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| UNITED STATES                                          |
|--------------------------------------------------------|
| SECURITIES AND EXCHANGE COMMISSION                     |
| Washington, D.C. 20549                                 |
|                                                   |
| FORM 10-Q                                              |
|                                                   |
| (Mark One)                                             |
| [X]                                                    | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE |
| SECURITIES EXCHANGE ACT OF 1934                        |
| For the quarterly period ended March 31, 2009          |
| or                                                     |
| [  ]                                         | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE |
| SECURITIES EXCHANGE ACT OF 1934                        |
| For the transition period from                         |   | to |
| Commission File Number: 0-19989                        |
|                                                   |
|                                                        |
|                                                   |
| Stratus Properties Inc.                                |
| (Exact name of registrant as specified in its charter) |

| Delaware                                                      | 72-1211572                           |
|---------------------------------------------------------------|--------------------------------------|
| (State or other jurisdiction ofincorporation or organization) | (I.R.S. Employer Identification No.) |
|                                                          |                                 |
| 98 San Jacinto Blvd., Suite 220                               |                                 |
| Austin, Texas                                                 | 78701                                |
| (Address of principal executive offices)                      | (Zip Code)                           |
|                                                          |
|                                                          |
| (512) 478-5788                                                |
| (Registrant's telephone number, including area code)          |
|                                                          |

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| STRATUS PROPERTIES INC.                                                              |   |
|--------------------------------------------------------------------------------------|--------|
| TABLE OF CONTENTS                                                                    |   |
|                                                                                 |   |
|                                                                                 |   |
|                                                                                 | Page   |
| Part I.  Financial Information                                             | 2      |
|                                                                                 |   |
| Item 1.  Financial Statements:                                             |   |
|                                                                                 |   |
| Consolidated Balance Sheets (Unaudited)                                              | 2      |
|                                                                                 |   |
| Consolidated Statements of Operations (Unaudited)                                    | 3      |
|                                                                                 |   |
| Consolidated Statements of Cash Flows (Unaudited)                                    | 4      |
|                                                                                 |   |
| Consolidated Statement of Equity (Unaudited)                                         | 5      |
|                                                                                 |   |
| Notes to Consolidated Financial Statements (Unaudited)                               | 6      |
|                                                                                 |   |
| Item 2.  Management’s Discussion and Analysis of Financial Condition |   |
| and Results of Operations                                                            | 15     |
|                                                                                 |   |
| Item 3.  Quantitative and Qualitative Disclosures About Market Risk        | 24     |
|                                                                                 |   |
| Item 4.  Controls and Procedures                                           | 24     |
|                                                                                 |   |
| Part II.  Other Information                                                | 24     |
|                                                                                 |   |
| Item 1A.  Risk Factors                                                     | 24     |
|                                                                                 |   |
| Item 2.  Unregistered Sales of Equity Securities and Use of Proceeds       | 24     |
|                                                                                 |   |
| Item 6.  Exhibits                                                          | 24     |
|                                                                                 |   |
| Signature                                                                            | 25     |
|                                                                                 |   |
| Exhibit Index                                                                        | E-1    |
|                                                                                 |   |

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Table of Contents

PART I

Item 1.

ST

|                                                          | March 31, |    | December 31, |   |
|---------------------------------------------------------------|-----------|---------|--------------|--------|
|                                                          | 2009      |    | 2008         |   |
| ASSETS                                                        |      |    |         |   |   |   |
| Cash and cash equivalents                                     | $         | 16,457  |         | $      | 17,097 |   |
| Investment in U.S. treasury securities                        |      | 14,894  |         |   | 15,388 |   |
| Real estate, commercial leasing assets and facilities, net:   |      |    |         |   |   |   |
| Property held for sale – developed or under development |      | 116,849 |         |   | 115,966 |   |
| Property held for sale – undeveloped                    |      | 31,846  |         |   | 27,514 |   |
| Property held for use, net                                    |      | 62,846  |         |   | 56,919 |   |
| Investment in unconsolidated affiliate                        |      | 2,469   |         |   | 2,283 |   |
| Deferred tax asset                                            |      | 8,243   |         |   | 7,330 |   |
| Other assets                                                  |      | 9,966   |         |   | 10,049 |   |
| Total assets                                                  | $         | 263,570 |         | $      | 252,546 |   |
|                                                          |      |    |         |   |   |   |
| LIABILITIES AND EQUITY                                        |      |    |         |   |   |   |
| Accounts payable and accrued liabilities                      | $         | 6,970   |         | $      | 6,585 |   |
| Accrued interest and property taxes                           |      | 917     |         |   | 3,203 |   |
| Deposits                                                      |      | 1,279   |         |   | 1,301 |   |
| Debt                                                          |      | 68,018  |         |   | 63,352 |   |
| Other liabilities                                             |      | 3,017   |         |   | 3,583 |   |
| Total liabilities                                             |      | 80,201  |         |   | 78,024 |   |
|                                                          |      |    |         |   |   |   |
| Commitments and contingencies                                 |      |    |         |   |   |   |
|                                                          |      |    |         |   |   |   |
| Equity:                                                       |      |    |         |   |   |   |
| Stratus stockholders’ equity:                           |      |    |         |   |   |   |
| Preferred stock                                               |      | -       |         |   | - |   |
| Common stock                                                  |      | 83      |         |   | 83 |   |
| Capital in excess of par value of common stock                |      | 196,884 |         |   | 196,692 |   |
| Accumulated deficit                                           |      | (31,832 | )            |   | (30,095 | ) |
| Accumulated other comprehensive loss                          |      | -       |         |   | (3 | ) |
| Common stock held in treasury                                 |      | (17,946 | )            |   | (17,441 | ) |
| Total Stratus stockholders’ equity                      |      | 147,189 |         |   | 149,236 |   |
| Noncontrolling interest in subsidiary                         |      | 36,180  |         |   | 25,286 |   |
| Total equity                                                  |      | 183,369 |         |   | 174,522 |   |
| Total liabilities and equity                                  | $         | 263,570 |         | $      | 252,546 |   |
|                                                          |      |    |         |   |   |   |

