**Exhibit
      10.27**










**STRATUS
      PROPERTIES INC.**


**NOTICE
      OF GRANT OF**


**NONQUALIFIED
      STOCK OPTIONS**


**UNDER
      THE**


**2002
      STOCK INCENTIVE PLAN**




1.  (a) Pursuant
      to the Stratus Properties Inc. 2002 Stock Incentive Plan (the “Plan”),
      _________________ (the “Optionee”) is hereby granted effective ___________,
      20__, Options to purchase from the Company, on the terms and conditions set
      forth in this Notice and in the Plan, __________ Shares of the Company at a
      purchase price of $__________per Share.




(b)  Defined
      terms not otherwise defined herein shall have the meanings set forth in Section
      2 of the Plan.




(c)  The
      Options granted hereunder are intended to constitute nonqualified stock options
      and are not intended to constitute incentive stock options within the meaning
      of
      Section 422 of the Internal Revenue Code of 1986, as amended (the
“Code”).




2.  (a) All
      Options granted hereunder shall terminate on____________, ____ unless terminated
      earlier as provided in Section 4 of this Notice.




(b)  The
      Options granted hereunder shall become exercisable in installments as
      follows:





Date
      Exercisable    Number
      of Shares










(c)  The
      Options granted hereunder may be exercised with respect to all or any part
      of
      the Shares comprising each installment as the Optionee may elect at any time
      after such Options become exercisable until the termination date set forth
      in
      Section 2(a) or Section 4, as the case may be.




(d)  Notwithstanding
      the foregoing provisions of this Section 2, the Options granted hereunder shall
      immediately become exercisable in their entirety at such time as there shall
      be
      a Change in Control of the Company.




3.  Upon
      each
      exercise of the Options granted hereunder, the Optionee shall give written
      notice to the Company, which shall specify the number of Shares to be purchased
      and shall be accompanied by payment in full of the aggregate purchase price
      thereof (which payment may be made in shares owned by the Optionee for at least
      six months), in accordance with procedures established by the Committee. Such
      exercise shall be effective upon receipt by the Company of such notice in good
      order and payment.




4.  (a) Except
      as
      set forth in this Section 4, the Options provided for in this Notice shall
      immediately terminate on the date that the Optionee ceases for any reason to
      be
      an Eligible Individual. In the event of a sale by the Company of its equity
      interest in a Subsidiary following which such entity is no longer a Subsidiary
      of the Company, persons who continue to be employed by such entity following
      such sale shall cease to be Eligible Individuals for purposes of the Plan and
      this Notice.




(b)  If
      the
      Optionee ceases to be an Eligible Individual for any reason other than death,
      Disability ***,*** Retirement, or termination for Cause ***,*** any
      Option granted hereunder that is then exercisable shall remain exercisable
      in
      accordance with the terms of this Notice within three months after the date
      of
      such cessation, but in no event shall any such Option be exercisable after
      the
      termination date specified in Section 2(a).




(c)  If
      the
      Optionee ceases to be an Eligible Individual by reason of the Optionee's
      Disability or Retirement, any Option granted hereunder that is exercisable
      on
      the date of such cessation, as well as any Option granted hereunder that would
      have become exercisable within one year after the date of such cessation had
      the
      Optionee continued to be an Eligible Individual, shall remain exercisable in
      accordance with the terms of this Notice within three years after the date
      of
      such cessation, but in no event shall any such Option be exercisable after
      the
      termination date specified in Section 2(a).




(d)  (i)
      If
      the Optionee ceases to be an Eligible Individual as a result of the Optionee’s
      death, any Option granted hereunder that is exercisable on the date of such
      death, as well as any Option granted hereunder that would have become
      exercisable within one year after the date of such death had the Optionee
      continued to be an Eligible Individual, shall remain exercisable by the
      Optionee’s Designated Beneficiary in accordance with the terms of this Notice
      until the third anniversary of ****** the
      date
      of such death, but in no event shall any such Option be exercisable after the
      termination date specified in Section 2(a).





(ii)  ****** If
      the
      Optionee dies after having ceased to be an Eligible Individual and any Option
      granted hereunder is then exercisable in accordance with the provisions of
      this
      Section 4, such Option will remain exercisable by the Optionee’s Designated
      Beneficiary in accordance with the terms of this Notice until the third
      anniversary of the date the Optionee ceased to be an Eligible Individual, but
      in
      no event shall any such Option be exercisable after the termination date
      specified in Section 2(a).




