Exhibit 10.20


                         LOAN AGREEMENT

      THIS  LOAN  AGREEMENT is made as of  June  14,  2001  among
STRATUS PROPERTIES INC., a Delaware corporation ("Borrower"), and
HOLLIDAY  FENOGLIO  FOWLER,  L.P., a  Texas  limited  partnership
("Lender").

      WHEREAS, Borrower and Lender desire to set forth herein the
terms and conditions upon which Lender shall provide financing to
Borrower;

     NOW, THEREFORE, the parties hereto hereby agree as follows:

     Section 1.     Certain Definitions and Index to Definitions.

           A.    Accounting  Terms.  Unless  otherwise  specified
     herein,   all   accounting  terms  used  herein   shall   be
     interpreted,  all accounting determinations hereunder  shall
     be  made,  and  all  financial  statements  required  to  be
     delivered  hereunder shall be prepared  in  accordance  with
     GAAP and practices consistently applied.

           B.    Definitions. Capitalized terms used herein shall
     have  the  respective  meanings  set  forth  in  Schedule  1
     attached  hereto when used in this Agreement (including  the
     Exhibits  hereto)  except  as the  context  shall  otherwise
     require.   Schedule  1  is  hereby  made  a  part  of   this
     Agreement.

     Section 2.     Loan.

           A.    Loan Amount. Lender agrees to provide a loan  to
     Borrower  in  the amount of FIVE MILLION AND 00/100  DOLLARS
     ($5,000,000.00)  ("Loan"),  provided  that  all   conditions
     precedent  described  in this Agreement  have  been  met  or
     waived  by  Lender  and that Borrower is  not  otherwise  in
     default as of the date of disbursement.

           B.    Note.  Borrower's obligation to repay  the  Loan
     shall  be further evidenced by the Note.  Reference is  made
     to  the  Note  for certain terms relating to interest  rate,
     payments,  prepayment, Maturity Date  and  additional  terms
     governing the Loan.

           C.    Origination Fee.  Borrower agrees to pay Lender,
     upon  Lender  advancing  the Loan,  an  origination  fee  of
     $50,000.00.

     Section 3.     Payments by Borrower.

           A.   General.  All payments hereunder shall be made by
     Borrower  to Lender at the Lending Office, or at such  other
     place as Lender may designate in writing.  Payments shall be
     made by wire transfer.

          B.   Other Outstanding Obligations.  Unless required to
     be  paid  sooner  hereunder,  any  and  all  Obligations  in
     addition to the amounts due under the Note shall be due  and
     payable in full upon the Maturity Date.

       Section   4.      Conditions  Precedent.    As  conditions
precedent to Lender's obligation to advance the Loan to Borrower:

           A.   Borrower shall deliver, or cause to be delivered,
to Lender:

                (1)  A duly executed copy of this Agreement,  the
          Note, and any and all other Loan Documents.

                (2)   A favorable written opinion of counsel  for
          Borrower, addressed to Lender and in form and substance
          acceptable to Lender and its counsel.

                (3)  Current financial statements of Borrower  in
          form and substance acceptable to Lender.

                (4)   The  following organizational documents  of
          Borrower:

                     (a)  Borrower's Certificate of Incorporation
               as  certified  by the Secretary of  State  of  the
               state  of  Borrower's  organization  and  by   the
               corporate secretary of Borrower, a Certificate  of
               Good  Standing dated no less recently than  thirty
               (30)  calendar  days prior to  the  date  of  this
               Agreement, issued by the Secretary of State of the
               state  of  Borrower's organization,  stating  that
               Borrower  is in good standing in such  state,  and
               evidence of good standing to transact business  in
               the  State  of Texas, dated no less recently  than
               thirty  (30)  calendar days prior to the  date  of
               this  Agreement, issued by the Secretary of  State
               of the State of Texas.

                     (b)   A resolution of the board of directors
               of  Borrower,  certified as of the  date  of  this
               Agreement  by its corporate secretary, authorizing
               the  execution, delivery and performance  of  this
               Agreement  and the other Loan Documents,  and  all
               other instruments or documents to be delivered  by
               Borrower pursuant to this Agreement.

                     (c)   A  certificate of Borrower's corporate
               secretary as to the incumbency and authenticity of
               the   signatures  of  the  officers  of   Borrower
               executing   any   Loan  Documents  (Lender   being
               entitled   to  rely  thereon  until  a  new   such
               certificate has been furnished to Lender).

               (5)  The written consent of Comerica Bank-Texas to
          the Loan as required under the Comerica Loan Agreement.

           B.    All  acts,  conditions, and  things  (including,
     without   limitation,  the  obtaining   of   any   necessary
     regulatory approvals and the making of any required filings,
     recordings  or  registrations)  required  to  be  done   and
     performed  and  to  have happened prior  to  the  execution,
     delivery and performance of the Loan Documents to constitute
     the  same  legal, valid and binding obligations of Borrower,
     enforceable  in  accordance  with  their  respective  terms,
     subject  to  limitations  as to enforceability  which  might
     result  from  bankruptcy, insolvency, moratorium  and  other
     similar  laws  affecting  creditors'  rights  generally  and
     subject  to  limitations  on the availability  of  equitable
     remedies, shall have been done and performed and shall  have
     happened  in  compliance with all applicable laws  or  shall
     have been waived by Lender in writing.

           C.    All documentation shall be satisfactory in  form
     and  substance to Lender, and Lender shall have received any
     and  all  further information, documents and opinions  which
     Lender   may   reasonably  have  requested   in   connection
     therewith,   such  documents,  where  appropriate,   to   be
     certified by proper authorities and officials of Borrower.

           D.   All representations and warranties of Borrower to
     Lender  set  forth  herein or in any of the  Loan  Documents
     shall be accurate and complete in all material respects.

           E.    There shall not exist an Event of Default or  an
     event which with the giving of notice or passage of time, or
     both, would be an Event of Default.

