
                                           ===========    ==========

LIABILITIES AND STOCKHOLDERS' EQUITY
Accounts payable and accrued liabilities   $     2,318    $    2,482
Accrued interest, property taxes and other       1,546         1,895
Current portion of borrowings outstanding        5,277           -
                                           -----------    ----------
     Total current liabilities                   9,141         4,377
Long-term debt                                  42,040        25,576
Other liabilities                                3,404         4,866
Mandatorily redeemable preferred stock             -          10,000
Stockholders' equity                            87,643        84,659
                                           -----------    ----------
Total liabilities and stockholders'equity  $   142,228    $  129,478
                                           ===========    ==========


</TABLE>


The accompanying notes are an integral part of these financial
statements.

<PAGE>                         3

<TABLE>
<CAPTION>

                     STRATUS PROPERTIES INC.
          CONSOLIDATED STATEMENTS OF INCOME (Unaudited)

                                      Three Months Ended   Six Months Ended
                                           June 30,            June 30,
                                      ------------------  ------------------
                                        2002      2001      2002      2001
                                      --------   -------  --------   -------
                                     (In Thousands, Except Per Share Amounts)
<S>                                   <C>        <C>      <C>        <C>
Revenues:
Real estate                           $  2,615   $ 7,900  $  3,640   $ 9,012
Rental income                              652         -       914         -
Other                                      310       313       767       627
                                      --------   -------  --------   -------
Total revenues                           3,577     8,213     5,321     9,639
Cost of sales:
Real estate, net                         1,282     5,515     2,173     5,961
Rental                                     439         -       553         -
Depreciation                               231        33       327        65
                                      --------   -------  --------   -------
Total cost of sales                      1,952     5,548     3,053     6,026
General and administrative expenses      1,173     1,387     2,356     2,475
                                      --------   -------  --------   -------
   Total costs and expenses              3,125     6,935     5,409     8,501
                                      --------   -------  --------   -------
Operating income (loss)                    452     1,278       (88)    1,138
Interest expense, net                     (164)     (363)     (212)     (456)
Interest income                            134       172       384       358
Equity in unconsolidated affiliaties'
   income (loss)                           (46)      (13)      372      (165)
Other income                                 -        16       286       235
                                      --------   -------  --------   -------
Net income                            $    376   $ 1,090  $    742   $ 1,110
                                      ========   =======  ========   =======

Reconciliation of net income to net
income attributable to common shareholders:
Net income                            $    376   $ 1,090  $    742   $ 1,110
Discount on purchase of mandatorily
  redeemable preferred stock               -         -       2,367       -
                                      --------   -------  --------   -------
Net income attributable to common
  shareholders                        $    376   $ 1,090  $  3,109   $ 1,110
                                      ========   =======  ========   =======

Net income per share of common stock:
     Basic                               $0.05     $0.15     $0.44     $0.15
                                         =====     =====     =====     =====
     Diluted                             $0.05     $0.13     $0.41     $0.14
                                         =====     =====     =====     =====
Average shares outstanding:
     Basic                               7,116     7,181     7,115     7,184
                                         =====     =====     =====     =====
     Diluted                             7,261     8,168     7,535     8,127
                                         =====     =====     =====     =====

</TABLE>

The accompanying notes are an integral part of these financial
statements.

<PAGE>                            4


<TABLE>
<CAPTION>

                     STRATUS PROPERTIES INC.
        CONSOLIDATED STATEMENTS OF CASH FLOW (Unaudited)

                                                        Six Months Ended
                                                            June 30,
                                                     ----------------------
                                                        2002        2001
                                                     ---------    ---------
                                                          (In Thousands)
<S>                                                  <C>          <C>
Cash flow from operating activities:
Net income                                           $     742    $   1,110
Adjustments to reconcile net income to net
 cash provided by operating activities:
 Depreciation and amortization                             327           65
 Cost of real estate sold                                  955        5,555
 Equity in unconsolidated affiliates'
 (income) loss                                            (372)         165
 Gain on sale of Stratus' 50 percent interest
   in Walden Partnership                                  (286)         -
 Amortization of deferred compensation (Note 3)             20          -
 (Increase) decrease in working capital:
    Accounts receivable and other                        1,348          228
    Accounts payable and accrued liabilities              (735)         579
 Long-term receivable and other                          1,106       (4,943)
Distribution of unconsolidated affiliates' income          278          -
                                                     ---------    ---------
Net cash provided by operating activities                3,383        2,759
                                                     ---------    ---------

Cash flow from investing activities:
Real estate and facilities, net of cost of real         (6,445)     (14,052)
  estate sold
Net cash acquired from Barton Creek and 7000 West
  Joint Ventures                                         1,067          -
Proceeds from the sale of Stratus' 50 percent
  interest in the Walden Partnership                     3,141          -
Acquisition of Olympus' interest in the Barton Creek
  and 7000 West Joint Ventures                          (3,858)         -
Investment in Lakeway Project                              505       (2,000)
                                                     ---------    ---------
Net cash used in investing activities                   (5,590)     (16,052)
                                                     ---------    ---------

Cash flow from financing activities:
Borrowings under revolving credit facility, net          2,912        5,765
Borrowings under 7500 Rialto project loan                1,781          -
Borrowings under term loan component of
  credit facility                                        4,645          -
Payments on term loan portion of credit facility          (432)         -
Payments on 7000 West project loan                         (64)         -
Repurchase of mandatorily redeemable preferred stock    (7,633)         -
Proceeds from unsecured term loan                          -          5,000
Repayment of convertible debt                              -         (3,240)
Repurchases of shares of Stratus' common stock             -           (187)
Exercise of stock options and other                         47          -
                                                     ---------    ---------
Net cash provided by financing activities                1,256        7,338
                                                     ---------    ---------
Net decrease in cash and cash equivalents                 (951)      (5,955)
Cash and cash equivalents at beginning of year           3,705        7,996
                                                     ---------    ---------
Cash and cash equivalents at end of period               2,754        2,041
Less cash restricted as to use                          (2,045)        (841)
                                                     ---------    ---------
Unrestricted cash and cash equivalents at
  end of period                                      $     709    $   1,200
                                                     =========    =========


</TABLE>

The accompanying notes are an integral part of these financial
statements.

<PAGE>                          5

                     STRATUS PROPERTIES INC.
                  NOTES TO FINANCIAL STATEMENTS

1.   OLYMPUS TRANSACTIONS
Since 1998, Stratus, through its subsidiaries, has been involved
with Olympus Real Estate Corporation (Olympus) in three joint
ventures: the Oly Stratus Barton Creek I Joint Venture (Barton
Creek Joint Venture), the Oly Walden General Partnership (Walden
Partnership) and the Stratus 7000 West Joint Venture (7000 West).
Each joint venture was governed by a partnership agreement
containing similar provisions, including a "buy/sell option"
which could be exercised by either Stratus or Olympus.

