STRATUS PROPERTIES INC
EXHIBIT 10.17
<DOCUMENT>
<TYPE>EX-10
<SEQUENCE>8
<FILENAME>strs1017a.txt
<DESCRIPTION>EXHIBIT 10.17
<TEXT>




                                              Exhibit 10.17
When recorded, return to:

Lynda Zimmerman, Esq.
Winstead Sechrest & Minick
5400 Renaissance Tower
1201 Elm Street
Dallas, Texas  75270


                 SECOND MODIFICATION AGREEMENT


     This SECOND MODIFICATION AGREEMENT ("Agreement") is made  to
be effective as of the 24th day of February, 2000, by and between
COMERICA  BANK-TEXAS,  a  state banking  association  ("Lender"),
STRATUS   7000   WEST  JOINT  VENTURE,  a  Texas  joint   venture
("Borrower"),   and   STRATUS  PROPERTIES,   INC.,   a   Delaware
corporation (the "Guarantor").

                     W I T N E S S E T H :

     WHEREAS, Lender made a loan ("Loan") to Borrower on April 9,
1999,  in the maximum principal amount of SIX MILLION SIX HUNDRED
THOUSAND AND NO/100 DOLLARS ($6,600,000.00); and

     WHEREAS,   Lender   and  Borrower  executed   that   certain
Construction  Loan Agreement ("Loan Agreement")  dated  April  9,
1999, pertaining to the Loan; and

     WHEREAS, the Borrower executed and delivered to Lender  that
certain Promissory Note (the "$6,600,000.00 Note") dated April 9,
1999,  payable  to  the  order of Lender in  the  amount  of  and
evidencing the Loan; and

     WHEREAS,  the  Borrower executed and delivered that  certain
Amended  and Restated Deed of Trust dated of even date  with  the
$6,600,000.00  Note to Gary W. Orr, as trustee  ("Trustee"),  for
the benefit of the Lender, recorded under Document No. 1999009453
of  the  Official Records of Travis County, Texas,  covering  the
real  property  described  in  Exhibit  A  attached  hereto   and
incorporated   herein  for  all  purposes,  together   with   all
improvements,  appurtenances, other properties (whether  real  or
personal),  rights and interests described in and  encumbered  by
the  Deed  of  Trust ("Property"), to secure the payment  of  the
$6,600,000.00  Note  and performance by  Borrower  of  the  other
obligations  set  forth  in  the Security  Documents  (as  herein
defined); and

     WHEREAS, the Borrower executed and delivered to Lender  that
certain  Assignment of Rents and Leases (the "Assignment")  dated
of even date with the $6,600,000.00 Note, assigning to Lender all
rents,  leases,  income, revenues, issues and profits  which  may
arise  from the operation or ownership of the Property, to secure
the payment of the $6,600,000.00 Note and performance by Borrower
of the other obligations set forth in the Security Documents; and

     WHEREAS,  the Borrower caused to be issued by Chicago  Title
Insurance Company ("Title Company") that certain Mortgagee Policy
of Title Insurance ("Policy") No.44-0394-101-339, dated April 16,
1999,  in  the  amount of the $6,600,000.00  Note,  insuring  the
dignity  and  priority of the lien created and evidenced  by  the
Amended and Restated Deed of Trust and the Assignment; and

     WHEREAS,  as  of  December  31, 1999,  the  Borrower  caused
Stratus Properties Inc., the Guarantor to execute and deliver  to
Lender  that  certain  Guaranty  ("Guaranty")  guaranteeing   the
payment  obligations  under  the  $6,600,000.00  Note  and  other
monetary  obligations  contained in the  Security  Documents  and
performance by Borrower of the other obligations as set forth  in
the Security Documents subject to and on the terms and conditions
set forth in the Guaranty, which Guaranty was in substitution  of
that  prior guaranty executed and delivered as of April 9,  1999;
and

     WHEREAS,  the  Borrower, Lender and Guarantor  entered  into
that  certain Modification Agreement dated as of the 16th day  of
August,  1999,  which Modification Agreement was  recorded  under
Document No. 1999093007 of the Official Records of Travis County,
Texas, and thereafter  entered into that certain Second Amendment
to  Construction Loan Agreement executed effective as of the 31st
day of December, 1999; and