      Section  5.     Representations and Warranties of Borrower.
Borrower represents and warrants to Lender as follows:

           A.    Capacity.   Borrower is duly organized,  validly
     existing,  and in good standing under the laws of the  state
     of  its organization (as described herein) and is authorized
     to  do  business in the State of Texas and in  any  and  all
     other  jurisdictions in which its ownership of  Property  or
     conduct of business legally requires such authorization  and
     the  failure to do so would have a Material Adverse  Effect,
     and  has  full power, authority, and legal right to own  its
     properties  and  assets  and  to  conduct  its  business  as
     presently  conducted or proposed to be  conducted,  and  the
     consummation of the transactions contemplated herein do not,
     and  will not, require the consent or approval of, or filing
     with, any Person which has not been obtained.

           B.   Authority. Borrower has full power, authority and
     legal  right  to  execute and deliver, and  to  perform  and
     observe  the provisions of the Loan Documents to be executed
     by Borrower.  The execution, delivery and performance of the
     Loan  Documents have been duly authorized by  all  necessary
     action, and when duly executed and delivered, will be legal,
     valid,  and  binding obligations of Borrower enforceable  in
     accordance   with   their  respective  terms,   subject   to
     limitations  as  to enforceability which might  result  from
     bankruptcy,  insolvency, moratorium and other  similar  laws
     affecting   creditors'  rights  generally  and  subject   to
     limitations on the availability of equitable remedies.

           C.    Compliance.  The execution and delivery  of  the
     Loan  Documents  and compliance with their  terms  will  not
     violate any provision of applicable law and will not  result
     in  a breach of any of the terms or conditions of, or result
     in  the imposition of any lien, charge, or encumbrance  upon
     any  properties  of Borrower pursuant to,  or  constitute  a
     default (with due notice or lapse of time or both) or result
     in an occurrence of an event pursuant to which any holder or
     holders  of  Indebtedness  may  declare  the  same  due  and
     payable.

           D.    Financial  Statements. The financial  statements
     provided by Borrower to Lender pursuant to subsection 4.A(3)
     are  correct and complete as of the dates indicated in  such
     statements  and fairly present the financial  condition  and
     results  of  operations of Borrower for the  fiscal  periods
     indicated therein.

           E.    Material  Adverse Events.  Since  the  Statement
     Dates,  neither  any  event nor  the  passage  of  time  has
     resulted in a Material Adverse Effect.

           F.    Litigation.  Except as heretofore  disclosed  by
     Borrower  to  Lender in writing, there  are  no  actions  or
     proceedings  pending,  or  to  the  knowledge  of   Borrower
     threatened,   against  or  affecting  Borrower   which,   if
     adversely determined, could reasonably be expected to have a
     Material  Adverse Effect.  Borrower is not in  default  with
     respect   to  any  applicable  laws  or  regulations   which
     materially  affect the operations or financial condition  of
     Borrower,  nor is it in default with respect  to  any  other
     writ, injunction, demand, or decree or in default under  any
     indenture, agreement, or other instrument to which  Borrower
     is  a party or by which Borrower may be bound where any such
     default would have a Materially Adverse Effect.

           G.    Taxes.  Borrower has filed or caused to be filed
     all  tax  returns  which are required to  be  filed  by  it.
     Borrower has paid, or made provision for the payment of, all
     taxes  which  have or may have become due pursuant  to  said
     returns  or otherwise or pursuant to an assessment  received
     by  Borrower,  except  such taxes,  if  any,  as  are  being
     contested  in  good faith and as to which adequate  reserves
     have been provided.  The charges, accruals, and reserves  in
     respect  of  income  taxes  on the  books  of  Borrower  are
     adequate.   Borrower  knows  of  no  proposed  material  tax
     assessment  against  it and no extension  of  time  for  the
     assessment of federal, state, or local taxes of Borrower  is
     in  effect or has been requested, except as disclosed in the
     financial statements furnished to Lender.

           H.    Accurate  Information. All  written  information
     supplied to Lender by or on behalf of Borrower is and  shall
     be  true  and  correct  in all material  respects,  and  all
     financial  projections or forecasts  of  future  results  or
     events  supplied to Lender by or on behalf of Borrower  have
     been  prepared  in  good  faith  and  based  on  good  faith
     estimates and assumptions of the management of Borrower, and
     Borrower  has no reason to believe that such projections  or
     forecasts are not reasonable.

           I.    Use  of Loan Proceeds.  Borrower is not  engaged
     principally  in,  nor does it have as one of  its  important
     activities, the business of extending credit for the purpose
     of  purchasing  or  carrying any margin  stock  (within  the
     meaning  of  Regulation U of the Board of Governors  of  the
     Federal  Reserve  System), and no part of any  advance  made
     hereunder  will be used to purchase or carry  margin  stock,
     extend  credit  to others for the purpose of  purchasing  or
     carrying  any  margin stock, or used for any  purpose  which
     violates  Regulation  U or Regulation  X  of  the  Board  of
     Governors  of  the  Federal  Reserve  System  or  any  other
     provision of law.

           J.    ERISA.  No plan (as that term is defined in  the
     Employee  Retirement Income  Security Act of 1974 ("ERISA"))
     of  the  Borrower (a "Plan") which is subject to Part  3  of
     Subtitle  B  of Title 1 of ERISA had an accumulated  funding
     deficiency (as such term is defined in ERISA) as of the last
     day  of the most recent fiscal year of such Plan ended prior
     to  the  date  hereof, or would have had such an accumulated
     funding deficiency on such date if such year were the  first
     year  of such Plan, and no material liability to the Pension
     Benefit Guaranty Corporation has been, or is expected by the
     Borrower to be, incurred with respect to any such Plan.   No
     Reportable Event (as defined in ERISA) has occurred  and  is
     continuing in respect to any such Plan.

