Howard Hughes Holdings Inc. Reports Fourth Quarter and Full Year 2024 Results

Strong fourth quarter performance leads to record financial results across all segments- MPC and Operating Assets momentum expected to continue into 2025

THE WOODLANDS, Texas, Feb. 26, 2025 (GLOBE NEWSWIRE) -- Howard Hughes Holdings Inc. (NYSE: HHH) (the "Company,” "HHH,” or "we”) today announced operating results for the fourth quarter and year ended December 31, 2024. The financial statements, exhibits, and reconciliations of non-GAAP measures in the attached Appendix and the Supplemental Information, as available through the Investors section of our website, provide further detail of these results.

Full Year 2024 Highlights:

• Net income from continuing operations per diluted share of $5.73, up $4.05 per share or 241% year-over-year
• Record Master Planned Community (MPC) Earnings Before Taxes (EBT) of $349 million accentuated by all-time high residential land sales revenues and average price per acre
• Record Total Operating Assets Net Operating Income (NOI) of $257 million led by strong leasing performance resulting in year-over-year increases of 11% in multifamily and 5% in office
• Record condominium revenues of $779 million with the delivery of Victoria Place^® and strong pre-sales of 394 condominiums from other towers in Hawai'i and Texas representing future revenues of $870 million
• Closed on $862 million of financings, including $680 million of construction loans for condo projects and $168 million of refinancings-as well as the accelerated collection of $177 million from the sale of existing and future MUD receivables
• Completed the spinoff of Seaport Entertainment Group on July 31, 2024, providing increased focus on HHH's real estate operations and MPC development

• Net income from continuing operations per diluted share of $3.25 in the quarter, up 207% compared to $1.06 in the prior-year period
• Delivered Victoria Place in Ward Village, generating $212 million of gross profit
• MPC EBT of $57 million driven by the sale of 60 residential acres at an average price of $909,000 per acre, including six custom lots in Summerlin^® at an average price of $6.0 million per acre
• Total Operating Assets NOI of $61 million was up 9% year-over-year with growth in retail, multifamily, and office
• Sold Lakeland Village Center at Bridgeland for $28 million generating an $11 million gain on sale
• Closed on $312 million of financings, including a $260 million construction loan for The Ritz-Carlton Residences, The Woodlands

"In our MPC segment, we closed out the year on a strong note, delivering $57 million of EBT in the fourth quarter, including robust land sales to homebuilders in Texas and the sale of six custom lots in Summerlin at an impressive average price of $6 million per acre. With this solid performance, we achieved key milestones in our residential land business-including new full-year records for price per acre and land sales revenues-helping propel MPC EBT to an all-time high of $349 million. Looking ahead, we anticipate continued strong homebuilder demand which is expected to contribute to incremental land sales growth and record MPC EBT in 2025.

"In Operating Assets, we delivered record NOI for a fourth consecutive year, increasing NOI by 6% compared to 2023. Growth was realized in each of our core property types, with the most significant percentage gain in multifamily which benefited from strong leasing momentum at our newest developments and improved overall leasing at our stabilized properties. In office, our successful leasing strategy in recent years started to pay dividends in 2024 as rent abatements began to expire across the portfolio. With another 473,000 square feet leased during the year, we closed out 2024 with our stabilized office portfolio 89% leased, well positioning us to deliver continued growth in the years ahead.

"In Strategic Developments, we had another remarkable year which culminated in the fourth quarter with the delivery and record sell-out of every condominium at Victoria Place in Ward Village. In addition to this milestone, our sales teams pre-sold nearly 400 additional condominiums in Hawai'i and Texas during the year, bringing the total value of future condo sales which will be recognized in the next few years to more than $2.6 billion. Subsequent to year end, the State of Hawai'i amended rules which we estimate will provide the potential for an additional 2.5 to 3.5 million gross square feet of residential entitlements in Ward Village. These entitlements could be used for the construction of additional residential towers in the undeveloped areas of the community, providing much needed additional housing in O'ahu and further enhancing the exceptional quality of life and vibrancy of the neighborhood. 