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Table of Contents

STR

|                                                                 |   | Three Months Ended |   |
|----------------------------------------------------------------------|--------|--------------------|--------|
|                                                                 |   | March 31,          |   |
|                                                                 |   | 2009               |   | 2008 |   |
| Revenues:                                                            |   |               |   |   |   |   |
| Real estate                                                          |   | $                  | 191    |   | $ | 3,904 |   |
| Rental income                                                        |   |               | 1,173  |   |   | 951 |   |
| Commissions, management fees and other                               |   |               | 168    |   |   | 212 |   |
| Total revenues                                                       |   |               | 1,532  |   |   | 5,067 |   |
| Cost of sales:                                                       |   |               |   |   |   |   |   |
| Real estate, net                                                     |   |               | 1,061  |   |   | 3,485 |   |
| Rental                                                               |   |               | 831    |   |   | 816 |   |
| Depreciation                                                         |   |               | 440    |   |   | 383 |   |
| Total cost of sales                                                  |   |               | 2,332  |   |   | 4,684 |   |
| General and administrative expenses                                  |   |               | 2,079  |   |   | 1,657 |   |
| Total costs and expenses                                             |   |               | 4,411  |   |   | 6,341 |   |
| Operating loss                                                       |   |               | (2,879 | ) |   | (1,274 | ) |
| Interest income                                                      |   |               | 246    |   |   | 949 |   |
| Loss on interest rate cap agreement                                  |   |               | (33    | ) |   | - |   |
| Loss before income taxes and equity in                               |   |               |   |   |   |   |   |
| unconsolidated affiliate’s (loss) income                       |   |               | (2,666 | ) |   | (325 | ) |
| Equity in unconsolidated affiliate’s (loss) income             |   |               | (74    | ) |   | 117 |   |
| Benefit from income taxes                                            |   |               | 897    |   |   | 52 |   |
| Net loss                                                             |   |               | (1,843 | ) |   | (156 | ) |
| Less: Net loss attributable to noncontrolling interest in subsidiary |   |               | 106    |   |   | - |   |
| Net loss attributable to Stratus common stock                        |   | $                  | (1,737 | ) | $ | (156 | ) |
|                                                                 |   |               |   |   |   |   |   |
| Net loss per share attributable to Stratus common stock:             |   |               |   |   |   |   |   |
| Basic and diluted                                                    |   | $                  | (0.23  | ) | $ | (0.02 | ) |
|                                                                 |   |               |   |   |   |   |   |
| Weighted average shares of common stock outstanding:                 |   |               |   |   |   |   |   |
| Basic and diluted                                                    |   |               | 7,446  |   |   | 7,567 |   |
|                                                                 |   |               |   |   |   |   |   |

