Howard Hughes (HHH) 5 Nov 24 2024 Q3 Earnings call transcript

In the latest earnings call, Howard Hughes Holdings provided an overview of their exceptional third quarter results, emphasizing the resilience of their business model and the continued demand for their land and real estate assets. Here are the key takeaways from the call.

Resilient Business Model and Record Results

Howard Hughes Holdings reported exceptional results in the third quarter, showcasing the robustness of their business model in the face of industry challenges. The company's master planned communities (MPCs) experienced elevated homebuilder demand for new acreage, leading to a significant increase in residential net revenue and a record quarterly MPC EBT. The operating assets also delivered strong 8% year-over-year NOI growth, with notable increases in office and multifamily sectors.

Strategic Development Projects

The company's strategic development projects are progressing well, with several important milestones achieved. In Hawaii, the Victoria Place project was completed, and bulk condo closings are expected to commence in the fourth quarter. The Ricolton residence in the Woodlands also saw significant progress, with groundbreaking underway and 69% of the project already presold.

Updated Full-Year Guidance

Based on the strong third-quarter performance, Howard Hughes Holdings raised their full-year guidance for MPC EBT, operating asset NOI, and condo sales revenues. The company is now expecting a record year with strong land sales, increased NOI, and high gross profit from condo sales.

Challenges and Opportunities

Despite the positive outlook, the company also acknowledged challenges, such as the reduction in inventory of finished homes available for sale in Summerlin. However, the management remains optimistic, citing continued demand for their land and the upcoming launch of new neighborhoods in 2025.

Impact of Mortgage Rates and Economy

The earnings call also touched on the impact of mortgage rates and the economy on their business. Despite the challenges, Howard Hughes Holdings reported strong demand for their communities, driven by the ongoing need for housing and the desire for a better quality of life. The company's strategic focus on meeting this demand, particularly in areas like Bridgeland and Summerlin, has led to record residential land sales and high margins.

Conclusion

In conclusion, Howard Hughes Holdings' third-quarter earnings call highlighted the company's strong performance, strategic initiatives, and positive outlook for the future. With record results, updated guidance, and ongoing development projects, Howard Hughes Holdings is well-positioned for continued growth and success in the real estate market.