    On February 27, 2002, Stratus and Olympus concluded their
business relationship in the following transactions:

   *   Stratus purchased its $10.0 million of mandatorily
       redeemable preferred stock held by Olympus for $7.6 million.
       Stratus recorded the $2.4 million discount as additional paid in
       capital (Note 4).

   *   Stratus sold its 49.9 percent ownership interest in the
       Walden Partnership to Olympus for $3.1 million.  Stratus
       recognized a $0.3 million gain on this transaction.

   *   Stratus acquired Olympus' 50.01 percent ownership interest
       in the Barton Creek Joint Venture for $2.4 million.  At the time
       of its acquisition, the Barton Creek Joint Venture's cash totaled
       $0.3 million and the joint venture received a $1.1 million
       municipal utility district reimbursement in May 2002.

    *  Stratus acquired Olympus' 50.1 percent ownership interest in
       7000 West for $1.5 million. Stratus received $0.8 million of cash
       from 7000 West upon its acquisition and also assumed 7000 West's
       $12.9 million of previously unconsolidated debt (Note 5).

    The net cash cost of the transactions for Stratus totaled
approximately $7.3 million, after considering the approximate
$1.1 million in cash it received from its acquisition of the
Barton Creek and 7000 West Joint Ventures.  Stratus completed
these transactions using funds available to it under its credit
facility (see Note 5 of "Notes to Financial Statements" included
in Stratus' 2001 Annual Report on Form 10-K).

     For a detailed discussion of the Olympus relationship and
the initial formation and subsequent transactions of the joint
ventures and partnership, see Notes 2, 3, 4 and 11 of the "Notes
To Financial Statements" included in Stratus' 2001 Annual Report
on Form 10-K.  Also refer to "Transactions with Olympus Real
Estate Corporation" within Item 1 "Business"; and "Joint Ventures
With Olympus Real Estate Corporation " and "Capital Resources and
Liquidity-Olympus Relationship" included in Items 7. and 7A.
"Management's Discussion and Analysis of Financial Condition and
Results of Operations and Disclosures of Market Risks" included
in Stratus' 2001 Annual Report on Form 10-K.

    The summarized unaudited financial information of Stratus'
unconsolidated affiliates is shown below (in thousands):
<TABLE>
<CAPTION>

                         Barton Creek      Walden       7000
                         Joint Venture   Partnership    West     Total
                         -------------   -----------   ------   -------
<S>                      <C>             <C>           <C>      <C>
Earnings data for the
 two months ended
 February 27, 2002:
Revenues                 $      -        $     652     $  562   $ 1,214
Operating income (loss)        (22)            (64)       178        92
Net income (loss)              (22)            (34)       218       162
Stratus' equity in net
 income (loss)                 (11)             (4)a      109        94 a


Earnings data for the
 three months ended
 June 30, 2001:
Revenues                 $      -        $   1,102     $  860   $ 1,962
Operating income (loss)        (67)              2        (39)     (104)
Net income (loss)              (66)             43        (32)      (55)
Stratus' equity in net
 income (loss)                 (33)             36 a      (16)      (13)a

</TABLE>
<PAGE>                                6

<TABLE>
<CAPTION>

                         Barton Creek      Walden       7000
                         Joint Venture   Partnership    West     Total
                         -------------   -----------   ------   -------
<S>                      <C>             <C>           <C>      <C>

Earnings data for the
 six months ended
 June 30, 2001:
Revenues                 $     223       $   1,539     $1,561   $ 3,323
Operating loss                (106)           (270)      (157)     (533)
Net loss                       (99)           (169)      (111)     (379)
Stratus' equity in net loss    (49)            (61)a      (55)     (165)a

</TABLE>

a.  Includes recognition of deferred income totaling $12,000
during the two months ended February 27, 2002,  $14,000 in the
second quarter of 2001 and $23,000 for the six months ended June
30, 2001, representing the difference in Stratus' investment in
the Walden Partnership and its underlying equity at the date of
acquisition. Through February 27, 2002, Stratus had recognized
$164,000 of a total of $337,000 of deferred income associated
with the Walden Partnership.  The remaining $0.2 million deferred
amount was eliminated in determining the $0.3 million gain on the
sale of Stratus' interest in the Walden Partnership.

     The following unaudited selected pro forma information
presents the results of operations of Stratus as if the Olympus
transactions had occurred on January 1 of each of the six-month
periods presented.  These unaudited pro forma results of
operations have been prepared for informational purposes only and
do not necessarily reflect the results of operations that would
have occurred had the transactions taken place on January 1 of
each of the periods presented, or that may result in the future
(amounts in thousands, except for per share data).

<TABLE>
<CAPTION>
                                   Six Months Ended
                                       June 30,
                                 --------------------
                                    2002       2001
                                 --------    --------
<S>                              <C>         <C>
Revenue                          $  5,842    $ 11,263
Operating income                       42         804
Net income                            736         716
Diluted net income per share a   $   0.43    $   0.42
Diluted shares outstanding		7,251       7,276

</TABLE>

a.   Earnings per share data includes the discount on the
  purchase of Stratus' mandatorily redeemable preferred stock
  (Notes 1 and 4).

2. LAKEWAY PROJECT
As previously disclosed, in January 2001 Stratus invested $2.0
million in the Lakeway project near Austin, Texas.  Since that
time Stratus has been the manager and developer of the 552-acre
Schramm Ranch tract, receiving both management fees and sales
commissions for its services.  In the second quarter of 2001,
Stratus negotiated the sale of substantially all of the Schramm
Ranch property to a single purchaser.  In return for Stratus
securing the required entitlements, the sale was to be completed
in four planned phases.   Stratus secured all the remaining
necessary entitlements for the Schramm Ranch property in the
fourth quarter of 2001.  In the first quarter of 2002, the
purchaser closed the third of the four planned sale installments.
In the second quarter of 2002, the purchaser closed on the fourth
and final planned sale installment.  In connection with the
closings, Stratus received a cash distribution of $0.8 million in
May 2002 and a cash distribution of $0.7 million in July 2002.
Stratus has received a total of $2.7 million of cash
distributions from its involvement in the Lakeway Project, which
represents a $1.8 million return of its $2.0 million
investment and $0.9 million of income.   During the second
quarter of 2002, Stratus reported a $46,000 loss within equity in
unconsolidated affiliates'income (loss) reflecting of a reduction in
its remaining investment basis in the Lakeway Project as a result
of market factors and the payment of certain Lakeway property taxes.
Stratus is entitled to 40 percent of the future proceeds
associated the future sale of a 5-acre commercial tract still
remaining at the Schramm Ranch property, which is actively being
marketed.

