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What changed in Five Point Holdings, LLC's 10-K — 2024 vs 2025

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Paragraph-level year-over-year comparison of Five Point Holdings, LLC's 2024 and 2025 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2025 report.

+279 added−255 removedSource: 10-K (2026-03-06) vs 10-K (2025-02-24)

Top changes in Five Point Holdings, LLC's 2025 10-K

279 paragraphs added · 255 removed · 213 edited across 8 sections

Item 1. Business

Business — how the company describes what it does

43 edited+11 added−10 removed84 unchanged
Biggest changeWe believe in cultivating a work environment that fosters accountability, professional development and opportunities to grow and share innovative ideas across all our community elements. Our associates are expected to exhibit and promote honest, ethical and respectful conduct in the workplace.
Biggest changeHuman Capital We are innovators and collaborators in the evolution of cities in coastal California, and our associates are the force behind the success of our communities. We believe in cultivating a work environment that fosters accountability, professional development and opportunities to grow and share innovative ideas across all our community elements.
We also typically obtain all discretionary entitlements and approvals that the homebuilder or commercial builder will need to build homes or commercial buildings on our lots, although we may from time to time allocate responsibility for obtaining certain discretionary entitlements to a homebuilder or commercial builder.
We also typically obtain all discretionary entitlements and approvals that the homebuilder or commercial builder will need to build homes or commercial buildings on our lots, although we may from time to time allocate responsibility for obtaining certain discretionary entitlements to a homebuilder or commercial builder.
Hedigan has been our President and Chief Executive Officer since February 2022. Prior to his appointment, Mr. Hedigan served as President of Land Sales and Home Building for the Irvine Company from 2013 to 2021, where he oversaw the design, building and sales of new homes in the master-planned villages of the Irvine Ranch in Orange County, California.
Mr. Hedigan has been our President and Chief Executive Officer since February 2022. Prior to his appointment, Mr. Hedigan served as President of Land Sales and Home Building for the Irvine Company from 2013 to 2021, where he oversaw the design, building and sales of new homes in the master-planned villages of the Irvine Ranch in Orange County, California.
Our planning and development process for our existing communities involves the following components: Mixed-use planning . We design all aspects of our communities, creating highly desirable places to live, work, shop and enjoy an active lifestyle.
Our planning and development process for our existing mixed-use planned communities involves the following components: Mixed-use planning . We design all aspects of our communities, creating highly desirable places to live, work, shop and enjoy an active lifestyle.
Candlestick now has the potential to include up to approximately 2.8 million square feet of research and development and office space, approximately 7,200 homesites, and approximately 550,000 square feet of retail, hotel, entertainment and community uses. We have commenced engineering for the next phase of infrastructure at Candlestick and expect to begin construction in early 2026.
Candlestick now has the potential to include up to approximately 2.8 million square feet of research and development and office space, approximately 7,200 homesites, and approximately 550,000 square feet of retail, hotel, entertainment and community uses. We have commenced engineering for the next phase of infrastructure at Candlestick and expect to begin construction in the first half 2026.
Such ordinances, regulations or codes typically divide uses of land into two categories—permitted uses and discretionary uses. Permitted uses are presumptively permitted, while discretionary uses are subject to a discretionary approval process, usually involving an application, an environmental review and a public hearing with input from other locally affected property owners and stake holders.
Such ordinances, regulations or codes typically divide uses of land into two categories—permitted uses and discretionary uses. Permitted uses are presumptively permitted, while discretionary uses are subject to a discretionary approval process, usually involving an application, an environmental review and a public hearing with input from other locally affected property owners and stakeholders.
Great Park Neighborhoods is approximately seven miles from the Pacific Ocean, approximately nine miles from the University of California, Irvine (UCI) and approximately 17 miles from Disneyland. It is adjacent to the Orange County Great Park, a metropolitan public park that will be nearly twice the size of New York’s Central Park upon completion.
Great Park Neighborhoods is approximately seven miles from the Pacific Ocean, approximately nine miles from the University of California, Irvine (UCI) and approximately 17 miles from Disneyland. It is adjacent to the Orange County Great Park, a 4 Table of Contents metropolitan public park that will be nearly twice the size of New York’s Central Park upon completion.
As a result of the foregoing, we could potentially incur material liabilities. 6 Table of Contents We are also subject to a variety of other local, state, federal and other laws and regulations concerning the environment, including those governing air emissions, wastewater discharges and use and disposal of hazardous or toxic substances.
As a result of the foregoing, we could potentially incur material liabilities. We are also subject to a variety of other local, state, federal and other laws and regulations concerning the environment, including those governing air emissions, wastewater discharges and use and disposal of hazardous or toxic substances.
In addition, you may obtain the documents that we file with the SEC from the SEC’s website at www.sec.gov. 8 Table of Contents We use our investor relations website as a means of disclosing material non-public information and for complying with our disclosure obligations under Regulation FD.
In addition, you may obtain the documents that we file with the SEC from the SEC’s website at www.sec.gov. We use our investor relations website as a means of disclosing material non-public information and for complying with our disclosure obligations under Regulation FD.
We may also elect to opportunistically retain a portion of the commercial and multi-family properties in our communities as income-producing assets. Our three mixed-use planned communities are owned either directly or through a joint venture.
We may also elect to 2 Table of Contents opportunistically retain a portion of the commercial and multi-family properties in our communities as income-producing assets. Our three mixed-use planned communities are owned either directly or through a joint venture.
In some cases, development areas have obtained entitlements and 5 Table of Contents approvals allowing homes and commercial buildings to be built and sold, and in other cases development areas require further discretionary entitlements or approvals prior to the commencement of construction. In the past, our approvals have been challenged by third parties.
In some cases, development areas have obtained entitlements and approvals allowing homes and commercial buildings to be built and sold, and in other cases development areas require further discretionary entitlements or approvals prior to the commencement of construction. In the past, our approvals have been challenged by third parties.
Regulation Entitlement Process Land use and zoning authority is exercised by local municipalities through the adoption of ordinances, regulations or zoning codes to direct the use and development of private property by controlling the use, size, density and location of and access to developments on private land.
Regulation Entitlement Process Land use and zoning authority is exercised by local municipalities through the adoption of ordinances, regulations or zoning codes to direct the use and development of private property by controlling the use, size, density and location of and access to 5 Table of Contents developments on private land.
We continually evaluate our plans for each community and make adjustments that we deem appropriate based on changes in local economic factors and other market dynamics. 2 Table of Contents Entitlements . We typically obtain all discretionary entitlements and approvals necessary to develop the infrastructure within our communities and prepare our residential and commercial lots for construction.
We continually evaluate our plans for each community and make adjustments that we deem appropriate based on changes in local economic factors and other market dynamics. Entitlements . We typically obtain all discretionary entitlements and approvals necessary to develop the infrastructure within our communities and prepare our residential and commercial lots for construction.
Until Class A units of the operating company are exchanged or redeemed, the capital associated with Class A units of the operating company not held by us is 1 Table of Contents presented within “noncontrolling interests” on our consolidated balance sheet.
Until Class A units of the operating company are exchanged or redeemed, the capital associated with Class A units of the operating company not held by us is presented within “noncontrolling interests” on our consolidated balance sheet.
This is an initial review of the site, including review of historical records and visual inspections. Limited sampling and analysis of soil, surface water and groundwater may also occur. Remedial investigation.
This is an initial review of the site, including review of historical records and visual inspections. Limited sampling and analysis of soil, surface water and groundwater may also occur. 7 Table of Contents Remedial investigation.
Our company has an entity structure in which our two largest equity owners, Lennar and GFFP, and our founder and Chairman Emeritus, Emile Haddad, separately hold, in addition to interests in our common shares, equity interests in either or both the operating company or the San Francisco Venture that can be exchanged for, at our option, either our Class A common shares or cash.
Our company has an entity structure in which our two largest equity owners, Lennar and GFFP, separately hold, in addition to interests in our common shares, equity interests in both the operating company and the San Francisco Venture that can be exchanged for, at our option, either our Class A common shares or cash.
Great Park Neighborhoods can include up to approximately 10,500 homesites (including up to 1,056 affordable homesites), approximately 4.9 million square feet of commercial space, approximately 61 acres of parks and approximately 138 acres of trails and open space. The actual commercial square footage and number of homesites are subject to change based on ultimate use and land planning.
Great Park Neighborhoods can include up to approximately 11,800 homesites (including up to 1,056 affordable homesites), approximately 4.1 million square feet of commercial space, approximately 61 acres of parks and approximately 138 acres of trails and open space. The actual commercial square footage and number of homesites are subject to change based on ultimate use and land planning.
Michael Alvarado . Mr. Alvarado was appointed our Chief Operating Officer in February 2024 and has been our Chief Legal Officer, Vice President and Secretary since May 2016. From 2011 until May 2016, Mr. Alvarado served as General Counsel for the management company. Prior to joining the management company, Mr.
Michael Alvarado . Mr. Alvarado has been our Chief Operating Officer since February 2024 and has been our Chief Legal Officer and Vice President since May 2016. From 2011 until May 2016, Mr. Alvarado served as General Counsel for the management company. Prior to joining the management company, Mr.
These activities have delayed the remaining land transfers from the U.S. Navy and could lead to additional legal claims or government investigations, all of which could in turn further delay or impede our future development of such parcels.
Navy and other regulatory agencies to undertake additional sampling. These activities have delayed the remaining land transfers from the U.S. Navy and could lead to additional legal claims or government investigations, all of which could in turn further delay or impede our future development of such parcels.
(3) We hold our interest in FPL directly and indirectly through the operating company and the management company. (4) Through a wholly owned subsidiary, the operating company owns a 37.5% percentage interest in the Great Park Venture.
(3) We hold our interest in FPL directly and indirectly through the operating company and the management company. (4) Through a wholly owned subsidiary, the operating company owns a 37.5% percentage interest in the Great Park Venture. We are the administrative member of the Great Park Venture.
Navy retesting, but there can be no assurance that these matters and other related matters that may arise in the future will not materially impact our development plans. Accordingly, our immediate development focus is on our Candlestick community that is not subject to land transfers from the U.S. Navy.
Navy retesting, but there can be no assurance that these matters and other related matters that may arise in the future will not have further material impacts on our development plans. Accordingly, our immediate development focus is on our Candlestick community that is not subject to land transfers from the U.S. Navy.
Our operations relating to these segments are discussed in more detail below in the section titled “Our Communities.” Our Communities Valencia Valencia is a mixed-use planned community in Los Angeles County that spans approximately 15,000 acres and can include up to approximately 21,500 homesites, approximately 11.5 million square feet of commercial space, approximately 50 miles of trails, approximately 275 acres of community parks and approximately 10,000 acres of protected open space.
Our operations relating to these segments are discussed in more detail below in the sections titled “Our Communities” and “Hearthstone.” 3 Table of Contents Our Communities Valencia Valencia is a mixed-use planned community in Los Angeles County that spans approximately 15,000 acres and can currently include up to approximately 21,000 homesites, approximately 9.3 million square feet of commercial space, approximately 50 miles of trails, approximately 275 acres of community parks and approximately 10,000 acres of protected open space.
The first homesites at the Great Park Neighborhoods were sold in April 2013, and as of December 31, 2024, the Great Park Venture had sold 8,683 homesites (including 853 affordable homesites) and approximately 166 acres of commercial land, including the Five Point Gateway Campus, allowing for development of up to approximately 3.6 million square feet of commercial office and research and development space.
The first homesites at the Great Park Neighborhoods were sold in April 2013, and as of December 31, 2025, the Great Park Venture had sold 9,603 homesites (including 853 affordable homesites) and approximately 166 acres of commercial land allowing for development of up to approximately 3.6 million square feet of commercial office, industrial and research and development space.
Based on the closing price of our Class A common shares on February 14, 2025 ($5.88), our market capitalization on a fully exchanged basis was approximately $874.6 million. (2) The operating company owns all of the outstanding Class B units of the San Francisco Venture.
Based on the closing price of our Class A common shares on February 27, 2026 ($5.52), our market capitalization on a fully exchanged basis was approximately $813.9 million. (2) The operating company owns all of the outstanding Class B units of the San Francisco Venture.
Our associates are eligible for medical, dental and vision insurance, a 401(k) plan with matching contributions, health savings and flexible spending accounts, paid time off, life and disability insurance, various wellness programs, paid parental leave and employee assistance programs.
We have designed our compensation and benefits programs to attract, retain and engage talented individuals. Our associates are eligible for medical, dental and vision insurance, a 401(k) plan with matching contributions, health savings and flexible spending accounts, paid time off, life and disability insurance, various wellness programs, paid parental leave and employee assistance programs.
At December 31, 2024, women constituted approximately 48% of our workforce, ethnic and racial minorities constituted approximately 32% of our workforce, and we had approximately 88 employees, all of whom were working full-time.
