Howard Hughes Holdings Inc. · NYSE:HHH
Howard Hughes — Investor Presentation (September 2012)
44 slides from Howard Hughes's investor presentation, Sep 13, 2012
Slide 1: Grant Herlitz, President and Andrew C. Richardson, CFO
Grant Herlitz, President September 13, 2012 Andrew C. Richardson, CFO
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 Mission Statement: “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-ter
Slide 4: GGP Bankruptcy & HHC Spinoff
GGP Bankruptcy & HHC Spinoff Merged with The Rouse Company in 1996. (Seaport, Columbia, Woodlands, Bridgeland, etc.) GGP acquired Rouse in 2004. (GGP assets incl. Ward, Cottonwood, Elk Grove, etc.) GGP bankruptcy and subsequent spinoff of select assets as The Howard Hughes Corporation. Land encompas
Slide 5: HHC asset list by segment
Master Planned Communities: • Bridgeland • Maryland Communities • Summerlin • The Woodlands Operating Assets - Retail: • 20/25 Waterway Avenue Retail • Cottonwood Square • Landmark Mall • Park West • Rio West Mall • Riverwalk Marketplace • South Street Seaport • Ward Centers • Waterway Garage Retail
Slide 6: What Makes HHC Compelling For Investors?
What Makes HHC Compelling For Investors? Note (1) Segment Basis Net Debt and book value as of June 30, 2012. Please refer to 10-Q. (2) Represents stock and warrants held by investors. Please refer to DEF 14A dated April 26,2012. Diverse Trophy Assets . World-class trophy assets with significant upsi
Slide 7: HHC is Positioned to Unlock the Value of Its Assets
HHC is Positioned to Unlock the Value of Its Assets 7
Slide 8: Operational Highlights
Operational Highlights Acquisitions Acquired partner’s interest in The Woodlands MPC for $117.5 million. Purchased 70 Corporate Center, a nine-story Class A office building in Columbia, MD. Acquired partner’s interest in the 393-unit Millennium Waterway Apartments in The Woodlands, TX. Development A
Slide 9: Operational Highlights
Operational Highlights Financing $250 million loan to support the master plan for Victoria Ward’s redevelopment. $168 million of property level financings at The Woodlands. $29 million financing at 110 N. Wacker. $158 million non-recourse term and revolver financing for horizontal land development a
Slide 10: Cash Needed to Fund Development – Case Study
Cash Needed to Fund Development – Case Study Cash Equity = 16.1% of total costs 11
Slide 11: Unlocking Value
Unlocking Value 12
Slide 12: Victoria Ward – Ocean-Front Acres
Victoria Ward – 60 Ocean-Front Acres, ~$22mm NOI 4,500+ Condominium units 1+ Million SF of Retail 13
Slide 13: South Street Seaport – 9+ Million Annual Visitors
South Street Seaport – 9+ Million Annual Visitors $4.7 billion Annual Buying Power $30 billion infrastructure & real estate investments in Lower Manhattan since 2002. 14
Slide 14: Lower Manhattan - Population Doubled Since 2001
Lower Manhattan - Population Doubled Since 2001 Pier 17 – 195,000 SF of GLA Uplands – 175,000 SF of GLA 15
Slide 15: South Street Seaport – NYC Retail Rental Rates PSF
South Street Seaport – NYC Retail Rental Rates PSF Times Square $1,000 World Financial Center $250 5th Ave. $500-$2,500 Madison Avenue $500-$1,000 16
Slide 16: South Street Seaport
South Street Seaport Poured Hoghes |,
Slide 17: South Street Seaport
South Street Seaport 18
Slide 18: South Street Seaport
South Street Seaport 19
Slide 19: South Street Seaport
South Street Seaport 20
Slide 20: Our MPC Business
Our MPC Business Community Location Gross Acres Community Population Remaining Saleable Acres Bridgeland Houston, TX 11,400 4,750 5,023 Maryland Howard/Prince George’s County, MD 16,450 104,700 202 Summerlin Las Vegas, NV 22,500 100,000 6,771 The Woodlands Houston, TX 28,400 101,000 2,125 Total 78,7
Slide 21: Bridgeland – Before Capital Invested
Bridgeland – Before Capital Invested 22
Slide 22: Bridgeland – Tomorrow's Leading MPC
Bridgeland – Tomorrow’s Leading MPC $325+ million invested by our predecessors 23
Slide 23: 19,000 Residential Lots; 1,226 Commercial Acres Remaining
19,000 Residential Lots; 1,226 Commercial Acres Remaining Grand Pkwy Fry Rd 290 24
Slide 24: World-Class Master Planning
World-Class Master Planning Note (1) As of December 31, 2011. Please refer to 10-K. 3,669 Residential Lots & 961 Commercial Acres Remaining1 25