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ST

|                                                                | Three Months Ended March 31, |   |
|---------------------------------------------------------------------|------------------------------|--------|
|                                                                | 2009                         |   | 2008 |   |
| Cash flow from operating activities:                                |                         |   |   |   |   |
| Net loss                                                            | $                            | (1,843 | ) | $ | (156 | ) |
| Adjustments to reconcile net loss to net cash                       |                         |   |   |   |   |   |
| used in operating activities:                                       |                         |   |   |   |   |   |
| Depreciation                                                        |                         | 440    |   |   | 383 |   |
| Loss on interest rate cap agreement                                 |                         | 33     |   |   | - |   |
| Cost of real estate sold                                            |                         | 126    |   |   | 2,722 |   |
| Deferred income taxes                                               |                         | (913   | ) |   | 23 |   |
| Stock-based compensation                                            |                         | 171    |   |   | 242 |   |
| Equity in unconsolidated affiliate’s loss (income)            |                         | 74     |   |   | (117 | ) |
| Distribution of unconsolidated affiliate’s income             |                         | -      |   |   | 1,044 |   |
| Deposits                                                            |                         | (22    | ) |   | (1,012 | ) |
| Purchases and development of real estate properties                 |                         | (8,454 | ) |   | (6,851 | ) |
| Municipal utility district reimbursements                           |                         | 3,387  |   |   | 3,753 |   |
| Decrease in other assets                                            |                         | 274    |   |   | 396 |   |
| (Increase) in accounts payable, accrued liabilities and other       |                         | (3,180 | ) |   | (2,876 | ) |
| Net cash used in operating activities                               |                         | (9,907 | ) |   | (2,449 | ) |
|                                                                |                         |   |   |   |   |   |
| Cash flow from investing activities:                                |                         |   |   |   |   |   |
| Development of commercial leasing properties and other expenditures |                         | (6,153 | ) |   | (1,793 | ) |
| (Investment in) return of investment in unconsolidated affiliate    |                         | (260   | ) |   | 1,596 |   |
| Proceeds from matured U.S. treasury securities                      |                         | 497    |   |   | - |   |
| Other                                                               |                         | 21     |   |   | 25 |   |
| Net cash used in investing activities                               |                         | (5,895 | ) |   | (172 | ) |
|                                                                |                         |   |   |   |   |   |
| Cash flow from financing activities:                                |                         |   |   |   |   |   |
| Borrowings from term loan                                           |                         | 4,700  |   |   | - |   |
| Borrowings from project loan                                        |                         | 35     |   |   | - |   |
| Repayments on Lantana promissory note                               |                         | (68    | ) |   | (43 | ) |
| Noncontrolling interest contributions                               |                         | 11,000 |   |   | - |   |
| Net payments for exercised stock options                            |                         | (101   | ) |   | (291 | ) |
| Excess tax benefit from exercised stock options                     |                         | -      |   |   | 64 |   |
| Purchases of Stratus common shares                                  |                         | (404   | ) |   | (252 | ) |
| Net cash provided by (used in) financing activities                 |                         | 15,162 |   |   | (522 | ) |
| Net decrease in cash and cash equivalents                           |                         | (640   | ) |   | (3,143 | ) |
| Cash and cash equivalents at beginning of year                      |                         | 17,097 |   |   | 40,873 |   |
| Cash and cash equivalents at end of period                          | $                            | 16,457 |   | $ | 37,730 |   |
|                                                                |                         |   |   |   |   |   |

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ST

|                                        | Stratus Stockholders’ Equity |   |       |   |    |   |          |    |
|---------------------------------------------|------------------------------------|--------|------------|--------|---------|--------|---------------|---------|
|                                        |                               |   |       |   |    |   |          |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                                        |                               |   |       |   |    |   | Accumulated   |    | Common |   |   |   |   |   |   |   |
|                                        |                               |   | Capital in |   | Accum-  |   | Other         |    | Stock |   | Total |   | Noncontrolling |   |   |   |
|                                        | Common                             |   | Excess of  |   | ulated  |   | Comprehensive |    | Held In |   | Stratus |   | Interest in |   | Total |   |
|                                        | Stock                              |   | Par Value  |   | Deficit |   | Loss          |    | Treasury |   | Equity |   | Subsidiary |   | Equity |   |
|                                        |                               |   |       |   |    |   |          |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Balance at December 31, 2008                | $                                  | 83     |       | $      | 196,692 |   | $             | (30,095 | ) | $ | (3 | ) | $ | (17,441 | ) | $ | 149,236 |   | $ | 25,286 |   | $ | 174,522 |   |
| Stock-based compensation costs              |                               | -      |       |   | 192     |   |          | -       |   |   | - |   |   | - |   |   | 192 |   |   | - |   |   | 192 |   |
| Tender of shares for stock-based awards     |                               | -      |       |   | -       |   |          | -       |   |   | - |   |   | (101 | ) |   | (101 | ) |   | - |   |   | (101 | ) |
| Purchases of Stratus common shares          |                               | -      |       |   | -       |   |          | -       |   |   | - |   |   | (404 | ) |   | (404 | ) |   | - |   |   | (404 | ) |
| Noncontrolling interest contributions       |                               | -      |       |   | -       |   |          | -       |   |   | - |   |   | - |   |   | - |   |   | 11,000 |   |   | 11,000 |   |
| Comprehensive loss:                         |                               |   |       |   |    |   |          |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Net loss                                    |                               | -      |       |   | -       |   |          | (1,737  | ) |   | - |   |   | - |   |   | (1,737 | ) |   | (106 | ) |   | (1,843 | ) |
| Other comprehensive income,                 |                               |   |       |   |    |   |          |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| net of taxes:                               |                               |   |       |   |    |   |          |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Unrealized gain on U.S. treasury securities |                               | -      |       |   | -       |   |          | -       |   |   | 3 |   |   | - |   |   | 3 |   |   | - |   |   | 3 |   |
| Other comprehensive income                  |                               | -      |       |   | -       |   |          | -       |   |   | 3 |   |   | - |   |   | 3 |   |   | - |   |   | 3 |   |
| Total comprehensive loss                    |                               | -      |       |   | -       |   |          | -       |   |   | - |   |   | - |   |   | (1,734 | ) |   | (106 | ) |   | (1,840 | ) |
| Balance at March 31, 2009                   | $                                  | 83     |       | $      | 196,884 |   | $             | (31,832 | ) | $ | - |   | $ | (17,946 | ) | $ | 147,189 |   | $ | 36,180 |   | $ | 183,369 |   |
|                                        |                               |   |       |   |    |   |          |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |

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ST

| 1.   | GENERAL |
|----------------|---------|

| 2.   | REVISIONS OF PREVIOUSLY ISSUED CONSOLIDATED FINANCIAL STATEMENTS |
|----------------|------------------------------------------------------------------|

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|                                              |     |   | Adjustments |   |     |   |
|---------------------------------------------------|----------|--------|-------------|--------|----------|--------|
|                                              | As       |   | Capitalized |   | Property |   |   |   | Net |   | As |   |
|                                              | Reported |   | Interest    |   | Tax      |   | Crestview |   | Adjustments |   | Revised |   |
| Total cost of sales                               | $        | (4,417 | )           | $      | (39      | )      | $ | (228 | ) |   | - |   | $ | (267 | ) | $ | (4,684 | ) |
| Operating loss                                    |     | (1,007 | )           |   | (39      | )      |   | (228 | ) |   | - |   |   | (267 | ) |   | (1,274 | ) |
| Interest expense, net                             |     | (330   | )           |   | 330      |   |   | - |   |   | - |   |   | 330 |   |   | - |   |
| Loss before income taxes and equity               |     |   |        |   |     |   |   |   |   |   | - |   |   |   |   |   |   |   |
| in unconsolidated affiliate’s income        |     | (388   | )           |   | 291      |   |   | (228 | ) |   | - |   |   | 63 |   |   | (325 | ) |
| Equity in unconsolidated affiliate’s income |     | 556    |        |   | -        |   |   | - |   |   | (439 | ) |   | (439 | ) |   | 117 |   |
| (Provision for) benefit from income taxes         |     | (79    | )           |   | (103     | )      |   | 80 |   |   | 154 |   |   | 131 |   |   | 52 |   |
| Net income (loss)                                 |     | 89     |        |   | 188      |   |   | (148 | ) |   | (285 | ) |   | (245 | ) |   | (156 | ) |
|                                              |     |   |        |   |     |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Basic and diluted net income (loss) per           |     |   |        |   |     |   |   |   |   |   |   |   |   |   |   |   |   |   |
| share of common stock                             | $        | 0.01   |        | $      | 0.03     |   | $ | (0.02 | ) | $ | (0.04 | ) | $ | (0.03 | ) | $ | (0.02 | ) |
|                                              |     |   |        |   |     |   |   |   |   |   |   |   |   |   |   |   |   |   |

| 3.   | RECLASSIFICATIONS |
|----------------|-------------------|

| 4.   | EARNINGS PER SHARE |
|----------------|--------------------|

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| 5.   | JOINT VENTURE WITH CANYON-JOHNSON URBAN FUND II, L.P. |
|----------------|-------------------------------------------------------|

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| 6.   | FAIR VALUE MEASUREMENTS |
|----------------|-------------------------|

|                |             |   | Quoted Prices in   |   |   |              |   |   | Significant  |   |
|---------------------|------------------|--------|--------------------|--------|--------|-------------------|--------|--------|--------------|--------|
|                | Total Fair Value |   | Active Markets for |   |   | Significant Other |   |   | Unobservable |   |
|                | Measurement      |   | Identical Assets   |   |   | Observable Inputs |   |   | Inputs       |   |
|                | March 31, 2009   |   | (Level 1)          |   |   | (Level 2)         |   |   | (Level 3)    |   |
|                |             |   |               |   |   |              |   |   |         |   |   |   |
| Cash equivalents    | $                | 6,952  |               | $      | 6,952  |              | $      | -      |         | $      | - |   |
| Investment in U.S.  |             |   |               |   |   |              |   |   |         |   |   |   |
| treasury securities |             | 14,894 |               |   | 14,894 |              |   | -      |         |   | - |   |
| Interest rate cap   |             |   |               |   |   |              |   |   |         |   |   |   |
| agreement           |             | 30     |               |   | -      |              |   | 30     |         |   | - |   |
|                | $                | 21,876 |               | $      | 21,846 |              | $      | 30     |         | $      | - |   |
|                |             |   |               |   |   |              |   |   |         |   |   |   |