     WHEREAS,  Borrower thereafter executed for  the  benefit  of
Lender  that  certain Second Amended and Restated Deed  of  Trust
(the "Deed of Trust") dated of even date herewith, wherein Lender
and  Borrower, among other things, agreed that the Property would
also  secure that certain Phase II construction loan in  addition
to  the  Phase  I  loan  covered  by  the  above-referenced  Loan
Agreement; and

     WHEREAS,  the Lender, Borrower and Guarantor now propose  to
modify certain of the terms and provisions of the Loan Agreement,
as  previously  amended, the Assignment, the $6,600,000.00  Note,
the  Deed  of Trust, the Guaranty and the other related documents
executed  by Borrower or third parties pertaining to,  evidencing
or securing the Loan (collectively, the "Security Documents").

     NOW, THEREFORE, for and in consideration of the premises and
the  mutual  covenants and agreements contained herein,  and  for
other   good   and  valuable  consideration,  the   receipt   and
sufficiency  of  which are hereby acknowledged, Lender,  Borrower
and Guarantor hereby agree as follows:

     1.     Increase   of   Indebtedness.   The   definition   of
"Indebtedness"  (the  "Further Indebtedness  Provision")  of  the
Amended and Restated Deed of Trust contemplates that other  debts
or  obligations  of Borrower to Lender, whensoever  or  howsoever
incurred and of whatever nature, would be secured by the Deed  of
Trust.   In  accordance with the terms of the Second Amended  and
Restated Deed of Trust of even date herewith, Borrower and Lender
hereby  agree  that the Property which secures the existing  Loan
shall  also secure the additional indebtedness in the  amount  of
SEVEN   MILLION   SEVEN  HUNDRED  THOUSAND  AND  NO/100   DOLLARS
($7,700,000.00) as evidenced by that certain Promissory Note (the
"$7,700,000.00  Note")  executed by Borrower  as  maker  for  the
benefit  of  Lender  as  payee of even date  herewith.   Borrower
hereby  promises to pay to the order of Lender the principal  sum
of  the $7,700,000.00 Note and the $6,600,000.000 Note (sometimes
hereinafter referred to collectively as the "Note"), or  so  much
thereof  as may be advanced, less any repayments of the principal
thereof  heretofore made, together with interest thereon  at  the
rate, on the dates, and in the manner specified therein.

     2.    Current  $6,600,000.00 Note  Balance.   Prior  to  the
execution  hereof, the aggregate amount advanced by Lender  under
the  $6,600,000.00  Note was FOUR MILLION SIX  HUNDRED  FORTY-ONE
THOUSAND AND NO/100 DOLLARS ($4,641,000.00).  There are committed
funds  remaining  in  the  amount of  ONE  MILLION  NINE  HUNDRED
FIFTY-NINE  THOUSAND  AND NO/100 DOLLARS  ($1,959,000.00)  to  be
disbursed in accordance with the Security Documents.

     3.    Extension  of  Maturity.  The  maturity  date  of  the
$6,600,000.00 Note is hereby extended until August 24, 2001, when
the  unpaid principal balance of the $6,600,000.00 Note, together
with  all accrued but unpaid interest thereon, shall be  due  and
payable, which maturity date coincides with the maturity date for
the  $7,700,000.00 Note of even date herewith.  In each  instance
in  the  $6,600,000.00  Note or in the Security  Documents  where
there  is  a  reference to the maturity date, said maturity  date
shall mean August 24, 2001 in lieu of the maturity date as shown.
The   Borrower  hereby  renews,  but  does  not  extinguish,  the
$6,600,000.00   Note  and  the  liens,  security  interests   and
assignments created and evidenced by the Deed of Trust and  other
Security  Documents,  and  in this regard  all  of  the  Security
Documents  are  hereby  renewed and  modified  by  extending  the
maturity date thereof as set forth above.  Borrower covenants  to
observe, comply with and perform each of the terms and provisions
of the Security Documents, as modified hereby.