      Section  6.      Affirmative Covenants of Borrower.   Until
payment in full of the Obligations, Borrower agrees that:

           A.   Financial Statements, Reports and Certifications.
     Borrower  will  furnish  to Lender, in  form  and  substance
     satisfactory to Lender:

                (1)   As  soon as possible after the end of  each
          fiscal year of Borrower, and in any event within ninety
          (90)  Business Days thereafter, (i) a complete copy  of
          its  annual audit which shall include the balance sheet
          of  Borrower as of the close of the fiscal year and  an
          income  statement  for  such  year,  certified  by  the
          Auditors   without  material  qualification,   (ii)   a
          statement of changes in partners' equity and cash flows
          for  the  period ended on such date, certified  by  the
          Auditors, and (iii) a statement certified by the  chief
          financial  officer of Borrower that no act or  omission
          has  occurred which has resulted in an Event or Default
          or,   if  not  cured,  remedied,  waived  or  otherwise
          eliminated to the satisfaction of Lender, would  result
          in an Event of Default;

               (2)  No later than thirty (30) Business Days after
          the  close  of  each Accounting Period, (i)  Borrower's
          balance sheet as of the close of such Accounting Period
          and  its income statement for that portion of the  then
          current  fiscal year through the end of such Accounting
          Period  prepared in accordance with GAAP and  certified
          as being complete, correct, and fairly representing its
          financial  condition and results of operations  by  the
          chief  financial officer of Borrower,  subject  to  the
          absence of footnotes and year-end adjustments,  (ii)  a
          statement of changes in equity and cash flows  for  the
          period  ended  on  such date, certified  by  the  chief
          financial  officer of Borrower, and (iii)  a  completed
          Borrower's Officer's Compliance Certificate;

                 (3)   Promptly  upon  the  filing  or  receiving
          thereof, copies of all reports which the Borrower files
          under  ERISA  or which the Borrower receives  from  the
          Pension  Benefit Guaranty Corporation  if  such  report
          shows any material violation or potential violation  by
          the Borrower of its obligations under ERISA; and

               (4)  Such other information concerning Borrower as
          Lender may reasonably request.

           B.    Other  Information. Borrower will  (1)  maintain
     accurate  books  and records concerning its  business  in  a
     manner  consistent with Borrower's current  bookkeeping  and
     record-keeping practices (provided such practices result  in
     accurate  books and records), (2) upon request,  furnish  to
     Lender  such information, statements, lists of Property  and
     accounts,  budgets,  forecasts, or  reports  as  Lender  may
     reasonably  request  with respect to the business,  affairs,
     and  financial condition of Borrower, and (3) permit  Lender
     or  representatives thereof, upon at least forty eight  (48)
     hours  prior  written notice to Borrower, to inspect  during
     Borrower's usual business hours, the properties of  Borrower
     and  to  inspect, audit, make copies of, and  make  extracts
     from the books or accounts of Borrower.

           C.   Expenses.  Borrower shall pay all reasonable out-
     of-pocket expenses of Lender (including, but not limited to,
     fees and disbursements of Lender's counsel) incident to  (1)
     preparation  and negotiation of the Loan Documents  and  any
     amendments,  extensions and renewals thereof, (2)  following
     an  Event  of  Default, the protection and exercise  of  the
     rights of Lender under the Loan Documents, or (3) defense by
     Lender  against  all claims against Lender relating  to  any
     acts  of  commission  or  omission  directly  or  indirectly
     relating  to  the  Loan Documents, all whether  by  judicial
     proceedings  or otherwise, but excluding claims  related  to
     Lender's   gross   negligence  or  intentional   misconduct.
     Borrower will also pay and save Lender harmless from any and
     all  liability  with  respect to any stamp  or  other  taxes
     (other   than  transfer  or  income  taxes)  which  may   be
     determined  to be payable in connection with the  making  of
     the Loan Documents.

           D.   Taxes and Expenses Regarding Borrower's Property.
     Borrower shall make due and timely payment or deposit of all
     taxes,  assessments or contributions required of it,  except
     such  deposits, assessments or contributions which are being
     contested  in good faith and as to which, in the  reasonable
     determination  of  Lender,  adequate  reserves   have   been
     provided.

           E.   Notice of Events. Promptly after the later of (i)
     the  occurrence  thereof or (ii) such time as  Borrower  has
     knowledge  of  the  occurrence thereof, Borrower  will  give
     Lender  written notice of any Event of Default or any  event
     which with the giving of notice or passage of time, or both,
     would become an Event of Default; provided, however, in  the
     event  that  the respective Event of Default is subsequently
     cured as permitted herein, such failure to give notice shall
     also be deemed to be cured.

            F.    Notice  of  Litigation.   In  addition  to  any
     regularly scheduled reporting required to be delivered  with
     the Borrower's Officer's Certificate, Borrower will promptly
     give  notice  to Lender in writing of (i) any litigation  or
     other  proceedings  against Borrower  involving  claims  for
     amounts  in  excess  of  $250,000  that  Borrower  does  not
     reasonably expect are covered by insurance, (ii)  any  labor
     controversy  resulting  in or threatening  to  result  in  a
     strike against Borrower, or (iii) any proposal by any public
     authority  to  acquire a material portion of the  assets  or
     business of Borrower.

           G.    Other  Debt.   Borrower will  promptly  pay  and
     discharge  any  and  all Indebtedness when  due  (where  the
     failure  to  do  so either individually or in the  aggregate
     with  any  such  other  unpaid  Indebtedness  would  have  a
     Material  Adverse  Effect),  and  lawful  claims  which,  if
     unpaid,  might become a lien or charge upon the Property  of
     Borrower,  except such as may in good faith be contested  or
     disputed or for which arrangements for deferred payment have
     been  made, provided appropriate reserves are maintained  to
     the  satisfaction of Lender for the eventual payment thereof
     in  the  event  it  is  found that such Indebtedness  is  an
     Indebtedness payable by Borrower, and when such  dispute  or
     contest  is  settled and determined, will promptly  pay  the
     full amount then due.