Slide 25: The Woodlands Town Center - Today
The Woodlands Town Center - Today 98% Class A Office Occupancy Additional 5+ MSF of Office, 2,000+ Residential Units & 500k+ of Retail to be Built 26
Slide 26: Waterway – 232,021 SF Class A Office Tower
3 Waterway – 232,021 SF Class A Office Tower 27
Slide 27: Waterway: 95% Preleased
3 Waterway: August 22, 2012 – 95% Preleased Average $27/SF Net Rent on Signed Leases Implied $6 million of NOI at Stabilization $50 million Construction Cost Excluding Land Implied $36 million of Value Creation at a 7.0% Capitalization Rate Note (1) Seventh floor as of 9/6/2012. 28
Slide 28: The Woodlands – Millennium Phase I
The Woodlands – Millennium Phase I 95.4% Occupancy $4.2 million stabilized NOI Note (1) As of June 30, 2012. Please reference 10-Q. 393 Class A Units 29
Slide 29: The Woodlands – Millennium Phase II
The Woodlands – Millennium Phase II Contributed 4.8 acres to JV at $75/SF ($15.5 million) 314 Class A Units 30
Slide 30: The Woodlands – Hughes Landing at Lake Woodlands
The Woodlands – Hughes Landing at Lake Woodlands New sixty-six acre mixed use development 31
Slide 31: The Woodlands Resort & Conference Center - Today
The Woodlands Resort & Conference Center - Today $8.9 million TTM NOI Note (1) TTM NOI as of June 30, 2012. 32
Slide 32: The Woodlands Resort & Conference Center - Redeveloped
The Woodlands Resort & Conference Center - Redeveloped HHC will Maintain & Grow NOI throughout Redevelopment 33
Slide 33: Summerlin – Residential Acres Remain
Summerlin – 5,880 Residential Acres, 891 Commercial Acres Remain1 Note (1) As of December 31, 2011. Please refer to10-K. 34
Slide 34: Housing Recovery Presents Tremendous Upside
Housing Recovery Presents Tremendous Upside 35 - 500 1,000 1,500 2,000 2,500 3,000 $- $50 $100 $150 $200 $250 $300 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 Revenue ($ in MM) Summerlin Revenue and Land Sales Total Revenue Long-Run Average Revenue Lots Sold Lots Sold
Slide 35: Shops at Summerlin – One of the Nation's Top Mall Sites
Shops at Summerlin – One of the Nation’s Top Mall Sites ~$150 million of infrastructure investment by our predecessor 36
Slide 36: Shops at Summerlin – Coming Soon
Shops at Summerlin – Coming Soon Source (1) RCLCO research. Over $1.5 billion of Retail Sales “Leaking” Out of Summerlin1 37
Slide 37: Shops at Summerlin
Shops at Summerlin 1.6+ million SF of GLA 38
Slide 38: Shops at Summerlin
Shops at Summerlin 39
Slide 39: Downtown Columbia – 10+ Million SF Redevelopment
Downtown Columbia – 10+ Million SF Redevelopment 5th Wealthiest County in the United States Premier Outdoor Concert Center & 1.2 million SF Mall at Development’s Center 40
Slide 40: Downtown Columbia – Residential Units + Retail
Downtown Columbia – 375 Residential Units + Retail Land contributed to JV for $20.1 million $3.0 million book value Market = 670% of Book 41
Slide 41: Summary
Summary Trophy Assets with substantial value creation potential Alignment of Interests: Management “pot committed” to moving assets to the point of creating maximum shareholder value Book Value significantly undervalues assets We believe the market is not fully recognizing: Value of Future Developme
Slide 42: Research Coverage and Contact
Research Coverage: Compass Point Research & Trading, LLC Contact: Wilkes Graham, wgraham@compasspointllc.com Expect more development announcements in 2012 43
Slide 43: Equity Method Operating Assets NOI reconciliation
Equity Method Operating Assets NOI - Non-consolidated (a) $ 3.5 $ 7.0 $ 4.2 $ 4.0 Adjustments to NOI (b) (1.5) (3.9) (1.9) (0.5) Non-consolidated Equity Method Assets REP EBT 2.0 3.1 2.3 3.5 Less: Joint venture partners' share of REP EBT (1.3) (3.1) (2.6) (2.6) Equity in earnings from real estate af
Slide 44: Reconciliation of Total Acreage Land Sales Revenue
Reconciliation of Total Acreage Land Sales Revenue to Total Land Sales Revenue - GAAP Basis ($ in millions) Q1-Q2 2012 2011 2010 2009 Total acreage land sales revenue $ 77.7 $ 150.3 $ 124.3 $ 100.4 Deferred revenue (0.8) (0.5) 4.0 (3.4) Deferred revenue - The Woodlands - 6.2 - - Special Improvement
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