Howard Hughes Holdings Inc. · NYSE:HHH
Howard Hughes — Q4 2022 Earnings Presentation
35 slides from Howard Hughes's earnings presentation, Feb 27, 2023
Slide 1: The Howard Hughes Corporation Supplemental Information Q4 2022
The Howard Hughes Corporation Supplemental Information Three Months Ended December 31, 2022 NYSE: HHC Exhibit 99.2
Slide 2: Cautionary Statements
HOWARD HUGHES 2 Cautionary StatementsCautionary Statements Forward Looking Statements This presentation includes forward-looking statements. Forward-looking statements give our current expectations relating to our financial condition, results of operations, plans, objectives, future performance and
Slide 3: Table of Contents
3 Table of Contents Table of Contents FINANCIAL OVERVIEW Definitions 4 Company Profile 5 Financial Summary 7 Balance Sheets 9 Statements of Operations 10 OPERATING PORTFOLIO PERFORMANCE Same Store Metrics 11 NOI by Region 13 Stabilized Properties 15 Unstabilized Properties 17 Under Construction Prop
Slide 4: Definitions
HOWARD HUGHES 4 Stabilized - Properties in the Operating Assets and Seaport segments that have been in service for more than 36 months or have reached 90% occupancy, whichever occurs first. If an office, retail or multi-family property has been in service for more than 36 months but does not exceed
Slide 5: Recent Company Highlights
HOWARD HUGHES 5 The Park at Ward Village 29% ‘A‘ali‘i 42% Kō'ula 29% Bridgeland 54% Summerlin 34% The Woodlands/ Woodlands Hills 12% Recent Company Highlights HONOLULU, Oct. 20, 2022 (PRNewswire) - Ward Village®, an award-winning 60-acre master planned community located in the heart of Honolulu, bro
Slide 6: Path to Projected Annual Stabilized NOI
HOWARD HUGHES 6 Office 37% Multi-family 53% Retail 10% Multi-family 14% Retail 86% Office 49% Multi-family 25% Retail 19% Other 7% Office 51% Multi-family 20% Retail 21% Other 8% Office 38% Multi-family 54% Retail 8% Q4 2022 Path to Projected Annual Stabilized NOI Currently Under Construction Curren
Slide 7: Company Profile
HOWARD HUGHES 7 thousands except share price and billions Q4 2022 Q3 2022 Q2 2022 Q1 2022 Q4 2021 FY 2022 FY 2021 Company Profile Share price (a) $ 76.42 $ 55.39 $ 68.05 $ 103.61 $ 101.78 $ 76.42 $ 101.78 Market Capitalization (b) $3.8b $2.8b $3.4b $5.4b $5.5b $3.8b $5.5b Enterprise Value (c) $8.0b
Slide 8: Financial Summary
HOWARD HUGHES 8 Financial Summary (a) Company's share of NOI for the Tin Building by Jean-Georges has been updated for the first and second quarters of 2022 using our current partnership funding provisions compared to the stated ownership of 65% used previously. (b) Excludes $2.7 million charge in t
Slide 9: Balance Sheets
HOWARD HUGHES 9 thousands except par values and share amounts December 31, 2022 December 31, 2021 ASSETS Master Planned Communities assets $ 2,411,526 $ 2,282,768 Buildings and equipment 4,246,389 3,962,441 Less: accumulated depreciation (867,700) (743,311) Land 312,230 322,439 Developments 1,125,02
Slide 10: Statements of Operations
HOWARD HUGHES 10 thousands except per share amounts Q4 2022 Q4 2021 FY 2022 FY 2021 REVENUES Condominium rights and unit sales $ 217,397 $ 464,406 $ 677,078 $ 514,597 Master Planned Communities land sales 117,033 194,093 316,065 346,217 Rental revenue 103,022 99,740 399,103 369,330 Other land, renta
Slide 11: Same Store NOI by Property Type
HOWARD HUGHES 11 thousands Q4 2022 Q4 2021 $ Change % Change FY 2022 FY 2021 $ Change % Change Same Store Office Houston, TX $ 19,249 $ 19,840 $ (591) (3) % $ 73,776 $ 72,764 $ 1,012 1 % Columbia, MD 5,154 6,272 (1,118) (18) % 23,413 22,659 754 3 % Las Vegas, NV 3,467 3,796 (329) (9) % 14,027 14,416
Slide 12: Same Store Performance - Operating Assets Segment
HOWARD HUGHES 12 thousands Q4 2022 Q3 2022 Q2 2022 Q1 2022 Q4 2021 Same Store Metrics Stabilized Leasing Percentages Office 85 % 89 % 88 % 90 % 91 % Retail 95 % 96 % 95 % 94 % 94 % Multi-Family 95 % 96 % 96 % 98 % 99 % Unstabilized Leasing Percentages (a) Office — % 71 % 64 % 52 % 52 % Retail — % 90
Slide 13: Stabilized Properties
HOWARD HUGHES 13 thousands except Sq. Ft. and units % Ownership (a) Total Q4 2022 Occupied (#) Q4 2022 Leased (#) Q4 2022 Occupied (%) Q4 2022 Leased (%) Q4 2022 Annualized NOI (b) Stabilized NOI Time to Stabilize (Years) (c)Sq. Ft. Units Sq. Ft. Units Sq. Ft. Units Sq. Ft. Units Sq. Ft. Units Stabi
Slide 14: NOI by Region, excluding Seaport (cont.)