"We closed out 2024 on a solid financial foundation with over $900 million of liquidity, including nearly $600 million of cash on the balance sheet and over $300 million of undrawn and fully available commitments. In 2025, we anticipate another strong year with mid-point guidance in both our MPC and Operating Assets segments that imply new full-year records. This is expected to yield approximately $350 million of Adjusted Operating Cash Flow-our new guidance metric which provides enhanced visibility into the key drivers of our cash flow generation and self-funding business model. We are also evaluating additional MUD receivable sales which, if completed, would add substantial additional liquidity to the Company. As always, we remain committed to deploying capital in a disciplined manner, seeking growth opportunities that improve our communities and achieve the highest risk-adjusted returns for our shareholders.”

Click Here: Fourth Quarter 2024 Howard Hughes Quarterly Spotlight Video

Click Here: Fourth Quarter 2024 Earnings Call Webcast

Financial Highlights

Total Company

Full Year

• HHH reported net income from continuing operations of $285.2 million, or $5.73 per diluted share in 2024, compared to $83.4 million, or $1.68 per diluted share in 2023. The year-over-year growth was primarily driven by the delivery of Victoria Place in Ward Village, increased MPC residential land sales, improved Operating Asset NOI, and final settlement of the construction defect dispute at Waiea in Ward Village.
• The Company continued to maintain a strong liquidity position with $596.1 million of cash and cash equivalents, $1.2 billion of undrawn lender commitments available to be drawn for property development, and limited near-term debt maturities.
• On July 31, 2024, HHH completed the spinoff of Seaport Entertainment Group Inc. (SEG), with holders of HHH common stock receiving one share of SEG common stock for every nine shares of HHH common stock. All current and historical net income and losses related to SEG are reflected in discontinued operations in the Company's financial statements.

• Net income from continuing operations was $162.3 million, or $3.25 per diluted share in the quarter, compared to net income of $52.8 million, or $1.06 per diluted share in the prior-year period.
• The year-over-year increase was primarily related to the delivery of Victoria Place in Ward Village, partially offset by reduced MPC land sales due to timing of superpad sales in Summerlin which occurred earlier in 2024.

Full Year

• MPC EBT totaled a record $349.1 million, representing a 2% increase compared to $341.4 million in the prior year.
• Record MPC land sales of $453.2 million increased 22% year-over-year, driven by the sale of 445 residential acres at a record average price of $990,000 per acre.
• In Teravalis^™, residential land sales commenced in Floreo with the sale of 115 acres to seven homebuilders at an impressive average price of $777,000 per acre. During the year, HHH recognized $4.9 million of equity earnings from Floreo.
• New homes sold at a robust pace in HHH's communities during 2024 and totaled 2,234 units, with Summerlin and Bridgeland ranking #5 and #7 in RCLCO's annual list of top-selling master planned communities, respectively.

• MPC EBT totaled $56.9 million in the fourth quarter, down from $139.3 million in the prior-year period. The reduction was primarily due to the timing of superpad sales in Summerlin which occurred earlier in the year and contributed to record MPC residential land sales and EBT in 2024.
• MPC land sales totaled $67.8 million and were driven by the sale of 60 acres of residential land across Bridgeland^®, The Woodlands Hills^®, and Summerlin for an average price of $909,000 per acre.
• In Nevada, custom lot sales commenced in Astra-Summerlin's newest luxury gated community-resulting in the sale of six lots totaling 3.8 acres for an average price of $6.0 million per acre.
• In Arizona, 34 acres were sold in HHH's Floreo joint venture for an average price of $767,000 per acre.

