Howard Hughes Holdings Inc. · NYSE:HHH
Howard Hughes — Q3 2022 Earnings Presentation
36 slides from Howard Hughes's earnings presentation, Nov 2, 2022
Slide 1: Supplemental Information Three Months Ended September 30, 2022
The Howard Hughes Corporation Supplemental Information Three Months Ended September 30, 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: Company Profile and Recent Company Highlights
HOWARD HUGHES 5 ‘A‘ali‘i 60% Kō'ula 40% Bridgeland 21% Summerlin 75%The Woodlands/ Woodlands Hills 4% Recent Company Highlights NEW YORK, July 18, 2022 (PRNewswire) - The Howard Hughes Corporation announced that iconic fashion designer Alexander Wang has selected the Seaport in New York City for its
Slide 6: Path to Projected Annual Stabilized NOI
HOWARD HUGHES 6 Office 37% Multi-family 59% Retail 4% Office 83% Multi-family 8% Retail 10% Office 48% Multi-family 25% Retail 20% Other 7% Office 46% Multi-family 22% Retail 23% Other 9% Office 80% Multi-family 12% Retail 8% Q3 2022 Path to Projected Annual Stabilized NOI Currently Under Constructi
Slide 7: Company Profile
HOWARD HUGHES 7 thousands except share price and billions Q3 2022 Q2 2022 Q1 2022 Q4 2021 Q3 2021 YTD Q3 2022 YTD Q3 2021 Company Profile Share price (a) $ 55.39 $ 68.05 $ 103.61 $ 101.78 $ 87.81 $ 55.39 $ 87.81 Market Capitalization (b) $2.8b $3.4b $5.4b $5.5b $4.8b $2.8b $4.8b Enterprise Value (c)
Slide 8: Financial Summary
HOWARD HUGHES 8 Financial Summary (a) Total Operating Assets NOI includes the Howard Hughes Corporation's (the Company or HHC) share of equity method investments NOI and the annual distribution from our cost basis investment. Prior periods have been adjusted to be consistent with current period pres
Slide 9: Balance Sheets
HOWARD HUGHES 9 thousands except par values and share amounts September 30, 2022 December 31, 2021 ASSETS Unaudited Unaudited Investment in real estate: Master Planned Communities assets $ 2,396,689 $ 2,282,768 Buildings and equipment 4,177,563 3,962,441 Less: accumulated depreciation (841,363) (743
Slide 10: Statements of Operations
HOWARD HUGHES 10 thousands except per share amounts Q3 2022 Q3 2021 YTD Q3 2022 YTD Q3 2021 REVENUES Unaudited Unaudited Unaudited Unaudited Condominium rights and unit sales $ 418,645 $ 163 $ 459,681 $ 50,191 Master Planned Communities land sales 52,585 56,305 199,032 152,124 Rental revenue 96,917
Slide 11: Same Store NOI
HOWARD HUGHES 11 thousands Q3 2022 Q3 2021 $ Change % Change YTD Q3 2022 YTD Q3 2021 $ Change % Change Same Store Office Houston, TX $ 19,050 $ 17,894 $ 1,156 6 % $ 54,527 $ 52,924 $ 1,603 3 % Columbia, MD 5,881 6,325 (444) (7) % 18,259 16,387 1,872 11 % Las Vegas, NV 3,499 3,597 (98) (3) % 10,560 1
Slide 12: Same Store Performance - Operating Assets Segment
HOWARD HUGHES 12 thousands Q3 2022 Q2 2022 Q1 2022 Q4 2021 Q3 2021 Same Store Metrics Stabilized Leasing Percentages Office 89 % 88 % 90 % 91 % 88 % Retail 95 % 95 % 93 % 93 % 92 % Multi-Family 96 % 96 % 98 % 99 % 97 % Unstabilized Leasing Percentages Office 71 % 64 % 52 % 52 % 45 % Retail 90 % 78 %
Slide 13: Stabilized Properties
HOWARD HUGHES 13 thousands except Sq. Ft. and units % Ownership (a) Total Q3 2022 Occupied (#) Q3 2022 Leased (#) Q3 2022 Occupied (%) Q3 2022 Leased (%) Q3 2022 Annualized NOI (b) Stabilized NOI (c) Time to Stabilize (Years) (d)Sq. Ft. Units Sq. Ft. Units Sq. Ft. Units Sq. Ft. Units Sq. Ft. Units S
Slide 14: NOI by Region, excluding Seaport
HOWARD HUGHES 14 NOI by RegionNOI by Region, excluding Seaport (cont.) (a) Includes our share of NOI for our joint ventures. (b) To better reflect the full-year performance of the properties, the impacts of certain prior period accruals and adjustments included in Q3 2022 NOI were not annualized. An
Slide 15: Unstabilized Properties
HOWARD HUGHES 15 thousands except Sq. Ft. and units Location % Ownership Rentable Sq. Ft. Q3 2022 % Occ. (a) Q3 2022 % Leased (a) Annualized Q3 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 Q3 2022 % Occ.(a) Q3 2022 % Leased (a) thousands except Sq. Ft. and units Location % Ownership Rentable Sq. Ft. Units Rentable Sq. Ft. Units Rentable Sq. Ft. Units Annualized Q3 2022 NOI (b) (c) Est. Stabilized NOI (b) Multi-family Creekside Park Apartments Houston, TX 100 % — 292 n
Slide 17: Unstabilized Properties - Estimated Costs and Yields
HOWARD HUGHES 17 Q3 2022 % Occ.(a) Q3 2022 % Leased (a) Develop. Costs Incurred Est. Total Cost (Excl. Land) Annualized Q3 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 Creekside P
Slide 19: Seaport Operating Performance