     4.    Modification  of  Payment Terms in  the  $6,600,000.00
Note.   The  payment  schedule set forth in Section  3.1  of  the
$6,600,000.00  Note  shall be deleted in its  entirety,  and  the
following new payment schedule shall be inserted in lieu thereof:

     "3.1 Payment  Schedule.  This Note  shall  be  due  and
          payable as follows:

          (a)   Commencing  on May 5, 1999,  and  continuing
     thereafter  on  the fifth (5th) day of each  successive
     month  until the Maturity Date, Maker shall  pay  Payee
     all then accrued but unpaid interest hereon.

          (b)    Commencing  on  September  5,   2000,   and
     continuing  on  the  fifth  (5th)  day  of  each  month
     thereafter until the Maturity Date, a Monthly Principal
     Payment  (hereinafter defined), together with all  then
     accrued  but unpaid interest hereon, shall be  due  and
     payable; and

          (c)   The outstanding principal balance hereof and
     any  and all accrued but unpaid interest thereon  shall
     be due and payable in full on the Maturity Date or upon
     earlier  maturity  hereof, whether by  acceleration  or
     otherwise.

     For  purposes hereof, "Monthly Principal Payment" shall
     mean that amount equal to 1.19% of the then outstanding
     principal  balance as of September 1, 2000  owed  under
     this  Note divided by twelve (12) months.  Payee  shall
     furnish  said amount, which is based upon a twenty-five
     (25)  year, mortgage equivalent amortization  schedule,
     to   Maker   in  writing,  which  fixed  amount   shall
     thereafter constitute the Monthly Principal Payment."

     5.    Events  of Default.  Borrower hereby agrees  that  the
Loan  Agreement,  as previously amended, and the  other  Security
Documents  shall  be  amended whereby  the  following  "Event  of
Default" shall be included  as an additional Event of Default  in
said documents:

          "An   Event  of  Default  as  defined  under   the
     $7,700,000.00 Note dated February 24, 2000 executed  by
     Borrower  as maker to Lender as payee or under  any  of
     the  loan documents which secure the $7,700,000.00 Note
     shall be deemed to constitute an Event of Default under
     the $6,600,000.00 Note and the Security Documents which
     secure the $6,600,000.00 Note."

     6.    Title Insurance.  Contemporaneously with the execution
and  delivery hereof, the Borrower shall cause the Title  Company
to  issue  to  Lender a standard Texas form Mortgagee  Policy  of
Title  Insurance  in  the  amount of  the  indebtedness  for  the
$6,600,000.00  Note  and  the $7,700,000.00  Note,  insuring  the
dignity  and  priority  of the lien of  the  Deed  of  Trust  and
Assignment, as previously modified and as further modified by the
terms  and  provisions  hereof,  and  subject  only  to  (i)  the
exceptions  and  encumbrances specified  in  Schedule  B  of  the
Policy,  (ii) such other exceptions as may have been approved  in
writing   by  Lender  at  the  time  of  execution  hereof,   and
(iii) taxes on the Property for the current and subsequent years,
but not yet due and payable.

     7.     Acknowledgment  by  Borrower.   Except  as  otherwise
specified  herein, the terms and provisions hereof  shall  in  no
manner   impair,   limit,  restrict  or  otherwise   affect   the
obligations  of  Borrower  or  any  third  party  to  Lender,  as
evidenced   by   the   Security   Documents.    Borrower   hereby
acknowledges, agrees and represents that (i) Borrower is indebted
to  Lender  pursuant to the terms of the $6,600,000.00  Note,  as
modified  hereby and of the $7,700,000.00 Note; (ii)  the  liens,
security interests and assignments created and evidenced  by  the
Security Documents are, respectively, valid and subsisting liens,
security interests and assignments of the respective dignity  and
priority  recited in the Security Documents; (iii) there  are  no
claims  or offsets against, or defenses or counterclaims to,  the
terms  or  provisions of the Security Documents,  and  the  other
obligations  created  or  evidenced by  the  Security  Documents;
(iv)  Borrower  has no claims, offsets, defenses or counterclaims
arising  from any of Lender's acts or omissions with  respect  to
the  Property,  the  Security Documents or  Lender's  performance
under  the  Security Documents or with respect to  the  Property;
(v)  the representations and warranties contained in the Security
Documents are true and correct representations and warranties  in
all  material  respects  of Borrower  and  to  the  knowledge  of
Borrower,  of  any  third parties, as of  the  date  hereof;  and
(vi)  Lender  is not in default and no event has occurred  which,
with  the  passage  of  time, giving of notice,  or  both,  would
constitute a default by Lender of Lender's obligations under  the
terms  and  provisions of the Security Documents.  To the  extent
Borrower  now  has any claims, offsets, defenses or counterclaims
against Lender or the repayment of all or a portion of the  Loan,
whether  known or unknown, fixed or contingent, same  are  hereby
forever irrevocably waived and released in their entirety.