          H.   Cooperation.  Borrower will execute and deliver to
     Lender any and all documents, and do or cause to be done any
     and all other acts reasonably deemed necessary by Lender, in
     its  reasonable  discretion, to effect  the  provisions  and
     purposes of this Agreement.

            I.     Maintenance  of  Insurance;  Notice  of  Loss.
     Borrower   shall  maintain  such  insurance  with  reputable
     insurance  carriers  as  is normally  carried  by  companies
     engaged  in similar businesses and owning similar  Property.
     Upon  request from Lender, Borrower will provide Lender with
     certificates indicating that such insurance is in effect and
     all premiums due have been paid.

           J.    Location of Business.  Borrower will give Lender
     written  notice  immediately upon forming  an  intention  to
     change the location of its chief place of business.

           K.   Maintenance of Existence.  Borrower will preserve
     and  maintain its legal existence and all rights, privileges
     and  franchises necessary or desirable in the normal conduct
     of  its  business, will conduct its business in an  orderly,
     efficient  and  regular manner, and  will  comply  with  all
     applicable  laws  and  regulations  and  the  terms  of  any
     indenture, contract or other instrument to which it may be a
     party  or under which it or its properties may be bound,  in
     each  instance  where the failure to  do  so  would  have  a
     Material Adverse Effect.

           L.    Compliance with ERISA. Cause each Plan to comply
     and  be administered in accordance with those provisions  of
     ERISA which are applicable to such Plan.

     Section 7.     Negative Covenants of Borrower. Until payment
in  full of the Obligations, without the prior written consent of
Lender (which consent may be withheld in the sole discretion  and
determination  of  Lender), Borrower  will  not  do  any  of  the
following:

           A.   Sale of Assets.  Borrower will not sell, abandon,
     or  otherwise  dispose of any of its assets  except  in  the
     ordinary course of business.

           B.    Consolidation, Merger, etc.  Borrower  will  not
     consolidate with, merge into, or sell (whether in  a  single
     transaction  or  in  a  series  of  transactions)   all   or
     substantially all of its assets to any Person.

           C.    Change in Business.   Borrower will not make any
     change  in  the  nature of the business  of  Borrower  or  a
     Subsidiary  which would result in a material change  in  the
     character of the business of Borrower, taken as a whole.

           D.    Transactions with Affiliates. Borrower will  not
     enter  into any transaction with any Person affiliated  with
     Borrower  on  terms materially less favorable  to  Borrower,
     than  at  the time could be available to Borrower, from  any
     Person not affiliated with Borrower.

           E.    Plans.   Borrower will not sponsor or contribute
     to  any other Plan or other defined benefit pension plan  or
     contributes to any multi-employer pension plan.

          F.   Dividends, Redemptions.

           (1)   Borrower  will  not, except  as  allowed  below,
     declare or pay any dividend on, or declare or make any other
     distribution  on  account of, any stock  interest  or  other
     ownership interest.

           (2)   Borrower  will  not, except  as  allowed  below,
     directly   or   indirectly  redeem,  retire,  purchase,   or
     otherwise  acquire beneficially any shares of any  class  of
     its  own stock now or hereafter outstanding or set apart any
     sum  for  any  such purpose.  The foregoing notwithstanding,
     Borrower  may redeem, retire, purchase or otherwise  acquire
     beneficially  (i) shares of common stock of Borrower  in  an
     aggregate  amount  that does not exceed  $5,000,000.00,  and
     (ii) shares of that certain mandatorily redeemable preferred
     stock  (defined  as the "Series B Participating  Preferred")
     issued  by Borrower to Oly/Stratus Equities, L.P.,  a  Texas
     limited  partnership,  on May 22,  1998,  pursuant  to  that
     certain  Securities  Purchase Agreement between  Oly/Stratus
     Equities,  L.P., as "Purchaser," and Borrower, as  "Seller,"
     dated May 22, 1998.

            G.     Indebtedness.  Borrower  will  not  incur  any
     Indebtedness other than Permitted Debt.

      Section 8.     Events of Default; Remedies. If any  of  the
following events occurs, it is hereby defined as and declared  to
be and to constitute an "Event of Default":

           A.    Borrower  shall  fail to  make  any  payment  of
     principal, interest or other amount under the Note, when due
     whether  at  maturity, upon acceleration, or otherwise,  and
     such  default  shall continue for three  (3)  Business  Days
     after  written notice to Borrower from Lender  (except  that
     Borrower  shall not be entitled to said three  (3)  Business
     Day  notice  period  more  than twice  in  any  twelve  (12)
     calendar month period); or

           B.    Borrower shall default in the payment of any  of
     the  other  Obligations  when due, and  such  default  shall
     continue for ten (10) Business Days after written notice  to
     Borrower from Lender; or

           C.    An  order  for relief shall be  entered  against
     Borrower  or any Subsidiary by any United States  Bankruptcy
     Court; or Borrower or any Subsidiary shall generally not pay
     its  debts  as  they become due (within the  meaning  of  11
     U.S.C.  303(h)  as  at  any time amended  or  any  successor
     statute  thereto) or make an assignment for the  benefit  of
     creditors; or Borrower or any Subsidiary shall apply for  or
     consent   to  the  appointment  of  a  custodian,  receiver,
     trustee,  or  similar  officer for it  or  for  all  or  any
     substantial  part  of  its  Property;  or  such   custodian,
     receiver,  trustee,  or similar officer shall  be  appointed
     without  the  application or consent  of  Borrower  or  such
     Subsidiary  and such appointment shall continue undischarged
     for  a  period of sixty (60) calendar days; or  Borrower  or
     such  Subsidiary shall institute (by petition,  application,
     answer,  consent, or otherwise) any bankruptcy,  insolvency,
     reorganization,  moratorium,  arrangement,  readjustment  of
     debt,   dissolution,   liquidation  or  similar   proceeding
     relating  to it under the laws of any jurisdiction;  or  any
     such   proceeding   shall   be  instituted   (by   petition,
     application,   or  otherwise)  against  Borrower   or   such
     Subsidiary  and  shall remain undismissed for  a  period  of
     sixty (60) calendar days; or any judgment, writ, warrant  of
     attachment, execution, or similar process shall be issued or
     levied  against  a  substantial  part  of  the  Property  of
     Borrower  or  such  Subsidiary and such judgment,  writ,  or
     similar  process  shall not be released, vacated,  or  fully
     bonded  within sixty (60) calendar days after its  issue  or
     levy; or