HOWARD HUGHES 14 NOI by RegionNOI by Region, excluding Seaport (cont.) (a) Includes our share of NOI from our unconsolidated ventures. (b) To better reflect the full-year performance of the properties, the impacts of certain prior period accruals and adjustments included in Q4 2022 NOI were not annu
Slide 15: Unstabilized Properties
HOWARD HUGHES 15 thousands except Sq. Ft. and units Location % Ownership Rentable Sq. Ft. Q4 2022 % Occ. (a) Q4 2022 % Leased (a) Annualized Q4 2022 NOI (b) (c) Est. Stabilized NOI (b) Office One Hughes Landing Houston, TX 100 % 197,719 55 % 55 % $ 2,840 $ 6,170 Two Hughes Landing Houston, TX 100 %
Slide 16: Unstabilized Properties - Multi-family
HOWARD HUGHES 16 Q4 2022 % Occ.(a) Q4 2022 % Leased (a) thousands except Sq. Ft. and units Location % Ownership Rentable Sq. Ft. Units Rentable Sq. Ft. Units Rentable Sq. Ft. Units Annualized Q4 2022 NOI (b) (c) Est. Stabilized NOI (b) Multi-family Creekside Park Apartments Houston, TX 100 % — 292 n
Slide 17: Unstabilized Properties (cont.)
HOWARD HUGHES 17 Q4 2022 % Occ. (a) Q4 2022 % Leased (a) Develop. Costs Incurred Est. Total Cost (Excl. Land) Annualized Q4 2022 NOI Est. Stabilized NOI (b) Est. Stab. Date Est. Stab. Yield thousands except Sq. Ft. and units Location % Ownership Rentable Sq. Ft. Units Rentable Sq. Ft. Units Rentable
Slide 18: Under Construction Properties
HOWARD HUGHES 18 Under Construction Properties thousands except Sq. Ft. and units Location % Ownership Est. Rentable Sq. Ft. Percent Pre- Leased (a) Const. Start Date Est. Stabilized Date (b) Develop. Costs Incurred Est. Total Cost (Excl. Land) Est. Stabilized NOI Est. Stab. Yield Office South Lake
Slide 19: Seaport Operating Performance
HOWARD HUGHES 19 NOI by Region Q4 2022 Landlord Operations (a) Landlord Operations - Multi-family (b) Managed Businesses (c) Tin Building (d) Events and Sponsorships (e) Q4 2022 Totalthousands except sq. ft. and percentages Revenues (f) $ 3,703 $ 331 $ 9,074 $ 3,212 $ 2,095 $ 18,415 Operating expens
Slide 20: Ward Village - Sold Out Condominiums
HOWARD HUGHES 20 As of December 31, 2022 Waiea Anaha Ae‘o Ke Kilohana (a) Victoria Place Total Key Metrics ($ in thousands) Type of building Luxury Luxury Upscale Workforce Luxury Number of units 177 317 465 423 349 1,731 Avg. unit Sq. Ft. 2,138 1,417 838 696 1,164 1,108 Condo Sq. Ft. 378,488 449,20
Slide 21: Ward Village - Condominiums to be Sold
HOWARD HUGHES 21 As of December 31, 2022 ‘A‘ali‘i Kō'ula The Park Ward Village Total Key Metrics ($ in thousands) Type of building Upscale Upscale Upscale Number of units 750 565 545 1,860 Avg. unit Sq. Ft. 520 725 846 678 Condo Sq. Ft. 390,097 409,612 460,864 1,260,573 Street retail Sq. Ft. (a) 11,
Slide 22: Summary of Remaining Development Costs
HOWARD HUGHES 22 As of December 31, 2022 thousands Location Total Estimated Costs (a) Costs Paid Through December 31, 2022 Estimated Remaining to be Spent Remaining Buyer Deposits/ Holdback to be Drawn Debt to be Drawn Costs Remaining to be Paid, Net of Debt and Buyer Deposits/ Holdbacks to be Drawn
Slide 23: Portfolio Key Metrics
HOWARD HUGHES 23 MPC Regions Non-MPC Regions The Woodlands The Woodlands Hills Bridgeland Summerlin Teravalis Floreo Columbia Total Hawai‘i Seaport Total As of December 31, 2022 Houston, TX Houston, TX Houston, TX Las Vegas, NV Phoenix, AZ Phoenix, AZ Columbia, MD MPC Regions Honolulu, HI New York,
Slide 24: MPC Performance
HOWARD HUGHES 24 Master Planned Community Land Consolidated MPC Segment EBT The Woodlands The Woodlands Hills Bridgeland Summerlin Teravalis Columbia Total Floreo (a) thousands Q4 2022 Q4 2021 Q4 2022 Q4 2021 Q4 2022 Q4 2021 Q4 2022 Q4 2021 Q4 2022 Q4 2021 Q4 2022 Q4 2021 Q4 2022 Q4 2021 Q4 2022 Q4
Slide 25: MPC Key Performance Metrics
