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What changed in Howard Hughes Holdings Inc.'s 10-K — 2023 vs 2024

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Paragraph-level year-over-year comparison of Howard Hughes Holdings Inc.'s 2023 and 2024 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 2024 report.

+349 added−413 removedSource: 10-K (2025-02-26) vs 10-K (2024-02-27)

Top changes in Howard Hughes Holdings Inc.'s 2024 10-K

349 paragraphs added · 413 removed · 240 edited across 8 sections

Item 1. Business

Business — how the company describes what it does

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Biggest changeSignificant factors that we believe allow us to compete effectively in this business include: – the size and scope of our MPCs – our strong reputation within the industry and years of experience serving our communities – the recreational and cultural amenities available within our communities – the commercial centers in our communities, including the properties that we own and/or operate or may develop – our relationships with homebuilders – our level of debt relative to total assets – the proximity of our developments to major metropolitan areas With respect to the Managed Businesses and Events & Sponsorships within our Seaport segment, the restaurant and event industry is intensely competitive with respect to the type and quality of food, price, service, restaurant, or event location, personnel, brand, attractiveness of facilities, availability of carryout and home delivery, internet and mobile ordering capabilities, and effectiveness of advertising and marketing.
Biggest changeSignificant factors that we believe allow us to compete effectively in this business include: – the size and scope of our MPCs – our strong reputation within the industry and years of experience serving our communities – the recreational and cultural amenities available within our communities – the commercial centers in our communities, including the properties that we own and/or operate or may develop – our relationships with homebuilders – the proximity of our developments to major metropolitan areas With respect to our Strategic Developments segment, our direct competitors include other commercial property developers and other owners of commercial real estate that engage in similar businesses.
Properties for additional detail on individual properties, including assets by reportable segment, geographic location, and predominant use at December 31, 2023. This section should be referred to when reading Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations , which contains information about our financial results and operating performance for our business segments.
Properties for additional detail on individual properties, including assets by reportable segment, geographic location, and predominant use at December 31, 2024. This section should be referred to when reading Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations , which contains information about our financial results and operating performance for our business segments.
We believe our structure currently provides us with significant financial and operating flexibility to maximize the value of our real estate portfolio. HHH 2023 FORM 10-K | 5 BUSINESS Table of Contents Index to Financial Statements Competition The nature and extent of our competition depends on the type of property involved.
We believe our structure currently provides us with significant financial and operating flexibility to maximize the value of our real estate portfolio. HHH 2024 FORM 10-K | 5 BUSINESS Table of Contents Index to Financial Statements Competition The nature and extent of our competition depends on the type of property involved.
From time to time, we use our website as an additional means of disclosing public information to investors, the media, and others interested in us. BUSINESS SEGMENTS The following further describes our four business segments and provides a general description of the assets comprising these segments. Refer to Item 2.
From time to time, we use our website as an additional means of disclosing public information to investors, the media, and others interested in us. BUSINESS SEGMENTS The following further describes our three business segments and provides a general description of the assets comprising these segments. Refer to Item 2.
HHH 2023 FORM 10-K | 4 BUSINESS Table of Contents Index to Financial Statements Our assets are located across the United States, with the vast majority of the assets in our Operating Assets segment located within our MPCs.
HHH 2024 FORM 10-K | 4 BUSINESS Table of Contents Index to Financial Statements Our assets are located across the United States, with the vast majority of the assets in our Operating Assets segment located within our MPCs.
This land is held in our MPC segment until we identify demand for a new commercial development, at which point the land is transitioned into our Strategic Developments segment. HHH was incorporated in Delaware on August 11, 2023, and its predecessor, HHC, was incorporated in Delaware on July 1, 2010.
This land is held in our MPC segment until we identify demand for a new commercial development, at which point the land is transitioned into our Strategic Developments segment. HHH was incorporated in Delaware on August 11, 2023, and its predecessor, The Howard Hughes Corporation (HHC), was incorporated in Delaware on July 1, 2010.
We create some of the most sought-after communities in the country by curating an environment tailored to meet the needs of our residents and tenants. Our unique business model allows us to drive outsized risk-adjusted returns while maintaining a sharp focus on sustainability to ensure our communities are equipped with the resources to last several decades.
We create some of the most sought-after communities in the country by curating an environment tailored to meet the needs of our residents and tenants. Our unique business model allows us to seek attractive risk-adjusted returns while maintaining a sharp focus on sustainability to ensure our communities are equipped with the resources to last several decades.
Summerlin and Bridgeland were again ranked by Robert Charles Lesser & Co., LLC (RCLCO), capturing fourth and fifth top-selling master planned communities in the nation, respectively, for the year ended December 31, 2023. We expect the competitive position, desirable locations, and land development expertise to drive the long-term growth of our MPCs.
Summerlin and Bridgeland were again ranked by Robert Charles Lesser & Co., LLC (RCLCO), capturing fifth and seventh top-selling master planned communities in the nation, respectively, for the year ended December 31, 2024. We expect the competitive position, desirable locations, and land development expertise to drive the long-term growth of our MPCs.
For residential tenants of our multi-family properties in our Operating Assets segment, we believe the principal factors that impact their decision of where to live are: (1) walkability/proximity to work; (2) amenities; and (3) the best value for their money.
For residential tenants of our multifamily properties in our Operating Assets segment, we believe the principal factors that impact their decision of where to live are: (1) walkability/proximity to work; (2) amenities; and (3) the best value for their money.
We are in various stages of predevelopment or execution of our strategic plans for many of these assets based on market conditions. As of December 31, 2023, seven properties are under construction and not yet placed into service. We generally obtain construction financing to fund a significant amount of the costs associated with developing these assets.
We are in various stages of predevelopment or execution of our strategic plans for many of these assets based on market conditions. As of December 31, 2024, eight properties were under construction and not yet placed into service. We generally obtain construction financing to fund a significant amount of the costs associated with developing these assets.
Our MPCs, including our Floreo joint venture, span approximately 101,000 gross acres, with approximately 22,000 residential acres of land remaining to be developed and sold in high-demand geographic areas. In addition to the residential land, our MPC segment contains approximately 13,000 acres designated for commercial development or sale to non-competing users such as hospitals.
Our MPCs, including Floreo, our unconsolidated joint venture, span approximately 101,000 gross acres, with approximately 21,000 residential acres of land remaining to be developed and sold in high-demand geographic areas. In addition to the residential land, our MPC segment contains approximately 14,000 acres designated for commercial development or sale to non-competing users such as hospitals.
This represents approximately 13 times the 7.5 million square feet we have delivered in the last 13 years without having to acquire another development site or external asset, which we believe is a significant competitive advantage over other real estate development corporations. – Flexible Balance Sheet . We ended the year with $631.5 million of cash on hand.
This represents approximately 13 times the 7.8 million square feet we have delivered in the last 14 years without having to acquire another development site or external asset, which we believe is a significant competitive advantage over other real estate development corporations. – Flexible Balance Sheet . We ended the year with $596.1 million of cash on hand.
Financial information about each of our segments is presented in Note 18 - Segments in the Notes to Consolidated Financial Statements under Item 8 of this Form 10-K. Our Competitive Strengths We distinguish ourselves from other real estate companies through the following competitive strengths: – Track Record of Value Creation .
Financial information about each of our segments is presented in Note 18 - Segments in the Notes to Consolidated Financial Statements under Item 8 of this Annual Report. Our Competitive Strengths We distinguish ourselves from other real estate companies through the following competitive strengths: – Track Record of Value Creation .
Master Planned Communities As of December 31, 2023, our portfolio of MPCs comprises Summerlin in Las Vegas; The Woodlands, The Woodlands Hills and Bridgeland in the Houston region; and Teravalis in the Phoenix region. Our MPC segment includes the development and sale of residential and commercial land, primarily in large-scale, long-term projects.
Master Planned Communities As of December 31, 2024, our portfolio of MPCs was comprised of Summerlin in Las Vegas; The Woodlands, The Woodlands Hills and Bridgeland in the Houston region; and Teravalis in the Phoenix region. Our MPC segment includes the development and sale of residential and commercial land, primarily in large-scale, long-term projects.
HHH 2023 FORM 10-K | 11 RISK FACTORS Table of Contents Index to Financial Statements
HHH 2024 FORM 10-K | 11 RISK FACTORS Table of Contents Index to Financial Statements
The 2022 Annual Report on Form 10-K of our subsidiary, The Howard Hughes Corporation, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K, and other publicly filed documents, including all exhibits filed therewith, are available and may be accessed free of charge through the Investors section of our website under the SEC Filings subsection, as soon as reasonably practicable after those documents are filed with, or furnished to, the SEC at www.sec.gov.
Our Annual Report on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K, and other publicly filed documents, including all exhibits filed therewith, are available and may be accessed free of charge through the Investors section of our website under the Securities and Exchange Commission (SEC) Filings subsection, as soon as reasonably practicable after those documents are filed with, or furnished to, the SEC at www.sec.gov.
We have completed the development of 7.5 million square feet of office and retail operating properties, 5,194 multi-family units, and 909 hospitality keys since 2011.
We have completed the development of 7.8 million square feet of office and retail operating properties, 5,194 multifamily units, and 909 hospitality keys since 2011.
Excluding land which we own, we have invested approximately $3.2 billion in these developments, which is projected to generate a 9.0% yield on cost, a significant spread over market cap rates which, in turn, has generated meaningful value for our shareholders. These investments and returns exclude condominium development as well as projects under construction.
Excluding the value of land that we own, we have invested approximately $3.4 billion in these developments, which is projected to generate a 8.9% yield on cost, a significant spread over market cap rates which, in turn, has generated meaningful value for our stockholders. These investments and returns exclude condominium development as well as projects under construction.
As of December 31, 2023, our MPCs, including Floreo, our unconsolidated joint venture near Phoenix, Arizona, encompass approximately 101,000 gross acres of land and include approximately 35,000 acres of land available for sale or development.
As of December 31, 2024, our MPCs, including Floreo, our unconsolidated joint venture, encompassed approximately 101,000 gross acres of land and include approximately 35,000 acres of land available for sale or development.
In Ward Village, we have either opened or have under construction 4,287 condominium units, which have approximately 99.2% units sold as of December 31, 2023. – Unique, Diverse Portfolio . We own a portfolio with many diverse market-leading assets with a combination of steady cash flow and longer-term value creation opportunities. – Significant Value Creation Opportunity .
In Ward Village, we have either opened or started construction on 4,727 condominium units, with approximately 98.4% of these units sold or presold as of December 31, 2024. – Unique, Diverse Portfolio . We own a portfolio with many diverse market-leading assets with a combination of steady cash flow and longer-term value creation opportunities. – Significant Value Creation Opportunity .
These policies and our Human Rights Policy are published on the Company’s website (https://investor.howardhughes.com/governance/governance-documents). HHH 2023 FORM 10-K | 10 BUSINESS Table of Contents Index to Financial Statements REGULATORY MATTERS A portion of our business is dedicated to the development and sale of condominiums.
These documents are published under Governance Documents on the Company’s website. HHH 2024 FORM 10-K | 10 BUSINESS Table of Contents Index to Financial Statements REGULATORY MATTERS A portion of our business is dedicated to the development and sale of condominiums.
HHH’s program is shaped and supported by the Board and encompasses a range of corporate governance policies and guidelines that include but are not limited to: Anti-Corruption Compliance Policy, Board Diversity Policy, Cybersecurity Policy, Code of Business Conduct and Ethics for Officers and Employees, Code of Business Conduct and Ethics for the Board of Directors, Corporate Governance Guidelines, and Insider Trading Policy.
HHH’s overall governance program is shaped and supported by the Board and encompasses a range of corporate governance policies and guidelines that include but are not limited to: Supplier Code of Conduct, Human Rights Policy, Anti-Corruption Compliance Policy, Code of Conduct, Code of Conduct and Ethics for Board of Directors, Corporate Governance Guidelines, Diversity Policy, and the Whistleblower Hotline.
With significant existing entitlements, we hold an advantage over many of our competitors in our markets in that we already own or have significant influence over, substantial acreage for development. We also own the majority of square feet of each product type in many of our markets. Available Information Our website address is www.howardhughes.com.
We also compete with residential condominium developers. With significant existing entitlements, we hold an advantage over many of our competitors in our markets in that we already own or have significant influence over, substantial acreage for development. We also own the majority of square feet of each product type in many of our markets.
Seaport Entertainment On October 5, 2023, HHH announced the intent to form a new division, Seaport Entertainment, that is expected to include the Company’s entertainment-related assets in New York and Las Vegas, including the Seaport in Lower Manhattan, the Las Vegas Aviators Triple-A Minor League Baseball team, and the Las Vegas Ballpark, as well as the Company’s ownership stake in Jean-Georges Restaurants and other partnerships and its 80% interest in the air rights above the Fashion Show Mall in Las Vegas.
SEG included HHH’s entertainment-related assets in New York and Las Vegas, including the Seaport in Lower Manhattan, the Las Vegas Aviators Triple-A Minor League Baseball team and the Las Vegas Ballpark, as well as the Company’s ownership stake in Jean-Georges Restaurants and other partnerships, and an interest in and to 80% of the air rights above the Fashion Show Mall in Las Vegas.
Our residential land sales, recurring NOI, and profits on the sales of condominium units generate substantial amounts of free cash flow, which is used to fund the equity required to execute our many development opportunities.
One of our key differentiators is our ability to self-fund significant portions of our new development without having to dispose of our recently completed developments. Our residential land sales, recurring NOI, and profits on the sales of condominium units generate substantial amounts of free cash flow, which is used to fund the equity required to execute our many development opportunities.
With respect to our Operating Assets segment and our Landlord Operations within the Seaport segment, we primarily compete for retail, office, and multi-family tenants.
With respect to our Operating Assets segment, we primarily compete for retail, office, and multifamily tenants.
We believe that the long-term value of our Operating Assets is driven by their concentration in our MPCs, where we have a competitive advantage.
HHH 2024 FORM 10-K | 6 BUSINESS Table of Contents Index to Financial Statements We believe that the long-term value of our Operating Assets is driven by their concentration in our MPCs, where we believe we have a competitive advantage.
HHH 2023 FORM 10-K | 7 BUSINESS Table of Contents Index to Financial Statements We also occasionally sell or lease land for commercial development when we deem its use will not compete with our existing properties or our development strategy.
We also occasionally sell or lease land for commercial development when we deem its use will not compete with our existing properties or our development strategy.
Business Overview The Company’s award-winning assets include one of the nation's largest portfolios of master planned communities (MPCs) spanning approximately 101,000 gross acres, as well as operating properties, strategic developments, and other unique assets across six states from New York to Hawai‘i.
See Note 2 - Discontinued Operations in the Notes to Consolidated Financial Statements under Item 8 of this Annual Report for additional information. Business Overview The Company’s award-winning assets include one of the nation's largest portfolios of master planned communities (MPCs), spanning approximately 101,000 gross acres, as well as operating properties, strategic developments, and other assets across five states.
Our strong balance sheet provides substantial insulation against potential downturns and provides us with the flexibility to evaluate new real estate project opportunities. – Self-Funded Business Plan . One of our key differentiators is our ability to self-fund significant portions of our new development without having to dispose of our recently completed developments.
Unconsolidated ventures refer to partnerships or joint ventures primarily for the development and operation of real estate assets. Our strong balance sheet provides substantial insulation against potential downturns and provides us with the flexibility to evaluate new real estate project opportunities. – Self-Funded Business Plan .
The strategic process is complex and unique to each asset and requires ongoing assessment of the changing market dynamics prior to the commencement of construction.
Many of these developments require extensive planning and expertise in large-scale and long-range development to maximize their highest and best uses. The strategic process is complex and unique to each asset and requires ongoing assessment of the changing market dynamics prior to the commencement of construction.
As of December 31, 2023, our total debt equaled approximately 55.4% of the book value of our total assets, which we believe is significantly less than our market value.