            D.    Borrower  shall  be  in  breach  of  any  other
     agreement, covenant, obligation, representation or  warranty
     hereunder or with respect to any of the Loan Documents,  and
     such  breach  shall continue for twenty (20)  Business  Days
     after whichever of the following dates is the earliest:  (i)
     the  date  on which Borrower gives notice of such breach  to
     Lender,  and (ii) the date on which Lender gives  notice  of
     such breach to Borrower; provided, however, such twenty (20)
     Business  Day period may be extended for up to an additional
     thirty (30) calendar days if and only if Lender extends such
     time   period  in  writing  following  Lender's  good  faith
     determination   that  (X)  Borrower  is   continuously   and
     diligently taking action to cure such breach, and  (Y)  such
     breach  cannot  be cured within the initial twenty  (20)-day
     cure period; or

           E.   The aggregate book value of the Borrower's assets
     shall at any time be less than (1) $50,000,000 minus (2) the
     product  of  $50,000,000 multiplied by the  Cash  Collateral
     Factor.

           F.    The  aggregate  market value of  the  Borrower's
     assets shall at any time be less than (1) $75,000,000  minus
     (2)  the  product  of  $75,000,000 multiplied  by  the  Cash
     Collateral Factor.

           G.    The  Debt Service Coverage Ratio measured  on  a
     quarterly basis for the previous twelve (12) months shall be
     less  than  (1)  (a)  5.0  minus  (b)  the  product  of  5.0
     multiplied by the Cash Collateral Factor, to (2) 1.0.

           H.    The ratio of (1) the Borrower's Indebtedness  to
     (2)  the  aggregate  market value of the  Borrower's  assets
     shall at any time exceed (a) sixty percent (60.0%) minus (b)
     the  product of sixty percent (60.0%) multiplied by the Cash
     Collateral Factor.

            I.     The   ratio  of  (1)  the  Borrower's  Secured
     Indebtedness  to  (2)  the aggregate  market  value  of  the
     Borrower's assets shall at any time exceed (1) forty percent
     (40.0%)  minus (2) forty percent (40.0%) multiplied  by  the
     Cash Collateral Factor.

           J.    An "Event of Default" as defined in the Comerica
     Loan Agreement shall occur.

           K.    Any Reportable Event (as defined in ERISA) shall
     have  occurred and continue for 30 days; or any  Plan  shall
     have  been terminated by the Borrower not in compliance with
     ERISA, or a trustee shall have been appointed by a court  to
     administer  any  Plan,  or  the  Pension  Benefit   Guaranty
     Corporation  shall have instituted proceedings to  terminate
     any Plan or to appoint a trustee to administer any Plan.

THEN,  at  Lender's option unless and until cured  or  waived  in
writing  by  Lender  and regardless of any prior  forbearance  by
Lender,  all  Obligations  shall,  without  presentment,  demand,
protest, or notice of any kind, all of which are hereby expressly
waived,  be forthwith automatically due and payable in full,  and
Lender  may, immediately and without expiration of any period  of
grace,  enforce payment of all Obligations and exercise  any  and
all other remedies granted to it at law, in equity, or otherwise.

      Section 9.     Disclaimer for Negligence.  Lender shall not
be  liable  for  any  claims, demands, losses  or  damages  made,
claimed  or  suffered by Borrower, excepting such  as  may  arise
through  or  could  be  caused by Lender's  gross  negligence  or
willful misconduct, and specifically disclaiming any liability of
Lender  to  Borrower  arising or claimed to have  arisen  out  of
Lender's ordinary negligence.

      Section  10.    Limitation of Consequential Damage.  Lender
shall not be responsible for any lost profits of Borrower arising
from  any  breach  of  contract, tort (excluding  Lender's  gross
negligence  or  willful misconduct), or any other  wrong  arising
from  the  establishment, administration  or  collection  of  the
obligations evidenced hereby.

     Section 11.    Indemnification and Expenses. Borrower agrees
to  hold  Lender harmless from and indemnify Lender  against  all
liabilities,  losses, damages, judgments, costs and  expenses  of
any kind which may be imposed on, incurred by or asserted against
Lender (collectively, the "Costs") relating to or arising out  of
this  Agreement,  any  other Loan Document,  or  any  transaction
contemplated  hereby or thereby, or any amendment, supplement  or
modification of, or any waiver or consent under or in respect of,
this  Agreement,  any  other Loan Document,  or  any  transaction
contemplated hereby or thereby, that, in each case, results  from
anything   other  than  Lender's  gross  negligence  or   willful
misconduct.    Borrower also agrees to reimburse  Lender  as  and
when  billed  by  Lender for all Lender's  reasonable  costs  and
expenses  incurred  in  connection with the  enforcement  or  the
preservation of Lender's rights under this Agreement,  any  other
Loan Document, or any transaction contemplated hereby or thereby,
including   without   limitation   the   reasonable   fees    and
disbursements of its counsel. Borrower's obligations  under  this
Section 11 shall survive repayment of the Loan.

     Section 12.    Miscellaneous.

           A.   Entire Agreement.   The Loan Documents embody the
     entire  agreement  and  understanding  between  the  parties
     hereto and supersede all prior agreements and understandings
     relating  to the subject matter hereof.  No course of  prior
     dealings between the parties, no usage of the trade, and  no
     parole or extrinsic evidence of any nature, shall be used or
     be  relevant to supplement, explain or modify any term  used
     herein.

