Howard Hughes Holdings Inc. · NYSE:HHH
Howard Hughes — JMP Securities Research Conference 2013
57 slides from Howard Hughes's conference presentation, May 13, 2013
Slide 1: The Howard Hughes Corporation Presentation to JMP Securities Research Conference
The Howard Hughes Corporation Presentation to JMP Securities Research Conference Grant Herlitz, President Andrew C. Richardson, Chief Financial Officer May 13, 2013
Slide 2: Disclaimer and Safe Harbor Statement
Disclaimer and Safe Harbor Statement The Howard Hughes Corporation (“HHC”) cautions that statements in this presentation that are forward-looking and provide other than historical information involve risks and uncertainties that may impact actual results and any future performance suggested by the f
Slide 3: The Howard Hughes Corporation
The Howard Hughes Corporation “The Howard Hughes Corporation's mission is to be the preeminent developer and operator of master planned communities and mixed-use properties. We create timeless places and memorable experiences that inspire people while driving sustainable, long-term growth and value
Slide 4: GGP Bankruptcy & HHC Spinoff
GGP Bankruptcy & HHC Spinoff Merged with The Rouse Company in 1996. (Seaport, Columbia, Woodlands, Bridgeland, etc.) GGP bankruptcy and subsequent spinoff of select assets as The Howard Hughes Corporation. Land encompassing Summerlin MPC acquired by Howard Hughes in the 1950s. Summerlin conducted bu
Slide 5: Operating Assets - Office/Other and Retail
Operating Assets - Office/Other • 110 N. Wacker • 1400 Woodloch Forest • Columbia Office Properties • Golf Courses at Summerlin and TPC Las Vegas (participation interest) • Arizona 2 Lease • 2201 Lake Woodlands Drive • 4 Waterway Square Office • 9303 New Trails Office • The Club at Carlton Woods • T
Slide 6: Investment Highlights
Investment Highlights Note (1) As of March 31, 2013. Please refer to 10-Q. (2) Company also has an indemnity from GGP to reimburse HHC for approximately $282 million of taxes associated with prior period land sales at its master planned communities. (3) Includes Pershing Square’s economic exposure t
Slide 7: Strong Liquidity & Cash Flow
Strong Liquidity & Cash Flow 7 Note (1)As of March 31, 2013. Of the $193 million of Debt Maturities between 2013 – 2015, $16 million is comprised of amortization payments with the remaining $177 million attributable to The Woodlands Master Credit Facility, which is currently being modified and exten
Slide 8: Corporate Highlights
Corporate Highlights . Acquired partner’s interest in The Woodlands MPC for $117.5 million. . Retired 6,083,333 Sponsor warrants which resulted in shareholders owning 10.1% more of the Company. . Achieved all approvals to begin construction and redevelopment of Pier 17 at South Street Seaport in Oct
Slide 9: ONE Ala Moana – HHC's 1st Honolulu Condominium
ONE Ala Moana – HHC’s 1st Honolulu Condominium 206 exclusive luxury residences atop Ala Moana Center, one of the premier shopping destinations in the country Partnership with strong local developers 10
Slide 10: ONE Ala Moana
ONE Ala Moana Hawaii residential market challenged by supply, price increases of approximately 55% expected by 20201 100% sold-out at an average price of $1,170/SF Note (1) Projections from Hawaiian economist Paul Brewbaker. 11
Slide 11: Victoria Ward – Ocean-Front Acres, ~$23mm NOI
Victoria Ward – 60 Ocean-Front Acres, ~$23mm NOI 12
Slide 12: Ward Village – Urban Master Planned Community
Ward Village – Urban Master Planned Community A “village within a city” offering unique retail and exceptional residences www.avisionforWARD.com 9+ MSF of vertical entitlements – over 4,000 condominium units 13
Slide 13: Ward Village – Urban Master Planned Community