As of December 31, 2024, our total debt equaled approximately 55.7% of the book value of our total assets, which we believe is significantly less than our market value. Our net debt, which includes our share of debt of unconsolidated ventures less cash and Special Improvement District and Municipal Utility District receivables, equaled approximately 48.8% of our total enterprise value.
(HHH or the Company), the new holding company, replaced HHC as the public company trading on the New York Stock Exchange.
Item 1. Business OVERVIEW General On August 11, 2023, Howard Hughes Holdings Inc. (HHH or the Company), a new holding company, replaced The Howard Hughes Corporation (HHC) as the public company trading on the New York Stock Exchange.
Our program is overseen by our chief executive officer, president, and board of directors. Additional details on our sustainable, inclusive, and transparent approach are available in our latest ESG annual report now called the Communities Report, which can be found on the Company’s website (https://www.howardhughes.com/communities/).
Additional details on our sustainable, inclusive, and transparent approach are available in our most recent annual Communities Report, which can be found on the Company’s website (https://www.howardhughes.com/communities/). This annual report, published in October 2024, looks at the collective efforts of our team in 2023.
The Risk Committee also reviews risk mitigation activities for emerging risks and oversees management’s approach to fostering a risk-intelligent culture. Additionally, the Risk Committee identifies key risk topics to refer to the Board for further analysis and decision-making.
The committee reviews both emerging risks and risk mitigation activities deemed material by management, and oversees management’s approach to fostering a risk-intelligent culture.
Once the commercial developments are completed, the assets transition to Operating Assets, which increase recurring Net Operating Income (NOI), further funding our Strategic Developments. New office, retail, and other commercial amenities make our MPC residential land more appealing to buyers and increase the velocity of land sales at premiums that typically exceed the broader market.
New office, retail, and other commercial amenities make our MPC residential land more appealing to buyers and increase the velocity of land sales at premiums that typically exceed the broader market. This increased demand for residential land generates more cash flow from MPCs, thus continuing the value-creation cycle.
We operate through four business segments: Operating Assets, MPCs, Strategic Developments, and Seaport. We create a unique and continuous value-creation cycle through operational and financial synergies associated with our three primary business segments of Operating Assets, MPCs, and Strategic Developments.
We operate through three business segments: Operating Assets, MPCs, and Strategic Developments. We create a continuous value-creation cycle through operational and financial synergies associated with these three business segments. In our MPC segment, we plan, develop, and manage small cities and large-scale, mixed-use communities, in markets with strong long-term growth fundamentals.
Strategic Developments Our Strategic Developments segment consists of 18 development or redevelopment projects, including developments within our MPCs that will transition to Operating Assets upon completion and condominium towers at Ward Village. Many of these developments require extensive planning and expertise in large-scale and long-range development to maximize their highest and best uses.
HHH 2024 FORM 10-K | 7 BUSINESS Table of Contents Index to Financial Statements Strategic Developments Our Strategic Developments segment consists of 15 development or redevelopment projects, including developments within our MPCs that will transition to Operating Assets upon completion and condominium towers at Ward Village in Hawai‘i and The Woodlands.
HHH became the successor issuer to HHC pursuant to Rule 12g-3 (a) under the Exchange Act and replaced HHC as the public company trading on the New York Stock Exchange under the ticker symbol "HHH." The holding company reorganization is intended to be a tax-free transaction for U.S. federal income tax purposes for the Company’s stockholders.
HHH became the successor issuer to HHC pursuant to Rule 12g-3 (a) under the Exchange Act and replaced HHC as the public company trading on the New York Stock Exchange under the ticker symbol "HHH." Seaport Entertainment Spinoff On July 31, 2024, the spinoff of Seaport Entertainment Group Inc. and its subsidiaries (Seaport Entertainment or SEG) was completed.
We will also occasionally sell an operating asset when it does not complement our existing properties or no longer fits within our current strategy.
We will also occasionally sell an operating asset when it does not complement our existing properties or no longer fits within our current strategy. In 2024, the Company completed the sale of four non-core ground leases and a medical office building in The Woodlands, and a retail property in Bridgeland for total proceeds of $51.6 million.
New homeowners create demand for commercial developments, such as retail, office, and multi-family offerings. We build these commercial properties through Strategic Developments at the appropriate time using the cash flow harvested from the sale of land to homebuilders, which helps mitigate development risk.
We build these commercial properties through our Strategic Developments business at the appropriate times, which helps mitigate development risk, using the cash flow harvested from the sale of land to homebuilders. Once the commercial developments are completed, the assets transition to our Operating Assets segment, which increases recurring Net Operating Income (NOI), further funding our Strategic Developments.
As of December 31, 2023, we have 73 Operating Assets, including our investments in unconsolidated ventures, consisting of 11 retail properties, 34 office properties, 17 multi-family properties, and 11 other operating properties or investments. Excluding our projects under construction, we own approximately 8.8 million square feet of retail and office space and 5,587 multi-family units.
Excluding our projects under construction, we own approximately 9.2 million square feet of retail and office space and 5,587 multifamily units.
Ward Village was honored and recognized as the top LEED developer in Hawai'i with the most LEED-certified and registered green buildings in the state. Each community manages and addresses its unique context through resilient planning, green building design, high operational performance, and ongoing risk management.
The Supplier Code of Conduct is available under Governance Documents on the Company’s website. Each community manages and addresses its unique context through resilient planning, green building design, high operational performance, and ongoing risk management.
These programs encompass a robust health benefits package and wellness discount, a 401k match program, up to 12 weeks of fully paid parental leave, support for adoption and surrogacy services, commuter benefits, and even pet care insurance. In 2023, we elevated our efforts in enhancing our workplace culture, fostering inclusivity, and promoting opportunities for all.
Personal well-being is prioritized through comprehensive benefits that include a robust health package, a 401(k) match program, up to 12 weeks of fully paid parental leave, adoption and surrogacy support, commuter benefits, pet insurance, and wellness incentives designed for all life stages.
In our MPC segment, we plan, develop, and manage small cities and large-scale, mixed-use communities in markets with strong long-term growth fundamentals. This business focuses on the horizontal development of residential land. The improved acreage is then sold to homebuilders who build and sell homes to new residents.
This business focuses on the horizontal development of residential land. The improved acreage is then sold to homebuilders who build and sell homes to new residents. New homeowners create demand for commercial developments, such as retail, office, multifamily, and hospitality offerings.
HHH 2023 FORM 10-K | 9 BUSINESS Table of Contents Index to Financial Statements Social Strategy and Impact Human Capital As of December 31, 2023, our workforce was made up of approximately 608 employees who form the bedrock of our core operations.
With this addition, Howard Hughes now boasts one of the largest LEED precertified or certified community portfolios in the U.S., covering more than 62,000 acres. Social Strategy and Impact Human Capital As of December 31, 2024, our workforce was made up of approximately 545 employees who form the bedrock of our core operations.
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Item 1. Business OVERVIEW General On July 17, 2023, The Howard Hughes Corporation (HHC) announced that its Board of Directors authorized the creation of a holding company structure. On August 11, 2023, upon the consummation of the transaction, Howard Hughes Holdings Inc.
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Under the terms of the separation, each stockholder who held HHH common stock as of the close of business on July 29, 2024, the record date for the distribution, received one share of SEG common stock for every nine shares of HHH common stock held as of the close of business on such date.
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The Board and the executive officers of HHC now hold their same roles at HHH. The Company believes that the reorganization will promote the growth of its businesses by providing additional flexibility to fund future investment opportunities and to segregate assets and related liabilities in separate subsidiaries.
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SEG common stock began trading on the NYSE American stock exchange on August 1, 2024, under the symbol “SEG”. As the spinoff of SEG represents a strategic shift in the Company’s operations, the results of SEG are presented as discontinued operations for all periods throughout this Annual Report.
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References to HHH, the Company, we, us, and our refer to Howard Hughes Holdings Inc. and its consolidated subsidiaries, which includes The Howard Hughes Corporation, unless otherwise specifically stated. References to HHC refer to The Howard Hughes Corporation and its consolidated subsidiaries unless otherwise specifically stated.
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Operating Assets We have developed many of the assets in our Operating Assets segment since the Company’s inception in 2010. As of December 31, 2024, we have 74 Operating Assets, including our investments in unconsolidated ventures, consisting of 12 retail properties, 36 office properties, 17 multifamily properties, and 9 other operating properties or investments.
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HHH is establishing Seaport Entertainment with the intention of completing its spinoff as an independent, publicly traded company in 2024, but there can be no assurance regarding the ultimate timing of the spinoff or that the spinoff will ultimately occur.
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Ward Village We continue to transform Ward Village into a vibrant neighborhood offering unique retail experiences, dining, and entertainment, along with exceptional residences and workforce housing set among open public spaces and pedestrian-friendly streets.
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The planned separation of Seaport Entertainment will refine the identity of HHH as a pure-play real estate company focused solely on its portfolio of master planned communities and allow the new company, Seaport Entertainment, to operate independently as an entertainment-focused enterprise.
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We believe we have found the optimal mix of price point and product in the Honolulu market for condominium development as evidenced by the demand for our condominium projects. In January 2025, the State of Hawai’i approved amendments to the local development rules to include updated guidelines for smart growth in areas including Ward Village.
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This increased demand for residential land generates more cash flow from MPCs, thus continuing the value-creation cycle. Our fourth business segment, Seaport, is one of the few multi-block districts largely under private management by a single owner in New York City.
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The Company estimates this amendment increases its potential residential entitlements in Ward Village between 2.5 to 3.5 million gross square feet, which could be used for the development of additional condominium towers in future years.
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Our net debt, which includes our share of debt of unconsolidated ventures less cash and Special Improvement District (SID) and Municipal Utility District (MUD) receivables, equaled approximately 46.1% of our total enterprise value. Unconsolidated ventures refer to partnerships or joint ventures primarily for the development and operation of real estate assets.
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ENVIRONMENTAL, SOCIAL AND GOVERNANCE (ESG) Howard Hughes communities are rooted with a deep respect for the natural environment and provide an exceptional lifestyle that has made them among the most sought-after places to live and work in the country. Today, our portfolio includes approximately 101,000 gross acres in five states.
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We compete in the New York area for guests, management, and hourly personnel. With respect to our Strategic Developments segment our direct competitors include other commercial property developers and other owners of commercial real estate that engage in similar businesses. With respect to our Strategic Developments segment, we also compete with residential condominium developers.
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The migration into The Woodlands, Bridgeland, and Summerlin reinforces that thoughtful planning is highly attractive as residents, CEOs, and commercial tenants are seeking and expecting a committed approach to sustainability and community health and wellness.
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HHH 2023 FORM 10-K | 6 BUSINESS Table of Contents Index to Financial Statements Operating Assets We have developed many of the assets in our Operating Assets segment since the Company’s inception in 2010.
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The strong demand for homes in amenity-rich, business-friendly environments that offer a high quality of life is driving relocation to our communities, and companies are following to take advantage of this talent pool.
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In 2023, the Company completed the sale of two land parcels in Honolulu, Hawai‘i, including an 11,929-square-foot building at the Ward Village Retail property, as well as two self-storage facilities and a medical office building in The Woodlands, for total net proceeds after debt repayment of $43.3 million.
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Through purposeful planning and advanced design of homes, offices, retail, mixed-use commercial areas, as well as public gathering spaces, we promote energy efficiency and conservation of resources, provide access to nature and walkable downtowns, and offer short commutes that foster community engagement and connectivity.
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Seaport On October 5, 2023, HHH announced the intent to form a new division, Seaport Entertainment, that is expected to include all of the assets in the Seaport segment, as well as the Las Vegas Aviators Triple-A Minor League Baseball team, the Las Vegas Ballpark, and our 80% interest in the air rights above the Fashion Show Mall in Las Vegas.
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We understand the value of having access to the natural environment, which is why we have dedicated at least 20% of our communities across the country to parks, lakes, trails, and nature preserves. Our program is overseen by our Chief Executive Officer, President, and Board of Directors.
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HHH is establishing Seaport Entertainment with the intention of completing its spinoff as an independent, publicly traded company in 2024, but there can be no assurance regarding the ultimate timing of the spinoff or that the spinoff will ultimately occur.
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Our disclosure is in reference to the most recent Global Reporting Initiative’s 2021 Standards , includes indices aligned with the Task Force on Climate-related Financial Disclosures (TCFD) and the Sustainability Accounting Standards Board Real Estate Standard. Prior to this report, our most recent Communities Report was published in October 2023, and covered calendar year 2022.
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The Seaport spans approximately 472,000 square feet and several city blocks, including Pier 17, the Tin Building, the Historic District, and the 250 Water Street development. Our Seaport segment is part non-stabilized operating asset, part development project, and part operating business.
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Environmental Strategy and Performance In the planning and development of our award-winning master planned communities, we take meaningful and measurable action to be more efficient and resilient, as we promote access to green spaces, reduce energy use and carbon emissions, conserve water resources, protect biodiversity, and support healthy living.
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Due to this range of asset types, we categorize the businesses in the Seaport segment into the following groups: Landlord Operations, Managed Businesses, the Tin Building, and Events and Sponsorships.
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Our approach starts by embedding industry leading sustainable strategies from the beginning as part of our horizontal land use planning and vertical development process. Best practices are then carried into the construction phase and through the ongoing maintenance and operations of our portfolio.
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HHH 2023 FORM 10-K | 8 BUSINESS Table of Contents Index to Financial Statements ENVIRONMENTAL, SOCIAL AND GOVERNANCE (ESG) Our expansive portfolio and tremendous scale give HHH a unique opportunity to build next-generation communities and make a meaningful, positive impact on people’s lives at a local, regional, and national level.
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We leverage independent reporting frameworks, third-party certifications, and globally adopted guidance to ensure we are in alignment with industry-recognized standards. Voluntary and industry leadership frameworks pursued in our portfolio currently exceed U.S. regulations and supplement our ambition to be best in class.
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We are acutely aware of the responsibility that comes along with that opportunity. Building on our reputation for excellence and innovation, we remain focused on making our developments sustainable; giving back to our communities; protecting our landscapes; supporting inclusivity; and establishing communities that create value and well-being for generations to come.
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HHH 2024 FORM 10-K | 8 BUSINESS Table of Contents Index to Financial Statements We pursue sustainability certifications for all applicable assets, and target a minimum of Leadership in Energy and Environmental Design (LEED) Silver for all new strategic developments to promote third-party verification and reinforce our trusted commitment to sustainable growth.
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Acknowledging the power of our scale, as well as the opportunities for taking climate action, we are amplifying and accelerating our efforts to further advance resiliency, conservation, innovation, and inclusion throughout our large-scale, mixed-use communities.
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Sustainability certifications require suppliers to align with common goals of energy and water efficiency, environmentally responsible material use, and occupational health. Our suppliers and vendors are strongly encouraged to follow the same ethical standards with respect to environmental impact, social responsibility, and corporate governance principles that guide our business.