At December 31, 2025, women constituted approximately 46% of our workforce, ethnic and racial minorities constituted approximately 42% of our workforce, and we had approximately 90 employees, all of whom were working full-time.
Major decisions by the Gateway Commercial Venture generally require unanimous approval by an executive committee composed of two people designated by us and two people designated by another investor. Some decisions require approval by all of the members of the Gateway Commercial Venture.
Major decisions by the Gateway Commercial Venture generally require unanimous approval by an executive committee composed of two people designated by us and two people designated by another investor. Some decisions require approval by all of the members of the Gateway Commercial Venture. In December 2024, the Gateway Commercial Venture sold its remaining interests in the Five Point Gateway Campus.
Our Business We are primarily engaged in the business of planning and developing our three mixed-use planned communities, and our revenues are principally generated by selling residential and commercial land sites to homebuilders, commercial developers and commercial buyers and by providing development management services.
Our Business We are primarily engaged in the business of planning and developing our three mixed-use planned communities, and our revenues are principally generated by (i) selling residential and commercial land sites to homebuilders, commercial developers and commercial buyers, (ii) providing development management services and (iii) providing asset management services to land banking funds that are primarily focused on acquiring, developing and managing residential lot option programs.
The actual commercial square footage and number of homesites are subject to change based on ultimate use and land planning. Valencia is located in an unincorporated portion of Los Angeles County along the Santa Clara River in the western portion of the Santa Clarita Valley.
The actual commercial square footage and number of homesites are subject to change as we further refine our development plans to optimize land values. Valencia is located in an unincorporated portion of Los Angeles County along the Santa Clara River in the western portion of the Santa Clarita Valley.
Competition We compete with other residential, retail and commercial property developers in the development of properties in the Northern and Southern California markets.
Development Management Services Through the management company, we receive fees for providing development management services for Great Park Neighborhoods. Competition We compete with other residential, retail and commercial property developers in the development of properties in the Northern and Southern California markets.
As of December 31, 2024, we had sold 3,088 homesites, and builders had sold 1,599 homes to homebuyers since home sales commenced in May 2021. 3 Table of Contents Candlestick and The San Francisco Shipyard Candlestick and The San Francisco Shipyard, located on approximately 800 acres of bayfront property in the City of San Francisco, can include up to approximately 12,000 homesites, approximately 6.3 million square feet of commercial space, approximately 100,000 square feet of community space, artist studios and approximately 355 acres of parks and open space.
Candlestick and The San Francisco Shipyard Candlestick and The San Francisco Shipyard, located on approximately 800 acres of bayfront property in the City of San Francisco, can include up to approximately 12,000 homesites, approximately 6.3 million square feet of commercial space, approximately 100,000 square feet of community space, artist studios and approximately 355 acres of parks and open space.
In total, our communities consist of approximately 23 million square feet of built or planned commercial space and approximately 40,000 homes built or planned. Structure and Formation of Our Company In 2009, our company was formed as a limited liability company to acquire ownership through the operating company of Newhall Land & Farming, which is developing our Valencia community.
Structure and Formation of Our Company In 2009, our company was formed as a limited liability company to acquire ownership through the operating company of Newhall Land & Farming, which is developing our Valencia community.
Haddad and can be exchanged on a one-for-one basis, at our option, for either Class A common shares or cash equal to the fair market value of such shares.
Class A units of the operating company that we do not own are held by affiliates of Lennar and GFFP and can be exchanged on a one-for-one basis, at our option, for either Class A common shares or cash equal to the fair market value of such shares.
We conduct all of our businesses in or through the operating company, which owns, directly or indirectly, equity interests in, and controls the management of FPL, the San Francisco Venture and the management company. Class A units of the operating company that we do not own are held by affiliates of Lennar, GFFP, and Mr.
We conduct all of our businesses in or through the operating company, which owns, directly or indirectly, equity interests in, and controls the management of FPL, the San Francisco Venture, the Hearthstone Venture and the management company.
While investigation and cleanup activities have been substantially completed for Great Park Neighborhoods, significant work is contemplated over the next several years for certain parcels within The San Francisco Shipyard, which will delay the transfer of such parcels to us for development.
While investigation and cleanup activities have been substantially completed for Great Park Neighborhoods, significant work is contemplated over the next several years for certain parcels within The San Francisco Shipyard, which will delay the transfer of such parcels to us for development. 6 Table of Contents The National Environmental Policy Act (“NEPA”) requires federal agencies to integrate environmental values into their decision making processes by considering the environmental impacts of their proposed actions and reasonable alternatives to those actions.
(1) Through a wholly owned subsidiary, we serve as sole managing general partner of the operating company, and as of December 31, 2024, we owned approximately 62.6% of the outstanding Class A units of the operating company.
The diagram below presents a simplified depiction of our current organizational structure. 1 Table of Contents (1) Through a wholly owned subsidiary, we serve as sole managing general partner of the operating company, and as of December 31, 2025, we owned approximately 65.0% of the outstanding Class A units of the operating company.
All of our associates must adhere to a code of business conduct and ethics that sets standards for appropriate behavior and participate in required training on preventing and identifying harassment and discrimination. We have designed our compensation and benefits programs to attract, retain and engage talented individuals.
Our associates are expected to exhibit and promote honest, ethical and respectful conduct in the workplace. All of our associates must adhere to a code of business conduct and ethics that sets standards for appropriate behavior and participate in required training on preventing and identifying harassment and discrimination.
Other Properties We own approximately 16,000 acres adjacent to our Valencia community in Ventura County that are primarily used for agriculture and energy operations.
Other Properties We own approximately 16,000 acres adjacent to our Valencia community in Ventura County that are primarily used for agriculture and energy operations. We also own remnant commercial, residential and open space land in Los Angeles County that is planned to be sold or deeded to third parties as we develop our Valencia community.
Navy to remediate hazardous substances to a level consistent with the protection of human health and the environment. Following the completion and approval of the remedial action completion report, the U.S.
Navy to remediate hazardous substances to a level consistent with the protection of human health and the environment. Following the completion and approval of the remedial action completion report, the U.S. Navy documents its findings that such remediation has occurred and that the property is suitable for transfer, consistent with all applicable laws and authorities, in a FOST.
Further, depending on the specific plans for each community and market conditions, we may vary the timing of certain of these activities. Our Segments We have organized our operations into three reportable segments, all of which are tied to our communities (our Valencia, San Francisco and Great Park segments).
Further, depending on the specific plans for each community and market conditions, we may vary the timing of certain of these activities.
Information about our Executive Officers The following individuals are our executive officers: Name Age Position Daniel Hedigan 71 President and Chief Executive Officer Michael Alvarado 59 Chief Operating Officer, Chief Legal Officer, Vice President and Secretary Greg McWilliams 73 Chief Policy Officer Kim Tobler 65 Chief Financial Officer, Treasurer and Vice President Daniel Hedigan. Mr.
In January 2026, we integrated approximately 24 employees into the company as part of our acquisition of the Hearthstone Venture. 8 Table of Contents Information about our Executive Officers The following individuals are our executive officers: Name Age Position Daniel Hedigan 72 President and Chief Executive Officer Michael Alvarado 60 Chief Operating Officer, Chief Legal Officer and Vice President Greg McWilliams 74 Chief Policy Officer Kim Tobler 66 Chief Financial Officer, Treasurer and Vice President Daniel Hedigan.
We do not include the Gateway Commercial Venture as a consolidated subsidiary, but rather as an equity method investee, in our consolidated financial statements. Tax Classification We have elected to be treated as a corporation for U.S. federal income tax purposes.
We have a controlling financial interest in HRH and include HRH as a consolidated subsidiary in our consolidated financial statements (see Note 3 of our consolidated financial statements included in Part II, Item 8 of this report ). Tax Classification We have elected to be treated as a corporation for U.S. federal income tax purposes.
The National Environmental Policy Act (“NEPA”) requires federal agencies to integrate environmental values into their decision making processes by considering the environmental impacts of their proposed actions and reasonable alternatives to those actions. To meet NEPA requirements federal agencies prepare a detailed statement known as an Environmental Impact Statement (“EIS”).
To meet NEPA requirements federal agencies prepare a detailed statement known as an Environmental Impact Statement (“EIS”).
Removed
In August 2017, we acquired a 75% interest in the Gateway Commercial Venture, the entity that previously owned portions of the Five Point Gateway Campus.
Added
In total, our communities consist of up to approximately 20 million square feet of built or planned commercial space and approximately 40,000 homes built or planned. We also operate a residential asset management platform providing capital solutions to the U.S. homebuilding industry.
Removed
Castlelake was previously one of the two largest equity owners of our company.
Added
During the year ended December 31, 2025, an entity controlled by Emile Haddad, the Chairman Emeritus of our Board of Directors, exchanged 3,137,134 Class A units of the operating company, and in exchange therefor, received 1,109,172 Class A common shares of the holding company.
Removed
As disclosed in an Amendment No. 1 to Schedule 13D filed on October 10, 2024, affiliates of Castlelake entered into a share purchase agreement with GFFP, pursuant to which Castlelake agreed to sell its Class A and Class B common shares, as well as its equity interests in the operating company and the San Francisco Venture to GFFP.
Added
The remaining 2,027,962 Class A units of the operating company that were tendered for redemption by Mr. Haddad were returned to the operating company in accordance with the dilution provisions of the operating company's limited partnership agreement and were canceled.
Removed
The sale of Castlelake’s equity interests to GFFP closed on October 22, 2024. The diagram below presents a simplified depiction of our current organizational structure.
Added
The purchase price of $88.5 million consisted of $45.0 million in cash paid at closing and a $43.5 million note from the buyer that matures in December 2026. We do not include the Gateway Commercial Venture as a consolidated subsidiary, but rather as an equity method investee, in our consolidated financial statements.
Removed
Holders of legacy interests in the Great Park Venture were entitled to receive priority distributions up to an aggregate amount of $565.0 million, all of which had been distributed as of December 31, 2024, as a result of which, the legacy interests are no longer deemed to be outstanding. We are the administrative member of the Great Park Venture.
Added
(6) In July 2025, the operating company, through its wholly owned subsidiary, acquired 75% of the Class A units of HRH. Management of HRH is vested in an executive committee consisting of three voting members, and we have the ability to appoint two of the members. Major decisions generally require the approval of at least two-thirds of the voting members.
Removed
In December 2024, the Gateway Commercial Venture sold its remaining interests in the Five Point Gateway Campus, which consisted of one of the four buildings and approximately 50 acres of commercial land on which up to an additional 189,000 square feet of commercial space can be developed.
Added
Our Segments We have organized our operations into four reportable segments, three of which are tied to our communities (our Valencia, San Francisco and Great Park segments) and the remaining reportable segment consists of our Hearthstone residential asset management platform.
Removed
Navy and other regulatory agencies to undertake additional sampling. As part of the 2018 Congressional spending bill, the U.S. Department of Defense allocated $36.0 million to help fund resampling efforts at The San Francisco Shipyard. An additional $60.4 million to fund resampling efforts was approved as part of a 2019 military construction spending bill.
Added
As of December 31, 2025, we had sold 3,088 homesites, and builders had sold 1,837 homes to homebuyers since home sales commenced in May 2021.
Removed
As of December 31, 2024, builder sales totaled 6,817 market rate homes at the Great Park Neighborhoods (including 38 homes under a fee build arrangement). The Great Park Venture reacquired the development rights equivalent to approximately one million square feet that had been previously sold with the Five Point Gateway Campus.
Added
As of December 31, 2025, builder sales totaled 7,428 market rate homes at the Great Park Neighborhoods. Hearthstone The Hearthstone Venture operates a residential asset management platform providing capital solutions to the U.S. homebuilding industry, primarily through land banking.
Removed
We also own remnant commercial, residential and open space land in Los Angeles County that is planned to be sold or deeded to third parties as we develop our Valencia community. 4 Table of Contents Development Management Services Through the management company, we receive fees for providing development management services for Great Park Neighborhoods and received fees for providing property management services to the Gateway Commercial Venture prior to the sale of its remaining interests in the Five Point Gateway Campus in December 2024.
Added
The Hearthstone Venture’s operations include managing funds that acquire fully entitled residential land parcels and enter into option and development agreements with U.S. homebuilders. The funds then engage the homebuilders to complete the horizontal development of the land, after which the homebuilders acquire the fully developed homesites from the funds pursuant to the option agreements.
Removed
Navy documents its findings that such remediation has occurred and that the property is suitable for transfer, consistent with all applicable laws and authorities, in a FOST. 7 Table of Contents Human Capital We are innovators and collaborators in the evolution of cities in coastal California, and our associates are the force behind the success of our communities.
Added
The Hearthstone Venture manages these lot option programs across multiple U.S. markets, working with capital partners consisting of state employee pension plans and institutional and private equity. The Hearthstone Venture sources projects mainly from large U.S. publicly-traded homebuilders. The Hearthstone Venture receives asset management fees and under some arrangements may also receive performance fees upon achievement of stipulated investor returns.
Added
We completed our acquisition of the Hearthstone Venture on July 31, 2025. As of December 31, 2025, the Hearthstone Venture had $3.4 billion in assets under management, which consisted of 30,647 lots with 13 separate homebuilders across 16 states.

Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

52 edited+16 added−3 removed183 unchanged
Biggest changeThe issuance of preferred shares could have the effect of limiting distributions on our Class A common shares. Accordingly, you may need to sell your Class A common shares to realize a return on your investment, and you may not be able to sell your shares at or above the price you paid for them.
Biggest changeAccordingly, you may need to sell your Class A common shares to realize a return on your investment, and you may not be able to sell your shares at or above the price you paid for them. 20 Table of Contents General Risk Factors Cyber-attacks or acts of cyber-terrorism could disrupt our business operations and information technology systems or result in the loss or exposure of confidential or sensitive employee or company information.
Our development and construction activities entail risks that could make our projects less profitable and otherwise adversely impact our financial condition and results of operations, including: • increased construction costs, unavailability of raw materials when needed, and permitting or construction delays; • claims for construction-related injuries, as well as claims for warranty, product liability and construction defects; • labor stoppages or slowdowns and/or disputes with contractors, subcontractors or other third parties on whom we rely; • federal, state and local grants to complete certain highways, interchange, bridge projects or other public improvements may not be available; • unforeseen engineering, environmental or geological problems, including the potential impacts of climate change; • compliance with environmental planning and protection regulations and related legal proceedings, including governmental regulations intended to reduce greenhouse gas emissions or ameliorate projected climate change impacts; • liabilities, expenses or project delays, stoppages or interruptions as a result of challenges by third parties in legal proceedings; • changes in U.S. trade policies (including the imposition of tariffs) and retaliatory responses from other countries, which could increase costs or limit the availability of materials and products used in development; • delay or inability to acquire property, rights of way or easements; and • weather-related and geological interference, including landslides, earthquakes, floods, drought, wildfires and other events, including rising sea-levels due to climate change.
Our development and construction activities entail risks that could make our projects less profitable and otherwise adversely impact our financial condition and results of operations, including: • increased construction costs, unavailability of raw materials when needed, and permitting or construction delays; • claims for construction-related injuries, as well as claims for warranty, product liability and construction defects; 9 Table of Contents • labor stoppages or slowdowns and/or disputes with contractors, subcontractors or other third parties on whom we rely; • federal, state and local grants to complete certain highways, interchange, bridge projects or other public improvements may not be available; • unforeseen engineering, environmental or geological problems, including the potential impacts of climate change; • compliance with environmental planning and protection regulations and related legal proceedings, including governmental regulations intended to reduce greenhouse gas emissions or ameliorate projected climate change impacts; • liabilities, expenses or project delays, stoppages or interruptions as a result of challenges by third parties in legal proceedings; • changes in U.S. trade policies (including the imposition of tariffs) and retaliatory responses from other countries, which could increase costs or limit the availability of materials and products used in development; • delay or inability to acquire property, rights of way or easements; and • weather-related and geological interference, including landslides, earthquakes, floods, drought, wildfires and other events, including rising sea-levels due to climate change.
Compliance with such laws could have a material adverse effect on our results of operations and competitive position in the future. Increasing scrutiny and evolving expectations from investors, regulators, and other stakeholders regarding our environmental, social and governance practices and reporting may impose additional costs on us or expose us to new or additional risks.
Compliance with such laws could have a material adverse effect on our results of operations and competitive position in the future. Evolving expectations from investors, regulators, and other stakeholders regarding our environmental, social and governance practices and reporting may impose additional costs on us or expose us to new or additional risks.
The credit agreement governing the revolving credit facility and the indenture relating to the senior notes due 2028 restrict our ability to dispose of assets and use the proceeds from those dispositions and may also restrict our ability to raise indebtedness or equity capital to be used to repay other indebtedness when it becomes due.
The credit agreement governing the revolving credit facility and the indenture relating to the senior notes due 2030 restrict our ability to dispose of assets and use the proceeds from those dispositions and may also restrict our ability to raise indebtedness or equity capital to be used to repay other indebtedness when it becomes due.
Although the indenture relating to our senior notes due 2028 limits our ability to incur additional indebtedness, our operating agreement does not limit the amount of debt we may incur, and our board of directors may change our target debt levels at any time without the approval of our shareholders.
Although the indenture relating to our senior notes due 2030 limits our ability to incur additional indebtedness, our operating agreement does not limit the amount of debt we may incur, and our board of directors may change our target debt levels at any time without the approval of our shareholders.
The risk of a security breach or disruption, particularly through cyber-attacks or cyber-intrusion, including by computer hackers, foreign governments, and cyber terrorists, has generally increased as the number, intensity and sophistication of attempted attacks and intrusions from around the world have increased.
The risk of a security breach or disruption, particularly through cyber-attacks or cyber-intrusion, including by computer hackers, foreign governments, and cyber terrorists, has generally increased as the sophistication of artificial intelligence and the number, intensity and sophistication of attempted attacks and intrusions from around the world have increased.
As of December 31, 2024, Lennar and GFFP and their respective affiliates beneficially owned, in the aggregate, Class A common shares and Class B common shares representing approximately 39% and 17%, respectively, of the voting power of our outstanding common shares.
As of December 31, 2025, Lennar and GFFP and their respective affiliates beneficially owned, in the aggregate, Class A common shares and Class B common shares representing approximately 39% and 17%, respectively, of the voting power of our outstanding common shares.
Factors such as competitive 10 Table of Contents market supply and demand for inventory, changes in laws and regulations, political and economic conditions and interest and inflation rate fluctuations subject our valuations to uncertainty. Our valuations are made on the basis of assumptions that may not prove to reflect economic or demographic reality.
Factors such as competitive market supply and demand for inventory, changes in laws and regulations, political and economic conditions and interest and inflation rate fluctuations subject our valuations to uncertainty. Our valuations are made on the basis of assumptions that may not prove to reflect economic or demographic reality.
In addition, because we are a holding company and our only investment is our interest in the operating company, we will only be able to pay distributions from funds we receive from the operating company. Our board of directors has the authority to issue one or more series of preferred shares 19 Table of Contents without action of our shareholders.
In addition, because we are a holding company and our only investment is our interest in the operating company, we will only be able to pay distributions from funds we receive from the operating company. Our board of directors has the authority to issue one or more series of preferred shares without action of our shareholders.
Further, if the terms and conditions of our existing development agreements with the Cities of Irvine and San Francisco are not complied with, existing entitlements under those agreements could be lost, including (in the case of San Francisco) the right to acquire certain portions of the land on which development activity is expected.
Further, if the terms and conditions of our existing development agreements with the County of Los Angeles and the Cities of Irvine and San Francisco are not complied with, existing entitlements under those agreements could be lost, including (in the case of San Francisco) the right to acquire certain portions of the land on which development activity is expected.
Although the U.S. Navy has been primarily responsible for investigation and cleanup activities at these properties and will continue to have liability for future contamination that is discovered, we also may incur costs for investigation or cleanup of contamination that is discovered or disturbed during the course of our future development activities or otherwise.
Navy has been primarily responsible for investigation and cleanup activities at these properties and will continue to have liability for future contamination that is discovered, we also may incur costs for investigation or cleanup of contamination that is discovered or disturbed during the course of our future development activities or otherwise.
As of December 31, 2024, Lennar owned Class A common shares and Class B common shares representing approximately 39% of our outstanding voting interests. One of our directors is the Executive Chairman and Co-Chief Executive Officer of Lennar. Lennar is one of the nation’s largest homebuilders and has in the past purchased properties from us.
As of December 31, 2025, Lennar owned Class A common shares and Class B common shares representing approximately 39% of our outstanding voting interests. One of our directors is the Executive Chairman and Chief Executive Officer of Lennar. Lennar is one of the nation’s largest homebuilders and has in the past purchased properties from us.
Our business operations and information technology systems, and the information technology systems we use that are provided or managed by third-party service providers, may be attacked by individuals or organizations intending to disrupt our business operations and information technology systems and those of our third-party service providers, whether through cyber-attacks or cyber-intrusions over the Internet, malware, computer viruses, attachments to e-mails, persons inside our organization, or persons with access to systems inside our organization.
Our business operations and information technology systems, and the information technology systems we use that are provided or managed by third-party service providers, including artificial intelligence resources, may be attacked by individuals or organizations intending to disrupt our business operations and information technology systems and those of our third-party service providers, whether through cyber-attacks or cyber-intrusions over the Internet, malware, computer viruses, attachments to e-mails, persons inside our organization, or persons with access to systems inside our organization.
Under the terms of the limited partnership agreement for the operating company, the operating company is obligated to make tax distributions to its partners, including us, subject to the restrictions 14 Table of Contents described below. These tax distributions are generally made on a pro-rata basis.
Under the terms of the limited partnership agreement for the operating company, the operating company is obligated to make tax distributions to its partners, including us, subject to the restrictions described below. These tax distributions are generally made on a pro-rata basis.
The TRA provides for payments by us to such 15 Table of Contents investors or their successors equal to 85% of the amount of cash savings, if any, in income tax we realize as a result of the structure of the formation transactions.
The TRA provides for payments by us to such investors or their successors equal to 85% of the amount of cash savings, if any, in income tax we realize as a result of the structure of the formation transactions.
Among other things, we are, and are likely to continue to be, affected by litigation against governmental agencies related to 13 Table of Contents environmental and similar approvals that we receive or seek to obtain or relating to historical contamination at our properties that have had prior industrial uses, such as The San Francisco Shipyard.
Among other things, we are, and are likely to continue to be, affected by litigation against governmental agencies related to environmental and similar approvals that we receive or seek to obtain or relating to historical contamination at our properties that have had prior industrial uses, such as The San Francisco Shipyard.
Due to building moratoriums, zoning changes or “slow-growth” or “no-growth” initiatives that could be implemented in the future in the areas in which our properties are located, our communities may also be subject to periodic delays, or we could be precluded entirely from developing in certain communities or otherwise restricted in our business activities.
Due to building moratoriums, zoning changes or “slow-growth” or “no-growth” initiatives that could be implemented in the future in the areas in which our properties are located, our communities may also be subject to periodic delays, or we could be precluded entirely from developing in certain 12 Table of Contents communities or otherwise restricted in our business activities.
Accordingly, no assurance can be given as to the liquidity of any market for our Class A common shares, the ability 18 Table of Contents of our shareholders to sell their Class A common shares or the price at which such shares may be sold.
Accordingly, no assurance can be given as to the liquidity of any market for our Class A common shares, the ability of our shareholders to sell their Class A common shares or the price at which such shares may be sold.
Our future financial performance and ability to execute on our growth strategies will depend, in part, on our ability to effectively manage any future ventures, acquisitions or investments. There are no guarantees that we will be able to do so in an effective or timely manner, or at all.
Our future financial performance and ability to execute on our growth strategies will depend, in part, on our ability to effectively integrate and manage the Hearthstone Venture and any future ventures, acquisitions or investments. There are no guarantees that we will be able to do so in an effective or timely manner, or at all.
If analysts fail to cover us or publish reports about us at all, we could lose visibility in the financial markets, which in turn could cause our share price or trading volume to decline. We also believe we have relatively low trading volume.
If analysts fail to cover us or publish reports about us at all, we could lose visibility in the financial markets, which in turn could cause our share price or trading volume to decline. 19 Table of Contents We also believe we have relatively low trading volume.
The distributions that we receive from the operating company are based on our ownership interest in it, which was 62.6%, as of December 31, 2024. The operating company is treated as a partnership for U.S. federal income tax purposes and, as such, is generally not subject to U.S. federal income tax.
The distributions that we receive from the operating company are based on our ownership interest in it, which was 65.0%, as of December 31, 2025. The operating company is treated as a partnership for U.S. federal income tax purposes and, as such, is generally not subject to U.S. federal income tax.
Such litigation could adversely affect the length of time and the cost required to obtain the necessary governmental approvals.
Such litigation could adversely affect the length of time and the cost required to obtain the necessary governmental 14 Table of Contents approvals.
While inflation has moderated somewhat over the last year, interest rates and mortgage rates remain elevated relative to recent rate levels, which can decrease demand by homebuyers for new homes and soften demand by our guest builders for home sites.
While inflation has moderated somewhat over the last couple of years, interest rates and mortgage rates remain elevated relative to prior rate levels, which can decrease demand by homebuyers for new homes and soften demand by our guest builders for home sites.
Risks Related to Financing and Indebtedness We may need additional capital to execute our development plans, and we may be unable to raise additional capital on favorable terms. We may need additional capital to execute our development plans.
Risks Related to Financing and Indebtedness We may need additional capital to execute our development plans, and we may be unable to raise additional capital on favorable terms. 17 Table of Contents We may need additional capital to execute our development plans.
In addition, 79,257,314 Class A common shares are reserved for issuance upon exchange of Class A units of the operating company (including 37,870,273 Class A units of the operating company issuable upon exchange of Class A units of the San Francisco Venture) and conversion of our Class B common shares.
In addition, 76,119,239 Class A common shares are reserved for issuance upon exchange of Class A units of the operating company (including 37,870,273 Class A units of the operating company issuable upon exchange of Class A units of the San Francisco Venture) and conversion of our Class B common shares.
In addition, 4,697,870 Class A common shares were available for future issuance under our incentive award plan as of December 31, 2024. We cannot predict whether future issuances or sales of our Class A common shares or the availability of shares for resale in the open market will decrease the per share trading price of our Class A common shares.
In addition, 1,439,767 Class A common shares were available for future issuance under our incentive award plan as of December 31, 2025. We cannot predict whether future issuances or sales of our Class A common shares or the availability of shares for resale in the open market will decrease the per share trading price of our Class A common shares.
If the TRA had been terminated on December 31, 2024, we estimate that the termination payment would have been approximately $110.6 million, assuming no material changes to the relevant tax law, that the aggregate value of our properties is equal to the value implied by such per share price and that SOFR is 4.24%.
If the TRA had been terminated on December 31, 2025, we estimate that the termination payment would have been approximately $123.9 million, assuming no material changes to the relevant tax law, that the aggregate value of our properties is equal to the value implied by such per share price and that the adjusted SOFR is 4.16%.
Sanctions or tariffs imposed by the United States and other countries in response to such conflicts or events may also adversely impact the financial markets and the global economy, and any economic countermeasures by the affected countries or others could exacerbate market and economic instability.
Sanctions or tariffs imposed by the United States and other countries may also adversely impact the financial markets and the global economy, and any economic countermeasures by the affected countries or others could exacerbate market and economic instability.
For example, the wildfires that have occurred in recent years in California, along with the increasing risk of future wildfires, have resulted in increased homeowners’ insurance costs and the unavailability of private homeowners’ insurance in certain high-risk areas. We expect these issues may be exacerbated by the recent wildfires in Southern California.
