Learn Portuguese (Portugal): A tarde está amena, por isso estamos na esplanada. - The afternoon is mild, so we are on the terrace.

You can use ser capaz de followed by an infinitive to say something is likely. For example: A tarde é capaz de estar amena, por isso somos capazes de estar na esplanada. This changes the meaning to: The afternoon is probably mild, so we might be on the terrace.

Why is está used with amena instead of é?

We use está (from estar) because it describes a temporary condition: the afternoon is mild right now, today. If you used é (from ser), you would be stating a permanent characteristic, implying that afternoons in this specific place are generally always mild.

Does esplanada refer to a terrace at someone's house?

No, an esplanada almost always refers to the outdoor public seating area of a café, bar, or restaurant. If you want to talk about a private patio or terrace at a house, you would use the word terraço.

Could we use então instead of por isso?

Yes, então (so / then) is very common in spoken Portuguese and fits perfectly here. The phrase por isso (therefore / for that reason) simply puts a slightly stronger emphasis on the direct cause-and-effect relationship between the mild weather and your choice to sit outside.