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| 7.   | INVESTMENT IN UNCONSOLIDATED AFFILIATE |
|----------------|----------------------------------------|

|                         | 2009   |   | 2008   |
|------------------------------|--------|--------|--------|
| Three Months Ended March 31: |   |   |   |   |   |
| Revenues                     | $      | -      |   | $ | 242 |
| Gross (loss) profit          |   | (148   | )      |   | 234 |
| Net (loss) income            |   | (148   | )      |   | 234 |
|                         |   |   |   |   |   |

| 8.   | INTEREST CAPITALIZATION |
|----------------|-------------------------|

| 9.   | INCOME TAXES |
|----------------|--------------|

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| 10.   | BUSINESS SEGMENTS |
|-----------------|-------------------|

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|                                  | Real Estate Operationsa |    | Commercial Leasing |   | Other  |   | Total  |   |
|---------------------------------------|-------------------------|---------|--------------------|--------|--------|--------|--------|--------|
|                                  | (In Thousands)          |    |
| Three Months Ended March 31, 2009     |                    |    |               |   |   |   |   |   |   |   |   |   |
| Revenues                              | $                       | 359     |               | $      | 1,173  |   | $      | -      |   | $ | 1,532 |   |
| Cost of sales, excluding depreciation |                    | (1,061  | )                  |   | (831   | )      |   | -      |   |   | (1,892 | ) |
| Depreciation                          |                    | (67     | )                  |   | (373   | )      |   | -      |   |   | (440 | ) |
| General and administrative expenses   |                    | (1,296  | )                  |   | (783   | )      |   | -      |   |   | (2,079 | ) |
| Operating loss                        | $                       | (2,065  | )                  | $      | (814   | )      | $      | -      |   | $ | (2,879 | ) |
|                                  |                    |    |               |   |   |   |   |   |   |   |   |   |
| Capital expenditures                  | $                       | 8,454   |               | $      | 6,153  |   | $      | -      |   | $ | 14,607 |   |
| Total assets at March 31, 2009        | $                       | 175,301 |               | $      | 79,635 |   | $      | 8,634  | b | $ | 263,570 |   |

| Three Months Ended March 31, 2008     |   |    |   |   |   |   |   |   |   |   |    |   |
|---------------------------------------|--------|---------|--------|--------|--------|--------|--------|--------|--------|--------|---------|--------|
| Revenues                              | $      | 4,116   |   | $      | 951    |   | $      | -      |   | $      | 5,067   |   |
| Cost of sales, excluding depreciation |   | (3,485  | )      |   | (816   | )      |   | -      |   |   | (4,301  | )      |
| Depreciation                          |   | (46     | )      |   | (337   | )      |   | -      |   |   | (383    | )      |
| General and administrative expenses   |   | (1,425  | )      |   | (232   | )      |   | -      |   |   | (1,657  | )      |
| Operating loss                        | $      | (840    | )      | $      | (434   | )      | $      | -      |   | $      | (1,274  | )      |
|                                  |   |    |   |   |   |   |   |   |   |   |    |   |
| Capital expenditures                  | $      | 6,851   |   | $      | 1,793  |   | $      | -      |   | $      | 8,644   |   |
| Total assets at March 31, 2008        | $      | 171,367 |   | $      | 50,266 |   | $      | 6,721  | b      | $      | 228,354 |   |
|                                  |   |    |   |   |   |   |   |   |   |   |    |   |
|                                  |   |    |   |   |   |   |   |   |   |   |    |   |

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

| b.   | Primarily includes deferred tax assets. |
|----------------|-----------------------------------------|

|                                                     | Three Months Ended |   |
|----------------------------------------------------------|--------------------|--------|
|                                                     | March 31,          |   |
|                                                     | 2009               |   | 2008 |   |
| Operating loss                                           | $                  | (2,879 | ) | $ | (1,274 | ) |
| Interest income                                          |               | 246    |   |   | 949 |   |
| Loss on interest rate cap agreement                      |               | (33    | ) |   | - |   |
| Loss before income taxes and                             |               |   |   |   |   |   |
| equity in unconsolidated affiliate’s (loss) income | $                  | (2,666 | ) | $ | (325 | ) |
|                                                     |               |   |   |   |   |   |

| 11.   | NEW ACCOUNTING STANDARDS |
|-----------------|--------------------------|

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| 12.   | SUBSEQUENT EVENTS |
|-----------------|-------------------|