For example, the wildfires that have occurred in recent years in California, along with the increasing risk of future wildfires, have resulted in increased homeowners’ insurance costs and the unavailability of private homeowners’ insurance in certain high-risk areas.
Risks Related to Laws and Regulations Zoning and land use laws and regulations may increase our expenses, limit the number of homes or commercial square footage that can be built or delay completion of our projects and adversely affect our financial condition and results of operations. 11 Table of Contents Our communities are subject to numerous local, state, and federal laws and other statutes, ordinances, rules and regulations concerning zoning, development, building design, construction and similar matters that impose restrictive zoning and density requirements in order to limit the number of homes or commercial square feet that can eventually be built within the boundaries of a particular area, as well as governmental taxes, fees and levies on the acquisition and development of land parcels.
Our communities are subject to numerous local, state, and federal laws and other statutes, ordinances, rules and regulations concerning zoning, development, building design, construction and similar matters that impose restrictive zoning and density requirements in order to limit the number of homes or commercial square feet that can eventually be built within the boundaries of a particular area, as well as governmental taxes, fees and levies on the acquisition and development of land parcels.
Future environmental permits and approvals that we will need to obtain for development areas within our communities may be similarly challenged. As an owner and operator of real property, we could incur liability for environmental contamination issues.
Certain of our environmental permits and approvals have been challenged in the past by third parties, such as environmental groups. Future environmental permits and approvals that we will need to obtain for development areas within our communities may be similarly challenged. As an owner and operator of real property, we could incur liability for environmental contamination issues.
Our growth strategy involves new potential joint ventures, acquisitions, investments and other transactions. These transactions will take time to execute and may create additional costs, expose us to additional legal and compliance risks, cause disruption to our current business and impact our operating results.
These and other transactions will take time to execute and may create additional costs, expose us to additional legal and compliance risks, cause disruption to our current business and impact our operating results.
The actual amount and timing of any payments under the TRA will vary depending upon a number of factors, including the timing of exchanges of Class A units of the operating company, the price of our Class A common shares at the time of such exchanges, the extent to which such exchanges are taxable and our ability to use the potential tax benefits, which will depend on the amount and timing of our taxable income and the rate at which we pay income tax.
The actual amount and timing of any payments under the TRA will vary depending upon a number of factors, including the timing of exchanges of Class A units of the operating company, the price of our Class A common shares at the time of such exchanges, the extent to which such exchanges are taxable and our ability to use the potential tax benefits, which will depend on the amount and timing of our taxable income and the rate at which we pay income tax. 16 Table of Contents Due to the various factors that will affect the amount and timing of the tax benefits we will receive, it is not possible to determine the exact amount of payments that will be made under the TRA.
Failure to comply with these laws, regulations and permit requirements may result in delays, administrative, civil and criminal penalties, denial or revocation of permits or other authorizations, other liabilities and costs, the issuance of injunctions to limit or cease operations and the imposition of additional requirements for future compliance as a result of past failures. 12 Table of Contents Certain of our environmental permits and approvals have been challenged in the past by third parties, such as environmental groups.
Failure to comply with these laws, regulations and permit requirements may result in delays, administrative, civil and criminal penalties, denial or revocation of permits or other authorizations, other liabilities and costs, the issuance of injunctions to limit or cease operations and the imposition of additional requirements for future compliance as a result of past failures.
These provisions include the following: (1) there is no cumulative voting in the election of directors; (2) our board of directors is classified so that approximately one-third of the directors are elected at each annual meeting of shareholders; (3) our board of directors is authorized to issue “blank check” preferred shares to increase the number of outstanding shares without shareholder approval; (4) shareholder action by written consent is not permitted; and (5) there are advance notice requirements for nominations for election to the board of directors or for proposing matters that can be acted upon by shareholders at shareholder meetings. 16 Table of Contents In addition, our operating agreement provides that Section 203 of the General Corporation Law of the State of Delaware (the “DGCL”) will be deemed to apply to us as if we were a Delaware corporation.
These provisions include the following: (1) there is no cumulative voting in the election of directors; (2) our board of directors is classified so that approximately one-third of the directors are elected at each annual meeting of shareholders; (3) our board of directors is authorized to issue “blank check” preferred shares to increase the number of outstanding shares without shareholder approval; (4) shareholder action by written consent is not permitted; and (5) there are advance notice requirements for nominations for election to the board of directors or for proposing matters that can be acted upon by shareholders at shareholder meetings.
In addition, adverse decisions or publicity arising from any litigation could increase the cost and length of time to obtain ultimate approval of a project, could require us to abandon all or portions of a project and could adversely affect the design, scope, plans and profitability of a project, any of which could negatively affect our financial condition and results of operations.
In addition, adverse decisions or publicity arising from any litigation could increase the cost and length of time to obtain ultimate approval of a project, could require us to abandon all or portions of a project, could adversely affect the design, scope, plans and profitability of a project, and could result in reputational harm that may impair the ability of the Hearthstone Venture to maintain existing capital partner relationships and attract new capital in the future, any of which could negatively affect our financial condition and results of operations.
These competitive conditions could make it difficult to sell properties at desirable prices and could adversely affect our financial condition and results of operations. Our property taxes could increase due to rate increases or reassessments or the imposition of new taxes or assessments, which may adversely impact our financial condition and results of operations.
These conditions could make it difficult for the Hearthstone Venture to generate asset management fees and could adversely affect our financial condition and results of operations. Our property taxes could increase due to rate increases or reassessments or the imposition of new taxes or assessments, which may adversely impact our financial condition and results of operations.
Our ability to effectively pursue and manage anticipated ventures, acquisitions and investments may require significant capital and other expenditures, as well as allocation of valuable management resources, which may negatively impact our ongoing business.
Our ability to effectively pursue and manage anticipated ventures, 11 Table of Contents acquisitions and investments may require significant capital and other expenditures, as well as allocation of valuable management resources, which may negatively impact our ongoing business. Acquisitions may result in additional valuation risks, including the risk of impairing goodwill.
California also continues to suffer from severe budgetary constraints, which may result in the layoff or furlough of government employees, and California is regarded as more litigious and more highly regulated and taxed than 9 Table of Contents many other states.
As a result, we are susceptible to greater risks than if we owned a larger or more geographically diverse portfolio. California also continues to suffer from severe budgetary constraints, which may result in the layoff or furlough of government employees, and California is regarded as more litigious and more highly regulated and taxed than many other states.
Some of our properties have been or may be impacted by contamination arising from these or other prior uses of these properties or adjacent properties. In this regard, certain portions of the El Toro Base and The San Francisco Shipyard have been or currently are listed on the USEPA’s National Priorities List as sites requiring cleanup under federal environmental law.
In this regard, certain portions of the El Toro Base and The San Francisco Shipyard have been or currently are listed on the USEPA’s National Priorities List as sites requiring cleanup under federal environmental law. Although the U.S.
Similarly, we may be limited in our ability to move capital among the operating company and its subsidiaries as a result of future financing arrangements and obligations to creditors.
Furthermore, the ability of the operating company’s subsidiaries and the Great Park Venture to pay distributions to the operating company may be limited by their obligations to their respective creditors and other investors. 15 Table of Contents Similarly, we may be limited in our ability to move capital among the operating company and its subsidiaries as a result of future financing arrangements and obligations to creditors.
In addition, an event of default under the credit agreement governing our revolving credit facility would permit the lenders to terminate commitments to extend further credit under that facility.
In addition, an event of default under the credit agreement governing our revolving credit facility would permit the lenders to terminate commitments to extend further credit under that facility. In addition, we may incur contingent liabilities in relation to investment funds and joint ventures that we manage, including land banking funds.
In addition, to the extent we 17 Table of Contents cannot meet any future debt service obligations, we will risk losing some or all of our assets that are pledged to secure such obligations. We may increase leverage in executing our development plan, which could further exacerbate the risks associated with our substantial indebtedness.
In addition, to the extent we cannot meet any future debt service obligations, we will risk losing some or all of our assets that are pledged to secure such obligations.
As of December 31, 2024, we had outstanding 69,369,234 Class A common shares.
As of December 31, 2025, we had outstanding 71,100,768 Class A common shares.
If we do not have sufficient funds to repay our debt at maturity or upon an earlier acceleration, it may be necessary to refinance the debt through additional debt or equity financings.
To the extent that such guaranties are enforced against us, it could have a material adverse effect on our business, financial condition and results of operations. If we do not have sufficient funds to repay our debt at maturity or upon an earlier acceleration, it may be necessary to refinance the debt through additional debt or equity financings.
Our substantial indebtedness may have a material adverse effect on our business, our financial condition and results of operations and our ability to secure additional financing in the future.
Our substantial indebtedness may have a material adverse effect on our business, our financial condition and results of operations and our ability to secure additional financing in the future. As of December 31, 2025, we had $450.0 million of total indebtedness, comprised of $450.0 million of our 8.000% rate senior notes due October 2030.
Also, some homebuilders may be unwilling or unable to close on previously committed land parcel purchases due to factors outside of our control. As a result, we may sell fewer land parcels and may have lower revenues from sales, which could adversely affect our financial condition and results of operations. Title to our property may be impaired by title defects.
As a result, we may sell fewer land parcels or the Hearthstone Venture-managed funds may acquire fewer residential projects, and we may have lower revenues from sales and Hearthstone Venture-generated management fees, which could adversely affect our financial condition and results of operations. 10 Table of Contents Title to our property may be impaired by title defects.
In addition, future financing arrangements may contain negative covenants limiting the ability of the operating company to make distributions to us. Furthermore, the ability of the operating company’s subsidiaries and the Great Park Venture to pay distributions to the operating company may be limited by their obligations to their respective creditors and other investors.
In addition, future financing arrangements may contain negative covenants limiting the ability of the operating company to make distributions to us.
We are highly dependent on homebuilders. We are highly dependent on our relationships with homebuilders to purchase lots at our residential communities. Our business will be adversely affected if homebuilders do not view our residential communities as desirable locations for homebuilding operations.
Our business will be adversely affected if homebuilders do not view our residential communities as desirable locations for homebuilding operations or do not use the Hearthstone Venture for land banking services.
For additional information on recent litigation relating to our properties, see “Item 3. Legal Proceedings.” Litigation and other claims may result in potentially significant defense costs, settlements, fines or judgments against us, some of which may not be covered by insurance.
To the extent our capital partners suffer losses resulting from our fraud, gross negligence, or willful misconduct, such partners may have contractual or other remedies against us. Litigation and other claims may result in potentially significant defense costs, settlements, fines or judgments against us, some of which may not be covered by insurance.
As of December 31, 2024, we had approximately $525.0 million of total indebtedness, comprised of $523.5 million of our 10.500% initial rate senior notes due January 2028 and $1.5 million of our 7.875% senior notes due November 2025. We also had $125.0 million available to be borrowed under our revolving credit facility as of December 31, 2024.
We also had $217.5 million available to be borrowed under our revolving credit facility as of December 31, 2025.
We may decide to increase leverage to execute our development plan.
We may increase leverage in executing our development plan, which could further exacerbate the risks associated with our substantial indebtedness. 18 Table of Contents We may decide to increase leverage to execute our development plan.
Removed
As a result, we are susceptible to greater risks than if we owned a larger or more geographically diverse portfolio.
Added
We are highly dependent on homebuilders. We are highly dependent on our relationships with homebuilders to purchase lots at our residential communities and to use the Hearthstone Venture for their land banking needs.
Removed
Due to the various factors that will affect the amount and timing of the tax benefits we will receive, it is not possible to determine the exact amount of payments that will be made under the TRA.
Added
Also, some homebuilders may be unwilling or unable to either close on previously committed land parcel purchases or exercise their land purchase options with Hearthstone Venture-managed funds due to factors outside of our control.
Removed
General Risk Factors Cyber-attacks or acts of cyber-terrorism could disrupt our business operations and information technology systems or result in the loss or exposure of confidential or sensitive employee or company information.
Added
Our growth strategy involves new potential joint ventures, acquisitions, investments and other transactions. For example, we acquired the Hearthstone Venture in July 2025, and we are currently integrating its operations into our business.
Added
We recorded goodwill in connection with our acquisition of the assets and operations of the Hearthstone Venture in 2025. We assess goodwill for impairment each year, and more frequently if circumstances suggest an impairment may have occurred.
Added
If we are unable to successfully integrate an acquisition or there is a decline in the expectation of future performance, we may be required to recognize an impairment charge on our existing goodwill or goodwill acquired in a future acquisition.
Added
These competitive conditions could make it difficult to sell properties at desirable prices and could adversely affect our financial condition and results of operations. In addition, the Hearthstone Venture competes with other land banking providers across the U.S.
Added
These competitors may offer lower pricing to homebuilders than Hearthstone Venture-managed funds, which could negatively impact the ability of the funds to acquire residential parcels and, in turn, the ability to attract capital partners for further investments.
Added
Risks Related to Laws and Regulations Zoning and land use laws and regulations may increase our expenses, limit the number of homes or commercial square footage that can be built or delay completion of our projects and adversely affect our financial condition and results of operations.
Added
In addition, federal or state government shutdowns, funding lapses, or budgetary constraints could result in delays in processing permits, approvals, or other governmental actions required for our development activities, which could adversely affect our project timelines and financial condition.
Added
Some of our properties have been or may be impacted by contamination arising from these or other prior 13 Table of Contents uses of these properties or adjacent properties.
Added
For additional information on recent litigation relating to our properties, see “Item 3. Legal Proceedings.” In addition, we and our subsidiaries manage joint ventures and land banking funds on behalf of third-party capital partners.
Added
In addition, our operating agreement provides that Section 203 of the General Corporation Law of the State of Delaware (the “DGCL”) will be deemed to apply to us as if we were a Delaware corporation.
Added
From time to time, we and our subsidiaries have entered into, and may in the future enter into, non-recourse carveout guaranties with financial institutions in relation to indebtedness incurred by such funds or joint ventures, which guaranties typically cover fraud, gross negligence, willful misconduct and other customary wrongful acts.
Added
The issuance of preferred shares could have the effect of limiting distributions on our Class A common shares.
Added
For example, on February 20, 2026, the United States Supreme Court issued a ruling striking down certain tariffs previously imposed under the International Emergency Economic Powers Act of 1977. Following the Supreme Court’s decision, President Trump stated that he intends to use other authorities to invoke other laws to collect tariffs and announced new tariffs on imports from all countries.
Added
There remains substantial uncertainty regarding the duration of existing and newly announced tariffs, potential changes or pauses to such tariffs, tariff levels, and whether further additional tariffs or other retaliatory actions may be imposed, modified, or suspended.

Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

4 edited+2 added−0 removed14 unchanged
Biggest changeOur program includes a cybersecurity incident response plan that consists of incident identification, classification, investigation and diagnosis, response, and recovery. Our process for managing cybersecurity risk is a collaborative effort that includes key members of our information technology, legal, and finance departments, as well as internal audit and third-party cybersecurity firms.
Biggest changeUntil integration is complete, certain Hearthstone Venture systems and controls operate under their pre-acquisition cybersecurity framework, which may differ from our established standards. Our process for managing cybersecurity risk is a collaborative effort that includes key members of our information technology, legal, and finance departments, as well as internal audit and third-party cybersecurity firms.
We may also elect to perform assessments more often based on material changes in business activities or other factors. The results of our cybersecurity risk assessment aid in identifying potential cybersecurity risks and guiding the adoption of appropriate risk mitigation measures.
We may also elect to perform assessments more often 21 Table of Contents based on material changes in business activities or other factors. The results of our cybersecurity risk assessment aid in identifying potential cybersecurity risks and guiding the adoption of appropriate risk mitigation measures.
Our cybersecurity threat defense 20 Table of Contents approach incorporates certain guiding principles from the NIST Cybersecurity Framework (the “NIST Framework”). This does not imply that we meet any particular technical standards, specifications, or requirements, only that we use the NIST Framework as a guide to help us identify, assess, and manage cybersecurity risks relevant to our business.
Our cybersecurity threat defense approach incorporates certain guiding principles from the NIST Cybersecurity Framework (the “NIST Framework”). This does not imply that we meet any particular technical standards, specifications, or requirements, only that we use the NIST Framework as a guide to help us identify, assess, and manage cybersecurity risks relevant to our business.
Our Vice President - Information Systems is responsible for proposing strategies and tactics to mitigate cybersecurity threats, which are subject to review and approval by the security committee.
Our Vice President - Information Systems is responsible for proposing strategies and tactics to mitigate cybersecurity threats, which are subject to review and approval by the security committee. 22 Table of Contents
Added
Our program includes a cybersecurity incident response plan that consists of incident identification, classification, investigation and diagnosis, response, and recovery. Following our acquisition of the Hearthstone Venture, we have been integrating the Hearthstone Venture’s information technology environment and related cybersecurity systems and processes into our enterprise cybersecurity program.
Added
The security committee is also overseeing the integration of the Hearthstone Venture systems and cybersecurity processes into our enterprise cybersecurity risk management and governance model.

Item 2. Properties

Properties — owned and leased real estate

3 edited+0 added−0 removed1 unchanged
Biggest changeITEM 2. Properties We lease and maintain our principal executive office located in Irvine, California. We also lease and maintain offices in Valencia, California and San Francisco, California near our mixed-use planned communities in those respective areas. We believe our present facilities are sufficient to support our operations.
Biggest changeITEM 2. Properties We lease and maintain our principal executive office located in Irvine, California. We also lease and maintain offices in Valencia, California and San Francisco, California near our mixed-use planned communities in those respective areas and in Calabasas, California and Mission Viejo, California. We believe our present facilities are sufficient to support our operations.
The properties we are developing at our mixed-use planned communities are held as inventory in the ordinary course of the planning and development process. Please review “Part I, Item 1. Business—Our Communities” for a description of each of our communities and our commercial venture.
The properties we are developing at our mixed-use planned communities are held as inventory in the ordinary course of the planning and development process. Please review “Part I, Item 1. Business—Our Communities” for a description of each of our communities.
We are the initial developer of our three 21 Table of Contents communities that are designed to include approximately 40,000 residential homes and approximately 23 million square feet of commercial space over a period of more than 10 years.
We are the initial developer of our three communities that are designed to include up to approximately 40,000 residential homes and approximately 20 million square feet of commercial space over a period of more than 10 years.

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

1 edited+0 added−0 removed3 unchanged
Biggest changePlease refer to Note 13 of our consolidated financial statements included in Part II, Item 8 of this report, which is incorporated herein by reference, for descriptions of additional legal proceedings to which we are a party. ITEM 4. Mine Safety Disclosures Not applicable. PART II
Biggest changePlease refer to Note 14 of our consolidated financial statements included in Part II, Item 8 of this report, which is incorporated herein by reference, for descriptions of additional legal proceedings to which we are a party. ITEM 4. Mine Safety Disclosures Not applicable. PART II

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

3 edited+2 added−1 removed7 unchanged
Biggest changeThere were no repurchases of our shares during the year ended December 31, 2024. 22 Table of Contents Performance Graph The following graph compares the cumulative total return of our Class A common shares with the S&P 500 and the S&P Homebuilders Select Industry Index from December 31, 2019 through December 31, 2024.
Biggest changeThere were no repurchases of our shares during the year ended December 31, 2025. 23 Table of Contents Performance Graph The following graph compares the cumulative total return of our Class A common shares with the S&P 500 and the S&P Homebuilders Select Industry Index from December 31, 2020 through December 31, 2025.
The graph assumes $100 was invested at the market close on December 31, 2019 in our Class A common shares, the S&P 500 and the S&P Homebuilders Select Industry Index, and the reinvestment of all dividends. Recent Sale of Unregistered Securities We conduct all of our business in or through our subsidiary, the operating company.
The graph assumes $100 was invested at the market close on December 31, 2020 in our Class A common shares, the S&P 500 and the S&P Homebuilders Select Industry Index, and the reinvestment of all dividends. Recent Sale of Unregistered Securities We conduct all of our business in or through our subsidiary, the operating company.
As of February 14, 2025, there were 41 and 5 holders of record of our Class A and Class B common shares, respectively. Our board of directors may, from time to time, in its sole discretion, authorize our company to repurchase our outstanding shares, subject to debt covenants and other contractual restrictions.
As of February 27, 2026, there were 40 and 4 holders of record of our Class A and Class B common shares, respectively. Our board of directors may, from time to time, in its sole discretion, authorize our company to repurchase our outstanding shares, subject to debt covenants and other contractual restrictions.
Removed
During the year ended December 31, 2024, no redemption notices were received from Class A Unit Holders. ITEM 6. [Reserved] 23 Table of Contents
Added
During the year ended December 31, 2025, an entity controlled by Emile Haddad, the Chairman Emeritus of our Board of Directors, exchanged 3,137,134 Class A units, and in exchange therefor, received 1,109,172 Class A common shares. The balance of the 2,027,962 Class A units that were tendered for redemption by Mr.
Added
Haddad were returned to the operating company in accordance with the dilution provisions of the operating company's partnership agreement and were canceled. ITEM 6. [Reserved] 24 Table of Contents