     For more information regarding the Lakeway Project see Note
4 of "Notes To Financial Statements" included in Stratus' 2001
Annual Report on Form 10-K.

3. RESTRICTED STOCK
On  January  17,  2002,  the  Board of Directors  authorized  the
issuance  of  22,726 restricted stock units (RSUs) that  will  be
converted  into 22,726 shares of Stratus common stock ratably  on
the  anniversary date over the next four years.   Under  Stratus'
restricted  stock  program, shares of its  common  stock  may  be

<PAGE>                        7

granted to certain officers of Stratus at no cost.  Upon issuance
of the RSUs, unearned compensation equivalent to the market value
at  the  date of grant of approximately $0.2 million was recorded
as  deferred  compensation in stockholders' equity  and  will  be
charged  to  expense  over  the four-year  period.   Stratus  has
charged  approximately $20,000 of this deferred  compensation  to
expense during the six months ended June 30, 2002.

4. EARNINGS PER SHARE
Following is a reconciliation of net income and weighted average
common shares outstanding for purposes of calculating basic and
diluted net income per share (in thousands, except per share
amounts):

<TABLE>
<CAPTION>

                                   Three Months Ended     Six Months Ended
                                         June 30,             June 30,
                                   ------------------    -------------------
                                      2002     2001       2002        2001
                                   --------   -------    -------    --------
<S>                                <C>        <C>        <C>        <C>
Basic net income per share of
common stock:
Net income                         $    376   $ 1,090    $   742    $  1,110
Add: Discount on purchase of
  mandatorily redeemable preferred
  stock (Note 1)                        -         -        2,367         -
                                   --------   -------    -------    --------
Net income applicable to common
  shareholders                     $    376   $ 1,090    $ 3,109    $  1,110
                                   ========   =======    =======    ========

Weighted average common shares
  outstanding                         7,116     7,181      7,115       7,184
Basic net income per share of
  common stock                        $0.05     $0.15      $0.44       $0.15
                                      =====     =====      =====       =====

Diluted net income per share of
common stock:
Net Income                         $    376   $ 1,090    $   742    $  1,110
Add: Discount on purchase of
 mandatorily redeemable preferred
 stock  (Note 1)                        -         -        2,367         -
                                   --------   -------    -------    --------

Net income applicable to common
 shareholders                      $    376   $ 1,090    $ 3,109    $  1,110
                                   ========   =======    =======    ========

Weighted average common shares
 outstanding                          7,116     7,181      7,115       7,184
Dilutive stock options                  145       136        136          92
Assumed redemption of preferred
  stock                                 -         851        284         851
                                   --------   -------    -------    --------
Weighted average common shares
 outstanding for purposes of
 calculating diluted net income
 per share                            7,261     8,168      7,535       8,127
                                   --------   -------    -------    --------

Diluted net income per share of
 common stock                         $0.05     $0.13      $0.41       $0.14
                                      =====     =====      =====       =====

</TABLE>

    Interest accrued on the convertible debt outstanding totaled
approximately $83,000 for the second quarter of 2001 and $174,000
for the six months ended June 30, 2001.  Although the debt was
convertible into 443,000 shares for the 2001 periods presented,
these shares were excluded from the diluted net income per share
calculation because the effect of an assumed redemption of the
convertible debt was anti-dilutive.  Stratus repaid all of its
outstanding convertible debt in the second quarter of 2001.
There were no dividends accrued or paid on Stratus' mandatorily
redeemable preferred stock through February 27, 2002, the date
Stratus purchased all the related outstanding shares held by
Olympus (Note 2).

     Outstanding stock options excluded from the computation of
diluted net income per share of common stock because their
exercise prices were greater than the average market price of the
common stock during the period are as follows:

<TABLE>
<CAPTION>
                                 Second Quarter        Six Months
                                -----------------   -----------------
                                 2002      2001       2002     2001
                                -------   -------   -------   -------
<S>                             <C>       <C>       <C>       <C>
Outstanding options             275,000   273,000   386,000   481,000
Average exercise price           $10.96    $10.97    $10.31     $9.81

</TABLE>

5. DEBT OUTSTANDING
At June 30, 2002, Stratus had debt of $47.3 million compared to
debt of $25.6 million at December 31, 2001.  The increase in debt
during the first six months of 2002 included the debt Stratus
assumed in connection with its acquisition of Olympus' 50.1
percent ownership interest in 7000 West and the additional
borrowings under its credit facility used to fund the Olympus
transactions (Note 1).  Stratus' debt outstanding at June 30,
2002 consisted of the following:

<PAGE>                            8


     * $10.0 million of borrowings outstanding under its two
       unsecured $5.0 million term loans, one of which will mature in
       December 2005 and the other in July 2006.

     * $15.0 million of borrowings under its $25 million revolver
       component of the Comerica Bank- Texas (Comerica) credit facility,
       which matures in April 2004.

     * $4.2 million of net borrowings under the $5.0 million term
       loan component of the Comerica facility. During the second
       quarter Stratus borrowed $4.6 million under the term loan and
       subsequently repaid $0.4 million of the balance.   The Mirador
       lots are currently serving as collateral for the term loan
       component of the credit facility.

     * $12.8 million of borrowings under the 7000 West project loan
       that were previously unconsolidated until the purchase of
       Olympus' 50.1 percent ownership interest in 7000 West.  This
       project loan is scheduled to mature on August 24, 2002; however,
       Stratus has exercised its option to extend the maturity of the
       loan by one year to August 24, 2003.  The bank has acknowledged
       that the maturity date has been extended.

     * $5.3 million of borrowings under its 7500 Rialto Drive
       project loan, which matures in June 2003, with an option to
       extend the loan for one year, if Stratus meets certain leasing
       and other criteria.  Stratus does not currently meet the required
       conditions to exercise the option to extend the maturity of the
       project loan.  Accordingly, the balance of the loan is reflected
       as a current liability in the accompanying balance sheet.

     The availability under the $30 million Comerica credit
facility was reduced to $28.5 million to satisfy the $1.5 million
interest reserve account requirement at June 30, 2002.     For a
discussion of Stratus' bank credit facilities see Note 5 included
in the "Notes To Financial Statements" included in its 2001
Annual Report on Form 10-K.

6.  RECLASSIFICATIONS, RESTRICTED CASH AND INTEREST COST
Reclassifications.  Certain prior year amounts have been
reclassified to conform to the year 2002 presentation.

Restricted Cash.  At June 30, 2002, Stratus had restricted cash
deposits totaling $2.0 million.  Approximately $1.8 million of
this restricted cash represents funds made available to Stratus'
lender as partial payment of Stratus' borrowings outstanding on
its $30 million credit facility (see Note 5 of "Notes To
Financial Statements" included in Stratus' 2001 Annual Report
Form 10-K), that were not applied to Stratus' account until early
July 2002.  The remaining $0.2 million of restricted proceeds
reflects the deposited funds used to purchase the fractional
shares of Stratus' common stock resulting from its stock split
transactions (see Note 8 of "Notes To Financial Statements"
included in Stratus' 2001 Annual Report on Form 10-K).