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Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

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Biggest changeThe process to comply with these regulations is usually lengthy and costly, may not result in the approvals we seek and can be expected to materially affect our development activities. Government regulations and legal challenges may delay the start or completion of the development of our communities, increase our expenses, or limit our homebuilding or other activities.
Biggest changeIn addition, our competitors and local residents may challenge our efforts to obtain entitlements and permits for the development of properties. The process to comply with these regulations is usually lengthy and costly, may not result in the approvals we seek and can be expected to materially affect our development activities.
Moreover, if a data security incident or breach affects our systems or our vendors’ systems, whether through a breach of our systems or a breach of the systems of third parties, or results in the unauthorized release of personally identifiable information, our reputation and brand could be materially damaged, and we may be exposed to a risk of loss or litigation and possible liability, including, without limitation, loss related to the fact that agreements with our vendors, or our vendors’ financial condition, may not allow us to recover all costs related to a cyber-breach for which they alone are responsible or for which we are jointly responsible for, which could result in a material adverse effect on our business, results of operations, and financial condition.
Moreover, if a data security incident or breach affects our systems or our vendors’ systems, whether through a breach of our systems or a breach of the systems of third parties, or results in the unauthorized release of personally identifiable information, our reputation and brand could be materially damaged, and we may be exposed to a risk of loss or litigation and possible liability, including, without limitation, loss related to the fact that agreements with our vendors, or our vendors’ financial condition, may not allow us to recover all costs related to a cyber-breach for which they alone are responsible or for which we are jointly responsible, which could result in a material adverse effect on our business, results of operations, and financial condition.
Our development, redevelopment, and construction activities expose us to risks such as: – inability to obtain construction financing for the development or redevelopment of properties – increased construction costs for a project that exceeded our original estimates due to increases in materials, labor, or other costs, which could make completion of the project less profitable because market rents or condominium prices may not increase sufficiently to compensate for the increased construction costs – supply chain issues and increased difficulty for workforce recruitment which may lead to construction delays and increased project development costs – claims for construction defects after a property has been developed – poor performance or nonperformance by any of our joint venture partners or other third parties on whom we rely – health and safety incidents and site accidents – easement restrictions which may impact our development costs and timing – compliance with building codes and other local regulations – the inability to secure tenants necessary to support commercial projects If any of the aforementioned risks were to occur during the development, redevelopment, or construction of our properties, it could have a substantial negative impact on the project’s success and result in a material adverse effect on our financial condition or results of operations.
Our development, redevelopment, and construction activities expose us to risks such as: – inability to obtain construction financing for the development or redevelopment of properties – increased construction costs for a project that exceed our original estimates due to increases in materials, labor, or other costs, which could make completion of the project less profitable because market rents or condominium prices may not increase sufficiently to compensate for the increased construction costs – supply chain issues and increased difficulty in workforce recruitment which may lead to construction delays and increased project development costs – claims for construction defects after a property has been developed – poor performance or nonperformance by any of our joint venture partners or other third parties on whom we rely – health and safety incidents and site accidents – easement restrictions which may impact our development costs and timing – compliance with building codes and other local regulations – the inability to secure tenants necessary to support commercial projects If any of the aforementioned risks were to occur during the development, redevelopment, or construction of our properties, it could have a substantial negative impact on the project’s success and result in a material adverse effect on our financial condition or results of operations.
Some of our properties, including Houston-area MPCs, Ward Village, and the Seaport are located in regions that could be affected by increases in sea levels, the frequency or severity of hurricanes and tropical storms, or environmental disasters, whether such events are caused by global climate changes or other factors.
Some of our properties, including Houston-area MPCs and Ward Village, are located in regions that could be affected by increases in sea levels, the frequency or severity of hurricanes and tropical storms, or environmental disasters, whether such events are caused by global climate changes or other factors.
Many of the properties we own are located in the same or in a limited number of geographic regions, including Texas, Hawai‘i, Nevada, New York, and Maryland. In October 2021, we announced the launch of Teravalis, a new large-scale master planned community in the West Valley of Phoenix, Arizona.
Many of the properties we own are located in the same or in a limited number of geographic regions, including Texas, Hawai‘i, Nevada, and Maryland. In October 2021, we announced the launch of Teravalis, a new large-scale master planned community in the West Valley of Phoenix, Arizona.
Given the current economic environment for certain retailers, there is a heightened risk an anchor store could close or enter into bankruptcy. Any losses resulting from the bankruptcy of any of our existing tenants could adversely impact our financial condition.
Given the current economic environment for certain retailers, there is a heightened risk that an anchor store could close or enter into bankruptcy. Any losses resulting from the bankruptcy of any of our existing tenants could adversely impact our financial condition.
The Company has no business operations of its own, and the Company’s only significant assets are the outstanding equity interests of its subsidiaries, including The Howard Hughes Corporation (HHC).
The Company has no business operations of its own, and the Company’s only significant assets are the outstanding equity interests of its subsidiaries, including The Howard Hughes Corporation.
HHH 2023 FORM 10-K | 13 RISK FACTORS Table of Contents Index to Financial Statements Further, Summerlin is to some degree dependent on the gaming industry, which could be adversely affected by changes in consumer trends and preferences and other factors over which we have no control.
HHH 2024 FORM 10-K | 13 RISK FACTORS Table of Contents Index to Financial Statements Further, Summerlin is to some degree dependent on the gaming industry, which could be adversely affected by changes in consumer trends and preferences and other factors over which we have no control.
These measures may reduce our ability to open new MPCs and to build and sell other real estate development projects in the affected markets, including with respect to land we may already own, and create additional costs and administration requirements, which in turn may harm our future sales, margins, and earnings.
These measures may reduce our ability to open new MPCs and to build and sell other real estate development projects in the affected markets, including with respect to land we may already own, and create additional costs and administrative requirements, which in turn may harm our future sales, margins, and earnings.
Additionally, adverse weather events can cause widespread property damage and significantly depress the local economies in which the Company operates and have an adverse impact on the Company’s business, financial condition, and operations. RISKS RELATED TO OUR BUSINESS OPERATIONS AND INFRASTRUCTURE Our MPC segment is highly dependent on homebuilders.
Additionally, adverse weather events can cause widespread property damage and significantly depress the local economies in which the Company operates and have an adverse impact on the Company’s business, financial condition, and operations. RISKS RELATED TO OUR BUSINESS OPERATIONS, INFRASTRUCTURE, AND STRATEGIC MATTERS Our MPC segment is highly dependent on homebuilders.
Accordingly, Pershing Square will have the ability to influence our policies and operations, including the appointment of management, future issuances of our common stock or other securities, the payment of dividends, if any, on our common stock, the incurrence or modification of debt by us, amendments to our amended and restated certificate of incorporation and amended and restated bylaws and the entering into of extraordinary transactions, and its interests may not in all cases be aligned with other stockholders’ interests.
Accordingly, Pershing Square has the ability to influence our policies and operations, including the appointment of management, future issuances of our common stock or other securities, the payment of dividends, if any, on our common stock, the incurrence or modification of debt by us, amendments to our amended and restated certificate of incorporation and amended and restated bylaws and the entering into of extraordinary transactions, and its interests may not in all cases be aligned with other stockholders’ interests.
Any failure in or breach of our information security systems, those of third-party service providers, or a breach of other third-party systems that ultimately impacts our operational or information security systems as a result of cyber-attacks or information security breaches could result in a wide range of potentially serious harm to our business and results of operations.
Any failure in or breach of our information security systems, those of third-party service providers, or a breach of other third-party systems that ultimately impacts our operational or information security systems as a result of cyber-attacks or information security breaches could result in potentially serious harm to our business and results of operations.
Subject to the limits contained in the indentures governing the $475 million Bridgeland Notes due 2026, the $750 million 5.375% senior notes due 2028, the $650 million 4.125% senior notes due 2029, and the $650 million 4.375% senior notes due 2031 (collectively, the Senior Notes), and any limits under our other debt agreements, we may need to incur substantial additional indebtedness from time to time, including project indebtedness for developments by our subsidiaries.
Subject to the limits contained in the indentures governing the $600 million Bridgeland Notes due 2029, the $750 million 5.375% senior notes due 2028, the $650 million 4.125% senior notes due 2029, and the $650 million 4.375% senior notes due 2031 (collectively, the Senior Notes), and any limits under our other debt agreements, we may need to incur substantial additional indebtedness from time to time, including project indebtedness for developments by our subsidiaries.
HHH 2023 FORM 10-K | 12 RISK FACTORS Table of Contents Index to Financial Statements We may be negatively impacted by the consolidation or closing of anchor stores. Many of our mixed-used properties are anchored by “big box” tenants. We could be adversely affected if these or other anchor stores were to consolidate, close, or enter into bankruptcy.
HHH 2024 FORM 10-K | 12 RISK FACTORS Table of Contents Index to Financial Statements We may be negatively impacted by the consolidation or closing of anchor stores. Many of our mixed-use properties are anchored by “big box” tenants. We could be adversely affected if these or other anchor stores were to consolidate, close, or enter into bankruptcy.
We depend on the efforts of key executive personnel. The loss of the services of any key executive personnel could adversely affect our business and operations. While we believe we have proper succession planning and are confident we could attract and train new personnel if necessary, this could impose additional costs and hinder our business strategy.
The loss of the services of any key executive personnel could adversely affect our business and operations. While we believe we have proper succession planning and are confident we could attract and train new personnel if necessary, this could impose additional costs and hinder our business strategy.
Specifically, an increased level of indebtedness could have important consequences, including: – making it more difficult for us to satisfy our obligations with respect to our indebtedness, including the Senior Notes and Loan Agreements – limiting our ability to obtain additional financing to fund future working capital, capital expenditures, debt service requirements, execution of our business strategy, or finance other general corporate requirements – requiring us to make non-strategic divestitures, particularly when the availability of financing in the capital markets is limited, which may adversely impact sales prices – requiring a substantial portion of our cash flow to be allocated to debt service payments instead of other business purposes, thereby reducing the amount of cash flow available for working capital, capital expenditures, acquisitions, dividends, and other general corporate purposes – increasing our vulnerability to general adverse economic and industry conditions, including increases in interest rates, particularly given that certain indebtedness bears interest at variable rates – limiting our ability to capitalize on business opportunities, reinvest in and develop properties, and to react to competitive pressures and adverse changes in government regulations – placing us at a disadvantage compared to other less leveraged competitors, if any – limiting our ability, or increasing the costs, to refinance indebtedness – resulting in an event of default if we fail to satisfy our obligations under our indebtedness, which default could result in all or part of our indebtedness becoming immediately due and payable and, in the case of our secured debt, could permit the lenders to foreclose on our assets securing such debt The indentures governing our Senior Notes, the Loan Agreements and our other debt agreements contain restrictions that may limit our ability to operate our business.
Specifically, an increased level of indebtedness could have important consequences, including: – making it more difficult for us to satisfy our obligations with respect to our indebtedness, including the Senior Notes and Loan Agreements – limiting our ability to obtain additional financing to fund future working capital, capital expenditures, debt service requirements, execution of our business strategy, or finance other general corporate requirements – requiring us to make non-strategic divestitures, particularly when the availability of financing in the capital markets is limited, which may adversely impact sales prices HHH 2024 FORM 10-K | 18 RISK FACTORS Table of Contents Index to Financial Statements – requiring a substantial portion of our cash flow to be allocated to debt service payments instead of other business purposes, thereby reducing the amount of cash flow available for working capital, capital expenditures, acquisitions, dividends, and other general corporate purposes – increasing our vulnerability to general adverse economic and industry conditions, including increases in interest rates, particularly given that certain indebtedness bears interest at variable rates – limiting our ability to capitalize on business opportunities, reinvest in and develop properties, and to react to competitive pressures and adverse changes in government regulations – placing us at a disadvantage compared to other less leveraged competitors, if any – limiting our ability, or increasing the costs, to refinance indebtedness – resulting in an event of default if we fail to satisfy our obligations under our indebtedness, which default could result in all or part of our indebtedness becoming immediately due and payable and, in the case of our secured debt, could permit the lenders to foreclose on our assets securing such debt The indentures governing our Senior Notes, the Loan Agreements and our other debt agreements contain restrictions that may limit our ability to operate our business.
Factors that affect our trading price may include the following: – results of operations that vary from the expectations of securities analysts and investors, including our ability to finance and achieve operational success at the Seaport project – changes in expectations as to our future financial performance, including financial estimates and investment recommendations by securities analysts and investors – announcements by us or our competitors of new significant real-estate developments, acquisitions, joint ventures, other strategic relationships or actions, capital commitments, or responses to these events – changes in general economic or market conditions, including increases in interest rates, or trends in our industry or markets – future sales of our common stock or other securities – guidance, if any, that we provide to the public, any changes in this guidance, or our failure to meet this guidance – the development and sustainability of an active trading market for our stock – changes in accounting principles – events or factors resulting from natural disasters, war, acts of terrorism, or responses to these events These broad market and industry fluctuations may adversely affect the market price of our common stock, regardless of our actual operating performance.
Factors that affect our trading price may include the following: – results of operations that vary from the expectations of securities analysts and investors, including our ability to finance and achieve the anticipated benefits of the spinoff – changes in expectations as to our future financial performance, including financial estimates and investment recommendations by securities analysts and investors – announcements by us or our competitors of new significant real-estate developments, acquisitions, joint ventures, other strategic relationships or actions, capital commitments, or responses to these events – changes in general economic or market conditions, including increases in interest rates, or trends in our industry or markets – future sales of our common stock or other securities – guidance, if any, that we provide to the public, any changes in this guidance, or our failure to meet this guidance – the sustainability of an active trading market for our stock – changes in accounting principles – events or factors resulting from natural disasters, war, acts of terrorism, or responses to these events These broad market and industry fluctuations may adversely affect the market price of our common stock, regardless of our actual operating performance.
Municipalities may restrict or place moratoriums on the availability of utilities, such as water and sewer taps. If municipalities in which we operate take such actions, it could have an adverse effect on our business by causing delays, increasing our costs, or limiting our ability to operate in those municipalities.
Municipalities may restrict or place moratoria on the availability of utilities, such as water and sewer taps. If municipalities in which we operate take such actions, they could have an adverse effect on our business by causing delays, increasing our costs, or limiting our ability to operate in those municipalities.
Certain provisions of the Internal Revenue Code could limit our ability to fully utilize certain tax assets if we were to experience a change in control. As of December 31, 2023, we have approximately $51.7 million of federal net operating loss carryforwards.
Certain provisions of the Internal Revenue Code could limit our ability to fully utilize certain tax assets if we were to experience a change in control. As of December 31, 2024, we have approximately $802.7 million of federal net operating loss carryforwards.
The ability of the ultimate buyers of condominiums to finance their purchases is generally dependent on their personal savings and availability of third-party financing. Consequently, the demand for condominiums could be adversely affected by increases in interest rates (which generally rose in 2022 and 2023), unavailability of mortgage financing, increasing housing costs, and unemployment levels.
The ability of the ultimate buyers of condominiums to finance their purchases is generally dependent on their personal savings and availability of third-party financing. Consequently, the demand for condominiums could be adversely affected by increases in interest rates (which generally rose in the period from 2022 through 2024), unavailability of mortgage financing, increasing housing costs, and unemployment levels.
Our certificate of incorporation and bylaws contain the following limitations: – the inability of our stockholders to act by written consent – restrictions on the ability of stockholders to call a special meeting without 15% or more of the voting power of the issued and outstanding shares entitled to vote generally in the election of our directors – rules regarding stockholder proposals and director nominations – the right of our board of directors to issue preferred stock without stockholder approval – a requirement that, to the fullest extent permitted by law, certain proceedings against or involving us or our directors or officers be brought exclusively in the Court of Chancery in the State of Delaware – that certain provisions may be amended only by the affirmative vote of at least 66 2/3% of the shares of common stock entitled to vote generally in the election of directors HHH 2023 FORM 10-K | 24 RISK FACTORS Table of Contents Index to Financial Statements In addition, we are a Delaware corporation, and Section 203 of the DGCL applies to us.
Our certificate of incorporation and bylaws contain the following limitations: – the inability of our stockholders to act by written consent – restrictions on the ability of stockholders to call a special meeting without 15% or more of the voting power of the issued and outstanding shares entitled to vote generally in the election of our directors – rules regarding stockholder proposals and director nominations – the right of our board of directors to issue preferred stock without stockholder approval – a requirement that, to the fullest extent permitted by law, certain proceedings against or involving us or our directors or officers be brought exclusively in the Court of Chancery in the State of Delaware – that certain provisions may be amended only by the affirmative vote of at least 66 2/3% of the shares of common stock entitled to vote generally in the election of directors In addition, we are a Delaware corporation, and Section 203 of the DGCL applies to us.
These restrictions limit our ability or the ability of certain of our subsidiaries to, among other things: – incur indebtedness or issue equity – create certain liens – pay dividends on, redeem, or repurchase capital stock or make other restricted payments – make investments – incur obligations that restrict the ability of our subsidiaries to make dividend or other payments to us HHH 2023 FORM 10-K | 19 RISK FACTORS Table of Contents Index to Financial Statements – consolidate, merge, or transfer all, or substantially all, of our assets – enter into or amend lease or other agreements or transactions without consent – substitute collateral, if applicable, due to product and geographic concentrations – enter into transactions with our affiliates – create or designate unrestricted subsidiaries Additionally, certain of our debt agreements also contain various restrictive covenants, including minimum net worth requirements, maximum payout ratios on distributions, minimum debt yield ratios, minimum fixed charge coverage ratios, minimum interest coverage ratios and maximum leverage ratios.
These restrictions limit our ability or the ability of certain of our subsidiaries to, among other things: – incur indebtedness or issue equity – create certain liens – pay dividends on, redeem, or repurchase capital stock or make other restricted payments – make investments – incur obligations that restrict the ability of our subsidiaries to make dividend or other payments to us – consolidate, merge, or transfer all, or substantially all, of our assets – enter into or amend lease or other agreements or transactions without consent – substitute collateral, if applicable, due to product and geographic concentrations – enter into transactions with our affiliates – create or designate unrestricted subsidiaries Additionally, certain of our debt agreements also contain various restrictive covenants, including minimum net worth requirements, maximum payout ratios on distributions, minimum debt yield ratios, minimum fixed charge coverage ratios, minimum interest coverage ratios and maximum leverage ratios.
As of December 31, 2023, our total consolidated debt was approximately $5.3 billion of which $2.1 billion was recourse to the Company or one of its subsidiaries. In addition, as of December 31, 2023, we have $69.3 million of recourse guarantees associated with undrawn financing commitments.
As of December 31, 2024, our total consolidated debt was approximately $5.1 billion of which $2.1 billion was recourse to the Company or one of its subsidiaries. In addition, as of December 31, 2024, we have $34.7 million of recourse guarantees associated with undrawn financing commitments.
Terrorist activities or violence also could directly affect the value of our properties, including a high-profile property such as the Seaport, through damage, destruction or loss, and the availability of insurance for such acts, or of insurance generally, might be lower or cost more, which could increase our operating expenses and adversely affect our financial condition and results of operations.