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Item

|             |      |   | Acreage                        |   |        |
|------------------|-----------|--------|--------------------------------|--------|-------------|
|             |      |   | Developed or Under Development |   | Undeveloped |   |   |
|             | Developed |   | Single                         |   | Multi-      |   |   |   |   |   | Single |   |   |   |   |   | Total |
|             | Lots      |   | Family                         |   | family      |   | Commercial |   | Total |   | Family |   | Commercial |   | Total |   | Acreage |
| Austin           |      |   |                           |   |        |   |   |   |   |   |   |   |   |   |   |   |   |
| Barton Creek     | 125       |   | 358                            |   | 249         |   | 368 |   | 975 |   | 510 |   | 28 |   | 538 |   | 1,513 |
| Lantana          | -         |   | -                              |   | -           |   | - |   | - |   | - |   | 223 |   | 223 |   | 223 |
| Circle C         | 95        | a      | -                              |   | -           |   | 265 |   | 265 |   | 148 | a | 122 |   | 270 |   | 535 |
| W Austin Hotel   |      |   |                           |   |        |   |   |   |   |   |   |   |   |   |   |   |   |
| & Residences | -         |   | -                              |   | -           |   | 2 | b | 2 |   | - |   | - |   | - |   | 2 |
| San Antonio      |      |   |                           |   |        |   |   |   |   |   |   |   |   |   |   |   |   |
| Camino Real      | -         |   | -                              |   | -           |   | - |   | - |   | - |   | 2 |   | 2 |   | 2 |
| Total            | 220       |   | 358                            |   | 249         |   | 635 |   | 1,242 |   | 658 |   | 375 |   | 1,033 |   | 2,275 |
|             |      |   |                           |   |        |   |   |   |   |   |   |   |   |   |   |   |   |

| a.   | Relates to Meridian, an 800-lot residential development. |
|----------------|----------------------------------------------------------|

| b.   | Represents a city block in downtown Austin planned for a mixture of hotel, residential, retail, office and entertainment uses. |
|----------------|--------------------------------------------------------------------------------------------------------------------------------|

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|                         | Residential Lots |
|------------------------------|------------------|
|                         | Developed        |   | Under Development |   | Potential Development a |   | Total |
| Barton Creek:                |             |   |   |   |   |   |   |
| Calera:                      |             |   |   |   |   |   |   |
| Calera Court Courtyard Homes | 4                |   | - |   | - |   | 4 |
| Calera Drive                 | 8                |   | - |   | - |   | 8 |
| Verano Drive                 | 68               |   | - |   | - |   | 68 |
| Amarra Drive:                |             |   |   |   |   |   |   |
| Phase I Lots                 | 7                |   | - |   | - |   | 7 |
| Phase II Lots                | 35               |   | - |   | - |   | 35 |
| Phase II and III Townhomes   | -                |   | - |   | 221 |   | 221 |
| Phase III                    | -                |   | 89 |   | - |   | 89 |
| Mirador Estate               | 2                |   | - |   | - |   | 2 |
| Wimberly Lane Phase II       | 1                |   | - |   | - |   | 1 |
| Section N Multi-family       | -                |   | - |   | 1,860 |   | 1,860 |
| Other Barton Creek Sections  | -                |   | - |   | 154 |   | 154 |
|                         |             |   |   |   |   |   |   |
| Circle C:                    |             |   |   |   |   |   |   |
| Meridian                     | 95               |   | - |   | 57 |   | 152 |
| Total Residential Lots       | 220              |   | 89 |   | 2,292 |   | 2,601 |
|                         |             |   |   |   |   |   |   |

| a.   | Our development of the properties identified under the heading “Potential Development” is dependent upon the approval of our development plans and permits by governmental agencies, including the City. Those governmental agencies may either not approve one or more development plans and permit applications related to such properties or requireus to modify our development plans. Accordingly, our development strategy with respect to those properties may change in the future. |
|----------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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|                          | Commercial Property |
|-------------------------------|---------------------|
|                          | Developed           |   | Under Development |   | Potential Development a |   | Total |
| Barton Creek:                 |                |   |   |   |   |   |   |
| Barton Creek Village Phase I  | 22,000              |   | - |   | - |   | 22,000 |
| Barton Creek Village Phase II | -                   |   | - |   | 18,000 |   | 18,000 |
| Entry Corner                  | -                   |   | - |   | 5,000 |   | 5,000 |
| Amarra Retail/Office          | -                   |   | - |   | 90,000 |   | 90,000 |
| Section N                     | -                   |   | - |   | 1,500,000 |   | 1,500,000 |
|                          |                |   |   |   |   |   |   |
| Circle C:                     |                |   |   |   |   |   |   |
| Chase Ground Lease            | 4,000               |   | - |   | - |   | 4,000 |
| Tract 106                     | 21,000              |   | - |   | - |   | 21,000 |
| Tract 110                     | -                   |   | 760,000 |   | - |   | 760,000 |
| Tract 107                     | -                   |   | 80,000 |   | - |   | 80,000 |
| Tract 101                     | -                   |   | - |   | 90,000 |   | 90,000 |
| Tract 102                     | -                   |   | - |   | 25,000 |   | 25,000 |
| Tract 114                     | -                   |   | - |   | 5,000 |   | 5,000 |
|                          |                |   |   |   |   |   |   |
| Lantana:                      |                |   |   |   |   |   |   |
| 7500 Rialto                   | 150,000             |   | - |   | - |   | 150,000 |
| Advanced Micro Devices        |                |   |   |   |   |   |   |
| Option Tracts                 | -                   |   | - |   | 760,000 |   | 760,000 |
| Tract GR1                     | -                   |   | - |   | 325,000 |   | 325,000 |
| Tract G07                     | -                   |   | - |   | 210,000 |   | 210,000 |
| Tract CS5                     | -                   |   | - |   | 175,000 |   | 175,000 |
| Tract CS1-CS3                 | -                   |   | - |   | 150,000 |   | 150,000 |
| Tract LR1                     | -                   |   | - |   | 75,000 |   | 75,000 |
| Tract L04                     | -                   |   | - |   | 70,000 |   | 70,000 |
|                          |                |   |   |   |   |   |   |
| Austin 290 Tract              | -                   |   | - |   | 20,000 |   | 20,000 |
| Total Square Feet             | 197,000             |   | 840,000 |   | 3,518,000 |   | 4,555,000 |
|                          |                |   |   |   |   |   |   |