Interest Costs.  Interest expense excludes capitalized interest
of $0.5 million in the second quarter of 2002, $0.3 million in
the second quarter of 2001, $0.9 million for the first six months
of 2002 and $0.5 million for the first six months of 2001.

7. BUSINESS SEGMENTS
As a result of completing transactions between Stratus and
Olympus in February 2002 (Note 1), Stratus now has two operating
segments, "Real Estate Operations" and "Commercial Leasing."
Stratus' commercial leasing segment was established when Stratus
acquired Olympus' 50.1 percent interest in 7000 West in February
2002.  The commercial leasing segment currently consists of the
140,000-square foot Lantana Corporate Center office complex,
which includes two fully-leased 70,000-square foot office
buildings.   Stratus anticipates that its substantially completed
75,000 square-foot office building at Rialto Drive will be
included in the results of the commercial leasing segment
beginning in the third quarter of 2002.  Stratus' real estate
operations segment is comprised of all of its developed and
undeveloped properties in Austin, Texas, which consist of its
properties in the Barton Creek community, including those
acquired from the Barton Creek Joint Venture; its Circle C
community properties and the properties in Lantana other than its
office buildings.  Stratus also owns undeveloped properties in
both Houston and San Antonio, Texas.

<PAGE>                          9

     The segment data presented below was prepared on the same
basis as the Stratus consolidated condensed financial statements.
Real estate was Stratus' only operating segment until February
27, 2002 as discussed above.

<TABLE>
<CAPTION>
                            Real Estate    Commercial
                             Operations a   Leasing      Total
                             ----------    ---------   ---------
<S>                          <C>           <C>         <C>
Second Quarter 2002:
Revenues                     $    2,925    $     652   $   3,577
Cost of sales                    (1,282)        (439)     (1,721)
Depreciation                        (30)        (201)       (231)
General and administrative
 expense                         (1,050)        (123)     (1,173)
                             ----------    ---------   ---------
Operating income (loss)      $      563    $    (111)  $     452
                             ==========    =========   =========
Total assets                 $  118,986    $  23,242   $ 142,228
                             ==========    =========   =========


Six Months Ended June 30, 2002:
Revenues                     $    4,407    $     914   $   5,321
Cost of sales                    (2,173)        (553)     (2,726)
Depreciation                        (59)        (268)       (327)
General and administrative
 expense                         (2,109)        (247)     (2,356)
                             ----------    ---------   ---------
Operating income (loss)      $       66    $    (154)  $     (88)
                             ==========    =========   =========
Capital expenditures         $    5,310    $   1,135   $   6,445
                             ==========    =========   =========

</TABLE>

a.   Includes sales commissions, management fees and other
  revenues together with related expenses.




                      --------------------
                             Remarks

The information furnished herein should be read in conjunction
with Stratus' financial statements contained in its 2001 Annual
Report on Form 10-K.  The information furnished herein reflects
all adjustments, which are, in the opinion of management,
necessary for a fair statement of the results for the periods.
All such adjustments are, in the opinion of management, of a
normal recurring nature.


<PAGE>                         10

Item 2.  Management's Discussion and Analysis of Financial
Condition and Results of Operations.

                              OVERVIEW

   Management's discussion and analysis presented below should be
read in conjunction with our discussion and analysis of financial
results contained in our 2001 Annual Report on Form 10-K. The
operating results summarized in this report are not necessarily
indicative of our future operating results.

    We acquire, develop, manage and sell commercial and
residential real estate almost exclusively in the Austin, Texas
area.   In February 2002, as a result of completing certain
transactions (see "Transactions with Olympus Real Estate
Corporation" below), we acquired a 140,000-square-foot office
complex that consists of two office buildings located in Austin,
Texas.  We have also substantially completed a 75,000-square-foot
office building in Austin, Texas, which will be ready for
occupancy in the third quarter of 2002.

                         DEVELOPMENT ACTIVITIES

     On August 1, 2002, the City of Austin (the City) granted
final approval of a development agreement and permanent zoning
for our 1,273 acres located within the Circle C community in
southwest Austin.   These approvals permit development of
approximately one million square feet of commercial space, 900
multi-family units and 830 single-family residential lots.  The
City will also provide us approximately $15 million of future
incentives in connection with our future development of our Circle C
and other Austin-area properties, including certain waivers of fees
and reimbursement for certain infrastructure costs.  This development
agreement firmly establishes all essential municipal development
regulations applicable to Stratus' Circle C properties for thirty years.
The Circle C development agreement and related documents were signed
and became effective on August 15, 2002.

     In the first quarter of 2002, we secured final permitting
for the first phase of "Calera Drive," a 212-acre tract within
the Barton Creek community.  We commenced the development of the
initial 19-acre phase of this project, which will include 16
condominium units.   Development of the second phase, which will
include 53 single-family lots, some of which adjoin the Fazio
Canyons golf course, is planned for 2003.  Development of the
third and last phase, which will include approximately 70 single-
family lots, is not anticipated until after 2003.

            TRANSACTIONS WITH OLYMPUS REAL ESTATE CORPORATION

     In May 1998, we formed a strategic alliance with Olympus
Real Estate Corporation (Olympus) to develop certain of our
existing properties and to pursue new real estate acquisition and
development opportunities.  Under the terms of the agreement,
Olympus purchased $10 million of our mandatorily redeemable
preferred stock, provided us a $10 million convertible debt
facility and agreed to make available up to $50 million of
additional capital representing its share of direct investments
in joint Stratus/Olympus projects.

     We subsequently entered into three joint ventures with
Olympus, the Oly Stratus Barton Creek I Joint Venture (Barton
Creek Joint Venture), the Stratus 7000 West Joint Venture (7000
West) and the Oly Walden General Partnership (Walden
Partnership).  We owned approximately 49.9 percent of each joint
venture and Olympus owned the remaining 50.1 percent. We also
served as the developer and manager for each of the joint venture
projects.  Accordingly, in addition to partnership distributions,
we received various development fees, sales commissions and other
management fees for our services.

      In February 2002 we concluded our business relationship
with Olympus, completing the following transactions:

  *  We purchased our $10.0 million of mandatorily redeemable
     preferred stock held by Olympus for $7.6 million.
  *  We acquired Olympus' ownership interest in the Barton Creek
     Joint Venture for $2.4 million.
  *  We acquired Olympus' ownership interest in 7000 West for
     $1.5 million. In connection with this acquisition, we have
     assumed $12.9 million of debt and included it in our balance
     sheet at March 31, 2002. We have subsequently repaid
     approximately $0.1 million of these borrowings and our balance
     for this loan totaled $12.8 million at June 30, 2002.
  *  We sold our ownership interest in the Walden Partnership to
     Olympus for $3.1 million.