     8.    No Waiver of Remedies.  Except as may be expressly set
forth   herein,   nothing  contained  in  this  Agreement   shall
prejudice,  act as, or be deemed to be a waiver of any  right  or
remedy  available  to  Lender  by reason  of  the  occurrence  or
existence  of  any  fact, circumstance or  event  constituting  a
default under the Note or the other Security Documents.

     9.    Joinder  of  Guarantor.  By  its  execution  hereof  ,
Guarantor  hereby (i) acknowledges and consents to the terms  and
provisions  hereof;  (ii)  ratifies and  confirms  the  Guaranty,
including  all interest and costs of collection, to  or  for  the
benefit  of Lender; (iii) agrees that the Guaranty is  and  shall
remain in full force and effect and that the terms and provisions
of  the  Guaranty cover and pertain to the Loan,  Note,  Deed  of
Trust   and   other   Security  Documents  as  modified   hereby;
(iv) acknowledges that there are no claims or offsets against, or
defenses  or  counterclaims to, the terms and provisions  of  the
Guaranty  or the other obligations created and evidenced  by  the
Guaranty;  (v) certifies that the representations and  warranties
contained in the Guaranty remain true and correct representations
and   warranties  of  Guarantor  as  of  the  date  hereof;   and
(vi)  acknowledges  that Lender has satisfied and  performed  its
covenants  and  obligations  under the  Guaranty  and  the  other
Security Documents, and that no action or failure to act by or on
behalf of, Lender has or will give rise to any cause of action or
other  claim against Lender for breach of the Guaranty  or  other
Security Documents or otherwise.

     10.    Costs  and  Expenses.   Contemporaneously  with   the
execution and delivery hereof, Borrower shall pay, or cause to be
paid,  all  costs  and  expenses  incident  to  the  preparation,
execution  and  recordation hereof and the  consummation  of  the
transaction  contemplated hereby, including, but not limited  to,
recording fees, title insurance policy or endorsement premiums or
other  charges  of  the Title Company, and  reasonable  fees  and
expenses of legal counsel to Lender.

     11.   Additional Documentation.  From time to time, Borrower
shall  execute  or procure and deliver to Lender such  other  and
further   documents  and  instruments  evidencing,  securing   or
pertaining  to  the Loan or the Security Documents  as  shall  be
reasonably  requested by Lender so as to evidence or  effect  the
terms  and  provisions hereof.  Upon Lender's  request,  Borrower
shall  cause  to  be delivered to Lender an opinion  of  counsel,
satisfactory  to  Lender  as  to form,  substance  and  rendering
attorney, opining to (i) the validity and enforceability of  this
Agreement  and  the terms and provisions hereof,  and  any  other
agreement   executed   in   connection   with   the   transaction
contemplated  hereby;  (ii) the authority of  Borrower,  and  any
constituents of Borrower, to execute, deliver and perform its  or
their  respective  obligations under the Security  Documents,  as
hereby  modified;  and  (iii) such other  matters  as  reasonably
requested by Lender.

