Welcome to the Stratus Properties First Quarter 2018 Earnings Conference Call. Stratus' released its financial results earlier this morning, which are available on its website at stratusproperties.com. Following management’s remarks, we will host a question-and-answer session. Please note, this call is being recorded and will be available for telephone replay through May 15, 2018. Anyone listening to a taped replay should note that all information presented is current as of today May 10, 2018 and should be considered valid only as of this date. I would now like to turn the call over to Mr. Beau Armstrong, Chairman, President and Chief Executive Officer of Stratus Properties.

Thank you and good morning, everyone. Joining me today is our Chief Financial Officer, Erin Pickens. As a reminder, today's press release and certain comments that we will make on this call include forward-looking statements, and actual results may differ materially. I would like to refer everyone to the cautionary language included in Stratus’ press release and to the risk factors described in Stratus’ Form 10-K and subsequent SEC filings that could cause actual results to differ materially from those projected by us in our forward-looking statements. Today's press release and certain of our comments on the call include financial measures, such as adjusted EBITDA and after-tax net asset value, which are not recognized under U.S. GAAP. As required by SEC regulations, these non-GAAP financial measures are reconciled to the most comparable GAAP financial measures in the supplemental schedules of Stratus’ press release. This morning we will cover highlights of our first quarter 2018 performance, our recently published after-tax net asset value, or NAV that underscores the value we create through our active development strategy. Operational update since our last earnings call, our financial results, which Erin will discuss, and then I'll finish with some brief comments on real estate market conditions. Starting with the first quarter 2018 highlights. The positive momentum we saw in our real estate development and leasing businesses during 2017 continued into the first quarter for our commercial and residential properties. We finalized our development plans for our fully permitted St. Mary project and expect to start construction during the second quarter for the 240 unit multifamily properties in the Circle C community, subject to completion of project financing. Our Lantana Place development is progressing well with the anchored tenant, Moviehouse & Eatery, scheduled to open this month ahead of schedule. We have also entered into…

Thank you, Beau. Today Stratus reported earnings for first quarter 2018 as detailed in our press release issued this morning. The net loss attributable to common stockholders was $1.9 million, or $0.23 per share, compared with a net loss of $2.7 million, or $0.33 per share a year ago. Factors that influenced the year-over-year comparison include, fewer lots sales in 2018 than in 2017 and lower revenue and operating income from W Austin Hotel and our entertainment segment. As Beau mentioned, 14 Amarra Drive lots are under contract and these sales are expected to close between June of this year and March of next year. Following the items we reported in first quarter 2017, a $2.5 million or $0.20 per share charge for profit participation costs and $0.5 million or $0.04 per share loss on the early extinguishment of debt, both related to the sale of The Oaks at Lakeway, partly offset by $1.1 million, or $0.09 per share, gain on the sale of the bank building, an adjacent land at Barton Creek. Adjusted EBITDA was $1 million in the first quarter of 2018 compared with $2.1 million a year ago. Looking at each of our operating segments, as Beau mentioned, we sold only two lots in the first quarter and real estate operations had an operating loss of $425,000 compared with operating income of $144,000 last year. Leasing operations had operating income of $432,000, up from a loss of $1.4 million a year ago, which is influenced by large profit participation expense to HEB. Hotel segment operating income was $1.5 million, down from $2.2 million last year as increased competition in the downtown Austin hotel market, pressures large group reservation. Also Revenue per available room, or RevPAR, declined to $262 from $299 in the first quarter of 2017. Operating income for our entertainment segment was $735,000 down from $1.1 million last year mostly related to lower concession revenues and fewer private events that are ACL Live and 3TEN ACL Live venues. Turning now to capital management, at the end of the first quarter, consolidated debt was $249 million compared with $222 million at year end as we drew down on lending facilities to invest an incremental $28 million of capital expenditures into our development project. We are in the process of finalizing an extension to our credit facility that matures in November of this year with the goal of increasing the revolver that may enhance our financial flexibility. We are confident that we’ll renew the revolver soon under favorable terms. We have net cash investment requirements for all of our current development projects and we expect to generate additional revenue from currently scheduled property sales. Our capital management supports the strategic real estate development program that Beau just described. Now, I'll turn it back to Beau.

Thank you, Erin. I'll conclude as I started by saying that the positive momentum we saw in 2017 in our development projects has continued into 2018. Our focus is simply to execute on the multiple ongoing development projects we just discussed. Over a period of many years, we set the company up for success by purchasing land for development, securing permits, building a talented team, establishing solid relationships with tenants and the financial community, so that we could fully capitalize on the robust real estate environment we have today. The regions we serve retail, office and residential properties are all attracting growing populations with the lowest unemployment rate we’ve seen in years. And Austin has increasingly become a travel destination for business people government officials, students, vocationers like supporting our hotel and entertainment properties. You know this as I mentioned on our last call, I believe Stratus is in the right place and at the right time with the right properties, and we will continue to capitalize on our strategic position for the benefit of our shareholders. This may include opportunistic sales of certain properties later this year including West Killeen Market and the retail complex in the first phase of Barton Creek Village subject to our assessment of leasing progress and market conditions. We expect that these potential sales will have a positive impact on our financial results. Now, we will open the call for a few questions.

We will now begin the question-and-answer session. [Operator Instructions] And our first question comes from Fred Buettner, a Private Investor. Please go ahead.

Hi, Beau. How are you?

I am very well, Fred, nice to hear your voice.

Same here. My first question is about net asset value. Over the next five years, what rate should we expect net asset value to grow?

Fred, I don’t think that we – I don't know that I'm in a position to disclose that. Our – obviously, we expected to increase. I don't know that we have – I know that we do not have a target, but I can tell you that we certainly expected to increase and where that comes from is as we stabilize these properties and sell it much like Lakeway that’s where we will see the increase in NAV when these things are stabilized and ultimately sold.

Okay, thank you. Also in terms of the master lease obligation at Lakeway, can you discuss the leasing trends that have allowed those payments to be reduced?

Sure, we have – as everyone knows, when we sold that property we had a master lease obligation to the buyer and we have continued to reduce our exposure by as we lease space and then there were – there's another element to it just as there was a time – timeframes where some of these other leases burned off so to speak that allowed us to reduce our liability. But since our last call, we have a couple new leases out there that have just further reduced our exposure. We do have two fairly big pads out there that we had always projected that would – we really wouldn’t see a lot of activity until the hotel is open. The hotel is well underway and I believe it will be scheduled to open in the first quarter – end of this year or first quarter of next year. So we’ve seen some increased activity and interest in those two remaining pad sites out there, but again all that activity was modeled and what I can tell you is that we are on track for the way we had modeled it at the time of the sale.

Thanks. I appreciate…

I’ll further add that that HEB has reported very, very strong sales in their store and that's generally a very good barometer of traffic and just overall interest in the property.

Thank you, Beau.

Thank you, Fred.

[Operator Instructions] And at this time, I'm showing no further questions. I would like to conclude the question-and-answer session as well as today's conference. We thank you for attending today’s presentation and you may disconnect your lines at this time.