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

106 edited+35 added−28 removed79 unchanged
Biggest changeOur three remaining reportable operating segments include our three community segments, Valencia, San Francisco and Great Park: • Our Valencia segment includes operating results related to the Valencia community and agricultural operations in Los Angeles and Ventura Counties, California.
Biggest changeAs a result of many of the factors described above, we have historically experienced, and expect to continue to experience, variability in results of operations between comparable periods. 26 Table of Contents Segments Our reportable operating segments include our three community segments, Valencia, San Francisco and Great Park, and our Hearthstone segment: • Our Valencia segment includes operating results related to the Valencia community and agricultural operations in Los Angeles and Ventura Counties, California. • Our San Francisco segment includes operating results for the Candlestick and The San Francisco Shipyard communities. • Our Great Park segment includes operating results for the Great Park Neighborhoods community as well as development management services provided by the management company for the Great Park Venture. • Our Hearthstone segment includes the operating results for the Hearthstone Venture, which owns and operates our residential asset management platform.
The operating company directly or indirectly owns equity interests in: • Five Point Land, LLC, which owns The Newhall Land & Farming Company, a California limited partnership, the entity that is developing Valencia, our community in northern Los Angeles County, California; • The Shipyard Communities, LLC (the “San Francisco Venture”), which is developing Candlestick and The San Francisco Shipyard, our communities in the City of San Francisco, California; • Heritage Fields LLC (the “Great Park Venture”), which is developing Great Park Neighborhoods, our community in Orange County, California; • Five Point Office Venture Holdings I, LLC (the “Gateway Commercial Venture”), which previously owned portions of the Five Point Gateway Campus, a commercial office, research and development and medical campus located within the Great Park Neighborhoods; and • Five Point Communities, LP and Five Point Communities Management, Inc.
The operating company directly or indirectly owns equity interests in: • Five Point Land, LLC, which owns The Newhall Land & Farming Company, a California limited partnership, the entity that is developing Valencia, our community in northern Los Angeles County, California; • The Shipyard Communities, LLC (the “San Francisco Venture”), which is developing Candlestick and The San Francisco Shipyard, our communities in the City of San Francisco, California; • Heritage Fields LLC (the “Great Park Venture”), which is developing Great Park Neighborhoods, our community in Orange County, California; • Five Point Office Venture Holdings I, LLC (the “Gateway Commercial Venture”), which previously owned portions of the Five Point Gateway Campus, a commercial office, research and development and medical campus located within the Great Park Neighborhoods; • Five Point Communities, LP and Five Point Communities Management, Inc.
Year Ended December 31, 2024 Valencia San Francisco Great Park Total reportable segments Corporate and unallocated Total under management Removal of unconsolidated entities (1) Total consolidated REVENUES: Land sales $ 139,097 $ — $ 590,170 $ 729,267 $ — $ 729,267 $ (590,170) $ 139,097 Land sales—related party — — 22,636 22,636 — 22,636 (22,636) — Management services—related party (2) — — 95,955 95,955 449 96,404 — 96,404 Operating properties 1,747 678 — 2,425 — 2,425 — 2,425 Total revenues 140,844 678 708,761 850,283 449 850,732 (612,806) 237,926 COSTS AND EXPENSES: Land sales 90,109 — 144,876 234,985 — 234,985 (144,876) 90,109 Management services (2) — — 23,852 23,852 — 23,852 — 23,852 Operating properties 5,134 — — 5,134 — 5,134 — 5,134 Selling, general, and administrative 10,356 4,883 11,033 26,272 35,994 62,266 (11,033) 51,233 Management fees—related party — — 113,934 113,934 — 113,934 (113,934) — Total costs and expenses 105,599 4,883 293,695 404,177 35,994 440,171 (269,843) 170,328 OTHER INCOME (EXPENSE): Interest income — 69 6,221 6,290 10,789 17,079 (6,221) 10,858 Interest expense — — — — — — — — Miscellaneous (49) — — (49) (5,928) (5,977) — (5,977) Total other income (expense) (49) 69 6,221 6,241 4,861 11,102 (6,221) 4,881 EQUITY IN EARNINGS FROM UNCONSOLIDATED ENTITIES 483 — — 483 12,347 12,830 119,787 132,617 SEGMENT PROFIT (LOSS)/INCOME BEFORE INCOME TAX PROVISION 35,679 (4,136) 421,287 452,830 (18,337) 434,493 (229,397) 205,096 INCOME TAX PROVISION — — — — (27,462) (27,462) — (27,462) SEGMENT PROFIT (LOSS)/NET INCOME $ 35,679 $ (4,136) $ 421,287 $ 452,830 $ (45,799) $ 407,031 $ (229,397) $ 177,634 (1) Represents the removal of the Great Park Venture operating results, which are included in the Great Park segment operating results at 100% of the venture’s historical basis but are not included in our consolidated results as we account for our investment in the venture using the equity method of accounting.
(2) For the Great Park segment, represents the revenues and expenses attributable to the management company for providing services to the Great Park Venture as applicable. 29 Table of Contents Year Ended December 31, 2024 Valencia San Francisco Great Park Total reportable segments Corporate and unallocated Total under management Removal of unconsolidated entities (1) Total consolidated REVENUES: Land sales $ 139,097 $ — $ 590,170 $ 729,267 $ — $ 729,267 $ (590,170) $ 139,097 Land sales—related party — — 22,636 22,636 — 22,636 (22,636) — Management services—related party (2) — — 95,955 95,955 449 96,404 — 96,404 Operating properties 1,747 678 — 2,425 — 2,425 — 2,425 Total revenues 140,844 678 708,761 850,283 449 850,732 (612,806) 237,926 COSTS AND EXPENSES: Land sales 90,109 — 144,876 234,985 — 234,985 (144,876) 90,109 Management services (2) — — 23,852 23,852 — 23,852 — 23,852 Operating properties 5,134 — — 5,134 — 5,134 — 5,134 Selling, general, and administrative 10,356 4,883 11,033 26,272 35,994 62,266 (11,033) 51,233 Management fees—related party — — 113,934 113,934 — 113,934 (113,934) — Total costs and expenses 105,599 4,883 293,695 404,177 35,994 440,171 (269,843) 170,328 OTHER (EXPENSE) INCOME: Interest income — 69 6,221 6,290 10,789 17,079 (6,221) 10,858 Miscellaneous (49) — — (49) (5,928) (5,977) — (5,977) Total other (expense) income (49) 69 6,221 6,241 4,861 11,102 (6,221) 4,881 EQUITY IN EARNINGS FROM UNCONSOLIDATED ENTITIES 483 — — 483 12,347 12,830 119,787 132,617 SEGMENT PROFIT (LOSS)/INCOME BEFORE INCOME TAX PROVISION 35,679 (4,136) 421,287 452,830 (18,337) 434,493 (229,397) 205,096 INCOME TAX PROVISION — — — — (27,462) (27,462) — (27,462) SEGMENT PROFIT (LOSS)/NET INCOME $ 35,679 $ (4,136) $ 421,287 $ 452,830 $ (45,799) $ 407,031 $ (229,397) $ 177,634 (1) Represents the removal of the Great Park Venture operating results, which are included in the Great Park segment operating results at 100% of the venture’s historical basis but are not included in our consolidated results as we account for our investment in the venture using the equity method of accounting.
We did not sell homesites directly to Lennar during the years ended December 31, 2024, 2023, and 2022 but did recognize revenues related to certain fees or profit participation associated with homes sold by Lennar to homebuyers at Valencia. For the year ended December 31, 2023, we recognized $0.6 million of revenue from Lennar, which primarily consisted of profit participation.
We did not sell homesites directly to Lennar during the years ended December 31, 2025, 2024, and 2023 but did recognize revenues related to certain fees or profit participation associated with homes sold by Lennar to homebuyers at Valencia. For the year ended December 31, 2023, we recognized $0.6 million of revenue from Lennar, which primarily consisted of profit participation.
Refer to Item 7, “Management’s Discussion and Analysis of Financial Condition and Results of Operations” under Part II of our annual report on Form 10-K for the fiscal year ended December 31, 2023 for financial data and related comparative discussions on results of operations for the fiscal years ended December 31, 2023 and 2022, which is incorporated herein by reference.
Refer to Item 7, “Management’s Discussion and Analysis of Financial Condition and Results of Operations” under Part II of our annual report on Form 10-K for the fiscal year ended December 31, 2024 for financial data and related comparative discussions on results of operations for the fiscal years ended December 31, 2024 and 2023, which is incorporated herein by reference.
Outstanding LOCs totaled $1.0 million at each of December 31, 2024 and 2023. At both December 31, 2024 and 2023, we had $1.0 million in restricted cash and certificates of deposit securing certain of our LOCs. Additionally, under our revolving credit facility, we are able to utilize undrawn capacity to support the issuance of LOCs.
Outstanding LOCs totaled $1.0 million at each of December 31, 2025 and 2024. At both December 31, 2025 and 2024, we had $1.0 million in restricted cash and certificates of deposit securing certain of our LOCs. Additionally, under our revolving credit facility, we are able to utilize undrawn capacity to support the issuance of LOCs.
During the year ended December 31, 2024, we received total distributions of $181.9 million from the Great Park Venture, of which $62.1 million is reflected as a return of our investment (investing activity) in the statement of cash flows, with the balance reflected as an operating activity and a distribution of $17.2 million from the Gateway Commercial Venture, of which $7.8 million is 34 Table of Contents reflected as a return of our investment (investing activity) in the statement of cash flows, with the balance reflected as an operating activity.
During the year ended December 31, 2024, we received total distributions of $181.9 million from the Great Park Venture, of which $62.1 million is reflected as a return of our investment (investing activity) in the statement of cash flows, with the balance reflected as an operating activity and a distribution of $17.2 million from the Gateway Commercial Venture, of which $7.8 million is reflected as a return of our investment (investing activity) in the statement of cash flows, with the balance reflected as an operating activity.
The table below reconciles the Great Park segment results for the years ended December 31, 2024 and 2023 to the equity in earnings from our investment in the Great Park Venture that is reflected in the consolidated statements of operations for the years ended December 31, 2024 and 2023, respectively.
The table below reconciles the Great Park segment results for the years ended December 31, 2025 and 2024 to the equity in earnings from our investment in the Great Park Venture that is reflected in the consolidated statements of operations for the years ended December 31, 2025 and 2024, respectively.
Candlestick now has the potential to include up to approximately 2.8 million square feet of research and development and office space, approximately 7,200 homesites, and approximately 550,000 square feet of retail, hotel, entertainment and community uses. We have commenced engineering for the next phase of infrastructure at Candlestick and expect to begin construction in early 2026.
Candlestick now has the potential to include up to approximately 2.8 million square feet of research and development and office space, approximately 7,200 homesites, and approximately 550,000 square feet of retail, hotel, entertainment and community uses. We have commenced engineering for the next phase of infrastructure at Candlestick and expect to begin construction in the first half of 2026.
Additionally, we received total distributions of $181.9 million from the Great Park Venture, of which $119.8 million is reflected as a return on our investment (operating activity) in the statement of cash flows, with the balance reflected as an investing activity and a distribution of $17.2 million from the Gateway Commercial Venture, of which $9.4 million is reflected as a return on our investment (operating activity) in the statement of cash flows, with the balance reflected as an investing activity.
Additionally, we received total distributions of $181.9 million from the Great Park Venture, of which $119.8 million is reflected as a 35 Table of Contents return on our investment (operating activity) in the statement of cash flows, with the balance reflected as an investing activity and a distribution of $17.2 million from the Gateway Commercial Venture, of which $9.4 million is reflected as a return on our investment (operating activity) in the statement of cash flows, with the balance reflected as an investing activity.
Since this method requires us to estimate future development costs and the expected sales prices for future land sales, the profit margin on subsequent parcels sold will be affected by both changes in the estimated total revenues, as well as any changes in the estimated total cost of the project. Selling, general, and administrative.
Since this method requires us to estimate future development costs and the expected sales prices for future land sales, the profit margin on subsequent parcels sold will be affected by both changes in the estimated total revenues, as well as any changes in the estimated total cost of the project.
Other than the Great Park Venture, no related party customer accounted for more than 10% of our revenue during the years ended December 31, 2024 and 2023.
Other than the Great Park Venture, no related party customer accounted for more than 10% of our revenue during the years ended December 31, 2025 and 2024.
If indicators of impairment exist, and the undiscounted cash flows expected to be generated by a long-lived asset are less than its carrying amount, an impairment charge is recorded to write down the carrying amount of such long-lived asset to its estimated fair value.
If indicators of impairment exist, 38 Table of Contents and the undiscounted cash flows expected to be generated by a long-lived asset are less than its carrying amount, an impairment charge is recorded to write down the carrying amount of such long-lived asset to its estimated fair value.
Equity in earnings for the years ended December 31, 2024 and 2023 was primarily a result of recognizing our share of the net income of the Great Park Venture generated from land sales during each period and the net income of the Gateway Commercial Venture generated from the sale of its remaining interests in the Five Point Gateway Campus.
Equity in earnings for the years ended December 31, 2025 and 2024 was primarily a result of recognizing our share of the net income of the Great Park Venture generated from land sales during each period and additionally for the year ended December 31, 2024 from the net income of the Gateway Commercial Venture for the sale of its remaining interests in the Five Point Gateway Campus.
Net income attributable to the noncontrolling interests on the consolidated statement of operations represents the portion of earnings or losses attributable to the interests in our subsidiaries held by the noncontrolling interests. 27 Table of Contents Segment Results and Financial Information The following tables reconcile the results of operations of our segments to our consolidated results for the years ended December 31, 2024 and 2023 (in thousands).
Net income attributable to the noncontrolling interests on the consolidated statement of operations represents the portion of earnings or losses attributable to the interests in our subsidiaries held by the noncontrolling interests. 28 Table of Contents Segment Results and Financial Information The following tables reconcile the results of operations of our segments to our consolidated results for the years ended December 31, 2025 and 2024 (in thousands).
Cash flows from our communities may occur in uneven 32 Table of Contents patterns as cash is primarily generated by land sales and reimbursements, which can occur at various points over the life cycle of our communities.
Cash flows from our communities may occur in uneven patterns as cash is primarily generated by land sales and reimbursements, which can occur at various points over the life cycle of our communities.
Critical Accounting Estimates Critical accounting estimates are those that are both significant to the overall presentation of our financial condition and results of operations and require management to make difficult, complex or subjective judgments. Our critical accounting estimates are discussed below.
Critical Accounting Estimates Critical accounting estimates are those that are both significant to the overall presentation of our financial condition and results of operations and require management to make difficult, complex or subjective judgments. Our critical accounting estimates 37 Table of Contents are discussed below.
The Company The following table summarizes our consolidated historical results of operations for the years ended December 31, 2024 and 2023.
The Company The following table summarizes our consolidated historical results of operations for the years ended December 31, 2025 and 2024.
Cost of land sales during the year ended December 31, 2024 was $90.1 million, compared to $105.7 million during year ended December 31, 2023. The cost of land sales includes both actual and estimated future capitalized costs allocated based upon relative sales values.
Cost of land sales during the year ended December 31, 2025 was $29.7 million, compared to $90.1 million during year ended December 31, 2024. The cost of land sales includes both actual and estimated future capitalized costs allocated based upon relative sales values.
(2) For the Great Park segment, represents the revenues and expenses attributable to the management company for providing services to the Great Park Venture as applicable. Valencia Segment Our Valencia property consists of approximately 15,000 acres in northern Los Angeles County and can include up to approximately 21,500 homesites and approximately 11.5 million square feet of commercial space.
(2) For the Great Park segment, represents the revenues and expenses attributable to the management company for providing services to the Great Park Venture as applicable. Valencia Segment Our Valencia property consists of approximately 15,000 acres in northern Los Angeles County and can currently include up to approximately 21,000 homesites and approximately 9.3 million square feet of commercial space.