<PAGE>                          11

     At the time of the transactions, the Barton Creek Joint
Venture assets included an inventory of 21 estate-sized single-
family lots within the Escala Drive subdivision and one single-
family lot within the Wimberly Lane subdivision.  The 7000 West
assets included a 140,000 square-foot office complex consisting of
two 70,000 square-foot office buildings that currently fully
leased.  The Walden Partnership's assets at the time of the sale
included 378 single-family lots and 80 acres of undeveloped real
estate.

     The net cash cost for these transactions was approximately
$7.3 million, after considering the approximate $1.1 million in
cash we received by acquiring the Barton Creek Joint Venture and
7000 West.  We completed the transactions through borrowings
available to us under our revolving credit facility agreement (see
"Capital Resources and Liquidity" below).

     For a detailed discussion of our Olympus transactions see
"Joint Ventures with Olympus Real Estate Corporation" and
"Olympus Relationship" located within Items 7. and 7A. and Notes
2, 3, 4 and 11 located in our 2001 Annual Report on Form 10-K.

                      RESULTS OF OPERATIONS

    Summary operating results follow (in thousands):

<TABLE>
<CAPTION>

                                       Second Quarter      Six Months
                                      -----------------  ----------------
                                        2002     2001      2002    2001
                                      -------   -------  -------  -------
<S>                                   <C>       <C>      <C>      <C>
Revenues:
Undeveloped properties:
 Unrelated parties                    $ 1,915   $ 6,373  $ 1,915  $ 6,373
 Recognition of deferred revenues         -       1,527      -      2,639
                                      -------   -------  -------  -------
   Total undeveloped properties         1,915     7,900    1,915    9,012
Developed properties                      700       -      1,725      -
Rental income                             652       -        914      -
Commissions, management fees and other    310       313      767      627
                                      -------   -------  -------  -------
Total revenues                        $ 3,577   $ 8,213  $ 5,321  $ 9,639
                                      =======   =======  =======  =======

Operating income (loss)               $   452   $ 1,278  $   (88) $ 1,138
                                      =======   =======  =======  =======
Net income                            $   376   $ 1,090  $   742  $ 1,110
                                      =======   =======  =======  =======
</TABLE>

Operating Results
     Our revenues during the second quarter of 2002 totaled $3.6
million, which included the sale of 19 acres of undeveloped multi-
family real estate in San Antonio, Texas, the sale of two
residential estate lots at the Mirador subdivision within the
Barton Creek community in Austin, Texas, and management fees and
sales commissions.  Our rental income during the second quarter
of 2002 included rental income from the two fully-leased office
buildings held by 7000 West, which was acquired in the Olympus
transactions (see above).  Our revenues for the second quarter of
2001 totaled $8.2 million, which included the sale of 112 acres
of undeveloped residential property in Houston, Texas ($2.7
million), the sale of 10 acres of undeveloped multi-family
property in Dallas, Texas ($1.7 million), and one 17-acre
undeveloped tract sale in Austin, Texas ($2.0 million).  Our
revenues during the second quarter of 2001 also included the
recognition of previously deferred revenues primarily associated
with the sale of the multi-family tract at Rialto Drive within
the Lantana Project in southwest Austin as discussed further
below, and management fees and sales commissions.  See below for
a discussion regarding our commissions, management fees and other
revenues.

     Our revenues for the six months ended June 30, 2002 totaled
$5.3 million compared with $9.6 million during the comparable
period in 2001.  In addition to our second-quarter sales
discussed above, our revenues during the first half of 2002
included the sale of two Escala Drive residential estate lots in
March 2002.  We also recorded rental income during March 2002
following our acquisition of 7000 West.  Our revenues during the
first half of 2001 included an additional $1.1 million
recognition of previously deferred revenues, as further discussed
below, and $0.3 million of management fees and sales commissions
during the first quarter of 2001.

      The majority of the deferred revenue recognized during the
first half of 2001 was associated with the sale of a 36.4-acre
multi-family Lantana tract in December 2000.  In this transaction

<PAGE>                          12

we sold the property for $5.3 million, but deferred $3.5 million
of the revenues and $1.6 million of the related operating income.
We recognized a pro rata portion of these deferred amounts as the
required infrastructure construction was completed.  During the
first half of 2001, our construction activities resulted in our
recognizing $2.6 million of the deferred revenues and $1.2
million of the operating income during that period.   See
"Results of Operations" included within Items 7. and 7A. of our
2001 Annual Report on Form 10-K for a discussion regarding the
completion of construction and full recognition of this deferred
revenue and related gain during 2001.

      When we sold real estate to an entity we jointly owned with
Olympus, we deferred recognizing revenues from the sale related
to our ownership interest until sales were made to unrelated
parties.  The sale of two Wimberly Lane single-family homesites
by the Barton Creek Joint Venture during the first quarter of
2001 resulted in our recognition of previously deferred revenues
of less than $0.1 million for the period.  There were no sales by
the Barton Creek Joint Venture during the second quarter of 2001.
In connection with our transactions with Olympus in February
2002, we reduced the carrying amount of the related real estate
by $1.1 million of deferred gain associated with our previous
land sales to the Barton Creek Joint Venture and by $0.8 million
of deferred gain associated with our previous land sales to 7000
West.

    Commissions, management fees and other revenues totaled $0.3
million during the second quarter of 2002 and $0.8 million for
the six months ended June 30, 2002 compared with $0.3 million and
$0.6 million during the comparable periods of 2001.   The
increase during the first half of 2002 from the same period last
year primarily reflects the commissions earned on the sale of two
Escala Drive lots in March 2002 and the sale of two lots at
Mirador during the second quarter of 2002, which represented the
first lots sold in the subdivision. We sold no Escala Drive lots
during the first half of 2001.  Our management fees also include
fees associated with our management of the 2,200-acre Lakeway
Project, near Austin, Texas (see "Capital Resources and
Liquidity" below).

    Cost of sales totaled $2.0 million during the second quarter
of 2002 compared with $5.5 million during the second quarter of
2001.  The decrease in the comparable periods reflects the
substantial amount of undeveloped property sales during the
second quarter of 2001.  The decrease in cost of sales relating
to our undeveloped property sales during the second quarter of
2002 was partially offset by the costs of the initial lot sales
at the Mirador subdivision as well as the three months of costs
associated with the two office buildings we acquired in February
2002.  The results of both the Barton Creek Joint Venture and
7000 West were unconsolidated before February 27, 2002.  Our cost
of sales for the six months ended June 30, 2002 totaled $3.1
million compared with $6.0 million for the same period last year.
The decrease reflects the higher sales during the second quarter
of 2001 as discussed above.   Our cost of sales during the first
half of 2002 also include the costs associated with the two
estate lots sold at Escala Drive during the first quarter of 2002
and the costs associated with the two office buildings at 7000
West.