Terrorist activities or violence also could directly affect the value of our properties through damage, destruction or loss, and the availability of insurance for such acts, or of insurance generally, might be lower or cost more, which could increase our operating expenses and adversely affect our financial condition and results of operations.
As of December 31, 2023, our proportionate share of the debt of our unconsolidated ventures was $134.9 million based upon our economic interest. All of this indebtedness is without recourse to the Company, with the exception of the collateral maintenance obligation for Floreo.
As of December 31, 2024, our proportionate share of the debt of our unconsolidated ventures was $175.6 million based upon our economic interest. All of this indebtedness is without recourse to the Company, with the exception of the collateral maintenance obligation for Floreo.
Additionally, COVID-19 disrupted our business and a resurgence of it, or another pandemic, could have a material adverse effect on our business, financial performance and condition, operating results, and cash flows, and could materially adversely impact and cause disruption to, our business, financial performance and condition, operating results, and cash flows.
Additionally, COVID-19 disrupted our business and a resurgence of it, or another pandemic, could have a material adverse effect on our business, financial performance and condition, operating results, and cash flows.
We will rely on Seaport Entertainment after the spinoff to satisfy its performance and payment obligations under these agreements. If Seaport Entertainment is unable to satisfy these obligations, including its indemnification obligations, we could incur operational difficulties or losses that could have an adverse effect on our business, financial condition, and results of operations.
If Seaport Entertainment is unable to satisfy these obligations, including its indemnification obligations, we could incur operational difficulties or losses that could have an adverse effect on our business, financial condition, and results of operations.
If certain change in control events were to occur, the cash flow benefits we might otherwise have received could be decreased. Inflation has adversely affected us and may continue to adversely affect us by increasing costs beyond what we can recover through price increases. The U.S. economy has experienced an increase in inflation recently.
If certain change in control events were to occur, the cash flow benefits we might otherwise have received could be decreased. Inflation has adversely affected us in recent years, and could continue to adversely affect us in future periods, by increasing costs beyond what we can recover through price increases.
HHH 2023 FORM 10-K | 15 RISK FACTORS Table of Contents Index to Financial Statements Adverse outcomes of disputes or litigation could negatively impact our business, results of operations, and financial condition, particularly if we have not limited the extent of the damages to which we may be liable, or if our liabilities exceed the amounts of the insurance that we carry.
Adverse outcomes of disputes or litigation could negatively impact our business, results of operations, and financial condition, particularly if we have not limited the extent of the damages to which we may be liable, or if our liabilities exceed the amounts of the insurance that we carry.
RISKS RELATED TO THE SPINOFF AND OUR RELATIONSHIP WITH SEAPORT ENTERTAINMENT The spinoff of Seaport Entertainment into an independent publicly traded company may not be completed on the currently contemplated timeline, or at all, and we may not achieve some or all of the spinoff’s expected benefits.
RISKS RELATED TO THE SPINOFF AND OUR RELATIONSHIP WITH SEAPORT ENTERTAINMENT In 2024, we completed the spinoff of Seaport Entertainment into an independent publicly traded company, and we may not achieve some or all of the spinoff’s expected benefits. On July 31, 2024, we completed the spinoff of Seaport Entertainment as an independent, publicly traded company.
All of these factors reduce our ability to respond to changes in the performance of our investments and could adversely affect our business, financial condition, and results of operations. Some of our properties are subject to potential natural or other disasters.
All of these factors reduce our ability to respond to changes in the performance of our investments and could adversely affect our business, financial condition, and results of operations. HHH 2024 FORM 10-K | 14 RISK FACTORS Table of Contents Index to Financial Statements Some of our properties are subject to potential natural or other disasters.
These agreements expose us to additional risks, including a risk that counterparties of these hedging and swap agreements will not perform. There also could be significant costs and cash requirements involved to fulfill our obligations HHH 2023 FORM 10-K | 20 RISK FACTORS Table of Contents Index to Financial Statements under a hedging agreement.
These agreements expose us to additional risks, including a risk that counterparties of these hedging and swap agreements will not perform. There also could be significant costs and cash requirements involved to fulfill our obligations under a hedging agreement.
Such environmental laws may affect, for example, how we manage storm water runoff, wastewater discharges, and dust; how we develop or operate on properties on or affecting resources such as wetlands, endangered species, cultural resources, or areas subject to preservation laws; and how we address contamination.
Such environmental laws may affect, for example, how we manage storm water runoff, wastewater discharges, and dust; how we develop or operate on properties on or affecting HHH 2024 FORM 10-K | 21 RISK FACTORS Table of Contents Index to Financial Statements resources such as wetlands, endangered species, cultural resources, or areas subject to preservation laws; and how we address contamination.
REGULATORY, LEGAL AND ENVIRONMENTAL RISKS Our development, construction, and sale of condominiums are subject to state regulations and may be subject to claims from the condominium owner’s association at each project. A portion of our business is dedicated to the development and sale of condominiums.
HHH 2024 FORM 10-K | 20 RISK FACTORS Table of Contents Index to Financial Statements REGULATORY, LEGAL AND ENVIRONMENTAL RISKS Our development, construction, and sale of condominiums are subject to state regulations and may be subject to claims from the condominium owner’s association at each project. A portion of our business is dedicated to the development and sale of condominiums.
Acting as a principal may also mean that we pay a contractor before we have been reimbursed by our tenants or have received the entire purchase price of a condominium unit from the purchaser. This exposes us to additional risks of collection in the event of a bankruptcy, insolvency, or a purchaser default.
Acting as a principal may also mean that we pay a contractor before we have been reimbursed by our tenants or have received the entire purchase price of a condominium unit from the purchaser.
We may be unable to access or acquire financing due to the market volatility and uncertainty. We may be unable to obtain an anchor store, mortgage lender and property partner approvals that are required for any such development, redevelopment, or expansion.
We may be unable to access or acquire financing due to the market volatility and uncertainty. We may be unable to obtain an anchor store, mortgage lender and property partner approvals that are required for any such development, HHH 2024 FORM 10-K | 19 RISK FACTORS Table of Contents Index to Financial Statements redevelopment, or expansion.
Water and electricity shortages could have an adverse effect on our business, financial condition, and results of operations. Drought conditions and increased temperatures in the Phoenix, Arizona and Las Vegas, Nevada, regions could cause our master planned communities in these regions to experience water and electricity shortages.
Drought conditions and increased temperatures in the Phoenix, Arizona and Las Vegas, Nevada, regions could cause our master planned communities in these regions to experience water and electricity shortages.
Pershing Square will have the ability to influence our policies and operations and its interests may not in all cases be aligned with other stockholders. Pershing Square beneficially owns approximately 37.7% of our outstanding common stock as of December 31, 2023. Additionally, Mr.
Pershing Square has the ability to influence our policies and operations and its interests may not in all cases be aligned with other stockholders. Pershing Square beneficially owns approximately 37.4% of our outstanding common stock as of February 19, 2025. Additionally, Mr. Ben Hakim, the President of Pershing Square, is a member of our board of directors.
This would result in lower land sales revenues, which could have an adverse effect on our financial position and results of operations. The Seaport’s operational results are volatile, which could have an adverse effect on our financial position and results of operations. The Seaport’s operational results are volatile.
This would result in lower land sales revenues, which could have an adverse effect on our financial position and results of operations. We are exposed to risks associated with the development, redevelopment, or construction of our properties.
Inflation can adversely affect us by increasing costs of land, materials, and labor, which we have experienced in recent years due to higher inflation rates. Although we believe that sources of supply for raw materials and components are generally adequate, it is difficult to predict what effects price increases may have in the future.
Although we believe that sources of supply for raw materials and components are generally adequate, it is difficult to predict what effects price increases may have in the future.
In the future, we may expend additional resources to continue to enhance our information security measures and/or to investigate and remediate any information security vulnerabilities.
In light of the increased risks, we have dedicated substantial additional resources of expense, labor, and time to strengthening the security of our computer systems. In the future, we may expend additional resources to continue to enhance our information security measures and/or to investigate and remediate any information security vulnerabilities.
In such case, we and our shareholders that are subject to U.S. federal income tax could incur significant adverse U.S. federal income tax consequences. FINANCIAL RISKS Our indebtedness and changing interest rates could adversely affect our business, prospects, financial condition, or results of operations and prevent us from fulfilling our obligations under our Senior Notes and Loan Agreements.
FINANCIAL RISKS Our indebtedness and changing interest rates could adversely affect our business, prospects, financial condition, or results of operations and prevent us from fulfilling our obligations under our Senior Notes and Loan Agreements.
In connection with our ownership, operation, and management of certain properties, we could be held liable for the costs of remedial action with respect to these regulated substances or tanks or related claims. We cannot predict with any certainty the magnitude of any expenditures relating to the environmental compliance or the long-range effect, if any, on our operations.
Federal and state laws also regulate the operation and removal of underground storage tanks. In connection with our ownership, operation, and management of certain properties, we could be held liable for the costs of remedial action with respect to these regulated substances or tanks or related claims.
We cannot predict the extent of damage that may result from such adverse weather events, which depend on a variety of factors beyond our control.
A number of our properties are located in areas that are subject to natural or other disasters, including hurricanes, floods, earthquakes, and oil spills. We cannot predict the extent of damage that may result from such adverse weather events, which depend on a variety of factors beyond our control.
If we were involved in securities litigation, it could have a substantial cost and divert resources and the attention of executive management from our business regardless of the outcome of such litigation.
If we were involved in securities litigation, it could have a substantial cost and divert resources and the attention of executive management from our business regardless of the outcome of such litigation. HHH 2024 FORM 10-K | 23 RISK FACTORS Table of Contents Index to Financial Statements The Company may not obtain the anticipated benefits of the holding company structure.
Taxes for financial reporting purposes and cash tax liabilities in the future may be adversely affected by changes in such tax rules. GENERAL RISKS The Company may not obtain the anticipated benefits of the holding company structu re.
Taxes for financial reporting purposes and cash tax liabilities in the future may be adversely affected by changes in such tax rules. GENERAL RISKS Loss of key personnel could adversely affect our business and operations. We depend on the efforts of key executive personnel.
The separation and distribution agreement and other agreements we intend to enter into in connection with the spinoff will determine the allocation of assets and liabilities between us and Seaport Entertainment following the spinoff and will include any necessary indemnifications related to liabilities and obligations.
These agreements, as well as the separation and distribution evidencing the spinoff, determine the allocation of assets and liabilities between us and Seaport Entertainment following the spinoff and include various related terms and conditions, including indemnifications related to liabilities and obligations. We will rely on Seaport Entertainment to satisfy its performance and payment obligations under these agreements.
Our business could be adversely affected by unstable economic and political conditions within the U.S. and foreign jurisdictions and geopolitical conflicts, such as the conflict between Russia and Ukraine and the more recent Israel-Hamas war.
Global economic and political instability, geopolitical conflicts, and changes in U.S. trade policies, including tariffs, could adversely affect our business, financial condition, or results of operations. Our business could be adversely affected by unstable economic and political conditions within the U.S. and foreign jurisdictions, geopolitical conflicts, and changes in trade policies.
While we do not have any customer or direct supplier relationships in any of these countries, the current military conflicts and related sanctions, as well as export controls or actions that may be initiated by nations (e.g., potential cyberattacks, disruption of energy flows, etc.) and other potential uncertainties could adversely affect our supply chain by causing shortages or increases in costs for materials necessary for construction.
While we do not have direct customer or supplier relationships in these regions, sanctions, export controls, cyberattacks, and disruptions to energy markets could indirectly impact our supply chain and the cost of goods necessary for construction.
The anticipated benefits of the holding company structure may not be obtained by the Company if circumstances prevent the Company from taking advantage of the strategic and business opportunities that it expects the structure may afford it.
If circumstances prevent the Company from taking advantage of the strategic and business opportunities that it expects to realize from the holding company structure, the Company would nevertheless bear the costs incurred in connection with the holding company structure, which could adversely affect the Company’s business, financial condition, cash flows, and results of operations.
Federal HHH 2023 FORM 10-K | 22 RISK FACTORS Table of Contents Index to Financial Statements and state laws also regulate the operation and removal of underground storage tanks.
HHH 2024 FORM 10-K | 22 RISK FACTORS Table of Contents Index to Financial Statements Water and electricity shortages could have an adverse effect on our business, financial condition, and results of operations.
Seaport Entertainment may fail to perform its obligations under various transaction agreements that will be executed as part of the spinoff.
Following the spinoff, we may be more susceptible to market fluctuations and other adverse events than prior to the spinoff, and our business is less diversified than the combined businesses prior to the spinoff. Seaport Entertainment may fail to perform its obligations under various transaction agreements that we entered into in connection with the spinoff.
In light of the increased risks, we have dedicated substantial additional resources of expense, labor, and time to HHH 2023 FORM 10-K | 16 RISK FACTORS Table of Contents Index to Financial Statements strengthening the security of our computer systems.
This exposes us to additional risks of collection in the event of a bankruptcy, insolvency, or a HHH 2024 FORM 10-K | 15 RISK FACTORS Table of Contents Index to Financial Statements purchaser default.
Removed
HHH 2023 FORM 10-K | 14 RISK FACTORS Table of Contents Index to Financial Statements A number of our properties are located in areas which are subject to natural or other disasters, including hurricanes, floods, earthquakes, and oil spills.
Added
For example, the ongoing conflict between Russia and Ukraine, conflicts in the Middle East, and uncertainty regarding future trade relations between the U.S. and key trading partners could disrupt global supply chains, increase material costs, and contribute to inflationary pressures.
Removed
The increased volatility is largely the result of: (i) seasonality; (ii) potential sponsorship revenue; (iii) potential event revenue; and (iv) business operating risks from our various managed businesses. We own, either wholly or through joint ventures, and in some instances operate several start-up businesses in the Seaport.
Added
HHH 2024 FORM 10-K | 16 RISK FACTORS Table of Contents Index to Financial Statements In addition, recent tariffs imposed or threatened by President Trump on imported goods, including construction materials and other critical supplies, could increase our costs and reduce availability of necessary materials.
Removed
As a result, the revenues and expenses of these businesses directly impact the net operating income of the Seaport, which could have an adverse effect on our financial position and results of operations.
Added
These tariffs, as well as potential retaliatory measures by other countries, may further impact global trade flows, exacerbate inflation, and contribute to higher interest rates or general economic uncertainty. Such factors could negatively impact our business partners, employees, and customers or otherwise adversely affect our financial condition and results of operations.
Removed
This is in contrast to our other retail properties where we generally receive lease payments from unaffiliated tenants and are not necessarily impacted by the operating performance of their underlying businesses. We are exposed to risks associated with the development, redevelopment, or construction of our properties.
Added
Pershing Square has submitted the Pershing Square Proposals, which may be a distraction to our board of directors, management, and employees and could have a material adverse impact on our business and operations.
Removed
For example, we are directly paying the costs to repair certain construction defects at the Waiea condominium tower in Ward Village and will seek to recoup these costs from the general contractor and other responsible parties. We have subsequently entered into a settlement agreement with the Waiea homeowners association pursuant to which we have agreed to pay for the repair.
Added
In August 2024, Pershing Square announced its intent to evaluate the possibility of various potential alternatives with respect to its investment in the Company, including a possible transaction in which it (either alone or together with one or more potential co-investors) might acquire all or substantially all of the shares of common stock in the Company not owned by Pershing Square and its affiliates, and in connection therewith take the Company private.
Removed
We believe the general contractor is ultimately responsible for the defects and as such, we should be entitled to recover our repair costs from the general contractor, other responsible parties and insurance proceeds; however, we can provide no assurances that all or any portion of these costs will be recovered.
Added
Following Pershing Square’s August 2024 announcement, our board of directors formed a Special Committee, composed of independent directors to review any proposal by Pershing Square.
Removed
Total estimated cost related to the remediation is $155.4 million, inclusive of $16.1 million of additional anticipated costs recognized in 2023 .
Added
Following the August 2024 announcement, Pershing Square has engaged in additional communications with the Special Committee, including, as previously disclosed, submitting on January 13, 2025, a proposal (the January 13 Pershing Square Proposal) pursuant to which Pershing Square would acquire additional shares of the Company’s common stock in a merger transaction between the Company and a newly formed merger subsidiary of Pershing Square Holdco, L.P., upon the consummation of which Pershing Square would own a majority of the Company’s common stock.
Removed
Global economic and political instability and conflicts, such as the conflict between Russia and Ukraine and the more recent Israel-Hamas war, could adversely affect our business, financial condition, or results of operations.
Added
On February 18, 2025, Pershing Square announced that it had withdrawn the January 13 Pershing Square Proposal and submitted a modified proposal (the February 18 Pershing Square Proposal) under which it would purchase from the Company $900 million of the Company’s Common Stock for $90 per share. Pershing Square currently beneficially owns approximately 37.4% of the Company's common stock.
Removed
These conflicts have already resulted in significant volatility in oil and natural-gas prices worldwide. In addition, such events could cause higher interest rates, inflation, or general economic uncertainty, which could negatively impact our business partners, employees, or customers, or otherwise adversely impact our business.
Added
Should the transaction contemplated by the February 18 Pershing Square Proposal be consummated, Pershing Square’s beneficial ownership would increase to 48.0%.
Removed
William Ackman, founder and chief executive officer of Pershing Square, is the chairman of our board of directors.
Added
There can be no assurance that the Company will pursue this proposed transaction or any further proposed modification thereof that Pershing Square submits, or any other strategic outcome, and HHH does not intend to comment further on this matter unless and until further disclosure is determined to be appropriate or necessary.
Removed
On October 5, 2023, we announced our intent to form a new division, Seaport Entertainment, that is expected to include our entertainment-related assets in New York and Las Vegas, including the Seaport in Lower Manhattan and the Las Vegas Aviators Triple-A Minor League Baseball team, as well as our 25% ownership stake in Jean-Georges Restaurants and other partnerships and our 80% interest in the air rights above the Fashion Show Mall in Las Vegas.
Added
The Special Committee is currently evaluating these matters to determine the appropriate course of action and process. HHH 2024 FORM 10-K | 17 RISK FACTORS Table of Contents Index to Financial Statements Uncertainty regarding the Pershing Square Proposals may be disruptive to our business, which could have a negative effect on our operations, financial condition or results of operations.
Removed
We are HHH 2023 FORM 10-K | 17 RISK FACTORS Table of Contents Index to Financial Statements establishing Seaport Entertainment with the intent of completing its spinoff as an independent, publicly traded company in 2024, but there can be no assurance regarding the ultimate timing of the spinoff or that the spinoff will ultimately occur.
Added
Management and employee distraction related to Pershing Square’s unsolicited interest also may adversely impact our ability to optimally conduct our business and pursue our strategic objectives.
Removed
Completion of the spinoff is subject to the satisfaction of certain conditions, including obtaining final approvals from our board of directors; the completion of the transfer of assets and liabilities to Seaport Entertainment in accordance with the separation and distribution agreement; due execution and delivery of the agreements relating to the spinoff; no order, injunction, or decree issued by any court of competent jurisdiction or other legal restraint or prohibition in effect preventing the consummation of the spinoff, the distribution, or any of the related transactions; acceptance for listing on a national stock exchange of the Seaport Entertainment shares to be distributed, subject to official notice of distribution; and no other event or development having occurred or being in existence that, in the judgment of our board of directors, in its sole discretion, makes it inadvisable to effect the spinoff.
Added
Responding to the Pershing Square Proposals, and any further proposals or activities that may follow from it, will require attention from our board of directors, management and employees, and has required, and may continue to require, us to incur additional expenses and costs.
Removed
The spinoff is complex in nature, and unanticipated developments or changes, including changes in the law, macroeconomic environment, and competitive conditions of our markets, the uncertainty of the financial markets, and challenges in executing the spinoff, could delay or prevent the completion of the spinoff or cause the spinoff to occur on terms or conditions that are different or less favorable than expected.

