Howard Hughes Holdings Inc. Reports Third Quarter 2024 Results

Core Insights - Howard Hughes Holdings Inc. reported strong financial results for Q3 2024, with net income from continuing operations of $96.5 million, or $1.95 per diluted share, compared to $32.1 million, or $0.64 per diluted share, in the prior year [7][2][3] - The Master Planned Community (MPC) segment achieved a record EBT of $145 million, driven by a 184% year-over-year increase in residential land sales revenue, averaging $1 million per acre [2][3][8] - The company completed the spinoff of Seaport Entertainment Group, allowing for a more focused approach on real estate operations and MPC development [2][7] Financial Performance - Total Operating Assets NOI was $65 million, an 8% increase year-over-year, attributed to strong performance in office and multifamily sectors [2][4][9] - The company contracted to sell 29 condominium units, representing $57 million in future revenue [2][5] - Cash and cash equivalents stood at $400.7 million, with $1.5 billion in undrawn lender commitments available for property development [7] Master Planned Communities (MPC) - MPC EBT reached $144.8 million, a 71% increase from $84.8 million in the prior year [8][3] - The average price per acre of residential land sold was approximately $1 million, reflecting a 13% year-over-year increase [8][19] - The company raised its full-year MPC EBT guidance by $30 million to a new midpoint of $330 million [3][13] Operating Assets - The office segment NOI increased by 9% year-over-year to $31.8 million, benefiting from expiring rent abatements [9][4] - Multi-family NOI reached a record $15.9 million, a 15% increase compared to the prior year [9][4] - Retail NOI increased by 2% year-over-year to $13 million, primarily due to improved occupancy [9][4] Strategic Developments - The company completed Victoria Place, the seventh condominium tower in Ward Village, with expected condo sales revenue of $760 million at approximately 27.5% gross margins [2][5][11] - Pre-sales for future condominium developments in Hawai'i and Texas continued at a solid pace, with 88% of available units pre-sold [5][10] - The Ritz-Carlton Residences in The Woodlands saw record pre-sales prices per square foot, indicating strong demand [5][11] Financing Activity - The company closed on the sale of $193.4 million in Municipal Utility District (MUD) receivables, enhancing its liquidity position [6][12] - Proceeds from the MUD receivable sale were used to pay down Bridgeland's line of credit, expanding borrowing capacity [6][12] - A $38 million loan was closed to refinance the construction loan for Starling at Bridgeland, with a five-year term at 5.35% interest [12][6] Full Year 2024 Guidance - MPC EBT is now expected to decline by 1% to 6% year-over-year, with a midpoint of approximately $330 million, reflecting strong demand for new homes [13][14] - Operating Assets NOI is projected to increase by 5% to 8% year-over-year, with a midpoint of approximately $257 million [13][14] - Projected condo sales revenues are now expected to range between $755 million and $765 million, driven by the closing of units at Victoria Place [14][13]