|    |   |
|--------------|--------|

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| a.   | Our development of the properties identified under the heading “Potential Development” is dependent upon the approval of our development plans and permits by governmental agencies, including the City. Those governmental agencies may either not approve one or more development plans and permit applications related to such properties or requireus to modify our development plans. Accordingly, our development strategy with respect to those properties may change in the future. |
|----------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|                      | First Quarter |   |
|---------------------------|---------------|--------|
|                      | 2009          |   | 2008 |   |
| Revenues:                 |          |   |   |   |
| Real estate operations    | $             | 359    |   | $ | 4,116 |   |
| Commercial leasing        |          | 1,173  |   |   | 951 |   |
| Total revenues            | $             | 1,532  |   | $ | 5,067 |   |
|                      |          |   |   |   |   |   |
| Operating loss            | $             | (2,879 | ) | $ | (1,274 | ) |
|                      |          |   |   |   |   |   |
| Benefit from income taxes | $             | 897    |   | $ | 52 |   |
|                      |          |   |   |   |   |   |
| Net loss                  | $             | (1,737 | ) | $ | (156 | ) |
|                      |          |   |   |   |   |   |

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|                                   | First Quarter |   |
|----------------------------------------|---------------|--------|
|                                   | 2009          |   | 2008 |   |
| Revenues:                              |          |   |   |   |
| Developed property sales               | $             | 191    |   | $ | 3,904 |   |
| Commissions, management fees and other |          | 168    |   |   | 212 |   |
| Total revenues                         |          | 359    |   |   | 4,116 |   |
|                                   |          |   |   |   |   |   |
| Cost of sales, including depreciation  |          | (1,128 | ) |   | (3,531 | ) |
| General and administrative expenses    |          | (1,296 | ) |   | (1,425 | ) |
|                                   |          |   |   |   |   |   |
| Operating loss                         | $             | (2,065 | ) | $ | (840 | ) |
|                                   |          |   |   |   |   |   |

|                   | First Quarter |   |
|------------------------|---------------|--------|
|                   | 2009          |   | 2008 |   |
|                   | Lots          |   | Revenues |   | Lots |   | Revenues |   |
| Barton Creek           |          |   |   |   |   |   |   |   |
| Wimberly Lane Phase II |          |   |   |   |   |   |   |   |
| Standard Homebuilder   | -             |   | $                                 - |   | 1 |   | $                           265 | a |
|                   |          |   |   |   |   |   |   |   |
| Circle C               |          |   |   |   |   |   |   |   |
| Meridian               | 3             |   | 191 |   | 33 |   | 2,229 |   |
|                   |          |   |   |   |   |   |   |   |
| Deerfieldb             | -             |   | - |   | 21 |   | 1,410 |   |
| Total Residential      | 3             |   | $                            191 |   | 55 |   | $                        3,904 |   |
|                   |          |   |   |   |   |   |   |   |

| a.   | Includes $0.1 million for homebuilder contract termination fee. |
|----------------|-----------------------------------------------------------------|

| b.   | In 2004, we acquired the Deerfield property in Plano, Texas, for $7.0 million. We executed agreements with a national homebuilder, whereby the homebuilder paid us $1.4 million for an option to purchase all 234 lots over 36 monthly take-downs. In 2005, we executed a revised agreement with the homebuilder, increasing the lot sizes and average purchaseprice to $67,150 based on a new total of 224 lots. In January 2008, we sold the final 21 lots for $1.4 million. |
|----------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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|                                | First Quarter |   |
|-------------------------------------|---------------|--------|
|                                | 2009          |   | 2008 |   |
| Rental income                       | $             | 1,173  |   | $ | 951 |   |
| Rental property costs               |          | (831   | ) |   | (816 | ) |
| Depreciation                        |          | (373   | ) |   | (337 | ) |
| General and administrative expenses |          | (783   | ) |   | (232 | ) |
| Operating loss                      | $             | (814   | ) | $ | (434 | ) |
|                                |          |   |   |   |   |   |