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Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

9 edited+0 added−1 removed6 unchanged
Biggest changeWe require all third parties with access to our information systems or data to maintain industry standard cybersecurity programs and to report actual or suspected security incidents to us. We employ a range of tools and strategies to mitigate cybersecurity risks, regularly testing them for effectiveness.
Biggest changeWe utilize a Managed Detection and Response service that provides threat intelligence, technology, and specialist expertise to protect our systems and networks from cyber threats. We require all third parties with access to our information systems or data to maintain industry standard cybersecurity programs and to report actual or suspected security incidents to us.
As of the date of this report, we are not aware of any material risks from cybersecurity threats that have materially affected or are reasonably likely to materially affect the Company, including our business strategy, results of operations, or financial condition. However, along with all companies of a similar size, we face common cybersecurity threats.
As of the date of this report, we are not aware of any material risks from cybersecurity threats that have materially affected or are reasonably likely to materially affect the Company, including our business strategy, results of operations, or financial condition. However, along with all companies of comparable size, we face common cybersecurity threats.
To the extent that our proactive monitoring and testing identifies weakness in our cybersecurity readiness, these weaknesses are tracked and remediated as part of our cybersecurity program. Our employees receive security awareness training on an annual basis and are subjected to phishing training and phishing tests throughout the year.
To the extent that our proactive monitoring and testing identifies weakness in our cybersecurity readiness, these weaknesses are tracked and remediated as part of our cybersecurity program. Our employees receive security awareness training at a minimum on an annual basis and are subjected to phishing training and phishing tests throughout the year.
Furthermore, the Board of Directors would be notified in accordance with the Company’s incident response plan, of any suspected cyber incidents that may have at least a moderate business impact on the Company. HHH 2023 FORM 10-K | 26 PROPERTIES Table of Contents Index to Financial Statements
Furthermore, the Board of Directors would be notified in accordance with the Company’s incident response plan, of any suspected cyber incidents that may have at least a moderate business impact on the Company. HHH 2024 FORM 10-K | 25 PROPERTIES Table of Contents Index to Financial Statements
The cybersecurity program is executed by the Company’s Senior Vice President of IT Governance, Risk, and Compliance, who has over 15 years of cybersecurity experience in overseeing and managing cybersecurity risk. He is also responsible for maintaining and, in the event of an actual suspected security incident, executing the Company’s WISP.
The cybersecurity program is executed by the Company’s Senior Vice President of IT Governance, Risk, and Compliance, who has over 15 years of cybersecurity experience in overseeing and managing cybersecurity risk. He is also responsible for maintaining and, in the event of an actual or suspected security incident, executing the Company’s incident response plan.
Annually, we perform tabletop exercises to test our cybersecurity incident response plan that is kept within our written information security program (WISP). Our cybersecurity program is aligned with industry standards and best practices such as the National Institute of Standards and Technology Cybersecurity Framework.
Annually, we perform tabletop exercises to test our cybersecurity incident response plan. Our cybersecurity program is aligned with industry standards and best practices such as the National Institute of Standards and Technology Cybersecurity Framework.
Additionally, we continuously assess and improve our cybersecurity stance by conducting vulnerability scans, internal and external network penetration tests, and by integrating threat intelligence updates. We also have specific tools to provide real time, continuous monitoring and protection of our endpoints.
We employ a range of tools and strategies to mitigate cybersecurity risks and regularly test them for effectiveness. Additionally, we continuously assess and improve our cybersecurity stance by conducting vulnerability scans, internal and external network penetration tests, and by integrating threat intelligence updates. We also have specific tools to provide real time, continuous monitoring and protection of our endpoints.
The Company’s Board of Directors recently formed a technology committee (the Technology Committee) to assume governance and oversight of HHH’s cybersecurity program from the Audit Committee. This includes reviewing the cybersecurity program’s strategy and effectiveness, the cybersecurity landscape and emerging threats, and reports from any cybersecurity events.
The Board of Directors’ Technology Committee governs and oversees HHH’s cybersecurity program. This includes reviewing the cybersecurity program’s strategy and effectiveness, the cybersecurity landscape and emerging threats, and reports from any cybersecurity events.
As some of these networks and systems are managed by third parties, the HHH cybersecurity program also includes evaluation and monitoring of cybersecurity risks associated with its use of third-party service providers.
As some networks and systems are managed by third parties, the HHH cybersecurity program also includes evaluation and monitoring of cybersecurity risks associated with its use of third-party service providers. We also leverage third-party experts and vendors to help manage our cybersecurity program, audit the effectiveness of our existing cybersecurity controls, and make recommendations for improvements and best practices.
Removed
We also leverage third-party experts and vendors to help manage our cybersecurity program, audit the effectiveness of our existing cybersecurity controls, and make recommendations for improvements and best practices. We utilize a Managed Detection and Response service that provides threat intelligence, technology, and specialist expertise to protect our systems and networks from cyber threats.