    Our general and administrative expense totaled $1.2 million
during the second quarter of 2002 and $2.4 million for the six
months ended June 30, 2002 compared with $1.4 million during the
second quarter of 2001 and $2.5 million for the six months ended
June 30, 2001.  The decrease in the general and administrative
expenses reflects our ongoing efforts to reduce costs.  Our
general and administrative expense during the six months ended
June 30, 2002 included certain costs associated with completing
the transactions with Olympus.

Non-Operating Results
    Interest expense, net of capitalized interest, totaled $0.2
during the second quarter of 2002 and six months ended June 30,
2002 compared with $0.4 million during the second quarter of 2001
and $0.5 million for the six months ended June 30, 2001.
Capitalized interest totaled $0.5 million in the second quarter
of 2002 and $0.9 million for the six months ended June 30, 2002.
Capitalized interest totaled $0.3 million in the second quarter
of 2001 and $0.5 million for the six months ended June 30, 2001.
The increase in capitalized interest reflects the higher average
balance of our borrowings outstanding during 2002 over amounts
outstanding during the comparable 2001 periods, partially offset
by a decrease in our current development activities (see "Capital
Resources and Liquidity" below).

    Other income totaled $0.3 million during the six months ended
June 30, 2002, which represented the gain from the sale of our
interest in the Walden Partnership (see "Transactions with
Olympus Real Estate Corporation" above).  Other income during the
first half of 2001 totaled $0.2 million, which resulted from an
adjustment to our workers compensation insurance accrual.

<PAGE>                          13

                 CAPITAL RESOURCES AND LIQUIDITY

     Net cash provided by operating activities totaled $3.4
million during the six months ended June 30, 2002 and $2.8
million during the six months ended June 30, 2001.  Cash used in
investing activities totaled $5.6 million during the six months
ended June 30, 2002 compared with $16.1 million during the same
period last year, reflecting a decrease in our net real estate
and facilities expenditures because of the current reduction of
our development activities.  Also, during the first quarter of
2001 we made a $2.0 million investment in the Lakeway project,
near Austin, Texas.  During the second quarter of 2002, we
received a $0.8 million cash disbursement from the Lakeway
Project, which resulted in the return of $0.5 million of our
investment in the project (see below).  Our investing activities
during 2002 also reflect the receipt of $0.4 million of net cash
proceeds in connection with the closing of the Olympus
transactions in February 2002 (see "Transactions with Olympus
Real Estate Corporation" above).

     Our financing activities provided cash of $1.3 million
during the six months ended June 30, 2002 compared with $7.3
million during the same period last year.   During the first half
of 2002 our financing activities reflected $7.1 million of net
borrowings under our revolving line of credit, which included the
$7.3 million required to fund the closing of the transactions
with Olympus in February 2002 (see "Transactions with Olympus
Real Estate Corporation" above). We borrowed $1.8 million under
our 7500 Rialto Drive project loan during the first six months of
2002.   We also purchased our mandatorily redeemable preferred
stock held by Olympus for $7.6 million.   The cash provided by
our financing activities during the first half of 2001
represented $5.8 million of net borrowings under our revolving
line of credit, $5.0 million borrowing under an unsecured term
loan offset in part by the repayment of the entire $3.2 million
balance under our previous convertible debt facility with Olympus
(see Note 2 of "Notes To Financial Statements included in our
2001 Annual Report on Form 10-K).

     At June 30, 2002, we had debt of $47.3 million compared to
debt of $25.6 million at December 31, 2001.  The increase in debt
during the first six months of 2002 included the $12.9 million of
debt we assumed in connection with our acquisition of Olympus'
50.1 percent ownership interest in 7000 West and the additional
borrowings under our revolving line of credit used to fund the
Olympus transactions (see "Transactions with Olympus Real Estate
Corporation" above).  Our debt outstanding at June 30, 2002
consisted of the following:

    *  $10.0 million of borrowings outstanding on our two unsecured
       $5.0 million term loans, one of which will mature in December
       2005 and the other in July 2006.

    *  $15.0 million of borrowings under our $25.0 million ($23.5
       million currently available, see below) revolver component of the
       Comerica Bank- Texas (Comerica) credit facility, which matures in
       April 2004.

    *  $4.2 million of net borrowings under the $5.0 million term
       loan component of the Comerica facility. During the second
       quarter we borrowed $4.6 million  under the term loan and
       subsequently repaid $0.4 million of the balance.   The Mirador
       lots are currently serving as collateral for the term loan
       component of the credit facility.

    *  $12.8 million of borrowings under the 7000 West project loan
       that were previously unconsolidated until we purchased Olympus'
       50.1 percent ownership interest in 7000 West.  This project loan
       was scheduled to mature on August 24, 2002; however, we exercised
       our option to extend the maturity of the loan by one year to
       August 24, 2003.  The bank has acknowledged that the maturity
       date has been extended.

    *  $5.3 million of borrowings under our 7500 Rialto Drive
       project loan, which matures in June 2003, with an option to
       extend the loan for one year, if we meet certain leasing and
       other criteria.  We do not currently meet the required conditions
       to exercise the option to extend the maturity of the project
       loan.  Accordingly, the balance of the loan is reflected as a
       current liability in the accompanying balance sheet.

     The availability under the $30 million Comerica credit
facility was reduced to $28.5 million to satisfy the $1.5 million
interest reserve account requirement at June 30, 2002.  For a
discussion of our bank credit facilities see Note 5 included in
the "Notes To Financial Statements" included in our 2001 Annual

<PAGE>                           14


Report on Form 10-K.

     Since mid-1998, we have provided development, management,
operating and marketing services for the Lakeway project near
Austin, Texas, which is owned by Commercial Lakeway Limited
Partnership, an affiliate of Credit Suisse First Boston, for a
fixed monthly fee.  In January 2001, we entered into an expanded
development management agreement with Commercial Lakeway Limited
Partnership covering a 552-acre portion of the Lakeway
development known as Schramm Ranch, and we contributed $2.0
million as an investment in this project.  Under the agreement,
we receive enhanced management and development fees and sales
commissions, as well as a net profits interest in the project.
Lakeway project distributions are made to us as sales
installments close.