          B.   No Waiver.  No failure to exercise and no delay in
     exercising  any right, power, or remedy hereunder  or  under
     the  Loan Documents shall impair any right, power, or remedy
     which Lender may have, nor shall any such delay be construed
     to  be  a waiver of any of such rights, powers, or remedies,
     or  any acquiescence in any breach or default under the Loan
     Documents; nor shall any waiver of any breach or default  of
     Borrower  hereunder be deemed a waiver  of  any  default  or
     breach  subsequently  occurring.  The  rights  and  remedies
     specified  in  the  Loan Documents are  cumulative  and  not
     exclusive  of each other or of any rights or remedies  which
     Lender would otherwise have.

           C.    Survival.   All representations, warranties  and
     agreements  herein contained on the part of  Borrower  shall
     survive  the  making  of  advances hereunder  and  all  such
     representations,   warranties  and   agreements   shall   be
     effective so long as the Obligations arising pursuant to the
     terms  of  this Agreement remain unpaid or for  such  longer
     periods as may be expressly stated therein.

           D.   Notices.  All notices of any type hereunder shall
     be  effective as against Borrower or Lender, as the case may
     be,  upon the first to occur of (a) three (3) Business  Days
     after  deposit  in  a receptacle under the  control  of  the
     United States Postal Service, (b) one (1) Business Day after
     being  transmitted by electronic means to a  receiver  under
     the  control  of the receiving party, provided there  is  an
     electronic confirmation of receipt, or (c) actual receipt by
     an  employee  or  agent  of the receiving  party.   For  the
     purposes hereof, the addresses are as follows:

     DEBTOR:
                                                with copy to:

Stratus Properties Inc.                      Arbrust Brown & Davis, L.L.P.
98 San  Jacinto  Boulevard,  Suite 220       100 Congress Avenue, Suite 1300
Austin, TX 78791                             Austin, TX 78701
Attention: Mr. William H.  Armstrong III     Attention: Kenneth Jones, Esq.
Phone:  (512) 478-5788                       Phone:  (512) 435-2312
Fax:    (512) 478-6340                       Fax:    (512) 435-2360

     LENDER:
                                                 with a copy to:
One Post Oak Central                         Leonard, Street and Deinard
2000 Post   Oak  Boulevard,  Suite 2000      Suite 2300, 150 S. Fifth Street
Houston, TX 77056                            Minneapolis, MN 55402
Attention:  Nancy Goodson                    Attention:  David W. Kelley
Phone   (713) 527-9646                       Phone:  (612) 335-1670
Fax:    (713) 521-7334                       Fax:    (612) 335-1657

          E.   Separability of Provisions.  In the event that any
     one  or  more of the provisions contained in this  Agreement
     should  be invalid, illegal or unenforceable in any respect,
     the  validity, legality, and enforceability of the remaining
     provisions contained herein shall not in any way be affected
     or impaired thereby.

           F.   Successors and Assigns.  This Agreement shall  be
     binding  upon and inure to the benefit of Borrower,  Lender,
     and  their  respective  successors  and  assigns,  provided,
     however,  that  Borrower  may not  transfer  its  rights  or
     obligations  under  any  of the Loan Documents  without  the
     prior written consent of Lender which may be withheld in its
     sole  and  absolute  discretion.   Lender  may  assign   its
     interest  in  the  Loan Documents, in  whole,  or  in  part,
     without any consent from, or notice to, Borrower.

           G.   Counterparts.  This Agreement may be executed  in
     any number of counterparts all of which taken together shall
     constitute  one agreement and any party hereto  may  execute
     this Agreement by signing any such Counterpart.

           H.    Choice of Law; Location of Loan.  This Agreement
     shall  be  governed by and construed in accordance with  the
     laws  of the State of Minnesota.  Lender and Borrower  agree
     that  the Loan will be negotiated, funded and closed in  the
     State of Minnesota.

           I.   Amendment and Waiver.  Neither this Agreement nor
     any provisions hereof may be changed, waived, discharged  or
     terminated  orally,  but only by an  instrument  in  writing
     signed  by the party against whom enforcement of the change,
     waiver, discharge or termination is sought.

           J.    Plural.   When  permitted by  the  context,  the
     singular includes the plural and vice versa.

           K.    Retention of Records.  Lender shall  retain  any
     documents, schedules, invoices or other papers delivered  by
     Borrower  only  for  such  period as  Lender,  at  its  sole
     discretion, may determine necessary.

           L.    Headings.   Section and paragraph  headings  and
     numbers have been set forth for convenience only.

          M.   Information to Participants.  Borrower agrees that
     Lender  may  furnish  any  financial  or  other  information
     concerning Borrower or any of its Subsidiaries heretofore or
     hereafter provided by Borrower to Lender, pursuant  to  this
     Agreement  or  otherwise,  to  any  prospective  or   actual
     purchaser of any participation or other interest in  any  of
     the  loans  made by Lender to Borrower (whether  under  this
     Agreement or otherwise), or to any prospective purchaser  of
     any  securities issued or to be issued by Lender;  provided,
     however,  any  such  delivery  shall  be  delivered  on  the
     condition   that   such  information  is  delivered   on   a
     confidential basis.

           N.    Acknowledgments.    Borrower hereby acknowledges
     that: (i) it has been advised by counsel in the negotiation,
     execution and delivery of this Agreement and the other  Loan
     Documents;  (ii)  Lender  has no fiduciary  relationship  to
     Borrower,  and the relationship between Borrower and  Lender
     is  solely that of debtor and creditor; and (iii)  no  joint
     venture exists between Lender and Borrower.