Item 2. Properties

Properties — owned and leased real estate

22 edited+5 added−13 removed5 unchanged
Biggest changeHHH 2023 FORM 10-K | 28 PROPERTIES Table of Contents Index to Financial Statements The following tables summarize certain metrics of our multi-family Operating Assets as of December 31, 2023: Multi-family Assets Ownership % Units Retail Square Feet % Units Leased Average Monthly Rate Average Monthly Rate Per Square Foot Year Built / Acquired / Redeveloped The Woodlands Creekside Park 100% 292 — 95% $1,806 $1.84 2018 Creekside Park The Grove 100% 360 — 95% 1,806 1.84 2021 Millennium Six Pines 100% 314 — 93% 2,030 2.11 2016 Millennium Waterway 100% 393 — 97% 1,767 1.96 2012 One Lakes Edge 100% 390 22,971 95% 2,267 2.29 2015 Two Lakes Edge 100% 386 11,415 94% 2,861 2.87 2020 The Lane at Waterway 100% 163 — 94% 2,597 2.36 2020 Bridgeland Lakeside Row 100% 312 — 96% 1,869 1.90 2019 Starling at Bridgeland 100% 358 — 94% 2,001 2.05 2022 Wingspan (a) 100% 263 — 15% 2,511 2.01 2023 Columbia Juniper 100% 382 55,677 96% 2,206 2.47 2020 Marlow 100% 472 32,607 57% 2,078 2.66 2022 The Metropolitan 50% 380 13,591 95% 2,319 2.45 2015 TEN.m.flats 50% 437 28,026 97% 2,232 2.51 2018 Summerlin Constellation 100% 124 — 87% 2,564 2.29 2017 Tanager 100% 267 — 96% 2,474 2.54 2019 Tanager Echo 100% 294 — 21% 2,652 3.03 2023 Total 5,587 164,287 (a) Wingspan, our first single-family rental community in Bridgeland, welcomed its first residents in October 2023.
Biggest changeHHH 2024 FORM 10-K | 27 PROPERTIES Table of Contents Index to Financial Statements The following tables summarize certain metrics of our multifamily Operating Assets as of December 31, 2024: Multifamily Assets Ownership % Units Retail Square Feet % Units Leased Average Monthly Rate Per Unit Average Monthly Rate Per Square Foot Year Built / Acquired / Redeveloped The Woodlands Creekside Park 100% 292 — 93% $1,845 $1.88 2018 Creekside Park The Grove 100% 360 — 95% 1,789 1.82 2021 One Lakes Edge 100% 390 22,971 95% 2,477 2.51 2015 Two Lakes Edge 100% 386 11,415 97% 2,862 2.87 2020 Millennium Six Pines 100% 314 — 96% 2,015 2.10 2016 Millennium Waterway 100% 393 — 96% 1,837 2.04 2012 The Lane at Waterway 100% 163 — 96% 2,620 2.38 2020 Bridgeland Lakeside Row 100% 312 — 95% 1,909 1.94 2019 Starling at Bridgeland 100% 358 — 96% 1,980 2.03 2022 Wingspan 100% 263 — 52% 2,542 2.03 2023 Columbia Juniper 100% 382 55,677 96% 2,612 2.93 2020 Marlow 100% 472 32,607 72% 2,057 2.63 2022 The Metropolitan 50% 380 13,591 98% 2,201 2.33 2015 TEN.m.flats 50% 437 28,026 96% 2,193 2.47 2018 Summerlin Constellation 100% 124 — 99% 2,564 2.29 2017 Tanager 100% 267 — 96% 2,474 2.54 2019 Tanager Echo 100% 294 — 79% 2,662 3.04 2023 Total 5,587 164,287 The following tables summarize certain metrics of our other Operating Assets as of December 31, 2024: Other Assets Ownership % Asset Type Size % Leased Year Built / Acquired / Redeveloped The Woodlands Hughes Landing Daycare 100% Other N/A N/A 2019 Houston Ground Leases 100% Ground lease N/A N/A Various Stewart Title of Montgomery County, TX 50% Title Company N/A N/A — The Woodlands Warehouse 100% Warehouse 125,801 sq ft 100% 2019 Woodlands Sarofim 20% Industrial 129,790 sq ft 84% late 1980s Summerlin Hockey Ground Lease 100% Ground lease N/A N/A 2017 Summerlin Hospital Medical Center 5% Hospital N/A N/A 1997 Ward Village Kewalo Basin Harbor 100% Marina 55 acres N/A 2019 Other Columbia Ground Leases 100% Ground lease N/A N/A 2024 Parking Garages (a) 100% Garage 9,696 spaces N/A Various (a) Includes parking garages in The Woodlands, Columbia, and Ward Village.
Annualized Base Rent Per Square Foot is the Annualized Base Rent for the property at December 31, 2023, divided by the average occupied square feet. (b) Effective Annual Rent includes base minimum rent and common area maintenance recovery revenue. Effective Annual Rent Per Square Foot is the Effective Annual Rent divided by the average occupied square feet.
Annualized Base Rent Per Square Foot is the Annualized Base Rent for the property at December 31, 2024, divided by the average occupied square feet. (b) Effective Annual Rent includes base minimum rent and common area maintenance recovery revenue. Effective Annual Rent Per Square Foot is the Effective Annual Rent divided by the average occupied square feet.
Item 2. Properties Our corporate headquarters are located in The Woodlands, Texas. We also maintain offices at certain of our properties nationwide, including Honolulu, Hawai‘i; New York, New York; Columbia, Maryland; Las Vegas, Nevada; and Scottsdale, Arizona. We believe our present facilities are sufficient to support our operations.
Item 2. Properties Our corporate headquarters is located in The Woodlands, Texas. We also maintain offices at certain of our properties nationwide, including Honolulu, Hawai‘i; Columbia, Maryland; Las Vegas, Nevada; and Scottsdale, Arizona. We believe our present facilities are sufficient to support our operations.
HHH 2023 FORM 10-K | 30 PROPERTIES Table of Contents Index to Financial Statements MASTER PLANNED COMMUNITIES Our MPCs are located in and around Houston, Texas; Las Vegas, Nevada; and Phoenix, Arizona and are summarized in the following table as of December 31, 2023: Total Gross Approx. No.
HHH 2024 FORM 10-K | 29 PROPERTIES Table of Contents Index to Financial Statements MASTER PLANNED COMMUNITIES Our MPCs are located in and around Houston, Texas; Las Vegas, Nevada; and Phoenix, Arizona and are summarized in the following table as of December 31, 2024: Total Gross Approx. No.
HHH 2023 FORM 10-K | 32 PROPERTIES Table of Contents Index to Financial Statements STRATEGIC DEVELOPMENTS We continue to plan, develop, and hold or seek development rights for unique properties primarily in Ward Village, The Woodlands, Bridgeland, Summerlin, Columbia, and Teravalis.
HHH 2024 FORM 10-K | 30 PROPERTIES Table of Contents Index to Financial Statements STRATEGIC DEVELOPMENTS We continue to plan, develop, and hold or seek development rights for unique properties primarily in Ward Village, The Woodlands, Bridgeland, Summerlin, Columbia, and Teravalis.
See below for additional detail. The Summit Within our Summerlin MPC, an exclusive luxury community named The Summit is being developed and managed through a joint venture with Discovery Land Company (Discovery), a leading developer of luxury communities and private clubs. The original 555-acre community is nearing completion and consists of approximately 270 homes including 32 condominiums.
See below for additional detail. The Summit Within our Summerlin MPC, an exclusive luxury community named The Summit is being developed and managed through a joint venture with Discovery Land Company, a leading developer of luxury communities and private clubs. The original 555-acre community, which is expected to include approximately 245 homes and 32 condominiums, is nearing completion.
OPERATING ASSETS In our Operating Assets segment, we own a variety of asset types including approximately 8.8 million square feet of retail and office properties, 5,587 wholly and partially owned multi-family units, and wholly and partially owned other properties and investments.
OPERATING ASSETS In our Operating Assets segment, we own a variety of asset types including approximately 9.2 million square feet of retail and office properties, 5,587 wholly and partially owned multifamily units, and wholly and partially owned other properties and investments.
The 3,029-acre village is located in the greater Phoenix, Arizona area and is expected to consist of approximately 5,000 residential lots, commercial sites, as well as a planned business park. The first Floreo land sales were contracted as of December 31, 2023, and are expected to close in the first quarter of 2024. See Item 7.
The 3,029-acre village is located in the greater Phoenix, Arizona area and is expected to consist of approximately 5,000 residential lots, commercial sites, as well as a planned business park. The first land sales closed in the first quarter of 2024. See Item 7.
Management’s Discussion and Analysis of Financial Condition and Results of Operations and Note 2 - Investments in Unconsolidated Ventures in the Notes to Consolidated Financial Statements under Item 8 of this Form 10-K for further details. Floreo Floreo, the first village to be developed in our Teravalis MPC, will be developed and managed through a 50% joint venture.
Management’s Discussion and Analysis of Financial Condition and Results of Operations and Note 3 - Investments in Unconsolidated Ventures in the Notes to Consolidated Financial Statements under Item 8 of this Annual Report for further details. Floreo Floreo, the first village to be developed in our Teravalis MPC, is being developed and managed through a 50% joint venture.
Management’s Discussion and Analysis of Financial Condition and Results of Operations and Note 2 - Investments in Unconsolidated Ventures in the Notes to Consolidated Financial Statements under Item 8 of this Form 10-K for further details .
Management’s Discussion and Analysis of Financial Condition and Results of Operations and Note 3 - Investments in Unconsolidated Ventures in the Notes to Consolidated Financial Statements under Item 8 of this Annual Report for further details .
(f) Represents land acquired or transferred to the Strategic Developments segment for future development, excluding acreage related to assets that are now in service in our Operating Assets segment or related to completed or under construction condominium towers.
(d) Represents acreage owned through a joint venture. (e) Represents land acquired or transferred to the Strategic Developments segment for future development, excluding acreage related to assets that are now in service in our Operating Assets segment or related to completed or under construction condominium towers.
HHH 2023 FORM 10-K | 33 PROPERTIES Table of Contents Index to Financial Statements The following table summarizes future Strategic Developments projects as of December 31, 2023: $ in thousands Location Size Future Strategic Developments Rights or Pending Construction Columbia Lakefront District (a) Columbia, MD 1,914,000 sq ft Bridgeland Village Green at Bridgeland Central (b) Houston, TX 28,000 sq ft Summerlin 80% Interest in Fashion Show Air Rights Las Vegas, NV — The Woodlands Grogan's Mill Village Center (c) The Woodlands, TX 79,000 sq ft 2000 Woodlands Parkway (d) The Woodlands, TX 7,900 sq ft Ward Village Kalae Honolulu, HI 329 units / 2,000 sq ft Other West End Alexandria (e) Alexandria, VA 41 acres Commercial Land The Woodlands The Woodlands Commercial Land (f) The Woodlands, TX 13 acres Columbia Columbia Commercial Land (f)(g) Columbia, MD 96 acres Merriweather District (f) Columbia, MD 15 acres Ward Village Ward Commercial Land (f) Honolulu, HI 10 acres (a) Represents remaining square footage approved for new mixed-use development in the Lakefront District which will include office, retail, and residential assets.
HHH 2024 FORM 10-K | 31 PROPERTIES Table of Contents Index to Financial Statements The following table summarizes future Strategic Developments projects as of December 31, 2024: Location Size Future Strategic Developments Rights or Pending Construction Columbia Lakefront District (a) Columbia, MD 1,914,000 sq ft The Woodlands 2000 Woodlands Parkway (b) The Woodlands, TX 7,900 sq ft Ward Village The Launiu (c) Honolulu, HI 485 units / 10,000 sq ft Other West End Alexandria (d) Alexandria, VA 41 acres Commercial Land Columbia Columbia Commercial Land (e)(f) Columbia, MD 96 acres Merriweather District (e) Columbia, MD 16 acres Ward Village Ward Commercial Land (e) Honolulu, HI 7 acres (a) Represents remaining square footage approved for new mixed-use development in the Lakefront District which will include office, retail, and residential assets.
(b) As of December 31, 2023, total estimated cost remaining to be spent on these properties was $1.3 billion, of which $207.5 million is expected to be funded by HHH with the remaining cost to be funded with existing debt.
(b) As of December 31, 2024, total estimated cost remaining to be spent on these properties was $1.4 billion, of which $229.1 million is expected to be funded by HHH with the remaining cost to be funded with existing construction loans and condominium buyer deposits.
(g) Columbia MPC land development is complete and the sale of remaining land or development of additional commercial assets will occur as the market dictates. As such, the remaining Columbia MPC land was transferred to the Strategic Developments segment in the first quarter of 2023. HHH 2023 FORM 10-K | 34 OTHER INFORMATION Table of Contents Index to Financial Statements
(f) Columbia residential land development is complete and the sale of remaining land or development of additional commercial assets will occur as the market dictates. HHH 2024 FORM 10-K | 32 OTHER INFORMATION Table of Contents Index to Financial Statements
HHH 2023 FORM 10-K | 27 PROPERTIES Table of Contents Index to Financial Statements The following table summarizes certain metrics of our retail properties within the Operating Assets segment as of December 31, 2023, and does not include any retail square footage in our multi-family assets: Retail Properties Rentable Square Feet % Leased Annualized Base Rent (thousands) (a) Annualized Base Rent Per Square Foot (a) Year Built / Acquired / Redeveloped The Woodlands Creekside Park West 72,976 97% $1,954 $29.70 2019 Hughes Landing Retail 125,709 100% 4,035 36.23 2015 1701 Lake Robbins 12,376 100% 533 43.05 2014 20/25 Waterway Avenue 51,543 100% 1,544 38.41 2011 Waterway Square Retail 21,513 100% 849 39.55 2011 284,117 Bridgeland Lakeland Village Center at Bridgeland 67,947 92% 1,845 33.01 2016 Columbia Color Burst Park Retail (b)(c) 12,410 100% — — 2020 Rouse Building (b) 89,199 100% 2,778 31.15 2014 101,609 Summerlin Downtown Summerlin (d) 803,145 96% 24,329 31.85 2014 / 2015 Ward Village Ward Village Retail - Pending Redevelopment 356,724 91% 7,848 24.06 2002 Ward Village Retail - New or Renovated 500,015 94% 21,310 45.25 2012 - 2023 856,739 Total 2,113,557 (a) Annualized Base Rent is calculated as the monthly Base Minimum Rent for the property for December 31, 2023, multiplied by 12.
HHH 2024 FORM 10-K | 26 PROPERTIES Table of Contents Index to Financial Statements The following table summarizes certain metrics of our retail properties within the Operating Assets segment as of December 31, 2024, and does not include any retail square footage in our multifamily assets: Retail Properties Rentable Square Feet % Leased Annualized Base Rent (thousands) (a) Annualized Base Rent Per Square Foot (a) Year Built / Acquired / Redeveloped The Woodlands Creekside Park West 72,976 97% $2,066 $30.33 2019 Hughes Landing Retail 125,721 92% 4,310 37.12 2015 1701 Lake Robbins 12,376 100% 542 43.77 2014 20/25 Waterway Avenue 51,543 87% 1,696 37.65 2011 Waterway Square Retail 21,513 100% 863 40.22 2011 284,129 Bridgeland Village Green at Bridgeland Central (b) 27,908 73% — — 2024 Columbia Color Burst Park Retail 12,410 100% 576 46.38 2020 Rouse Building 89,199 100% 2,930 32.84 2014 101,609 Summerlin Downtown Summerlin (c) 803,170 99% 25,373 38.43 2014 / 2015 Summerlin Grocery Anchored Center (b) 67,000 77% — — 2024 870,170 Ward Village Ward Village Retail - Pending Redevelopment 357,376 92% 8,105 24.71 2002 Ward Village Retail - New or Renovated 500,015 92% 20,531 44.89 2012 - 2023 857,391 Total 2,141,207 (a) Annualized Base Rent is calculated as the monthly Base Minimum Rent for the property for December 31, 2024, multiplied by 12.
The following table summarizes our Strategic Developments projects under construction as of December 31, 2023: $ in thousands Asset Type Location Size (a) Total Estimated Cost (b) Estimated Completion Estimated Stabilization Date Strategic Developments Under Construction Columbia 10285 Lakefront Medical Office (c) Office Columbia, MD 86,000 sq ft $49,930 Q2 2024 2027 Summerlin Meridian (c) Office Las Vegas, NV 147,000 sq ft 55,459 Q1 2024 2027 Summerlin Grocery Anchored Center Retail Las Vegas, NV 67,000 sq ft 46,372 Q3 2024 2027 The Woodlands 1 Riva Row Multi-Family The Woodlands, TX 268 units 155,997 2025 2028 Ward Village Under Construction The Park Ward Village Condominium Honolulu, HI 545 units / 26,800 sq ft 605,150 2026 N/A Ulana Ward Village Condominium Honolulu, HI 696 units / 32,100 sq ft 402,914 2025 N/A Victoria Place Condominium Honolulu, HI 349 units 511,343 Q4 2024 N/A Completed and Sold Out ‘A‘ali‘i Condominium Honolulu, HI 750 units / 11,175 sq ft 394,908 Completed N/A Ae‘o Condominium Honolulu, HI 465 units / 70,800 sq ft 430,737 Completed N/A Anaha Condominium Honolulu, HI 317 units / 16,048 sq ft 403,974 Completed N/A Ke Kilohana Condominium Honolulu, HI 423 units / 28,386 sq ft 218,406 Completed N/A Kō'ula Condominium Honolulu, HI 565 units / 36,995 sq ft 487,039 Completed N/A Waiea Condominium Honolulu, HI 177 units / 7,716 sq ft 624,254 Completed N/A (a) For condominium units and multi-family assets, square feet represents ground floor retail space whereas units represents residential units for sale or rent.