(e)  If
      the
      Optionee ceases to be an Eligible Individual by reason of the Optionee’s
      termination for Cause, any Option granted hereunder that is exercisable on
      the
      date of such cessation shall terminate immediately.




5.  The
      Options granted hereunder are not transferable by the Optionee otherwise than
      by
      will or by the laws of descent and distribution or pursuant to a domestic
      relations order, as defined in the Code, and shall be exercised during the
      lifetime of the Optionee only by the Optionee or by the Optionee's duly
      appointed legal representative.




6.  All
      notices hereunder shall be in writing and, if to the Company, shall be delivered
      personally to the Secretary of the Company or mailed to its principal office,
      1615 Poydras Street, New Orleans, Louisiana 70112, addressed to the attention
      of
      the Secretary; and, if to the Optionee, shall be delivered personally, mailed
      or
      delivered via e-mail to the Optionee at the address on file with the Company.
      Such addresses may be changed at any time by notice from one party to the other.




7.  The
      terms
      of this Notice shall bind and inure to the benefit of the Optionee, the Company
      and the successors and assigns of the Company and, to the extent provided in
      the
      Plan and in this Notice, the Designated Beneficiaries and the legal
      representatives of the Optionee.




8.  This
      Notice is subject to the provisions of the Plan. The Plan may at any time be
      amended by the Board, and this Notice may at any time be amended by the
      Committee, except that any such amendment of the Plan or this Notice that would
      impair the rights of the Optionee hereunder may not be made without the
      Optionee's consent. Except as set forth above, any applicable determinations,
      orders, resolutions or other actions of the Committee shall be final, conclusive
      and binding on the Company and the Optionee.




9.  The
      Optionee is required to satisfy any obligation in respect of withholding or
      other payroll taxes resulting from the exercise of any Option granted hereunder,
      in accordance with procedures established by the Committee, as a condition
      to
      receiving any certificates for securities resulting from the exercise of any
      such Option.




10.  As
      used
      in this Notice, the following terms shall have the meanings set forth below.




(a)  “Change
      in Control” shall mean the earliest of the following events: (i) any person or
      any two or more persons acting as a group, and all affiliates of such person
      or
      persons, shall acquire beneficial ownership of more than 20% of all classes
      and
      series of the Company's outstanding stock (exclusive of stock held in the
      Company's treasury or by the Company's Subsidiaries), taken as a whole, that
      has
      voting rights with respect to the election of directors of the Company (not
      including any series of preferred stock of the Company that has the right to
      elect directors only upon the failure of the Company to pay dividends) pursuant
      to a tender offer, exchange offer or series of purchases or other acquisitions,
      or any combination of those transactions, or (ii) there shall be a change in
      the
      composition of the Board at any time within two years after any tender offer,
      exchange offer, merger, consolidation, sale of assets or contested election,
      or
      any combination of those transactions (a “Transaction”), such that (A) the
      persons who were directors of the Company immediately before the first such
      Transaction cease to constitute a majority of the board of directors of the
      corporation that shall thereafter be in control of the companies that were
      parties to or otherwise involved in such Transaction or (B) the number of
      persons who shall thereafter be directors of such corporation shall be fewer
      than two-thirds of the number of directors of the Company immediately prior
      to
      such first Transaction.




(b)  “Disability”
      shall mean long-term disability, as defined in the Company’s long-term
      disability plan.




(c)  “Retirement”
      shall mean early, normal or deferred retirement of the Optionee under a tax
      qualified retirement plan of the Company or any other cessation of the provision
      of services to the Company or a Subsidiary by the Optionee that is deemed by
      the
      Committee or its designee to constitute a retirement.




(d)  “Cause”
      shall mean any of the following: (i) the commission by the Optionee of an
      illegal act (other than traffic violations or misdemeanors punishable solely
      by
      the payment of a fine), (ii) the engagement of the Optionee in dishonest or
      unethical conduct, as determined by the Committee or its designee, (iii) the
      commission by the Optionee of any fraud, theft, embezzlement, or
      misappropriation of funds, (iv) the failure of the Optionee to carry out a
      directive of his superior, employer or principal, or (v) the breach of the
      Optionee of the terms of his engagement.













STRATUS
      PROPERTIES INC.








By:
      __________________________