Full Year

• Total Operating Assets NOI, including the contribution from unconsolidated ventures, was $257.0 million-a new full-year record representing a $15.7 million or 6% year-over-year increase.
• Office delivered record NOI in 2024, increasing $6.4 million or 5% year-over-year largely due to strong lease-up activity and abatement expirations in The Woodlands^® and Summerlin. These increases were partially offset by some tenant vacancies in The Woodlands and Downtown Columbia^®, as well as initial operating losses at Meridian in Summerlin. In 2024, the Company executed 473,000 square feet of new or expanded office leases including 323,000 square feet in The Woodlands, 91,000 square feet in Downtown Columbia, and 59,000 square feet in Summerlin.
• Multifamily contributed record NOI and increased 11% year-over-year, predominantly due to strong lease-up at new developments in Downtown Columbia, Summerlin, and Bridgeland, as well as improved overall leasing at HHH's stabilized properties.
• Retail NOI was up 8% primarily due to the collection of prior-year reserves for tenants in Ward Village and improved occupancy in the ground floor retail at Juniper and Marlow in Downtown Columbia and Kō'ula^® in Ward Village.
• During the year, HHH divested Creekside Medical Plaza in The Woodlands, Lakeland Village Center at Bridgeland, and four non-core ground leases in Houston which resulted in a combined gain on sale of $22.9 million.

• Total Operating Assets NOI-including the contribution from unconsolidated ventures-totaled $61.2 million in the quarter, representing an 9% year-over-year increase.
• Office NOI of $29.0 million increased 5% year-over-year, driven primarily by rent abatement expirations and increased occupancy at 9950 Woodloch Forest in The Woodlands and 1700 Pavilion in Summerlin, partially offset by lower occupancy at 1725 Hughes Landing in The Woodlands. At quarter end, the stabilized office portfolio was 89% leased, and 129,000 square feet of new or expanded leases were executed during the quarter.
• Multifamily NOI of $15.0 million increased 13% compared to the prior-year period primarily due to the continued lease-up of HHH's newest properties including Tanager Echo in Summerlin, Wingspan in Bridgeland, and Marlow in Downtown Columbia. At year end, the stabilized portfolio was 96% leased.
• Retail NOI of $13.0 million increased 15% year-over-year primarily due to non-recurring prior-year reserves for various tenants in Ward Village and the opening of the ground floor retail at Kō'ula. At quarter end, the retail portfolio was 96% leased.
• The Company sold Lakeland Village Center at Bridgeland for $28.0 million and two non-core ground leases in Houston, resulting in a combined gain on sale of $14.9 million.

Full Year

• Delivered Victoria Place in the fourth quarter, closing on the sale of all 349 condo units and generating record annual condominium revenues of $778.6 million with adjusted gross profit of $211.1 million.
• In Hawai'i, HHH contracted to sell 316 condominium units at three towers in pre-sales-The Park Ward Village^®, Kalae^®, and The Launiu-representing incremental future revenue of $533.4 million. The majority of these pre-sales occurred at The Launiu, which contracted 283 units during the year. At year end, The Park Ward Village was 97% pre-sold, Kalae was 93% pre-sold, and The Launiu was 58% pre-sold.
• In Texas, pre-sales at The Ritz Carlton Residences, The Woodlands-a new 111-unit luxury condominium development on the shores of Lake Woodlands-commenced in March. Construction began in early October and 70% of its units representing $336.9 million of future revenue are already pre-sold.
• In the third quarter, the Company recovered $90.0 million of insurance proceeds related to the settlement of construction defect claims at Waiea in Ward Village-including window remediation expenditures incurred since 2020. During the year, the Company recognized $15.1 million of additional condominium rights and unit cost of sales in conjunction with this project and to settle final costs previously incurred by the Waiea general contractor.

• Closed on the sale of all 349 condo units at Victoria Place, generating $778.4 million of condominium revenues with a 27% gross margin.
• Contracted to sell 19 condominium units in Hawai'i and Texas representing $40.7 million of future revenue, including 15 units at The Launiu, two at The Park Ward Village, one at Kalae, and one at The Ritz-Carlton Residences, The Woodlands.
• Subsequent to year end in January, the Governor of Hawai'i approved amendments to the HCDA Mauka Area Rules to include updated guidelines for smart growth in areas including Ward Village. The Company estimates this amendment increases its potential residential entitlements in Ward Village to between 2.5 to 3.5 million gross square feet, which could be used for the development of additional condominium towers in future years.
• Completed construction on Village Green at Bridgeland Central and the Summerlin Grocery Center anchored by Whole Foods. At quarter end, both of these retail centers were approximately 75% leased with all of the remaining square footage in LOI or lease negotiations.