The following table summarizes our Strategic Developments projects under construction as of December 31, 2024: $ in thousands Asset Type Location Size (a) Total Estimated Cost (b) Estimated Completion Estimated Stabilization Date Strategic Developments Under Construction Bridgeland One Bridgeland Green Office Cypress, TX 49,501 sq ft $35,365 Q2 2025 2028 The Woodlands Grogan’s Mill Retail Retail The Woodlands, TX 38,378 sq ft 8,583 Q2 2025 2028 Grogan’s Mill Library and Community Center (c) Other The Woodlands, TX 53,863 sq ft 16,498 Q2 2025 N/A 1 Riva Row Multifamily The Woodlands, TX 268 units 155,997 Q4 2025 2028 Condominiums Under Construction Kalae Condominium Honolulu, HI 329 units / 2,000 sq ft 623,745 2027 N/A The Park Ward Village Condominium Honolulu, HI 545 units / 26,800 sq ft 613,807 2026 N/A Ulana Ward Village Condominium Honolulu, HI 696 units / 32,100 sq ft 402,914 Q4 2025 N/A The Ritz-Carlton Residences Condominium The Woodlands, TX 111 units / 5,800 sq ft 369,465 2027 N/A Completed and Sold Out ‘A‘ali‘i Condominium Honolulu, HI 750 units / 11,175 sq ft 386,405 Completed N/A Ae`o Condominium Honolulu, HI 465 units / 70,800 sq ft 430,086 Completed N/A Anaha Condominium Honolulu, HI 317 units / 16,048 sq ft 403,796 Completed N/A Ke Kilohana Condominium Honolulu, HI 423 units / 28,386 sq ft 217,318 Completed N/A Kō'ula Condominium Honolulu, HI 565 units / 36,995 sq ft 484,238 Completed N/A Victoria Place Condominium Honolulu, HI 349 units 536,155 Completed N/A Waiea Condominium Honolulu, HI 177 units / 7,716 sq ft 542,717 Completed N/A (a) For condominium units and multifamily assets, square feet represents ground floor retail space whereas units represents residential units for sale or rent.
Remaining Saleable Acres Average Price Per Acre (thousands) (b) Projected Community Sell-Out Date Projected Cash Margin (c) Community Location Acres (a) Residents Residential Commercial Residential Commercial Residential Commercial Residential Bridgeland Cypress, TX 11,506 23,000 1,671 1,055 $501 $752 2035 2046 78% Summerlin Las Vegas, NV 22,500 127,000 2,462 551 1,309 1,176 2043 2039 80% Teravalis Phoenix, AZ 33,810 — 15,804 10,531 751 206 2086 2086 39% The Woodlands (d) The Woodlands, TX 28,545 123,000 35 725 1,923 950 2026 2034 97% The Woodlands Hills Conroe, TX 2,055 2,700 691 167 346 532 2030 2033 89% Total 98,416 275,700 20,663 13,029 Floreo (e) Phoenix, AZ 3,029 — 861 457 779 151 2032 2035 53% (a) Encompasses all of the land located within the borders of the master planned community, including parcels already sold, saleable parcels, and non-saleable areas such as roads, parks and recreation areas, conservation areas, and parcels acquired during the year.
Remaining Saleable Acres Estimated Price Per Acre (thousands) (b) Projected Community Sell-Out Date Projected Cash Margin (c) Community Location Acres (a) Residents Residential Commercial Residential Commercial Residential Commercial Residential Bridgeland Cypress, TX 11,506 26,000 1,400 1,075 $580 $763 2033 2046 87% Summerlin Las Vegas, NV 22,500 130,000 2,443 473 1,633 1,404 2043 2039 82% Teravalis Phoenix, AZ 33,810 — 15,804 10,531 791 206 2086 2086 76% The Woodlands (d) The Woodlands, TX 28,545 124,800 34 728 N/A 981 2027 2034 97% The Woodlands Hills Conroe, TX 2,055 3,230 681 173 356 523 2032 2032 90% Total 98,416 284,030 20,362 12,980 Floreo (e) Phoenix, AZ 3,029 — 715 571 777 180 2033 2036 42% (a) Encompasses all of the land located within the borders of the master planned community, including parcels already sold, saleable parcels, and non-saleable areas such as roads, parks and recreation areas, conservation areas, and parcels acquired during the year.
The following table summarizes certain metrics of our office assets within our Operating Assets segment as of December 31, 2023: Office Assets Rentable Square Feet % Leased Annualized Base Rent (thousands) (a) Annualized Base Rent Per Square Foot (a) Effective Annual Rent (thousands) (b) Effective Annual Rent per Square Foot (b) Year Built / Acquired / Redeveloped The Woodlands Creekside Park Medical Plaza (c) 32,689 —% $— $— $— $— 2022 One Hughes Landing 200,639 65% 3,436 27.03 5,165 40.63 2013 Two Hughes Landing 197,950 87% 4,353 25.15 6,714 38.80 2014 Three Hughes Landing 321,649 96% 7,702 28.43 11,670 43.08 2016 1725 Hughes Landing Boulevard 339,608 58% 4,815 24.55 7,051 35.95 2015 1735 Hughes Landing Boulevard 318,237 100% 8,202 25.77 12,607 39.62 2015 2201 Lake Woodlands Drive 22,259 100% 470 21.13 878 39.45 2011 Lakefront North 258,058 98% 7,069 28.00 11,356 44.97 2018 8770 New Trails (d) 180,000 100% — — — — 2020 9303 New Trails 98,283 42% 874 21.20 1,454 35.27 2011 3831 Technology Forest Drive 97,360 100% 2,444 25.10 3,710 38.10 2014 3 Waterway Square 227,617 91% 5,085 27.47 7,833 42.32 2013 4 Waterway Square 217,952 90% 4,867 26.93 7,524 41.64 2011 The Woodlands Towers at The Waterway (e) 1,395,599 96% 37,388 30.47 56,297 45.88 2019 1400 Woodloch Forest 94,276 84% 2,493 31.98 2,691 34.51 2011 4,002,176 Columbia Merriweather Row (f) 925,584 79% 18,336 26.37 18,893 27.17 2012 / 2014 Columbia Office Properties 67,066 83% 1,319 23.77 1,602 28.85 2004 / 2007 One Mall North 99,806 49% 1,444 29.49 1,594 32.56 2016 One Merriweather 209,959 100% 8,222 39.16 8,583 40.88 2017 Two Merriweather 124,639 94% 4,000 36.88 4,168 38.43 2017 6100 Merriweather 326,237 98% 8,182 36.19 8,432 37.30 2019 1,753,291 Summerlin Aristocrat (d) 181,534 100% — — — — 2018 1700 Pavilion 265,898 90% 4,648 35.46 4,648 35.46 2022 One Summerlin 207,292 87% 7,694 43.24 7,953 44.70 2015 Two Summerlin 147,139 100% 5,542 37.67 5,940 40.37 2018 801,863 Total 6,557,330 (a) Annualized Base Rent is calculated as the monthly Base Minimum Rent for the property for December 31, 2023, multiplied by 12.
The following table summarizes certain metrics of our office assets within our Operating Assets segment as of December 31, 2024: Office Assets Rentable Square Feet % Leased Annualized Base Rent (thousands) (a) Annualized Base Rent Per Square Foot (a) Effective Annual Rent (thousands) (b) Effective Annual Rent per Square Foot (b) Year Built / Acquired / Redeveloped The Woodlands One Hughes Landing 201,268 79% $3,682 $29.35 $5,406 $43.09 2013 Two Hughes Landing 200,255 86% 4,332 27.02 6,583 41.06 2014 Three Hughes Landing 325,810 99% 7,543 24.43 10,927 35.40 2016 1725 Hughes Landing Boulevard 340,611 55% 2,818 19.81 4,315 30.34 2015 1735 Hughes Landing Boulevard 319,456 100% 8,365 26.18 12,204 38.20 2015 2201 Lake Woodlands Drive 22,259 100% 482 21.67 940 42.24 2011 Lakefront North 258,058 98% 7,194 28.49 11,606 45.96 2018 8770 New Trails (c) 180,000 100% — — — — 2020 9303 New Trails 98,283 53% 886 17.56 1,578 31.27 2011 3831 Technology Forest Drive 106,104 100% 2,491 23.48 3,928 37.02 2014 The Woodlands Towers at The Waterway 1,395,599 100% 43,588 31.70 65,040 47.31 2019 Waterway Plaza II 141,763 55% 1,678 24.76 2,446 36.09 2024 3 Waterway Square 227,617 91% 5,496 26.65 8,313 40.30 2013 4 Waterway Square 217,952 90% 5,488 28.09 8,560 43.81 2011 1400 Woodloch Forest 94,931 85% 2,577 32.12 2,764 34.45 2011 4,129,966 Columbia Columbia Office Properties 67,066 72% 1,329 27.61 1,528 31.74 2004 / 2007 10285 Lakefront Medical Office 85,380 48% 208 41.50 241 48.21 2024 One Mall North 99,806 48% 1,493 31.36 1,653 34.72 2016 One Merriweather 209,959 94% 7,813 39.47 8,150 41.17 2017 Two Merriweather 124,639 92% 3,970 37.89 4,109 39.23 2017 6100 Merriweather 326,237 98% 8,702 38.50 8,981 39.73 2019 Merriweather Row 925,584 74% 17,115 27.21 17,753 28.23 2012 / 2014 1,838,671 Summerlin Aristocrat (c) 181,534 100% — — — — 2018 Meridian (d) 147,602 17% — — — — 2024 1700 Pavilion 265,898 92% 8,934 37.29 9,090 37.95 2022 One Summerlin 207,292 90% 8,234 44.79 8,704 47.34 2015 Two Summerlin 147,139 100% 5,119 37.36 5,632 41.10 2018 949,465 Total 6,918,102 (a) Annualized Base Rent is calculated as the monthly Base Minimum Rent for the property for December 31, 2024, multiplied by 12.
(c) Color Burst Park Retail is comprised of two buildings and each is entirely leased by a single tenant. Therefore, the Annualized Base Rent and Effective Annual Rent details have been excluded for competitive reasons. (d) Excludes 381,767 square feet of anchors and 39,700 square feet of additional office space above our retail space.
Therefore, the Annualized Base Rent and Effective Annual Rent details are not yet applicable. (c) Excludes 381,767 square feet of anchors and 39,700 square feet of additional office space above our retail space.
(c) Creekside Park Medical Plaza was placed in service during the fourth quarter of 2022 and had no executed leases. Subsequent to year end, the Company completed the sale of this property for $14.0 million. As such, Annualized Base Rent and Effective Annual Rent are not applicable. (d) These properties are build-to-suit projects entirely leased by a single tenant.
(c) These properties are build-to-suit projects entirely leased by a single tenant. Therefore, the Annualized Base Rent and Effective Annual Rent details have been excluded for competitive reasons. (d) Meridian was placed in service during 2024, and no tenants have taken occupancy as of December 31, 2024.
HHH 2023 FORM 10-K | 29 PROPERTIES Table of Contents Index to Financial Statements The following table summarizes our Operating Assets segment lease expirations: $ in thousands Year Number of Expiring Leases (a) Total Square Feet Expiring Total Annualized Base Rent Expiring % of Total Annual Gross Rent Expiring 2024 96 519,920 $ 20,616 5.3 % 2025 161 928,431 43,664 11.3 % 2026 109 553,655 23,463 6.1 % 2027 77 902,884 38,148 9.9 % 2028 71 583,446 28,340 7.3 % 2029 76 599,875 29,196 7.6 % 2030 37 613,838 31,556 8.2 % 2031 37 381,187 20,275 5.3 % 2032 30 1,143,715 61,314 15.9 % 2033 37 595,768 31,770 8.2 % 2034+ 86 1,228,659 57,272 14.9 % Total 817 8,051,378 $ 385,614 100.0 % (a) Excludes leases with an initial term of 12 months or less.
HHH 2024 FORM 10-K | 28 PROPERTIES Table of Contents Index to Financial Statements The following table summarizes our Operating Assets segment lease expirations: $ in thousands Year Number of Expiring Leases (a) Total Square Feet Expiring Total Annualized Base Rent Expiring % of Total Annual Gross Rent Expiring 2025 130 529,435 $ 23,928 6.1 % 2026 111 539,939 22,812 5.8 % 2027 98 950,314 40,102 10.1 % 2028 84 560,674 27,205 6.9 % 2029 84 811,493 40,992 10.4 % 2030 70 858,520 43,529 11.0 % 2031 39 433,450 23,112 5.9 % 2032 33 1,210,763 63,775 16.1 % 2033 32 575,186 29,303 7.4 % 2034 35 429,427 22,245 5.6 % 2035+ 71 1,193,292 58,198 14.7 % Total 787 8,092,493 $ 395,201 100.0 % (a) Excludes leases with an initial term of 12 months or less.
Annualized Base Rent Per Square Foot is the Annualized Base Rent for the property at December 31, 2023, divided by the average occupied square feet. (b) In 2023, the Company rebranded Color Burst Park Retail (formerly Merriweather District Area 3 Retail) and Rouse Building (formerly Columbia Regional Building).
Annualized Base Rent Per Square Foot is the Annualized Base Rent for the property at December 31, 2024, divided by the average occupied square feet. (b) These properties were placed in service during the fourth quarter of 2024, and no tenants have taken occupancy as of December 31, 2024.
Removed
Therefore, the Annualized Base Rent and Effective Annual Rent details have been excluded for competitive reasons. (e) The Woodlands Towers at the Waterway includes 1201 Lake Robbins and 9950 Woodloch Forest. (f) In 2023, the Company rebranded Merriweather Row (formerly 10 - 70 Columbia Corporate Center).
Added
Therefore, the Annualized Base Rent and Effective Annual Rent details are not yet applicable for this property.
Removed
As of December 31, 2023, 28% of the property has been placed in service, with an additional 35% being placed in service in January 2024. The remaining 37% is expected to be placed in service in the second quarter of 2024.
Added
(b) Residential and commercial pricing represents the Company's estimate of price per acre that will be achieved in 2025 per its land models. For Summerlin, this estimate excludes an anticipated bulk sale. For bulk sales, the Company does not incur the usual development costs associated with superpad sales, resulting in a lower price per acre.
Removed
The following tables summarize certain metrics of our other Operating Assets as of December 31, 2023: Other Assets Ownership % Asset Type Size % Leased Year Built / Acquired / Redeveloped The Woodlands Hughes Landing Daycare 100% Daycare 10,000 sq ft 100% 2019 Houston Ground Leases 100% Ground lease N/A N/A Various Stewart Title of Montgomery County, TX 50% Title Company N/A N/A — Woodlands Sarofim 20% Industrial 129,790 sq ft 84% late 1980's The Woodlands Warehouse 100% Warehouse 125,801 sq ft 100% 2019 Summerlin Hockey Ground Lease 100% Ground lease N/A N/A 2017 Las Vegas Aviators 100% Minor League Baseball Team N/A N/A 2017 Las Vegas Ballpark 100% Ballpark N/A N/A 2019 Summerlin Hospital Medical Center 5% Hospital N/A N/A 1997 Ward Village Kewalo Basin Harbor 100% Marina 55 acres N/A 2019 Other Parking Garages (a) 100% Garage 9,184 spaces N/A Various (a) Includes parking garages in The Woodlands, Columbia, and Ward Village.
Added
(c) The Grogan’s Mill Library and Community Center is being developed in connection with a land swap agreement entered into with Montgomery County, Texas. Upon completion of construction, the Company will transfer the Grogan's Mill Library and Community Center to Montgomery County in exchange for land parcels elsewhere in The Woodlands.
Removed
(b) Average Price Per Acre is the uninflated weighted-average land value per acre, which reflects current market values being attained by the Company on current projects or at new projects based on third-party market data.
Added
As such, a stabilization date is not applicable to this development project.
Removed
HHH 2023 FORM 10-K | 31 PROPERTIES Table of Contents Index to Financial Statements SEAPORT The Seaport, located on the East River in Lower Manhattan, encompasses several city blocks (inclusive of Historic Area/Uplands, Pier 17, Tin Building, and the 250 Water Street development) and totals approximately 472,000 square feet of innovative culinary, entertainment, and cultural experiences.
Added
(b) 2000 Woodlands Parkway was transferred to Strategic Developments in the fourth quarter of 2023 and is currently pending redevelopment. (c) We have launched presales for our next condominium tower, The Launiu and as of December 31, 2024, we have entered into contracts for 283 units, representing 58.4% of total units. Construction is expected to begin in 2025.
Removed
The following table summarizes certain metrics of the Seaport as of December 31, 2023: $ in thousands Landlord Operations (a) Landlord Operations - Multi-family (b) Managed Businesses (c) Tin Building (d) Events and Sponsorships (e) Total Rentable Square Feet / Units Total square feet / units 342,674 13,000 / 21 51,458 53,783 24,577 Leased square feet / units (f) 201,223 — / 21 45,846 53,783 24,577 % Leased (f) 59% —% / 100% 89% 100% 100% Development Development costs incurred (g) $ 567,414 $ — $ — $ 201,579 $ — $ 768,993 (a) Landlord Operations represents physical real estate in the Historic District and Pier 17 developed and owned by HHH and leased to third parties.
Removed
(b) Landlord Operations - Multi-family represents 85 South Street which includes base-level retail in addition to residential units. (c) Managed Businesses represents retail and food and beverage businesses in the Historic District and Pier 17 that HHH owns, either wholly or through joint ventures, and operates, including through license and management agreements.
Removed
(d) The Company owns 100% of the Tin Building and leases 100% of the space to the Tin Building by Jean-Georges joint venture, in which the Company has an equity ownership interest. (e) Events and Sponsorships includes private events, catering, sponsorships, concert series, and other rooftop activities.
Removed
(f) The square footage and percent leased for Landlord Operations includes agreements with terms of less than one year. (g) Development costs incurred are shown net of insurance proceeds of approximately $64.7 million and excludes any impact related to the Seaport impairment recognized in 2023.
Removed
Refer to Note 4 - Impairment in the Notes to Consolidated Financial Statements under Item 8 of this Form 10-K for additional detail.
Removed
(c) In 2023, the Company rebranded 10285 Lakefront Medical Office (formerly South Lake Medical Office Building) and Meridian (formerly Summerlin South Office).
Removed
(b) This development will be anchored by 110,000 square feet of grocery space currently being constructed by H-E-B under a ground lease. The additional 28,000 square feet of retail space shown above will be constructed by HHH. The Company closed on the related construction loan in December 2023, and expects to begin construction in early 2024.
Removed
(c) Grogan’s Mill Village Center was acquired in 2023 and is being held in the Strategic Developments segment for planned redevelopment. (d) 2000 Woodlands Parkway was transferred to Strategic Developments in the fourth quarter of 2023 and is currently pending redevelopment. (e) Represents acreage owned through a joint venture.