HOWARD HUGHES 19 NOI by Region Q3 2022 Landlord Operations (a) Landlord Operations - Multi-family (b) Managed Businesses (c) Tin Building (d) Events and Sponsorships (e) Q3 2022 Totalthousands except sq. ft. and percentages Revenues Rental revenue (f) $ 2,101 $ 237 $ — $ 1,563 $ — $ 3,901 Tenant rec
Slide 20: Ward Village - Sold Out Condominiums
HOWARD HUGHES 20 As of September 30, 2022 Anaha Ae‘o Ke Kilohana (a) Victoria Place Total Key Metrics ($ in thousands) Type of building Luxury Upscale Workforce Luxury Number of units 317 465 423 349 1,554 Avg. unit Sq. Ft. 1,417 838 696 1,164 991 Condo Sq. Ft. 449,205 389,663 294,273 406,351 1,539,
Slide 21: Ward Village - Condominiums to be Sold
HOWARD HUGHES 21 As of September 30, 2022 Waiea ‘A‘ali‘i Kō'ula Total Key Metrics ($ in thousands) Type of building Luxury Upscale Upscale Number of units 177 750 565 1,492 Avg. unit Sq. Ft. 2,138 520 725 790 Condo Sq. Ft. 378,488 390,097 409,612 1,178,197 Street retail Sq. Ft. (a) 7,716 11,175 36,8
Slide 22: Summary of Remaining Development Costs
HOWARD HUGHES 22 As of September 30, 2022 thousands Location Total Estimated Costs (a) Costs Paid Through September 30, 2022 Estimated Remaining to be Spent Remaining Buyer Deposits/ Holdback to be Drawn Debt to be Drawn (b) Costs Remaining to be Paid, Net of Debt and Buyer Deposits/ Holdbacks to be
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 September 30, 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 Q3 2022 Q3 2021 Q3 2022 Q3 2021 Q3 2022 Q3 2021 Q3 2022 Q3 2021 Q3 2022 Q3 2021 Q3 2022 Q3 2021 Q3 2022 Q3 2021 Q3 2022 Q3
Slide 25: MPC Land 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 Q3 2022 Q3 2021 Q3 2022 Q3 2021 Q3 2022 Q3 2021 Q3 2022 Q3 2021 Q3 2022 Q3 2021 Q3 2022 Q3 2021 Q3 2022 Q3 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 Q3 2022 Acquisitions Date Acquired Property % Ownership Location Acres Acquisition Price No acquisition activity to report for Q3 2022 Q3 2022 Dispositions Date Sold Property % Ownership Location Ac
Slide 28: Other Assets
HOWARD HUGHES 28 Other Assets Property Name City, State % Ownership Acres Notes West End Alexandria (formerly Landmark Mall) Alexandria, VA 58.33% 41.1 In June 2021, a Contribution Agreement was executed by and between affiliates of HHC, Seritage, and Foulger-Pratt which establishes a framework for
Slide 29: Debt Summary
HOWARD HUGHES 29 thousands September 30, 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, notes and loans payable 1,204,10
Slide 30: Property-Level Debt
HOWARD HUGHES 30 thousands Q3 2022 Principal Balance Contract Interest Rate Interest Rate Hedge Current Annual Interest Rate Initial / Extended Maturity (a) Operating Assets Lake Woodlands Crossing Retail $ 12,093 4.61 % Floating/Swap 4.61 % (d) Jan-23 Senior Secured Credit Facility 242,174 4.61 % F
Slide 31: Property-Level Debt Notes
HOWARD HUGHES 31 (a) Extended maturity assumes exercise of all extension options, some of which have performance requirements.. (b) The following properties are included as collateral for the credit facility: 10-70 Columbia Corporate Center, One Mall North, 1701 Lake Robbins, Creekside Village Green
Slide 32: Summary of Ground Leases
HOWARD HUGHES 32 Minimum Contractual Ground Lease Payments (thousands) Future Cash Payments Pro-Rata Three months ended Remaining Year Ended Ground Leased Asset Share Expiration Date September 30, 2022 2022 December 31, 2023 Thereafter Total Seaport 100% 2072 (b) $ 615 $ 615 $ 2,491 $ 244,917 $ 248,
Slide 33: Reconciliation of Non-GAAP Measures
HOWARD HUGHES 33 Reconciliation of Non-GAAP Measures (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 p
Slide 34: Reconciliation of Seaport Segment EBT to Total NOI
HOWARD HUGHES 34 Reconciliation of Seaport segment EBT to Total NOI thousands Q3 2022 Q2 2022 Q1 2022 Q4 2021 Q3 2021 YTD Q3 2022 YTD Q3 2021 Seaport segment EBT (a) $ (18,114) $ (12,573) $ (20,714) $ (18,146) $ (14,929) $ (51,401) $ (40,272) Add back: Depreciation and amortization 9,651 7,720 7,823
Slide 35: Reconciliation of MPC Land Sales and Segment EBT
HOWARD HUGHES 35 Reconciliation of MPC Land Sales Closed to GAAP Land Sales Revenue Three Months Ended September 30, Nine Months Ended September 30, thousands 2022 2021 2022 2021 Total residential land sales closed in period $ 47,217 $ 48,807 $ 155,855 $ 140,069 Total commercial land sales closed in
Slide 36: Reconciliations of Net Income to FFO
HOWARD HUGHES 36 RECONCILIATIONS OF NET INCOME TO FFO Q3 2022 Q3 2021 YTD Q3 2022 YTD Q3 2021 thousands except share amounts Unaudited Unaudited Unaudited Unaudited Net income attributable to common shareholders $ 108,096 $ 4,053 $ 131,782 $ (57,700) Adjustments to arrive at FFO: Segment real estate