Fourth Quarter

• Closed on a $260 million three-year construction loan for The Ritz-Carlton Residences, The Woodlands. The loan bears interest at SOFR plus 5.1%.
• Closed on a $38.0 million loan to refinance the construction loan for Starling at Bridgeland. The five-year non-recourse loan bears interest at a fixed rate of 5.35%.
• Closed on a $13.5 million financing for Waterway Plaza II, which was purchased in an all-cash transaction for $19.2 million in the second quarter of 2024. The loan bears interest at SOFR plus 3.5% and matures in 2029.
• Increased the capacity of the Bridgeland Notes from $475.0 million to $600.0 million and extended the maturity date from September 2026 to September 2029. This transaction was supported by the proceeds from the Bridgeland MUD receivables sale in the third quarter which were used to pay down the notes by $192.0 million.

• MPC EBT is projected to be strong in 2025 and aided by continued tight supply of existing homes on the market and low inventories of vacant developed lots in our MPCs. As a result, we anticipate solid new home sales in Summerlin, Bridgeland, and The Woodlands Hills and continued strong homebuilder demand for residential land throughout 2025. Residential land sales are expected to occur throughout the year, but the second and third quarters will likely see a higher concentration of superpad sales in Summerlin. Overall, 2025 MPC EBT is expected to be up 5% to 10% year-over-year with a mid-point of approximately $375 million.
• Operating Assets NOI, including the contribution from unconsolidated ventures, is projected to benefit from continued growth in multifamily driven by increased occupancy at new multifamily developments. Office is also expected to improve year-over-year due to strong leasing momentum and expiring rent abatements across the portfolio. This improvement will likely be partially offset by lower occupancy at various properties in Downtown Columbia, some tenant turnover in The Woodlands, and initial operating losses from our newest office developments. Retail is expected to see a modest reduction in NOI during 2025, primarily due to non-recurring collections of tenant reserves in Ward Village during 2024 and the impact of some turnover resulting from tenant upgrades in Downtown Summerlin as this property reaches its 10-year anniversary. Overall, 2025 Operating Assets NOI is expected to be flat to up 4% year-over-year with a mid-point of approximately $262 million.
• Condo sales revenues are projected to be approximately $375 million in 2025 and driven entirely by the closing of units at Ulana-a 696-unit development in Ward Village which is 100% pre-sold and expected to be completed in the fourth quarter. Because Ulana is a workforce housing tower, the Company does not expect to recognize any gross profit from the project. The Park Ward Village-HHH's next condo tower which comprises 545 market rate units-is already 97% pre-sold and expected to contribute meaningful revenues and gross profit in 2026.
• Cash G&A is projected to range between $76 million and $86 million in 2025-or a mid-point of $81 million-excluding approximately $9 million of anticipated non-cash stock compensation.
• Overall, Adjusted Operating Cash Flow is projected to range between $325 million and $375 million in 2025 with a mid-point of approximately $350 million or $7.00 per share.
• With a disciplined approach to capital allocation throughout the year, the Company expects to end 2025 with cash and cash equivalents of approximately $600 million. This does not include the benefit of any MUD receivable sales that could occur during the year.

Howard Hughes Holdings Inc. will host its fourth quarter 2024 earnings conference call on Thursday, February 27, 2025, at 10:00 a.m. Eastern Time (9:00 a.m. Central Time). Please visit the Howard Hughes website to listen to the earnings call via a live webcast. For listeners who wish to participate in the question-and-answer session via telephone, please preregister using HHH's earnings call registration webpage. All registrants will receive dial-in information and a PIN allowing them to access the live call. An on-demand replay of the earnings call will be available on the Company's website.

We are primarily focused on creating shareholder value by increasing our per-share net asset value. Often, the nature of our business results in short-term volatility in our net income due to the timing of MPC land sales, recognition of condominium revenue and operating business pre-opening expenses, and, as such, we believe the following metrics summarized below are most useful in tracking our progress towards net asset value creation.