Ward Village – Urban Master Planned Community Over 1M SF of new retail, dining, and entertainment www.avisionforWARD.com 14
Slide 14: Ward Village – Phase I
Ward Village – Phase I www.avisionforWARD.com 15
Slide 15: Ward Village – Sales Center
Ward Village – Sales Center Repurposing iconic IBM Building into world class sales center www.avisionforWARD.com 16
Slide 16: Ward Village – First Floor Sales Center
Ward Village – First Floor Sales Center www.avisionforWARD.com Presales begin by year-end 2013 17
Slide 17: HHC has the Country's Preeminent MPC Portfolio
HHC has the Country’s Preeminent MPC1 Portfolio Community Location Gross Acres Community Population Remaining Saleable Acres 2012 National Ranking by Sales Bridgeland Houston, TX 11,400 6,250 4,849 15 Maryland Howard/Prince George’s County, MD 16,450 106,000 142 - Summerlin Las Vegas, NV 22,500 100,
Slide 18: The Woodlands – World Class Master Planning
The Woodlands – World Class Master Planning 99.5% Class A Office Occupancy with high demand drivers 6 MSF of additional office, 2,000 residential units, 3+ hotels & 2 condo towers 19
Slide 19: The Woodlands – Latest Demand Driver: ExxonMobil
The Woodlands – Latest Demand Driver: ExxonMobil Over 10,000 new direct jobs at ExxonMobil’s 385-acre campus just south of The Woodlands 20
Slide 20: Significant Increase in Resi Lot Pricing
Significant Increase in Resi Lot Pricing – New Competitive Bidding Process Residential Revenue Increase by Product ($ in thousands) 21 Lot Size $246 million aggregate revenue increase above previous forecast when the results of first two rounds of auctions are applied across remaining residential lo
Slide 21: The Woodlands - Waterway
The Woodlands - 3 Waterway 232,021 SF, 94% Pre-leased 22
Slide 22: The Woodlands - Waterway
The Woodlands - 3 Waterway Note (1) Picture as of May 2013. Average $27/SF net rent on signed leases, implied $6.3 million NOI at stabilization Approximately $50 million construction cost excluding land, implied $40 million of value creation at a 7.0% cap rate 23
Slide 23: The Woodlands – Millennium Phase II
The Woodlands – Millennium Phase II 314 Class A Units, Contributed land to JV at $75/SF ($15.5 million) 25
Slide 24: The Woodlands – Millennium Phase II
The Woodlands – Millennium Phase II 26
Slide 25: The Woodlands – Hughes Landing at Lake Woodlands
The Woodlands – Hughes Landing at Lake Woodlands 66-acre mixed-use development will include office, retail, multifamily, boutique hotel and a high-end specialty grocer 27
Slide 26: The Woodlands – One Hughes Landing
The Woodlands – One Hughes Landing 195,000 SF Class A Office, 35% pre-leased 28
Slide 27: The Woodlands – One Hughes Landing
The Woodlands – One Hughes Landing Grand Opening - September 2013 29
Slide 28: The Woodlands Resort & Conference Center - Today
The Woodlands Resort & Conference Center - Today 2012 NOI - $10.5 million, a $6 million increase from 2009 30
Slide 29: The Woodlands Resort & Conference Center - Redeveloped
The Woodlands Resort & Conference Center - Redeveloped $75 million redevelopment to solidify position as premier resort in Texas 31
Slide 30: The Woodlands Resort & Conference Center
The Woodlands Resort & Conference Center Commenced redevelopment 32
Slide 31: Bridgeland – Tomorrow's Leading MPC
Bridgeland – Tomorrow’s Leading MPC $325+ million invested by our predecessors 15th best selling MPC in the U.S. in 2012 33
Slide 32: Bridgeland – Strategically Located
Bridgeland – Strategically Located Exxon Campus The Woodlands Bridgeland 18,471 Residential lots; 1,226 commercial acres remaining VICINITY MAP 34
Slide 33: Summerlin – The Sleeping Giant Awakes
Summerlin – The Sleeping Giant Awakes 5,085 Residential Acres, 890 Commercial Acres Remain 35
Slide 34: Summerlin – The Sleeping Giant Awakes
