Howard Hughes Holdings Inc at NAREIT REITweek: Investor Conference Transcript

The following is excerpted from the question-and-answer section of the transcript.

Question: Alex Goldfarb - Piper Sandler Companies - Analyst : So with that, maybe I'll just let Carlos give a quick minute or two update on the latest thing going on in Howard Hughes. We have questions and I certainly welcome your participation. I believe there's someone with a microphone so no one has to scream and shout. We'll leave that for your objection to any questions I raise. So with that, if you want to --

Question: Alex Goldfarb - Piper Sandler Companies - Analyst : By the way, the only reason he won't speak for three hours is if you promise to buy some condos, he won't talk that whole time. But maybe we can talk on pre-pandemic versus post-pandemic. Interest rates spiked, home sales were supposed to collapse, no one can get construction loans. So technically, you shouldn't be in the condition that you are. REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. JUNE 04, 2024 / 2:15PM, HHH.N - Howard Hughes Holdings Inc at NAREIT REITweek: Investor Conference But in contrast, as O'Reilly has said, ironically, condo construction loans were the easiest loans to get. Your home sales and land sales have been elevated, far surpassing pre-pandemic levels, and you're seeing the condo success down in Houston. So what's gone on in the MPCs, that, in this inflationary high interest rate, bank tightening world, your operations and developed the investments have actually done quite well? What explains that?

Question: Alex Goldfarb - Piper Sandler Companies - Analyst : And maybe you can talk a little bit about what's going on from the bank and lending side, because in the rest of real estate land, construction loans are punitive because of the reserves. Certainly no one even dares mention office and yet you're building condos, you're contemplating a studio project. You're still underway and still getting construction loans. So maybe talk about that.

Question: Alex Goldfarb - Piper Sandler Companies - Analyst : And maybe talk about the difference between Hawaii escrow versus like California, Florida, the difference in the hard money timing.

Question: Alex Goldfarb - Piper Sandler Companies - Analyst : And I think that's the difference. I think Eric has mentioned that that's the difference between, like, California or Florida, where the deposit money is refundable up until the day of closing. So it's a significant advantage there.

Question: Alex Goldfarb - Piper Sandler Companies - Analyst : Texas gives people 6 days? I thought --

Question: Alex Goldfarb - Piper Sandler Companies - Analyst : And maybe you can talk a bit about the housing market. Despite 7% mortgages, your new home sales have been incredibly strong. The homebuilders were coming at you for land. Obviously, you restrain them, so they don't get too far [with the SKUs]. You have the builder participation, which you've been booking healthy profit. So how are people buying new homes at 7% mortgages?

Question: Alex Goldfarb - Piper Sandler Companies - Analyst : Actually just sort of curious. Show of hands for anyone who's recently bought a home and took out a market rate mortgage. Anyone in the audience? What was the mortgage? What cost? [6% and 8%]? Unidentified Participant (inaudible - microphone inaccessible)

Question: Alex Goldfarb - Piper Sandler Companies - Analyst : And maybe you can talk a bit, and then we'll open up for questions. I have two more questions and then we'll open it up. Maybe you could talk a bit about the funding. Certainly you rarely issue equity. It's been, obviously, the pandemic, but you don't really issue equity, but you do a lot of development, you self-fund. Maybe you can just walk through the funding model.

Question: Alex Goldfarb - Piper Sandler Companies - Analyst : And now that the Seaport filings are public, you can once again do buybacks, stocks trading at a material discount to NAV. I think on our numbers it's 50% or so. What's your outlook for stock buybacks? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. JUNE 04, 2024 / 2:15PM, HHH.N - Howard Hughes Holdings Inc at NAREIT REITweek: Investor Conference

Question: Alex Goldfarb - Piper Sandler Companies - Analyst : Counsel is not here. They're not listening to this. It's on a livestream.

Question: Alex Goldfarb - Piper Sandler Companies - Analyst : Perfect. And let's look for attractive questions. Anyone? My colleague, Connor, will come around, so you don't have to scream. Unidentified Participant So I have kind of a general question. You mentioned that you have these empty-nesters, if you will. Is that potentially why we're seeing a lot of communities now, the 55 and older? Because I'm seeing a lot of that. Is that something similar? Just kind of curious.

Question: Alex Goldfarb - Piper Sandler Companies - Analyst :

Question: Alex Goldfarb - Piper Sandler Companies - Analyst : But if you want a condo in The Woodlands, they're happy to sell you one. Unidentified Participant No, thank you. It comes with the weather that you have there.

Question: Alex Goldfarb - Piper Sandler Companies - Analyst : Other questions? Unidentified Participant Just to follow up to Alex's question. What has kept you from doing buybacks previously outside of the filing with Seaport?

Question: Alex Goldfarb - Piper Sandler Companies - Analyst : I think there was a question in the back. Unidentified Participant Yeah, and I apologize for harping on that same point. But over the last 10 years, the stock's down over 50%, have a very frustrated base of shareholders who believe in your business model and see the fruits of its labor. But we haven't seen any results. And it would be helpful to understand what your plan is for closing the gap between your value today and what you believe to be, and I believe to be, your net asset value. It seems to me that you have the share buyback tool, which we've talked about, dividends, which you could do a dividend. You have plenty of cash flow to generate a dividend, or, at some point, people will start asking why don't you sell the company, right? If you're worth twice or more than what the stock is trading at today, and it refuses to move, you have to have some sort of future monetization plan where you set yourself a deadline for the achievement of your objectives or the realization of that value. And I don't mean to be confrontational, but if you could speak to that, it would be great to understand.

Question: Alex Goldfarb - Piper Sandler Companies - Analyst : And with that, we are unfortunately running out the clock. But thank you, everyone. Feel free to stay after and ask questions. Really appreciate your interest.