     12.   Effectiveness  of the Security Documents.   Except  as
expressly  modified by the terms and provisions hereof,  each  of
the  terms  and provisions of the Security Documents  are  hereby
ratified  and  shall remain in full force and  effect;  provided,
however,  that any reference in any of the Security Documents  to
the Loan, the amount constituting the Loan, any defined terms, or
to  any of the other Security Documents shall be deemed, from and
after  the  date  hereof,  to  refer  to  the  Loan,  the  amount
constituting  the Loan, defined terms and to such other  Security
Documents, as modified hereby.

     13.   Governing Law.  THE TERMS AND PROVISIONS HEREOF  SHALL
BE  GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF  THE
STATE OF TEXAS, EXCEPT AS OTHERWISE EXPRESSLY PROVIDED HEREIN.

     14.  Time.  Time is of the essence in the performance of the
covenants contained herein and in the Security Documents.

     15.   Binding  Agreement.  This Agreement shall  be  binding
upon  the successors and assigns of the parties hereto; provided,
however,  the  foregoing  shall not be  deemed  or  construed  to
(i)  permit, sanction, authorize or condone the assignment of all
or  any  part of the Property or any of Borrower's rights, titles
or  interests  in  and to the Property or any rights,  titles  or
interests  in and to Borrower, except as expressly authorized  in
the Security Documents, or (ii) confer any right, title, benefit,
cause  of action or remedy upon any person or entity not a  party
hereto, which such party would not or did not otherwise possess.

     16.  Headings.  The section headings hereof are inserted for
convenience  of reference only and shall in no way alter,  amend,
define  or be used in the construction or interpretation  of  the
text of such section.

     17.  Construction.  Whenever the context hereof so requires,
reference  to the singular shall include the plural and likewise,
the  plural  shall  include the singular; words  denoting  gender
shall be construed to mean the masculine, feminine or neuter,  as
appropriate;  and  specific enumeration  shall  not  exclude  the
general,  but  shall be construed as cumulative  of  the  general
recitation.

     18.   Severability.   If  any clause or  provision  of  this
Agreement  is  or should ever be held to be illegal,  invalid  or
unenforceable under any present or future law applicable  to  the
terms hereof, then and in that event, it is the intention of  the
parties hereto that the remainder of this Agreement shall not  be
affected  thereby,  and  that in lieu  of  each  such  clause  or
provision   of  this  Agreement  that  is  illegal,  invalid   or
unenforceable,  such  clause  or provision  shall  be  judicially
construed  and  interpreted to be as  similar  in  substance  and
content  to  such  illegal, invalid or  unenforceable  clause  or
provision, as the context thereof would reasonably suggest, so as
to thereafter be legal, valid and enforceable.

     19.   Counterparts.  To facilitate execution, this Agreement
may  be executed in as many counterparts as may be convenient  or
required.   It  shall  not be necessary that  the  signature  and
acknowledgment  of,  or on behalf of, each  party,  or  that  the
signature and acknowledgment of all persons required to bind  any
party,  appear  on  each  counterpart.   All  counterparts  shall
collectively  constitute a single instrument.  It  shall  not  be
necessary in making proof of this Agreement to produce or account
for  more  than  a single counterpart containing  the  respective
signatures  and acknowledgment of, or on behalf of, each  of  the
parties  hereto.  Any signature and acknowledgment  page  to  any
counterpart  may  be  detached  from  such  counterpart   without
impairing  the legal effect of the signatures and acknowledgments
thereon  and thereafter attached to another counterpart identical
thereto  except  having attached to it additional  signature  and
acknowledgment pages.

     20.   THIS MODIFICATION AND THE OTHER LOAN DOCUMENTS  EMBODY
THE  FINAL, ENTIRE AGREEMENT AMONG THE PARTIES HERETO AND THERETO
AND   SUPERSEDE  ANY  AND  ALL  PRIOR  COMMITMENTS,   AGREEMENTS,
REPRESENTATIONS,  AND UNDERSTANDINGS, WHETHER  WRITTEN  OR  ORAL,
RELATING TO THE SUBJECT MATTER HEREOF AND THEREOF AND MAY NOT  BE
CONTRADICTED OR VARIED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS,  OR
SUBSEQUENT  ORAL AGREEMENTS OR DISCUSSIONS OF THE PARTIES  HERETO
OR  THERETO.   THERE  ARE NO ORAL AGREEMENTS  AMONG  THE  PARTIES
HERETO  OR THERETO.  THE PROVISIONS OF THIS MODIFICATION AND  THE
OTHER  LOAN  DOCUMENTS  MAY  BE AMENDED  OR  WAIVED  ONLY  BY  AN
INSTRUMENT  IN WRITING SIGNED BY THE RESPECTIVE PARTIES  TO  SUCH
DOCUMENTS.