     In the second quarter of 2001, we negotiated the sale of
substantially all the Schramm Ranch property to a single
purchaser.  In return for our securing the required entitlements,
the sale was to be completed in four planned phases.   We secured
all the remaining necessary entitlements for the Schramm Ranch
property in the fourth quarter of 2001.  During the first half of
2002, the purchaser closed on the third sale installment in March
2002 and on the fourth and final sale installment in June 2002.
In connection with the third sales installment, we received a
cash distribution of $0.8 million in May 2002 and we received a
cash distribution of $0.7 million associated with the fourth
sales installment in July 2002.  We have now received a total of
$2.7 million of cash distributions from the Lakeway project,
which represents a $1.8 million return of our $2.0 million investment
and $0.9 million of income.  We are entitled to 40 percent of the
future proceeds associated with the future sale of a 5-acre
commercial tract still remaining at the Schramm Ranch property, which
is being actively marketed.

     Our future operating cash flows and, ultimately, our ability
to develop our properties and expand our business will be largely
dependent on the level of our real estate sales.  In turn, these
sales will be significantly affected by future real estate
values, regulatory issues, development costs, interest rate
levels and our ability to continue to protect our land use and
development entitlements. Significant development expenditures
remain to be incurred for our Austin-area properties prior to
their eventual sale.  As a result of our settlement of certain
entitlement and reimbursement issues with the City during 2000,
we initiated a plan to develop a significant portion of our
Austin-area properties and incurred capital expenditures for 2001
totaling $23.1 million.  Capital expenditures for the first half
of 2002 totaled $6.4 million compared to $14.1 million during the
first half of 2001.

      As a result of our development activities and our
acquisition of the Barton Creek Joint Venture, we now have an
adequate inventory of developed lots to satisfy the near-term
demand for estate lots in Austin, as well as an additional 75,000
square feet of office space ready for leasing as the Austin
economy starts its expected recovery after a very poor year
during 2001.   Accordingly, although we will continue to develop
our Austin-area properties, we will do so at a much more
conservative pace during 2002 as we continue to monitor the
economic environment in Austin.

We are continuing to actively pursue additional development and
management fee opportunities, both individually and through our
existing relationships with institutional capital sources.  We
also believe we can obtain bank financing at a reasonable cost
for developing our properties. However, obtaining land
acquisition financing is generally expensive and uncertain.

                      CAUTIONARY STATEMENT

     Management's discussion and analysis of financial  condition
and  results  of  operations contains forward-looking  statements
regarding    anticipated   sales,   debt    repayments,    future
reimbursement for infrastructure costs, future events related  to
financing  and  regulatory matters, the expected results  of  our
business  strategy and other plans and objectives  of  management
for  future  operations and activities.   Important factors  that
could  cause  actual  results  to  differ  materially  from   our
expectations  include economic and business conditions,  business
opportunities that may be presented to and pursued by us, changes
in  laws  or  regulations and other factors, many  of  which  are
beyond  our control, that are described in more detail under  the
heading "Risk Factors" in our Annual Report on Form 10-K for  the
year ended December 31, 2001.

<PAGE>                          15


                  PART II. - OTHER INFORMATION

Item 1. Legal Proceedings
SOS LITIGATION:  The Save Our Springs Alliance and Circle C
Neighborhood Association vs. The City of Austin, Circle C Land
Corp., and Stratus Properties Inc., Cause No. GN 202018 (Travis
County 261st Judicial District Court of Texas filed June 24,
2002).  In an effort to prevent the City of Austin and Stratus
Properties Inc. from reaching a settlement concerning development
of the Circle C Project, the Save Our Springs Alliance, a non-
profit public-interest corporation, and the Circle C Neighborhood
Association, an unincorporated association, filed a lawsuit
against the City of Austin, Stratrus Properties Inc., and its
subsidiary, Circle C Land Corp. on June 24, 2002.  In their
petition, Plaintiffs request judicial declarations that (i) the
city of Austin's Save Our Springs Ordinance is exempt from
Chapter 245 of the Texas Local Government Code ("Chapter 245");
(ii) Chapter 245 is an unconstitutional intrusion of the
municipal authority of Texas home-rule cities; (iii) under the
Texas Constitution, the City of Austin has the authority and duty
to apply the SOS Ordinance and its zoning authority to Stratus'
Circle C properties; and (iv) residents of the Circle C
community, including Plaintiffs, are entitled to full application
of the City's current watershed protection ordinances and the
City's zoning powers.  Stratus believes that the Plaintiffs'
claims have either been previously adjudicated or are moot as a
result of the City and Stratus reaching a settlement and will
vigorously defend its position.

Item 4.  Submission of Matters to a Vote of Security Holders.
     (a)  Our Annual Meeting of Stockholders was held May 16,
2002 (the Annual Meeting).  Proxies were solicited pursuant to
Regulation 14A under the Securities Exchange Act of 1934, as
amended.

     (b)  At the Annual Meeting Michael D. Madden was elected to
serve until the 2005 Annual Meeting of Stockholders.  In addition
to the director elected at the Annual Meeting, the terms of the
following directors continued after the Annual Meeting: William
H. Armstrong III and James C. Leslie.

     (c)  At the Annual Meeting, holders of Stratus' Common Stock
elected one director with the number of votes cast for or
withheld from the nominee as follows:


Name                         For            Withheld
-----------------         ---------         --------
Michael D. Madden         6,575,870          92,295

With respect to the election of the director, there were no abstentions
or broker no-votes.

At the Annual Meeting, the stockholders voted on and approved a
proposal to adopt Stratus' 2002 Stock Incentive Plan in the form
presented in Stratus' proxy statement dated April 1, 2002.
Holders of 6,067,604 shares voted for, holders of 571,205 shares
voted against and holders of 29,356 shares abstained from voting
on the proposal.  There were no broker non-votes with respect to
the proposal.

Item 6.  Exhibits and Reports on Form 8-K.

      (a)   The exhibits to this report are listed in the Exhibit
Index beginning on page E-1 hereof.

      (b)   During the period covered by this Quarterly Report
          on Form 10-Q and through August 19, 2002, the
          registrant filed one Current Report on Form 8-K
          reporting an event under Item 5 dated May 16, 2002 and
          two Current Reports on Form 8-K reporting an events
          under Item 4 dated July 15, 2002 and August 14, 2002.

<PAGE>                          16


                            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 thereunto duly authorized.

                     STRATUS PROPERTIES INC.

                         By:  /s/ C. Donald Whitmire, Jr.
                             -----------------------------
                                  C. Donald Whitmire, Jr.
                                Vice President - Controller
                                 (authorized signatory and
                               Principal Accounting Officer)

Date:   August 19, 2002

<PAGE>                            17

                    STRATUS PROPERTIES INC.
                         EXHIBIT INDEX
Exhibit
Number

3.1    Amended and Restated Certificate of Incorporation of
       Stratus.  Incorporated by reference to Exhibit 3.1 to
       Stratus' 1998 Form 10-K.

3.2    Certificate of Amendment to the Amended and Restated
       Certificate of Incorporation of Stratus.  Incorporated by
       reference to Exhibit 3.2 to Stratus' 2001 Form 10-K.