      Section  13.     Submission  to Jurisdiction;  Venue.    To
induce  Lender to enter into this Agreement, Borrower irrevocably
agrees that, subject to Lender's sole discretion, all actions and
proceedings in any way, manner or respect, arising out  of,  from
or related to this Agreement or the other Loan Documents shall be
litigated  in courts having situs within the City of Minneapolis,
State of Minnesota.  Borrower hereby consents and submits to  the
jurisdiction of any local, state or federal court located  within
said City and State. Borrower hereby waives any right it may have
to transfer or change the venue of any litigation brought against
Borrower by Lender in accordance with this paragraph.

      Section 14.    Waiver Of Trial By Jury.  In recognition  of
the  higher  costs and delay which may result from a jury  trial,
the parties hereto waive any right to trial by jury of any claim,
demand,  action or cause of action (1) arising hereunder  or  any
other instrument, document or agreement executed or delivered  in
connection herewith, or (2) in any way connected with or  related
or  incidental to the dealings of the parties hereto  or  any  of
them  with  respect hereto or any other instrument,  document  or
agreement  executed or delivered in connection herewith,  or  the
transactions related hereto or thereto, in each case whether  now
existing  or hereafter arising, and whether sounding in  contract
or  tort  or otherwise; and each party hereby agrees and consents
that  any such claim, demand, action or cause of action shall  be
decided by court trial without a jury, and that any party  hereto
may  file an original counterpart or a copy of this section  with
any  court  as  written evidence of the consent  of  the  parties
hereto to the waiver of their right to trial by jury.

       Section   14.      Liability   of   Officers,   Directors,
Shareholders.  Notwithstanding anything contained  herein  or  in
the other Loan Documents, or any conduct or course of conduct  by
the  parties hereto, before or after signing the Loan  Documents,
this  Agreement  shall not be construed as creating  any  rights,
claims or causes of action against any partner of Borrower or any
officers, directors, or shareholders of Borrower.

           [This space was intentionally left blank.]


          IN WITNESS WHEREOF, the parties hereto have caused this
Agreement  to  be  executed as of the day and  year  first  above
written.


BORROWER:
STRATUS PROPERTIES INC., a Delaware corporation



By: _______________________________________
Name: _____________________________________
Its: ________________________________________


          IN WITNESS WHEREOF, the parties hereto have caused this
Agreement  to  be  executed as of the day and  year  first  above
written.


LENDER:
HOLLIDAY  FENOGLIO FOWLER L.P., a Texas limited  partnership,  by
HFF-GP, Inc., a Delaware corporation, its general partner



By: _______________________________________
Name: _____________________________________
Its: ________________________________________




                  SCHEDULE 1 TO LOAN AGREEMENT

                       CERTAIN DEFINITIONS


           "Accounting Period" means each calendar quarter during
the term of the Loan, commencing on April 1, 2001.

           "Agreement"  means the Loan Agreement  to  which  this
Schedule 1 is attached to and made a part of.

            "Auditors"  means  Borrower's  independent  certified
public  accountants,  which  shall be  of  nationally  recognized
standing and otherwise reasonably acceptable to Lender.

          "Borrower" has the meaning provided in the introductory
paragraph of the Agreement.

           "Borrower's Officer's Compliance Certificate" means  a
certificate  made by a duly authorized officer  of  Borrower  and
addressed to Lender, in the form attached hereto as Exhibit B.

           "Business  Day"  means any day excluding  Saturday  or
Sunday   and   excluding  any  day  on  which  national   banking
associations are closed for business.

           "Cash  Collateral  Account" means  a  blocked  deposit
account  held by Lender in which funds are deposited by Borrower,
which funds are pledged as collateral for the Loan pursuant to an
agreement  satisfactory to Lender in form and  substance  and  in
which Lender has a first security interest.

          "Cash Collateral Factor" means at any time the ratio of
(1)  the  balance  in  the Cash Collateral  Account  to  (2)  the
principal balance of the Loan.

           "Comerica  Debt"  means the Indebtedness  incurred  by
Borrower  from  time  to  time  pursuant  to  the  Comerica  Loan
Agreement.

           "Comerica  Loan  Agreement" means  that  certain  Loan
Agreement  dated  as  of December 16, 1999,  among  Borrower  and
certain  Affiliates  of  Borrower  and  Comerica  Bank-Texas,  as
amended by Amendment to Loan Agreement dated December 27, 2000.

            "Controlled  Group"  means  a  "controlled  group  of
corporations" as defined in Section 1563(a) (4) of  the  Internal
Revenue  Code of 1954, as amended, determined without  regard  to
Section  1563(a) and (e) (3) (c) of such Code, of which  Borrower
is a part.

          "Costs" has the meaning contained in Section 11.

           "Debt  Service"  means, with respect  to  a  specified
period, scheduled payments of principal and interest with respect
to the respective Indebtedness.

           "Debt Service Coverage Ratio" means for any period  of
time the ratio of (1) the sum of the Borrower's net income during
that  period plus interest, depreciation, amortization and income
tax  expense  during that period to (2) Debt Service  on  all  of
Borrower's Indebtedness.

           "Events  of  Default"  has the  meaning  contained  in
Section 8 of the Agreement.

            "GAAP"   shall  mean  generally  accepted  accounting
principles as in effect from time to time in the United States.

           "Indebtedness"  of  any  Person  means  all  items  of
indebtedness which, in accordance with GAAP, would  be  deemed  a
liability  of such Person as of the date as of which indebtedness
is  to be determined and shall also include, without duplication,
all  indebtedness and liabilities of others assumed or guaranteed
by  such Person or in respect of which such Person is secondarily
or  contingently liable (other than by endorsement of instruments
in the course of collection) that would otherwise be deemed to be
liabilities  under GAAP, whether by reason of  any  agreement  to
acquire  such  indebtedness,  to  supply  or  advance  sums,   or
otherwise.

           "Lender"  has the meaning provided in the introductory
paragraph of the Agreement.

            "Lending  Office"  shall  refer  to  Lender's  office
described in Section 12.D of the Agreement.

           "Loan" has the meaning contained in Subsection 2.A. of
the Agreement.