We began selling homesites in the first development area at Valencia in 2019, and as of December 31, 2024 we had sold 3,088 homesites for aggregate consideration of approximately $721.6 million. Homebuilders sold 348 homes at Valencia during the year ended December 31, 2024 and have sold a total of 1,599 homes since home sales began in May 2021.
We began selling homesites in the first development area at Valencia in 2019, and as of December 31, 2025 we had sold 3,088 homesites for aggregate consideration of approximately $721.6 million. Homebuilders sold 238 homes at Valencia during the year ended December 31, 2025 and have sold a total of 1,837 homes since home sales began in May 2021.
See “Cautionary Statement Regarding Forward-Looking Statements.” Overview Our Company We conduct all of our business in or through our operating company, Five Point Operating Company, LP (the “operating company”). We are, through a wholly owned subsidiary, the sole managing general partner and owned, as of December 31, 2024, approximately 62.6% of the operating company.
See “Cautionary Statement Regarding Forward-Looking Statements.” Overview Our Company We conduct all of our business in or through our operating company, Five Point Operating Company, LP (the “operating company”). We are, through a wholly owned subsidiary, the sole managing general partner and owned, as of December 31, 2025, approximately 65.0% of the operating company.
As of December 31, 2024, there were no amounts currently payable under the TRA.
As of December 31, 2025, there were no amounts currently payable under the TRA.
Our operating cash flows may vary significantly each year due to the timing of land sales and the development efforts related to our mixed-use planned communities. Net cash provided by operating activities was $116.0 million for the year ended December 31, 2024, compared to $154.1 million net cash provided by operating activities for the year ended December 31, 2023.
Our operating cash flows may vary significantly each year due to the timing of land sales and the development efforts related to our mixed-use planned communities. Net cash provided by operating activities was $105.2 million for the year ended December 31, 2025, compared to $116.0 million net cash provided by operating activities for the year ended December 31, 2024.
We expect to meet our cash requirements for at least the next 12 months with available cash, distributions from our unconsolidated entities, collection of management fees under our development management agreement with the Great Park Venture, proceeds from land sales, reimbursements from public financing and access to financing sources, including our revolving credit facility.
We expect to meet our cash requirements for at least the next 12 months with available cash, distributions from our unconsolidated entities, collection of development management fees, including incentive compensation, under our development management agreement with the Great Park Venture, asset management fees at the 33 Table of Contents Hearthstone Venture, proceeds from land sales, reimbursements from public financing and access to financing sources, including our revolving credit facility.
We had outstanding performance bonds of $375.8 million as of December 31, 2024 predominantly related to our Valencia community. At December 31, 2024, the San Francisco Venture had outstanding guarantees benefiting a municipal agency for infrastructure and construction of certain park and open space obligations with aggregate maximum obligations of $198.3 million.
We had outstanding performance bonds of $344.9 million as of December 31, 2025 predominantly related to our Valencia community. At December 31, 2025, the San Francisco Venture had outstanding guarantees benefiting a municipal agency for infrastructure and construction of certain park and open space obligations with aggregate maximum obligations of $198.9 million.
As part of our growth strategy, we may pursue acquisitions, investments, joint ventures or other growth opportunities. In particular, we may seek out capital partners to enter into joint ventures for the development of both our existing communities as well as new assets.
As we look at additional growth opportunities, we may pursue acquisitions, investments, joint ventures or other growth alternatives. In particular, we may seek out capital partners to enter into joint ventures for the development of both our existing communities as well as new assets.
Our segment results for the Great Park segment present the results of the Great Park Venture at the book basis of the venture within the segment. Equity in earnings from unconsolidated entities increased by $56.0 million, to $132.6 million for the year ended December 31, 2024, from $76.6 million for the year ended December 31, 2023.
Our segment results for the Great Park segment present the results of the Great Park Venture at the book basis of the venture within the segment. Equity in earnings from unconsolidated entities increased by $71.0 million, to $203.6 million for the year ended December 31, 2025, from $132.6 million for the year ended December 31, 2024.
In 2024, the Great Park Venture sold 12.8 acres of commercial land planned for retail uses and land entitled for an aggregate of 559 homesites on 56.1 acres at the Great Park Neighborhoods. In 2023, the Great Park Venture closed 38 acres of commercial land and land entitled for an aggregate of 798 homesites on approximately 84 acres.
In 2024, the Great Park Venture sold 12.8 acres of commercial land planned for retail uses and land entitled for an aggregate of 559 homesites on 56.1 acres at the Great Park Neighborhoods.
The Great Park Venture made distributions and related participating payments with proceeds from the land sales, of which we received approximately $231.0 million for both our ownership interests and incentive management fee compensation. Home sales by guest homebuilders totaled 441 homes in 2024.
The Great Park Venture made distributions and related participating payments with proceeds from the land sales, of which we received approximately $319.9 million for both our ownership interests and incentive management fee compensation. Home sales by guest homebuilders totaled 611 homes in 2025.
The majority of TRA payments, however, are not expected to begin until after 2028. We are committed under various performance bonds and letters of credit (“LOCs”) to perform certain development activities and provide certain guarantees in the normal course of the entitlement and development process.
The majority of TRA payments, however, are not expected to begin for the next several years. We are committed under various performance bonds and letters of credit (“LOCs”) to perform certain development activities and provide certain guarantees in the normal course of the entitlement and development process.
The Great Park Venture sold the first homesites in April 2013 and, as of December 31, 2024, had sold 8,683 homesites (including 853 affordable homesites) and 166 acres of commercial land, including the Five Point Gateway Campus, allowing for development of up to approximately 3.6 million square feet of commercial office and research and development space for aggregate consideration of approximately $4.4 billion.
The Great Park Venture sold the first homesites in April 2013 and, as of December 31, 2025, had sold 9,603 homesites (including 853 affordable homesites) and 166 acres of commercial land, including the Five Point Gateway Campus, allowing for development of up to approximately 3.6 million square feet of commercial office, industrial and research and development space for aggregate consideration of approximately $5.2 billion.
The cost of land sales decreased by $15.5 million, to $90.1 million for the year ended December 31, 2024, from $105.7 million for the year ended December 31, 2023. The decrease in cost of land sales was attributable to lower land sales at our Valencia segment in 2024 compared to 2023. Cost of management services.
The cost of land sales decreased by $60.4 million, to $29.7 million for the year ended December 31, 2025, from $90.1 million for the year ended December 31, 2024. The decrease in cost of land sales was attributable to lower land sales at our Valencia segment in 2025 compared to 2024. Cost of management services.
The Great Park Venture recognized expense of $101.9 million and $53.4 million for incentive compensation fees during the years ended December 31, 2024 and 2023, respectively.
The Great Park Venture recognized expense of $29.5 million and $101.9 million for incentive compensation fees during the years ended December 31, 2025 and 2024, respectively.
As of December 31, 2024, no funds had been drawn on and no letters of credit were outstanding on the operating company’s $125.0 million revolving credit facility.
As of December 31, 2025, no funds had been drawn on and no letters of credit were outstanding on the operating company’s $217.5 million revolving credit facility.
Changes in Capital Structure During the year ended December 31, 2024, our 62.6% ownership percentage in the operating company increased slightly primarily due to our issuance of shared-based compensation in the form of 0.2 million restricted Class A common shares and 0.3 million restricted share units that were settled for Class A common shares, partially offset by our reacquisition of approximately 0.3 million restricted Class A common shares from employees for income tax withholding purposes upon vesting.
Changes in Capital Structure During the year ended December 31, 2025, our 65.0% ownership percentage in the operating company increased primarily due to a unit holder’s exchange of 3.1 million Class A units of the operating company into 1.1 million Class A common shares, our issuance of share-based compensation in the form of 0.1 million restricted Class A common shares and 0.9 million restricted share units that were settled for Class A common shares, partially offset by our reacquisition of approximately 0.4 million restricted Class A common shares from employees for income tax withholding purposes upon vesting.
Navy retesting, but there can be no assurance that these matters and other related matters that may arise in the future will not materially impact our development plans.
Navy retesting, but there can be no assurance that these matters and other related matters that may arise in the future will not have further material impacts on our development plans.
Net cash provided by investing activities was $70.1 million for the year ended December 31, 2024, compared to the net cash provided by investing activities of $77.1 million for the year ended December 31, 2023.
Net cash used in investing activities was $6.6 million for the year ended December 31, 2025, compared to the net cash provided by investing activities of $70.1 million for the year ended December 31, 2024.
We also provide management services to the Great Park Venture pursuant to a development management agreement. For the years ended December 31, 2024 and 2023, we recognized $96.0 million and $47.2 million, respectively, of revenue from management 35 Table of Contents services provided to the Great Park Venture.
We also provide management services to the Great Park Venture pursuant to a development management agreement. For the years ended December 31, 2025 and 2024, we recognized $53.5 million and $96.0 million, respectively, of revenue from management services provided to the Great Park Venture.
Additionally, we received total distributions of $1.1 million from the Valencia Landbank Venture, which is reflected as a return of our investment (investing activity) in the statement of cash flows. Cash Flows from Financing Activities.
Additionally, we received total distributions of $1.0 million from other equity method investments, which is reflected as a return of our investment (investing activity) in the statement of cash flows. Cash Flows from Financing Activities.
We assessed the realization of the net deferred tax asset and the need for a valuation allowance, based on positive and negative evidence, and determined that at December 31, 2023, it was more likely than not that such net deferred tax assets would be fully realized, and our valuation allowance was released.
We assessed the realization of the net deferred tax asset and the need for a valuation allowance, based on positive and negative evidence, and determined that at December 31, 2025, it was more likely than not that such net deferred tax asset would be realizable, and we had no valuation allowance recorded.
The decrease in total land sales revenues was attributable to the recognition of revenue from the sale of land entitled for an aggregate of 493 homesites on 54.4 acres during the year ended December 31, 2024 compared to the recognition of revenue from the sale of land entitled for an aggregate of 729 homesites on approximately 72 acres during the year ended December 31, 2023.
The decrease in total land sales revenues was attributable to the recognition of revenue from the sale of 13.8 acres of commercial land for $42.5 million during the year ended December 31, 2025 compared to the recognition of revenue from the sale of residential land entitled for an aggregate of 493 homesites on 54.4 acres during the year ended December 31, 2024.
We believe these joint ventures offer the ability to de-risk and accelerate monetization of our existing communities and the opportunity to generate additional revenue streams from new assets and investments. In addition, the joint venture strategy will allow us to move to an asset-lighter balance sheet model.
We believe these joint ventures offer the ability to (i) de-risk and accelerate monetization of our existing communities, (ii) generate additional fee-based revenue streams from new assets and investments and (iii) move to an asset-lighter balance sheet model.
Management fees increased by $48.5 million, to $113.9 million for the year ended December 31, 2024, from $65.4 million for the year ended December 31, 2023. Management fees incurred by the Great Park Venture were comprised of base development management fees and incentive compensation fees.
Management fees decreased by $70.9 million, to $43.0 million for the year ended December 31, 2025, from $113.9 million for the year ended December 31, 2024. Management fees incurred by the Great Park Venture were comprised of base development management fees and incentive compensation fees.
The operating company owns a 37.5% percentage interest in the Great Park Venture and a 75% interest in the Gateway Commercial Venture and accounts for its interest in both using the equity method.
The operating company owns a 37.5% percentage interest in the Great Park Venture and a 75% interest in the Gateway Commercial Venture and accounts for its interest in both using the equity method. The Hearthstone Venture generally has between a 1% and 3% interest in an individual Hearthstone Fund and accounts for such interest using the equity method.
We believe that we already have the core infrastructure and personnel required to pursue these opportunities. Factors That May Influence our Results of Operations Fluctuations in the Economy and Market Conditions Our results of operations are subject to various risks and fluctuations in value and demand, many of which are beyond our control.
Factors That May Influence our Results of Operations Fluctuations in the Economy and Market Conditions Our results of operations are subject to various risks and fluctuations in value and demand, many of which are beyond our control.
Summary of Cash Flows The following table outlines the primary components of net cash provided by (used in) operating, investing and financing activities (in thousands): Year Ended December 31, 2024 2023 Operating activities $ 115,986 $ 154,123 Investing activities 70,064 77,111 Financing activities (108,976) (9,204) Cash Flows from Operating Activities.
Summary of Cash Flows The following table outlines the primary components of net cash provided by (used in) operating, investing and financing activities (in thousands): Year Ended December 31, 2025 2024 Operating activities $ 105,230 $ 115,986 Investing activities (6,552) 70,064 Financing activities (104,007) (108,976) Cash Flows from Operating Activities.
Our short-term cash needs consist primarily of general and administrative expenses and development expenditures at Valencia and the Candlestick and The San Francisco Shipyard communities, interest payments under our senior notes and payments under a related party reimbursement obligation.
Our short-term cash needs consist primarily of general and administrative expenses and development expenditures at Valencia and the Candlestick and The San Francisco Shipyard communities, interest payments under our senior notes and payments under a related party reimbursement obligation. In September 2025, we issued $450.0 million in new 8.000% senior notes due October 2030.
Pre-tax income of $205.1 million for the year ended December 31, 2024 resulted in a tax provision of $27.5 million. Pre-tax income of $109.3 million for the year ended December 31, 2023 resulted in a tax benefit of $4.4 million.
Pre-tax income of $212.5 million for the year ended December 31, 2025 resulted in a tax provision of $28.9 million. Pre-tax income of $205.1 million for the year ended December 31, 2024 resulted in a tax provision of $27.5 million.
Navy and could lead to additional legal claims or government investigations, all of which could in turn further delay or impede our future development of such parcels.
These activities have delayed the remaining land transfers from the U.S. Navy and could lead to additional legal claims or government investigations, all of which could in turn further delay or impede our future development of such parcels.
After the sale of the Gateway Commercial Venture’s commercial operating assets in December 2024, our commercial segment is no longer operating. We have recast the segment presentation for the comparative prior period to report the equity in loss from our investment in the Gateway Commercial Venture within the corporate and unallocated column in the table above.
After the sale of the Gateway Commercial Venture’s commercial operating assets in December 2024, our commercial segment is no longer operating. The equity in earnings from our investment in the Gateway Commercial Venture is reported within the corporate and unallocated column in the table above.
The actual commercial square footage and number of homesites are subject to change based on ultimate use and land planning. The current communities under development in Valencia complement the neighboring communities that were previously developed by us.
The actual commercial square footage and number of homesites are subject to change as we further refine our development plans to optimize land values. The current communities under development in Valencia complement the neighboring communities that were previously developed by us.
