Howard Hughes Holdings Inc Q3 2024 Earnings Call Transcript

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

Question: Anthony Paolone - J.P. Morgan - Analyst : First question is, if I look at slide 26, where you give a rough value for the MPCs. Can you maybe spend a minute, just giving us a little background as to how you're getting the $3.9 billion, whether it's just kind of applying recent acreage prices to what you have on the balance sheet? Or is there also like an included cost that you'd have to incur to achieve the $3.9 billion? Just any color there would be great.

Question: Anthony Paolone - J.P. Morgan - Analyst : Okay. So that does include margin and just the cost and disparate and timing and all those sorts of variables?

Question: Anthony Paolone - J.P. Morgan - Analyst : Okay. Got it. And then I don't know if you'd be able to comment, but any thinking around the time line for the Board's special committee around the process that Bill Ackman and Pershing Square is running?

Question: Anthony Paolone - J.P. Morgan - Analyst : Okay. And last question just for me. Looking at the operating portfolio, still looking at areas like Summerlin retail where the NOI is off from kind of 22 levels. And then just the upside with that you think might exist in some of the office assets and Merriweather. Like any just context around in line for some of those projects where there's a big NOI gap that could be achieved?

Question: Alexander Goldfarb - Piper Sandler - Analyst : So a few questions here. David, maybe you could just go back to -- you routed off some numbers early on, on land and home inventory in your communities versus national. And one, if you could just go back over those, but two, more importantly, mortgage rates certainly haven't driven as REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. NOVEMBER 05, 2024 / 5:00PM, HHH.N - Q3 2024 Howard Hughes Holdings Inc Earnings Call much as people thought, there's still a pretty wide -- still sort of high relative to the past where they were a number of years ago. And the economy is what it is, and yet, your land sales and home sales just would almost suggest like a really strong economy. So two parts to this. One is, if you could just run back through so we can catch the numbers on how your communities are positioned for land and homes versus sort of national dynamics. And then two, the performance of your communities on home and land versus the general economy overall.

Question: Alexander Goldfarb - Piper Sandler - Analyst : Okay. And then second question is I realize you're not giving '25 guidance but still, when we look at this year, your business is heavy transactional. Clearly, it's been a better year than you anticipated. But as we, the analyst community, think about where you're going to be for '25, is there some sort of ballpark where you'd say, hey, look, this year route size take 20% off the numbers and use that as a run rate. Like how do we sort of gauge the best way to try and look for where you're going to be, just given the heavy transactional nature and the fact that this year certainly well exceeded where you originally started out? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. NOVEMBER 05, 2024 / 5:00PM, HHH.N - Q3 2024 Howard Hughes Holdings Inc Earnings Call

Question: Alexander Goldfarb - Piper Sandler - Analyst : Okay. And just final question, Carlos. On the MUDs sale, you guys generated a tremendous amount of liquidity through the land sales. So just curious what prompted you to monetize the MUDs. And by doing so, does that necessarily -- not necessarily restrict, is there an offset to that? Or is this like sort of free -- I'm just trying to understand if this is free money and then what drove that decision just given all the liquidity you generate out of your land sales.

Question: Eric Borden - BMO Capital Markets - Analyst : It's Eric Borden on for John Kim. Maybe just starting with, now that the drag from the Seaport has gone and you're going to receive a large infusion of capital from condo sales, which is coming online next quarter. I guess, how are you thinking about allocating capital to new development starts? And what operating asset segment is the most attractive in terms of return profile across your multifamily retail and office segments?

Question: Eric Borden - BMO Capital Markets - Analyst : Maybe one on the retail leasing demand environment. Just curious if you could comment on the strength there. And with the 15% of leasing next year, I was hoping you could provide some brackets around your expectations for cash re-leasing spreads.

Question: Dara Hiwat - Black Oak - Analyst : Good morning, everyone, and congrats on another solid quarter and thanks for taking our call. It's a general call. But I mean, as we look across your business and we're obviously seeing your increasing NOI in the operating assets and Victoria Place has been delivered just now, which is great, big wins on the land sale side, Seaport behind us. I mean, your business is really hitting on all cylinders right now, and it's showing up in the form of rising liquidity and net worth in the financials. And you've already kind of touched on this a little bit. But against that backdrop, success and looking forward, we're really focused on that, how you all are comparing the relatively low new development returns against what at least to us, seems to be a continuing very conservative valuation of your stock. And as looking ahead in the fourth quarter and beyond, even higher liquidity from condo sales and other liquidity drivers. So I guess could you just -- any more particulars you could give around your latest thinking on capital allocation over the next few quarters? And is it possible that we sit on this much liquidity in your mind for a year or more and -- I guess as I ask all that, I know you have a Capital Markets Day. So maybe if you plan on addressing it more then, maybe just punt us to that. But congrats again on the quarter and look forward to anything you have on that topic.

Question: Dara Hiwat - Black Oak - Analyst : Great. I appreciate that. Yeah. And yeah -- obviously, your Summerlin project is great, and I appreciate that -- just additional context. So congrats again. Great quarter.

Question: Amanda Schiavo - Commercial Observer - Analyst : I was just wondering if you could go into a little bit more detail about your office leasing, particularly in the Hawaii market and the success you guys have had there?