          "Loan Documents" means the Agreement, the Note, and any
riders,  supplements and amendments thereto, mortgages,  security
agreements,  assignments,  pledges, subordination  agreements  or
guaranties  delivered in connection with the  Agreement  and  all
other  documents  or  instruments heretofore,  now  or  hereafter
executed, pursuant to the Agreement, or any of the aforesaid.

           "Material  Adverse Effect" means with respect  to  any
event or circumstance, a material adverse effect on:

          (i)  the ability of Borrower to perform its obligations
     under  the  Agreement, the Note, or any other Loan Document;
     or

           (ii) the validity, enforceability or collectibility of
     the Note, the Agreement or any other Loan Document.

          "Maturity Date" means July 1, 2006.

           "Note" means the Promissory Note dated as of the  date
of   the  Agreement  made  by  Borrower  to  Lender  pursuant  to
Subsection 2.B. of the Agreement in the form attached  hereto  as
Exhibit   A,   together  with  any  replacements,  modifications,
amendments, renewals and extensions thereof.

           "Obligations" means and includes all amounts owing  by
Borrower  to Lender under the Note and the other Loan  Documents,
together  with  any and all loans, advances, debts,  liabilities,
obligations, letters of credit, or acceptance transactions, trust
receipt  transactions,  or  any other  financial  accommodations,
owing  by  Borrower  to  Lender of  every  kind  and  description
(whether  or  not evidenced by any note or other  instrument  and
whether  or  not for the payment of money), direct  or  indirect,
absolute  or  contingent, due or to become due, now  existing  or
arising  hereafter with respect to the Note and  the  other  Loan
Documents,  including, without limitation,  all  interest,  fees,
charges,   expenses,  attorneys'  fees,  and  accountants'   fees
chargeable  to Borrower and incurred by Lender in connection  the
Loan.

           "Permitted Debt" means (i) the Loan, (ii) the Comerica
Debt,  (iii)  any other Indebtedness of Borrower for  fair  value
received  that is secured by assets owned by Borrower  having  an
appraised value equal to or greater than the indebtedness secured
thereby (and which assets do not secure other indebtedness), (iv)
debt  outstanding  as  of  the date of the  Loan  Agreement,  (v)
unsecured trade, utility or non-extraordinary accounts payable in
the  ordinary  course  of business and other  unsecured  debt  of
Borrower  at  any  one time not to exceed $500,000.00,  and  (vi)
guaranties  of  Borrower guaranteeing project development  and/or
construction costs and related costs, provided that Borrower  has
a  direct  or  indirect interest in such projects  and  that  the
aggregate  amount, at any one time, of such guaranties  does  not
exceed the sum of $15,000,000.00.

           "Person"  means  any  individual, entity,  government,
governmental agency or any other entity and whether acting in  an
individual, fiduciary or other capacity.

           "Plan" means any employee pension benefit plan subject
to  Title IV of ERISA and maintained by Borrower or any member of
a  Controlled  Group or any such plan to which  Borrower  or  any
member  of a Controlled Group is required to contribute on behalf
of any of its employees.

           "Property"   shall mean any and all right,  title  and
interest  of  a specified Person in and to any and all  property,
whether  real  or personal, tangible or intangible, and  wherever
situated.

           "Secured Indebtedness" means any Indebtedness that  is
subject to any security interest or lien securing the payment  of
money.

           "Statement  Dates" means the dates  of  the  financial
statements delivered to Lender pursuant to Section 4.A(3) of  the
Agreement.

           "Subsidiary" means (i) any entity of which  more  than
fifty  percent  (50%) of the outstanding having  ordinary  voting
power  (irrespective  of whether or not  at  the  time  class  or
classes of shall have or might have voting power by reason of the
happening  of  any  contingency)  is  at  the  time  directly  or
indirectly  owned  by  Borrower and/or any Subsidiary,  (ii)  any
limited  liability company or similar entity of which  more  than
fifty  percent  (50%)  of the member interests  of  such  limited
liability  company are directly or indirectly owned  by  Borrower
and/or  any  Subsidiary, and (iii) any partnership of which  more
than fifty percent (50%) of the limited partner interests of such
limited  partnership or any of the general partner  interests  of
such  limited  partnership are directly or  indirectly  owned  by
Borrower and/or any Subsidiary.


1971463v1


                   EXHIBIT A TO LOAN AGREEMENT

                          FORM OF NOTE







                   EXHIBIT B TO LOAN AGREEMENT

       FORM OF BORROWER'S OFFICER'S COMPLIANCE CERTIFICATE

                     Stratus Properties Inc.
               98 San Jacinto Boulevard, Suite 220
                        Austin, TX 78791


                             [DATE]

Holliday Fenoglio Fowler, L.P.
One Post Oak Central
2000 Post Oak Boulevard
Suite 2000
Houston, TX  77056
Attention:  Nancy Goodson

Re   Loan  Agreement  dated as of June 14, 2001 between  Stratus
     Properties  Inc. ("Borrower") and Holliday Fenoglio  Fowler,
     L.P.  ("Lender")  (the "Loan Agreement") (capitalized  terms
     not defined herein have the respective meanings contained in
     the Loan Agreement)

Ladies and Gentlemen:

      Pursuant  to  subsection  6.A(2)  of  the  Loan  Agreement,
Borrower certifies to Lender as follows:

      1.   As of the date of this Certificate, no act or omission
has occurred which has resulted in an Event or Default or, if not
cured,   remedied,   waived  or  otherwise  eliminated   to   the
satisfaction of Lender, would result in an Event of Default.

      2.    The  undersigned officer is authorized to  make  this
Certificate on behalf of Borrower and has reviewed the  terms  of
the  Loan Agreement and has made, or caused to be made under such
officer's supervision, a review in reasonable detail of the facts
necessary to make the certifications contained herein.


STRATUS PROPERTIES INC., a Delaware corporation



By: _______________________________________
Name: _____________________________________
Its: ________________________________________