3.3    By-laws of Stratus, as amended as of February 11, 1999.
       Incorporated by Reference to Exhibit 3.2 to Stratus' 1998
       Form 10-K.

4.1    The loan agreement by and between Comerica Bank-Texas and
       Stratus Properties Inc., Stratus Properties Operating Co.,
       L.P., Circle C Land Corp. and Austin 290 Properties Inc.
       dated December 21, 1999.  Incorporated by reference to
       Exhibit 4.4 to Stratus 1999 Form 10-K.

4.2    Rights Agreement, dated as of May 16, 2002, between Stratus
       and Mellon Investor Services LLP, as Rights Agent, which
       includes the Certificates of Designation of Series C
       Participating Preferred Stock; the Forms of Rights
       Certificate Assignment, and Election to Purchase; and the
       Summary of Rights to Purchase Preferred Shares.
       Incorporated by reference to Exhibit 4.1 to Stratus
       Registration Statement on Form 8-A dated May 22, 2002.

10.1   Development and Management Agreement dated and effective as
       of June 1, 1991 by and between Longhorn Development Company
       and Precept Properties, Inc. (the "Precept Properties
       Agreement"). Incorporated by reference to Exhibit 10.8 to
       Stratus' 1992 Form 10-K.

10.2   Assignment dated June 11, 1992 of the Precept Properties
       Agreement by and among FTX (successor by merger to FMI
       Credit Corporation, as successor by merger to Longhorn
       Development Company), the Partnership and Precept
       Properties, Inc. Incorporated by reference to Exhibit 10.9
       to Stratus' 1992 Form 10-K.

10.3   Construction Loan Agreement dated April 9, 1999 by and
       between Stratus 7000 West Joint Venture and Comerica Bank-
       Texas.  Incorporated by Reference to Exhibit 10.13 to
       Stratus' 2001 Form 10-K.

10.4   Modification Agreement dated August 16, 1999, by and between
       Comerica Bank-Texas, as lender, Stratus 7000 West Joint
       Venture, as borrower and Stratus Properties Inc., as
       guarantor.  Incorporated by Reference to Exhibit 10.14 to
       Stratus' 2001 Form 10-K.

10.5   Construction Loan Agreement dated February 24, 2000 by and
       between Stratus 7000 West Joint Venture and Comerica Bank-
       Texas.  Incorporated by Reference to Exhibit 10.15 to
       Stratus' 2001 Form 10-K.

10.6   Second Amendment to Construction Loan Agreement dated
       December 31, 1999 by and between Stratus 7000 West Joint
       Venture, as borrower, Stratus Properties Operating Co., L.P.
       and Stratus Properties Inc., as Guarantors, and Comerica
       Bank-Texas.  Incorporated by Reference to Exhibit 10.16 to
       Stratus' 2001 Form 10-K.

10.7   Second Modification Agreement dated February 24, 2000 by and
       between Comerica Bank-Texas, as lender, and Stratus 7000
       West Joint Venture, as borrower, and Stratus Properties
       Inc., as guarantor.  Incorporated by Reference to Exhibit
       10.17 to Stratus' 2001 Form 10-K.

10.8   Third Modification Agreement dated August 23, 2001 by and
       between Comerica Bank-Texas, as lender, Stratus 7000 West
       Joint Venture, as Borrower and Stratus Properties Inc., as
       guarantor.  Incorporated by Reference to Exhibit 10.18 to
       Stratus' 2001 Form 10-K.

10.9   Guaranty Agreement dated December 31, 1999 by and between
       Stratus Properties Inc. and Comerica Bank-Texas.

<PAGE>                         E-1

       Incorporated by reference to Stratus' Quarterly Report on
       Form 10-Q  for the Quarter ended March 31, 2000.

10.10  Guaranty Agreement dated February 24, 2000 by and between
       Stratus Properties Inc. and Comerica Bank-Texas.
       Incorporated by reference to Stratus' Quarterly Report on
       Form 10-Q  for the Quarter ended March 31, 2000.

10.11  Development Management Agreement by and between Commercial
       Lakeway Limited Partnership, as owner, and Stratus
       Properties Inc., as development manager, dated January 26,
       2001.  Incorporated by reference to Exhibit 10.18 to the
       Stratus 2001 First Quarter 10-Q.

10.12  Amended Loan Agreement dated December 27, 2000 by and
       between Stratus Properties Inc. and Comerica-Bank Texas.
       Incorporated by reference to Exhibit 10.19 to the Stratus
       2000 Form 10-K.

10.13  Second Amendment to Loan Agreement dated December 18, 2001
       by and among Stratus Properties Inc., Stratus Properties
       Operating Co., L.P., Circle C Land Corp. and Austin 290
       Properties Inc. collectively as borrower and Comerica Bank-
       Texas, as lender.  Incorporated by Reference to Exhibit
       10.23 to Stratus' 2001 Form 10-K.

10.14  Loan Agreement dated December 28, 2000 by and between
       Stratus Properties Inc. and Holliday Fenoliglio Fowler,
       L.P., subsequently assigned to an affiliate of First
       American Asset Management.  Incorporated by reference to
       Exhibit 10.20 to the Stratus 2000 Form 10-K.

10.15  Loan Agreement dated June 14, 2001, by and between Stratus
       Properties Inc. and Holliday Fenoliglio Fowler, L.P.,
       subsequently assigned to an affiliate of First American
       Asset Management.  Incorporated by reference to Exhibit
       10.22 to Stratus' Quarterly Report on Form 10-Q for the
       quarter ended September 30, 2001.

10.16  Construction Loan Agreement dated June 11, 2001 between 7500
       Rialto Boulevard, L.P. and Comerica Bank-Texas.
       Incorporated by Reference to Exhibit 10.26 to Stratus' 2001
       Form 10-K.

10.17  Guaranty Agreement dated June 11, 2001 by Stratus Properties
       Inc. in favor of Comerica Bank-Texas.  Incorporated by
       Reference to Exhibit 10.27 to Stratus' 2001 Form 10-K.

10.18  Stratus' Performance Incentive Awards Program, as amended
       effective February 11, 1999. Incorporated by reference to
       Exhibit 10.18 to Stratus' 1998 Form 10-K.

10.19  Stratus Stock Option Plan, as amended.  Incorporated by
       reference to Exhibit 10.9 to Stratus' 1997 Form 10-K.


10.20  Stratus 1996 Stock Option Plan for Non-Employee Directors,
       as amended.  Incorporated by reference to Exhibit 10.10 to
       Stratus' 1997 Form 10-K.

10.21  Stratus Properties Inc. 1998 Stock Option Plan as amended
       effective February 11, 1999. Incorporated by reference to
       Exhibit 10.21 to Stratus' 1998 Form 10-K.


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