Land sales and related party land sales revenues. Total land sales revenues decreased by $22.3 million to $139.1 million for the year ended December 31, 2024, from $161.4 million for the year ended December 31, 2023.
Land sales and related party land sales revenues. Total land sales revenues decreased by $96.6 million to $42.5 million for the year ended December 31, 2025, from $139.1 million for the year ended December 31, 2024.
When estimates of the amount of incentive compensation probable of being paid change, the Great Park Venture records a cumulative adjustment in the period in which the estimate changes. The increase in management fees — related party was mainly attributable to an increased estimate of the amount of incentive compensation fees probable of being paid.
When estimates of the amount of incentive compensation probable of being paid change, the Great Park Venture records a cumulative adjustment in the period in which the estimate changes.
Prior to our acquisition, related parties assumed the EB-5 loan liabilities, and the San Francisco Venture entered into reimbursement agreements pursuant to which it agreed to 33 Table of Contents reimburse the related parties for a portion of the EB-5 loan liabilities and related interest.
Prior to our acquisition, related parties assumed the EB-5 loan liabilities, and the San Francisco Venture entered into reimbursement agreements pursuant to which it agreed to reimburse the related parties for a portion of the EB-5 loan liabilities and related interest. The amounts set forth in the above table include interest based on the weighted average interest rate of 4.6%.
The increase in revenues was primarily due to an increase in management services revenue at our Great Park segment in 2024, partially offset by lower land sales at our Valencia segment in 2024 compared to 2023. 26 Table of Contents Cost of land sales.
The decrease in revenues was primarily due to lower land sales at our Valencia segment in 2025 compared to 2024 and a decrease in management services revenue at our Great Park segment in 2025, partially offset by management services revenue recognized at our new Hearthstone segment. Cost of land sales.
At the Great Park Neighborhoods, in which we have a 37.5% percentage interest and manage all aspects of the development cycle, the Great Park Venture recognized land sale revenue of $480.0 million from the sale of 559 homesites on 56.1 acres of land and $25.4 million from the sale of 12.8 acres of commercial land.
At the Great Park Neighborhoods, in which we have a 37.5% percentage interest and manage all aspects of the development cycle, the Great Park Venture recognized residential land sale revenue of $781.7 million from the sale of 920 homesites on 75.6 acres of land.
In 2024 and 2023, 179 and 583 of the homesites, respectively, were sold to an unaffiliated land banking entity whereby Lennar retained the option to acquire the homesites in the future from the land bank entity. 29 Table of Contents Cost of land sales.
The aggregate base purchase price was $137.9 million for the 2024 sales, and 179 of the homesites were sold to an unaffiliated land banking entity whereby Lennar retained the option to acquire the homesites in the future from the land bank entity. 30 Table of Contents Cost of land sales.
The 798 homesites were sold to an unaffiliated land banking entity whereby Lennar retained the option to acquire the homesites in the future from the land bank entity. The aggregate purchase price was $174.2 million for the 2023 commercial land sales.
For the 2025 land sales, the base purchase price was $781.7 million, and 308 of the homesites were sold to an unaffiliated land banking entity whereby Lennar retained the option to acquire the homesites in the future from the land bank entity.
During the years ended December 31, 2024 and 2023, revenues also included changes in estimates of variable consideration, including profit participation and price participation, from those amounts previously recorded by the Great Park Venture.
The base purchase price was $25.4 million and $480.0 million for the 2024 commercial land sales and homesite land sales, respectively. During the years ended December 31, 2025 and 2024, revenues also included changes in estimates of variable consideration, including profit participation and price participation, from those amounts previously recorded by the Great Park Venture.
Year Ended December 31, 2024 2023 (in thousands) Segment profit from operations $ 421,287 $ 275,630 Less net income of management company attributed to the Great Park segment 72,103 25,020 Net income of Great Park Venture 349,184 250,610 The Company’s share of net income of the Great Park Venture 130,944 93,979 Basis difference amortization, net (11,157) (15,032) Equity in earnings from Great Park Venture $ 119,787 $ 78,947 Liquidity and Capital Resources At December 31, 2024, we had $430.9 million of consolidated cash and cash equivalents, compared to $353.8 million at December 31, 2023.
Year Ended December 31, 2025 2024 (in thousands) Segment profit from operations $ 625,933 $ 421,287 Less net income of management company attributed to the Great Park segment 41,454 72,103 Net income of Great Park Venture 584,479 349,184 The Company’s share of net income of the Great Park Venture 219,180 130,944 Basis difference amortization, net (17,891) (11,157) Equity in earnings from Great Park Venture $ 201,289 $ 119,787 Liquidity and Capital Resources At December 31, 2025, we had $425.5 million of consolidated cash and cash equivalents, compared to $430.9 million at December 31, 2024.
We estimate the fair value of our investments using a discounted cash flow of distributions we expect to receive from the venture. Significant input assumptions used in estimating the distributions we expect to receive from the venture include revenue and development cost estimates.
Significant input assumptions used in estimating the distributions we expect to receive from the venture include revenue and development cost estimates.
Results of Operations The following tables and related discussions on the results of operations are for the fiscal years ended December 31, 2024 and 2023.
The operating results for the Hearthstone segment are presented from the acquisition date of July 31, 2025. Results of Operations The following tables and related discussions on the results of operations are for the fiscal years ended December 31, 2025 and 2024.
During the year ended December 31, 2023, we received total distributions of $154.2 million from the Great Park Venture, of which $76.0 million is reflected as a return of our investment (investing activity) in the statement of cash flows, with the balance reflected as an operating activity.
During the year ended December 31, 2025, we received total distributions of $252.0 million from the Great Park Venture, of which $50.7 million is reflected as a return of our investment (investing activity) in the statement of cash flows, with the balance reflected as an operating activity, a distribution of $1.6 million from the Gateway Commercial Venture, of which $0.2 million is reflected as a return of our investment (investing activity) in the statement of cash flows, with the balance reflected as an operating activity and total distributions of $5.2 million mostly from funds managed by the Hearthstone Venture, of which $4.6 million is reflected as a return of our investment (investing activity) in the statement of cash flows.
During the year ended December 31, 2024, the Great Park Venture recognized additional estimated variable consideration of $66.6 million related to a residential land sale that closed in 2023 for future price participation payments expected to be received when homes are sold to homebuyers.
During the years ended December 31, 2025 and 2024, the Great Park Venture recognized additional estimated variable consideration of $19.4 million and $66.6 million, respectively, for price participation related to a residential land sale that closed in 2023. As of December 31, 2025, substantially all of the homes related to the 2023 land sale have been sold to homebuyers.
Other than the third-party home builders and the unaffiliated land bank entity, no third-party customer accounted for more than 10% of our revenue during the year ended December 31, 2023.
Other than the third-party commercial builder, no third-party customer accounted for more than 10% of our revenue during the year ended December 31, 2025.
Additionally, we received total distributions of $154.2 million from the Great Park Venture, of which $78.2 million is reflected as a return on our investment (operating activity) in the statement of cash flows, with the balance reflected as an investing activity.
Additionally, we received total distributions of $252.0 million from the Great Park Venture, of which $201.3 million is reflected as a return on our investment (operating activity) in the statement of cash flows, with the balance reflected as an investing activity, a distribution of $1.6 million from the Gateway Commercial Venture, of which $1.4 million is reflected as a return on our investment (operating activity) in the statement of cash flows, with the balance reflected as an investing activity and total distributions of $5.2 million mostly from funds managed by the Hearthstone Venture, of which $0.6 million is reflected as a return on our investment (operating activity) in the statement of cash flows, with the balance reflected as an investing activity.
During the year ended December 31, 2024, the Great Park Venture made aggregate distributions of $18.1 million to holders of legacy interests and $485.1 million to holders of percentage interests. The Company received $181.9 million for its 37.5% percentage interest.
During the year ended December 31, 2025, the Great Park Venture made aggregate distributions of $672.0 million to holders of percentage interests. The Company received $252.0 million for its 37.5% percentage interest. Land sales and related party land sales revenues.
Included in operating cash outflows during the year ended December 31, 2024 is $7.7 million in third party transaction and advisory costs incurred in connection with the senior notes exchange. During the year ended December 31, 2024, an additional $45.8 million was paid for interest due on our existing 7.875% senior notes and new 10.500% initial rate senior notes.
During the year ended December 31, 2024, an additional $45.8 million was paid for interest due on our existing 7.875% senior notes and 10.500% initial rate senior notes. Cash Flows from Investing Activities.
In addition to the related party revenues, during the year ended December 31, 2023, we recognized an aggregate of $21.7 million and $39.4 million of revenue from two third-party home builders, respectively, which primarily consisted of homesites sold to the two third-party home builders and which separately accounted for more than 10% of total consolidated revenues.
In addition to the related party revenues, during the year ended December 31, 2025, we recognized $42.5 million of revenue from a third-party commercial builder, which primarily consisted of commercial land sold to the third-party commercial builder and accounted for more than 10% of total consolidated revenues.
For the years ended December 31, 2024 and 2023, we recognized $84.0 million and $35.2 million, respectively, attributable to variable incentive compensation, mostly as a result of changes in estimates of the amount of variable incentive compensation we expect to receive. Management services costs and expenses.
For the years ended December 31, 2025 and 2024, we recognized $40.0 million and $84.0 million, respectively, attributable to variable incentive compensation, which reflects changes in the estimate of the amount of incentive compensation we expected to be entitled to receive and changes in constraints on the estimate. Management services costs and expenses.
During the year ended December 31, 2023, $49.2 million was paid for interest due on our existing 7.875% senior notes. Our horizontal development costs for the year ended December 31, 2024 were partially offset by $9.1 million in public financing reimbursements for public infrastructure development costs we incurred in Valencia.
Our horizontal development costs for the years ended December 31, 2025 and 2024 were partially offset by $1.2 million and $9.1 million in public financing reimbursements for public infrastructure development costs we incurred in Valencia, respectively.
The table below summarizes outstanding Class A units of the operating company and Class A units of the San Francisco Venture, which are redeemable on a one-for-one basis for Class A units of the operating company, at December 31, 2024 and 2023 held by us and those held by noncontrolling interest members. 2024 2023 Class A units of the operating company: Held by us 69,369,234 69,199,938 Held by noncontrolling interest members 41,363,271 41,363,271 110,732,505 110,563,209 Class A units of the San Francisco Venture held by noncontrolling interest members 37,870,273 37,870,273 148,602,778 148,433,482 At December 31, 2024, we had 79,233,544 Class B common shares outstanding that were held by the noncontrolling interest members of the operating company and the Class A unitholders of the San Francisco Venture.
The issuances and settlements resulted in the operating company issuing to us an equal number of Class A units of the operating company or retiring an equal number of Class A units of the operating company that we previously held. 36 Table of Contents The table below summarizes outstanding Class A units of the operating company and Class A units of the San Francisco Venture, which are redeemable on a one-for-one basis for Class A units of the operating company, at December 31, 2025 and 2024 held by us and those held by noncontrolling interest members. 2025 2024 Class A units of the operating company: Held by us 71,100,768 69,369,234 Held by noncontrolling interest members 38,226,137 41,363,271 109,326,905 110,732,505 Class A units of the San Francisco Venture held by noncontrolling interest members 37,870,273 37,870,273 147,197,178 148,602,778 At December 31, 2025, we had 76,096,410 Class B common shares outstanding that were held by the noncontrolling interest members of the operating company and the Class A unitholders of the San Francisco Venture.
The cost of land sales includes both actual and estimated future capitalized costs allocated based upon relative sales values.
Cost of land sales. Cost of land sales during the years ended December 31, 2025 and 2024 were $195.9 million and $144.9 million, respectively. The cost of land sales includes both actual and estimated future capitalized costs allocated based upon relative sales values.
During the year ended December 31, 2024, management services costs and expenses increased by $1.7 million, or 7.6%, to $23.9 million, from $22.2 million for the year ended December 31, 2023. The increase was mainly attributable to an increase in intangible asset amortization expense recognized during the year ended December 31, 2024. 31 Table of Contents Management fees—related party.
During the year ended December 31, 2025, management services costs and expenses decreased by $11.8 million, or 49.4%, to $12.1 million, from $23.9 million for the year ended December 31, 2024. The decrease was mainly attributable to a decrease in intangible asset amortization expense recognized during the year ended December 31, 2025. 32 Table of Contents Selling, general, and administrative.
Investments in Unconsolidated Entities For investments in entities that we do not control, but over which we exercise significant influence, we use the equity method of accounting.
Investments in Unconsolidated Entities For investments in entities that we do not control, but over which we exercise significant influence, we use the equity method of accounting. Investments accounted for under the equity method of accounting are recorded at cost and adjusted for our share in the earnings (losses) of the venture and cash contributions and distributions.
We also made payments of $4.3 million to reduce our related party reimbursement obligation during the year ended December 31, 2023. We used $0.8 million and $0.2 million during the years ended December 31, 2024 and 2023, respectively, to net settle certain share-based compensation awards with employees for tax withholding purposes.
The tax distribution is treated as an advance distribution under the LPA. We used $2.4 million and $0.8 million during the years ended December 31, 2025 and 2024, respectively, to net settle certain share-based compensation awards with employees for tax withholding purposes.
Great Park Neighborhoods can include up to approximately 10,500 homesites and approximately 4.9 million square feet of commercial space. The actual commercial square footage and number of homesites are subject to change based on ultimate use and land planning.
The actual commercial square footage and number of homesites are subject to change based on ultimate use and land planning.
Revenues increased by $26.2 million, to $237.9 million for the year ended December 31, 2024, from $211.7 million for the year ended December 31, 2023.
Revenues decreased by $127.9 million, to $110.0 million for the year ended December 31, 2025, from $237.9 million for the year ended December 31, 2024.
During the year ended December 31, 2023, we received $162.4 million from the sale of land at our Valencia segment. We also received incentive compensation payments of $41.6 million under our development management agreement with the Great Park Venture. The payment is net of $4.9 million that we concurrently distributed to the holders of the management company’s Class B units.
During the year ended December 31, 2025, we received $42.5 million from the sale of land at our Valencia segment. We also received incentive compensation payments of $68.0 million under our development management agreement with the Great Park Venture.

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Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

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Biggest changeAs of December 31, 2024, we had outstanding consolidated indebtedness of $525.7 million, none of which bears interest based on floating interest rates. 37 Table of Contents We have not entered into any transactions using derivative financial instruments or derivative commodity instruments. 38 Table of Contents
Biggest changeAs of December 31, 2025, we had outstanding consolidated indebtedness of $443.3 million, none of which bears interest based on floating interest rates. We have not entered into any transactions using derivative financial instruments or derivative commodity instruments. 39 Table of Contents

Other FPH 10-K year-over-year comparisons