HOWARD HUGHES 25 Master Planned Community Land Consolidated MPC Segment The Woodlands The Woodlands Hills Bridgeland Summerlin Teravalis Columbia Floreo (a) thousands Q4 2022 Q4 2021 Q4 2022 Q4 2021 Q4 2022 Q4 2021 Q4 2022 Q4 2021 Q4 2022 Q4 2021 Q4 2022 Q4 2021 Q4 2022 Q4 2021 Key Performance Metri
Slide 26: Lease Expirations
HOWARD HUGHES 26 Office Expirations (a) Retail Expirations (a) Expiration Year Annualized Cash Rent ($ in thousands) Percentage of Annualized Cash Rent Wtd. Avg. Annualized Cash Rent Per Leased Sq. Ft. Annualized Cash Rent ($ in thousands) Percentage of Annualized Cash Rent Wtd. Avg. Annualized Cash
Slide 27: Acquisition / Disposition Activity
HOWARD HUGHES 27 Acquisition / Disposition Activity thousands except rentable Sq. Ft. / Units / Acres Q4 2022 Acquisitions Date Acquired Property % Ownership Location Acres Acquisition Price No acquisition activity to report for Q4 2022 Q4 2022 Dispositions Date Sold Property % Ownership Location Ac
Slide 28: Other Assets
HOWARD HUGHES 28 Other Assets Property Name Location % Ownership Acres Notes West End Alexandria (formerly Landmark Mall) Alexandria, VA 58% 41.1 West End Alexandria is a joint venture formed to redevelop the former Landmark Mall into four million square feet of residential, retail, commercial and e
Slide 29: Debt Summary
HOWARD HUGHES 29 thousands December 31, 2022 December 31, 2021 Fixed-rate debt Unsecured 5.375% Senior Notes due 2028 $ 750,000 $ 750,000 Unsecured 4.125% Senior Notes due 2029 650,000 650,000 Unsecured 4.375% Senior Notes due 2031 650,000 650,000 Secured mortgages payable 1,500,841 1,006,428 Specia
Slide 30: Property-Level Debt
HOWARD HUGHES 30 thousands Q4 2022 Principal Contract Interest Rate Interest Rate Hedge Current Annual Interest Rate Initial / Extended Maturity (a) Operating Assets 9303 New Trails $ 9,830 4.88 % Fixed 4.88 % Dec-23 4 Waterway Square 28,786 4.88 % Fixed 4.88 % Dec-23 Creekside Park West 15,869 L+22
Slide 31: Property-Level Debt (cont.)
HOWARD HUGHES 31 (a) Extended maturity assumes exercise of all extension options, some of which have performance requirements. (b) The Company's interest rate swap with a notional amount of $615 million matures in September 2023. (c) 1201 Lake Robbins and 9950 Woodloch Forest, are collectively known
Slide 32: Reconciliation of Operating Assets segment EBT to Total NOI
HOWARD HUGHES 32 (a) EBT excludes corporate expenses and other items that are not allocable to the segments. (b) The Company's share of NOI related to 110 North Wacker in 2021 is calculated using our stated ownership of 23% and does not include the impact of the partnership distribution waterfall. R
Slide 33: Reconciliation of Seaport segment EBT to Total NOI
HOWARD HUGHES 33 Reconciliation of Seaport segment EBT to Total NOI thousands Q4 2022 Q3 2022 Q2 2022 Q1 2022 Q4 2021 FY 2022 FY 2021 Seaport segment EBT (a) $ (32,988) $ (18,114) $ (12,573) $ (20,714) $ (18,146) $ (84,389) $ (58,418) Add back: Depreciation and amortization 11,144 9,651 7,720 7,823
Slide 34: Reconciliation of MPC Land Sales Closed to GAAP Revenue
HOWARD HUGHES 34 Reconciliation of MPC Land Sales Closed to GAAP Land Sales Revenue Three Months Ended December 31, Year Ended December 31, thousands 2022 2021 2022 2021 Total residential land sales closed in period $ 92,094 $ 189,423 $ 247,949 $ 329,492 Total commercial land sales closed in period
Slide 35: Reconciliations of Net Income to FFO
HOWARD HUGHES 35 RECONCILIATIONS OF NET INCOME TO FFO Q4 2022 Q4 2021 FY 2022 FY 2021 thousands except share amounts Net income attributable to common shareholders $ 52,751 $ 113,800 $ 184,533 $ 56,100 Adjustments to arrive at FFO: Segment real estate related depreciation and amortization 51,971 48,