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| ·   | $40.0 million of borrowings outstanding under seven unsecured term loans, which include two $5.0 million loans, two $8.0 million loans, a $7.0 million loan and two $3.5 million loans, all of which will mature in December 2011. |
|--------------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | $21.2 million of borrowings outstanding under the Lantana promissory note, which matures in January 2018. |
|--------------------|-----------------------------------------------------------------------------------------------------------|

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| ·   | $2.1 million of borrowings outstanding under the $165 million W Austin Hotel & Residences project construction loan, which was acquired by a Stratus subsidiary in June 2009 (see Note 12 and below). |
|--------------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | $4.7 million of borrowings outstanding under a term loan secured by Barton Creek Village, which matures in April 2014. The applicable interest rate is 6.25 percent, and payments of interest and principal are due monthly beginning May 1, 2009. |
|--------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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It

It

PA

Ite

Ite

|                   |   | (a) Total |   |        |   | (c) Total Number of      |   | (d) Maximum Number     |
|------------------------|--------|-----------|--------|-------------|--------|--------------------------|--------|------------------------|
|                   |   | Number    |   | (b) Average |   | Shares Purchased as Part |   | of Shares That May     |
|                   |   | of Shares |   | Price Paid  |   | of Publicly Announced    |   | Yet Be Purchased Under |
| Period                 |   | Purchased |   | Per Share   |   | Plans or Programsa       |   | the Plans or Programsa |
| January 1 to 31, 2009  |   | 49,000    | b      | $8.25       |   | 49,000                   |   | 161,145                |
| February 1 to 28, 2009 |   | -         |   | -           |   | -                        |   | 161,145                |
| March 1 to 31, 2009    |   | -         |   | -           |   | -                        |   | 161,145                |
| Total                  |   | 49,000    |   | $8.25       |   | 49,000                   |   |                   |
|                   |   |      |   |        |   |                     |   |                   |

| a.   | In February 2001, our Board of Directors approved an open market share purchase program for up to 0.7 million shares of our common stock. The program does not have an expiration date. Our loan agreement with Comerica provides a limit of $6.5 million for common stock purchases after September 30, 2005. At March 31, 2009, $0.9 million remained under theComerica agreement for purchases of common stock. |
|----------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| b.   | Represents shares purchased in a private transaction on January 29, 2009. |
|----------------|---------------------------------------------------------------------------|

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SIG

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ST

|    |                                                                                                              | Filed     |                      |      |       |   |
|---------|-------------------------------------------------------------------------------------------------------------------|-----------|---------------------------|-----------|------------|--------|
| Exhibit |                                                                                                              | with this | Incorporated by Reference |
| Number  | Exhibit Title                                                                                                     | Form 10-Q | Form                      | File No.  | Date Filed |
| 3.1     | Amended and Restated Certificate of Incorporation of Stratus.                                                     |      | 10-Q                      | 000-19989 | 05/17/2004 |
|    |                                                                                                              |      |                      |      |       |
| 3.2     | Certificate of Amendment to the Amended and Restated Certificate of Incorporation of Stratus, dated May 14, 1998. |      | 10-Q                      | 000-19989 | 05/17/2004 |
|    |                                                                                                              |      |                      |      |       |
| 3.3     | Certificate of Amendment to the Amended and Restated Certificate of Incorporation of Stratus, dated May 25, 2001. |      | 10-K                      | 000-19989 | 03/22/2002 |
|    |                                                                                                              |      |                      |      |       |
| 3.4     | By-laws of Stratus, as amended as of November 6, 2007.                                                            |      | 10-Q                      | 000-19989 | 08/11/2008 |
|    |                                                                                                              |      |                      |      |       |
| 23.1    | Consent of PricewaterhouseCoopers LLP.                                                                            | X         |                      |      |       |
|    |                                                                                                              |      |                      |      |       |
| 31.1    | Certification of Principal Executive Officer pursuant to Rule 13a-14(a)/15d-14(a).                                | X         |                      |      |       |
|    |                                                                                                              |      |                      |      |       |
| 31.2    | Certification of Principal Financial Officer pursuant to Rule 13a-14(a)/15d-14(a).                                | X         |                      |      |       |
|    |                                                                                                              |      |                      |      |       |
| 32.1    | Certification of Principal Executive Officer pursuant to 18 U.S.C. Section 1350.                                  | X         |                      |      |       |
|    |                                                                                                              |      |                      |      |       |
| 32.2    | Certification of Principal Financial Officer pursuant to 18 U.S.C. Section 1350.                                  | X         |                      |      |       |
|    |                                                                                                              |      |                      |      |       |

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