                         LENDER:

                         COMERICA BANK-TEXAS,
                         a state banking association


                         By:
                         Name:
                         Title:


BORROWER:

STRATUS 7000 WEST JOINT VENTURE,
a Texas joint venture

By:  Stratus 7000 West, Ltd.,
     a Texas limited partnership,
     Its Operating Partner

     By:  STRS L.L.C.,
          a Delaware limited liability company,
          Its General Partner

          By:  Stratus Properties Inc.,
               a Delaware corporation,
               Its Sole Member



               By:    /s/ William H. Armstrong, III
                     -------------------------------
               Name:     William H. Armstrong, III
               Title:    Chairman of the Board,
                          President and Chief
                           Executive Officer

By:  Oly Lantana, L.P.,
     a Texas limited partnership,
     Its Financial Partner

     By:  Oly Lantana GP, L.L.C.,
          a Texas limited liability company,
          Its Sole General Partner



          By:
          Name:
          Title:



GUARANTOR:

STRATUS PROPERTIES INC.,
a Delaware corporation


By:    /s/ William H. Armstrong, III
      ------------------------------
Name:      William H. Armstrong, III
Title:  Chairman of the Board, President
         and Chief Executive Officer





STATE OF TEXAS
                    &
COUNTY OF _________ &

     This instrument was ACKNOWLEDGED before me, on the _____ day
of   March,   2000,   by  ________________________________,   the
__________________  of  COMERICA  BANK-TEXAS,  a  state   banking
association, on behalf of said banking association.


[ S E A L ]
                              Notary Public, State of Texas
My Commission Expires:

_____________________              Printed Name of Notary Public



THE STATE OF TEXAS  &
                    &
COUNTY OF __________     &

     This instrument was acknowledged before me on            day
of                          , 2000, by William H. Armstrong, III,
Chairman  of the Board, President and Chief Executive Officer  of
STRATUS PROPERTIES INC., a Delaware corporation, the Sole  Member
of STRS L.L.C., a Delaware limited liability company, the General
Partner  of STRATUS 7000 WEST, LTD., a Texas limited partnership,
the Operating Partner of STRATUS 7000 WEST JOINT VENTURE, a Texas
joint venture, on behalf of each said entity.

[SEAL]


                              Notary Public, State of Texas
My Commission Expires:

______________________
                              Printed Name of Notary Public:






STATE OF TEXAS      &
                    &
COUNTY OF _________ &

     This instrument was acknowledged before me on            day
of                                   ,          2000,          by
____________________________,  the __________________________  of
OLY  LANTANA  GP, L.L.C., a Texas limited liability company,  the
Sole  General  Partner  of OLY LANTANA,  L.P.,  a  Texas  limited
partnership,  the Financial Partner of STRATUS  7000  WEST  JOINT
VENTURE, a Texas joint venture, on behalf of each said entity.

[ S E A L ]
                              Notary Public, State of Texas
My Commission Expires:

_____________________              Printed Name of Notary Public



STATE OF TEXAS      &
                    &
COUNTY OF _________ &

     This instrument was acknowledged before me on            day
of                          , 2000, by William H. Armstrong, III,
Chairman  of the Board, President and Chief Executive Officer  of
STRATUS  PROPERTIES INC., a Delaware corporation,  on  behalf  of
said corporation.


[ S E A L ]
                              Notary Public, State of Texas
My Commission Expires:

_____________________              Printed Name of Notary Public



</TEXT>
</DOCUMENT>