Summerlin – The Sleeping Giant Awakes 36 $76 $89 $86 $179 $147 $232 $260 $70 $8 $5 $11 $35 $31 $28 $- $50 $100 $150 $200 $250 $300 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 Q1 - 2013 Revenue ($ in MM) Summerlin Revenue Total Revenue Long-Run Average Revenue
Slide 35: Summerlin – The Sleeping Giant Awakes
Summerlin – The Sleeping Giant Awakes New home construction is back in Las Vegas 37
Slide 36: The Shops at Summerlin
The Shops at Summerlin ~$150 million of infrastructure investment by our predecessor 38
Slide 37: The Shops at Summerlin – Master Plan Aerial
The Shops at Summerlin – Master Plan Aerial Launching development of downtown 39
Slide 38: The Shops at Summerlin
The Shops at Summerlin 1.5+ MSF of retail and office GLA 40
Slide 39: The Shops at Summerlin
The Shops at Summerlin Announced 380,000 SF of commitments from Macy’s and Dillard’s 41
Slide 40: The Shops at Summerlin
The Shops at Summerlin Development anticipated to add $100 million of value to land surrounding Shops1 Note (1) Land valuation study performed by Robert Charles Lesser & Co. 42
Slide 41: The Shops at Summerlin
The Shops at Summerlin 43
Slide 42: Downtown Columbia
Downtown Columbia 5th Wealthiest County in the United States Premier Outdoor Concert Center & 1.2 million SF Mall at Development’s Center COMMERCIAL 44
Slide 43: Downtown Columbia – Parcel D
Downtown Columbia – Parcel D 380 Residential Units + Retail 45
Slide 44: Downtown Columbia – Parcel D
Downtown Columbia – Parcel D Land contributed to JV for $20.3 million, $3.0 million book value Market = 677% of Book 46
Slide 45: Downtown Columbia – The Rouse Building
Downtown Columbia – The Rouse Building Repurposing historic Frank Gehry designed building into mixed-use property anchored by Whole Foods 47
Slide 46: Downtown Columbia – The Rouse Building
Downtown Columbia – The Rouse Building Breaking Ground on Redevelopment – May 2013 48
Slide 47: South Street Seaport – Today
South Street Seaport – Today 49
Slide 48: South Street Seaport – Redeveloped
South Street Seaport – Redeveloped Pier 17 – 190,000 SF of GLA Uplands – 179,000 SF of GLA 50
Slide 49: South Street Seaport – 9+ Million Annual Visitors
South Street Seaport – 9+ Million Annual Visitors Rooftop venue ideal for concerts, films and special events Lower Manhattan - Fastest growing residential market in NYC 51
Slide 50: South Street Seaport
South Street Seaport Dramatic space with 30 foot floor to ceiling height 52
Slide 51: South Street Seaport
South Street Seaport 53
Slide 52: South Street Seaport
South Street Seaport 54
Slide 53: South Street Seaport
South Street Seaport 55
Slide 54: Summary
Summary . Trophy Assets with substantial value creation potential . Management interests are fully aligned with shareholders demonstrated by personal financial commitment . We believe the market is not fully recognizing: . Value of Future Development . Transition from Asset-Based to a Cash Flow-Base
Slide 55: The Howard Hughes Corporation
THE HOWARD HUGHES cofkfp oration
Slide 56: Reconciliation of NOI to Net Income (Loss) from Continuing Operations
Reconciliation of Net Operating Income (NOI) to Net Income (Loss) from Continuing Operations ($ in millions) Q1 2013 2012 2011 2010 2009 Income-Producing Operating Assets NOI - Consolidated (a) 14.3 $ 59.2 $ 51.7 $ 48.6 $ 47.3 $ Total other properties NOI (1.2) (3.3) (4.4) (1.6) (2.8) Straight line
Slide 57: Equity Method Operating Assets NOI reconciliation
Equity Method Operating Assets NOI - Non-consolidated (a) 0.7 $ 4.8 $ 7.0 $ 4.2 $ 4.0 $ Adjustments to NOI (b) (0.0) (1.5) (3.9) (1.9) (0.5) Non-consolidated Equity Method Assets REP EBT 0.7 3.3 3.1 2.3 3.5 Less: Joint venture partners' share of REP EBT (0.5) (2.0) (3.1) (2.6) (2.6) Equity in earnin
Howard Hughes — JMP Securities Research Conference 2013 on 6ix