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

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Biggest changeSee Note 10 - Commitments and Contingencies in the Notes to Consolidated Financial Statements under Item 8 of this Form 10-K for further discussion.
Biggest changeSee Note 11 - Commitments and Contingencies in the Notes to Consolidated Financial Statements under Item 8 of this Annual Report for further discussion.
As of December 31, 2023, management believes that any monetary liability or financial impact of claims or potential claims to which we might be subject after final adjudication of any legal procedures would not be material to our financial position or our results of operations.
As of December 31, 2024, management believes that any monetary liability or financial impact of claims or potential claims to which we might be subject after final adjudication of any legal procedures would not be material to our financial position or our results of operations.

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Biggest changeHHH 2023 FORM 10-K | 36 OTHER INFORMATION Table of Contents Index to Financial Statements PURCHASES OF EQUITY SECURITIES BY THE ISSUER The following sets forth information with respect to the equity compensation plans available to employees and directors of the Company at December 31, 2023: Plan Category (a) Number of securities to be issued upon exercise of outstanding options, warrants, and rights (1) (b) Weighted-average exercise price of outstanding options, warrants, and rights (c) Number of securities remaining available for future issuance under equity compensation plans (excluding securities reflected in column (a) Equity compensation plans approved by security holders (2) 134,337 $ 108.76 727,758 Equity compensation plans not approved by security holders — — — Total 134,337 $ 108.76 727,758 (1) The amounts shown in columns (a) of the above table do not include 393,698 outstanding Common Shares (all of which are restricted and subject to vesting requirements) that were granted under the Company’s 2020 Equity Incentive Plan and its predecessor, the Amended and Restated 2010 Incentive Plan (2010 Incentive Plan), as further described in Note 11 - Stock-Based Compensation Plans in the Notes to Consolidated Financial Statements under Item 8 of this Form 10-K.
Biggest changeHHH 2024 FORM 10-K | 34 OTHER INFORMATION Table of Contents Index to Financial Statements PURCHASES OF EQUITY SECURITIES BY THE ISSUER The following sets forth information with respect to the equity compensation plans available to employees and directors of the Company at December 31, 2024: Plan Category (a) Number of securities to be issued upon exercise of outstanding options, warrants, and rights (1) (b) Weighted-average exercise price of outstanding options, warrants, and rights (c) Number of securities remaining available for future issuance under equity compensation plans (excluding securities reflected in column (a) Equity compensation plans approved by security holders (2) 91,402 $ 91.90 598,842 Equity compensation plans not approved by security holders — — — Total 91,402 $ 91.90 598,842 (1) The amounts shown in columns (a) of the above table do not include 371,955 outstanding Common Shares (all of which are restricted and subject to vesting requirements) that were granted under the Company’s 2020 Equity Incentive Plan as further described in Note 12 - Stock-Based Compensation Plans in the Notes to Consolidated Financial Statements under Item 8 of this Annual Report.
The graph tracks the performance of a $100 investment in our common stock and in each of the indexes during the last five fiscal years ended December 31, 2023. The graph was prepared based on the assumption that dividends have been reinvested subsequent to the initial investment.
The graph tracks the performance of a $100 investment in our common stock and in each of the indexes during the last five fiscal years ended December 31, 2024. The graph was prepared based on the assumption that dividends have been reinvested subsequent to the initial investment.
The following sets forth information with respect to repurchases made by the Company of its shares of common stock during the fourth quarter of 2023: Period Total number of shares purchased (a) Average price paid per share Total number of shares purchased as part of publicly announced plans or programs Approximate dollar value of shares that may yet be purchased under the plans or programs October 1-31, 2023 31 $ 66.79 — $ 15,009,600 November 1-30, 2023 1,675 $ 73.45 — $ 15,009,600 December 1-31, 2023 10,127 $ 85.55 — $ 15,009,600 Total 11,833 $ 83.79 — (a) During the fourth quarter of 2023, all 11,833 shares repurchased related to stock received by the Company for the payment of withholding taxes due on employee share issuances under share-based compensation plans.
The following sets forth information with respect to repurchases made by the Company of its shares of common stock during the fourth quarter of 2024: Period Total number of shares purchased (a) Average price paid per share Total number of shares purchased as part of publicly announced plans or programs Approximate dollar value of shares that may yet be purchased under the plans or programs (b) October 1 - 31, 2024 — $ — — $ 15,009,600 November 1 - 30, 2024 1,853 $ 86.74 — $ 15,009,600 December 1 - 31, 2024 18,679 $ 76.93 — $ 15,009,600 Total 20,532 $ 77.82 — (a) During the fourth quarter of 2024, all 20,532 shares repurchased related to stock received by the Company for the payment of withholding taxes due on employee share issuances under share-based compensation plans.
NUMBER OF HOLDERS OF RECORD As of February 20, 2024, there were 1,154 stockholders of record of our common stock.
NUMBER OF HOLDERS OF RECORD As of February 19, 2025, there were 1,058 stockholders of record of our common stock.
MARKET INFORMATION Our common stock is traded on the New York Stock Exchange (the NYSE) under the ticker symbol “HHH”. No dividends have been declared or paid in 2023 or 2022.
Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters, and Issuer Purchases of Equity Securities MARKET INFORMATION Our common stock is traded on the New York Stock Exchange (the NYSE) under the ticker symbol “HHH”. No dividends have been declared or paid in 2024 or 2023.
(2) Reflects stock option grants under the Company’s 2020 Equity Incentive Plan and the 2010 Incentive Plan. In March 2022, the Board authorized a share repurchase program pursuant to which the Company may, from time to time, purchase up to $250.0 million of its common stock through open-market transactions.
For additional information, see Note 12 - Stock-Based Compensation Plans in the Notes to Consolidated Financial Statements under Item 8 of this Annual Report. (b) In March 2022, the Board authorized a share repurchase program pursuant to which the Company may, from time to time, purchase up to $250.0 million of its common stock through open-market transactions.
Removed
Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters, and Issuer Purchases of Equity Securities During the third quarter of 2023, the Company became the successor issuer of HHC pursuant to Rule 12g-3(a) under the Exchange Act as of August 11, 2023.
Added
(2) Reflects stock option grants under the Company’s 2020 Equity Incentive Plan and the 2010 Incentive Plan. Following adoption of the 2020 Equity Incentive Plan by our stockholders, grants are no longer made under the 2010 Incentive Plan.
Removed
The date and time of such repurchases will depend upon market conditions and the program may be suspended or discontinued at any time. During 2022, the Company repurchased 2,704,228 shares of its common stock under this program for approximately $235.0 million at an average price of $86.90 per share. All purchases were funded with cash on hand.
Added
During 2022, the Company repurchased $235.0 million of its common stock.
Removed
Following the Company’s holding company reorganization on August 11, 2023, HHC transferred to the Company, and the Company assumed sponsorship of all of HHC’s stock plans along with all of HHC’s rights and obligations under each plan.
Removed
For additional information, see Note 11 - Stock-Based Compensation Plans in the Notes to Consolidated Financial Statements under Item 8 of this Form 10-K.

Item 7. Management's Discussion & Analysis

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

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Biggest changeResidential and Commercial Land Sales The following tables detail our residential and commercial land sales for the years ended December 31: Summary of MPC Land Sales Closed Land Sales Acres Sold Average Price Per Acre thousands, except acres sold 2023 2022 2023 2022 2023 2022 Residential Land Sales Closed Bridgeland Single family $ 85,156 $ 85,320 151.0 156.8 $ 564 $ 544 Summerlin Superpad sites 223,583 108,196 169.2 94.6 1,321 1,144 Custom lots 2,000 8,910 0.7 2.0 2,857 4,455 The Woodlands Single family 24,421 21,864 9.8 7.4 2,492 2,955 The Woodlands Hills Single family 19,103 23,659 44.7 61.9 427 382 Total residential land sales closed (a) $ 354,263 $ 247,949 375.4 322.7 $ 944 $ 768 Commercial Land Sales Closed Bridgeland Commercial $ 30,536 $ 47,971 123.5 110.7 $ 247 $ 433 Summerlin Commercial — 26,016 — 16.6 — 1,567 The Woodlands Commercial 5,424 — 8.4 — 646 — The Woodlands Hills Commercial — 1,396 — 8.0 — 175 Total commercial land sales closed (a) $ 35,960 $ 75,383 131.9 135.3 $ 273 $ 557 (a) Excludes revenues related to sales closed in a previous period and deferred for recognition that met criteria for recognition in the current period.
Biggest changeTotal net recognized (deferred) revenue includes revenues recognized in the current period which are related to sales closed in prior periods, offset by revenues deferred on sales closed in the current period. thousands 2024 2023 Total residential land sales closed $ 441,044 $ 354,263 Total commercial land sales closed 4,984 35,960 Net recognized (deferred) revenue: Bridgeland 6,491 10,467 The Woodlands 517 (782) The Woodlands Hills 30 22 Summerlin (18,140) (44,174) Total net recognized (deferred) revenue (11,102) (34,467) Special Improvement District revenue 18,269 14,429 Master Planned Community land sales $ 453,195 $ 370,185 HHH 2024 FORM 10-K | 44 MANAGEMENT’S DISCUSSION AND ANALYSIS RESULTS OF OPERATIONS Table of Contents Index to Financial Statements Residential and Commercial Land Sales Closed The following tables detail our residential and commercial land sales closed for the years ended December 31: Summary of MPC Land Sales Closed Land Sales Acres Sold Average Price Per Acre thousands, except acres sold 2024 2023 2024 2023 2024 2023 Residential Land Sales Closed Bridgeland Single family $ 105,296 $ 85,156 178.1 151.0 $ 591 $ 564 Summerlin Superpad sites 291,230 223,583 216.5 169.2 1,345 1,321 Custom lots 22,982 2,000 3.8 0.7 6,048 2,857 The Woodlands Single family — 24,421 — 9.8 — 2,492 The Woodlands Hills Single family 21,536 19,103 47.0 44.7 458 427 Total residential land sales closed (a) $ 441,044 $ 354,263 445.4 375.4 $ 990 $ 944 Commercial Land Sales Closed Bridgeland $ 4,984 $ 30,536 13.5 123.5 $ 369 $ 247 The Woodlands — 5,424 — 8.4 — 646 Total commercial land sales closed (a) $ 4,984 $ 35,960 13.5 131.9 $ 369 $ 273 (a) Excludes revenues recognized in the current period which are related to sales closed in prior periods and includes revenues deferred on sales closed in the current period.
Below is a discussion of the accounting policies that we consider critical to an understanding of our financial condition and operating results that may require complex or significant judgment in their application or require estimates about matters which are inherently uncertain.
Below is a discussion of the accounting policies and estimates that we consider critical to an understanding of our financial condition and operating results that may require complex or significant judgment in their application or require estimates about matters which are inherently uncertain.
Management uses this measure because it captures current period performance through the velocity of sales, as well as current period development expenditures based upon demand at our MPCs, which varies depending upon the stage of the MPCs development lifecycle and the overall economic environment.
Management uses this measure because it captures current period performance through the velocity of sales, as well as current period development expenditures based upon demand at our MPCs, which varies depending upon the stage of the MPC’s development lifecycle, and the overall economic environment.
Often, the nature of our business results in short-term volatility in our net income due to the timing of Master Planned Communities (MPC) land sales, recognition of condominium revenue, and operating business pre-opening expenses. 2023 Results During 2023, we maintained positive momentum and delivered solid financial results which met or exceeded our 2023 guidance expectations within each of our core businesses.
Often, the nature of our business results in short-term volatility in our net income due to the timing of Master Planned Communities (MPC) land sales, recognition of condominium revenue, and operating business pre-opening expenses. 2024 Results During 2024, we maintained positive momentum and delivered solid financial results which met or exceeded our 2024 guidance expectations within each of our core businesses.
Other than our condominium properties, most of the properties and projects in our Strategic Developments segment do not generate revenues, and the cash flows and earnings may vary. Condominium deposits received from contracted units offset by other various cash uses related to condominium development and sales activities are a substantial portion of our operating activities in 2023.
Other than our condominium properties, most of the properties and projects in our Strategic Developments segment do not generate revenues, and the cash flows and earnings may vary. Condominium deposits received from contracted units offset by other various cash uses related to condominium development and sales activities are a substantial portion of our operating activities in 2024.
Operating cash continued to be utilized in 2023 to fund ongoing development expenditures in our Strategic Developments and MPC segments, consistent with prior years. The cash flows and earnings from the MPC business may fluctuate more than from our operating assets because the MPC business generates revenues from land sales rather than recurring contractual revenues from operating leases.
Operating cash continued to be utilized in 2024 to fund ongoing development expenditures in our Strategic Developments and MPC segments, consistent with prior years. The cash flows and earnings from the MPC business may fluctuate more than from our operating assets because the MPC business generates revenues from land sales rather than recurring contractual revenues from operating leases.
Total development costs are expected to be approximately $156.0 million, which will be partially financed by a $93.3 million construction loan. We began construction in the third quarter of 2023 and anticipate project completion in 2025. We expect to reach projected annual stabilized NOI of $9.9 million by 2028.
Total development costs are expected to be approximately $156.0 million, which will be partially financed by a $93.3 million construction loan. We began construction in the third quarter of 2023, and anticipate project completion in the fourth quarter of 2025. We expect this property to reach projected annual stabilized NOI of $9.9 million by 2028.
Summary of Remaining Development Costs The following table summarizes remaining development costs and related debt for projects held in the Operating Assets and Strategic Developments segments as of December 31, 2023.
Summary of Remaining Development Costs The following table summarizes remaining development costs and related debt for projects held in the Operating Assets and Strategic Developments segments as of December 31, 2024.
HHH 2023 FORM 10-K | 51 MANAGEMENT’S DISCUSSION AND ANALYSIS RESULTS OF OPERATIONS Table of Contents Index to Financial Statements Strategic Developments Our Strategic Developments assets generally require substantial future development to maximize their value. Other than our condominium properties, most of the properties and projects in this segment do not generate revenues.
HHH 2024 FORM 10-K | 46 MANAGEMENT’S DISCUSSION AND ANALYSIS RESULTS OF OPERATIONS Table of Contents Index to Financial Statements Strategic Developments Our Strategic Developments assets generally require substantial future development to maximize their value. Other than our condominium properties, most of the properties and projects in this segment do not generate revenues.
Our expenses relating to these assets are primarily related to costs associated with constructing the assets, selling condominiums, marketing costs associated with our Strategic Developments, carrying costs including, but not limited to, property taxes and insurance and other ongoing costs relating to maintaining the assets in their current condition.
Our expenses relating to these assets are primarily related to costs associated with constructing the assets, selling condominiums, carrying costs including, but not limited to, property taxes and insurance and other ongoing costs relating to maintaining the assets in their current condition.
Net debt is defined as Mortgages, notes, and loans payable, net, including our ownership share of debt of our unconsolidated ventures, reduced by liquidity sources to satisfy such obligations such as our ownership share of Cash and cash equivalents and SID, MUD, and TIF receivables.
Net debt is defined as Mortgages, notes, and loans payable, net, including our ownership share of debt of our unconsolidated ventures, reduced by liquidity sources to satisfy such obligations such as our ownership share of Cash and cash equivalents and SID, MUD, and Tax Increment Financing (TIF) receivables.
HHH 2023 FORM 10-K | 54 MANAGEMENT’S DISCUSSION AND ANALYSIS RESULTS OF OPERATIONS Table of Contents Index to Financial Statements Corporate Income, Expenses, and Other Items The following table contains certain corporate-related and other items not related to segment activities and that are not otherwise included within the segment analyses.
HHH 2024 FORM 10-K | 49 MANAGEMENT’S DISCUSSION AND ANALYSIS RESULTS OF OPERATIONS Table of Contents Index to Financial Statements Corporate Income, Expenses, and Other Items The following table contains certain corporate-related and other items not related to segment activities and that are not otherwise included within the segment analyses.
HHH 2023 FORM 10-K | 55 MANAGEMENT’S DISCUSSION AND ANALYSIS LIQUIDITY AND CAPITAL RESOURCES Table of Contents Index to Financial Statements LIQUIDITY AND CAPITAL RESOURCES We continue to maintain a strong balance sheet and ensure we maintain the financial flexibility and liquidity necessary to fund future growth.
HHH 2024 FORM 10-K | 50 MANAGEMENT’S DISCUSSION AND ANALYSIS LIQUIDITY AND CAPITAL RESOURCES Table of Contents Index to Financial Statements LIQUIDITY AND CAPITAL RESOURCES We continue to maintain a strong balance sheet and ensure we maintain the financial flexibility and liquidity necessary to fund future growth.
RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS AND DEVELOPMENTS Please refer to Note 1 - Presentation of Financial Statements and Significant Accounting Policies in the Notes to Consolidated Financial Statements under Item 8 of this Form 10-K for additional information about new accounting pronouncements. HHH 2023 FORM 10-K | 60 MARKET RISK QUANTITATIVE AND QUALITATIVE DISCLOSURES Table of Contents Index to Financial Statements
RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS AND DEVELOPMENTS Please refer to Note 1 - Presentation of Financial Statements and Significant Accounting Policies in the Notes to Consolidated Financial Statements under Item 8 of this Annual Report for additional information about new accounting pronouncements. HHH 2024 FORM 10-K | 55 MARKET RISK QUANTITATIVE AND QUALITATIVE DISCLOSURES Table of Contents Index to Financial Statements
MPC Net Contribution is defined as MPC segment EBT, plus MPC cost of sales, Depreciation and amortization, and net collections from Special Improvement District (SID) bonds and Municipal Utility District (MUD) receivables, reduced by MPC development expenditures, land acquisitions, and Equity in earnings from unconsolidated ventures, net of distributions.
MPC Net Contribution is defined as MPC segment EBT, plus MPC cost of sales, Depreciation and amortization, and net collections from MUD and SID bonds receivables, reduced by MPC development expenditures, land acquisitions, and Equity in earnings from unconsolidated ventures, net of distributions.
HHH 2023 FORM 10-K | 42 MANAGEMENT’S DISCUSSION AND ANALYSIS RESULTS OF OPERATIONS Table of Contents Index to Financial Statements We believe that NOI is a useful supplemental measure of the performance of our Operating Assets and Seaport segments because it provides a performance measure that reflects the revenues and expenses directly associated with owning and operating real estate properties.
HHH 2024 FORM 10-K | 40 MANAGEMENT’S DISCUSSION AND ANALYSIS RESULTS OF OPERATIONS Table of Contents Index to Financial Statements We believe that NOI is a useful supplemental measure of the performance of our Operating Assets segment because it provides a performance measure that reflects the revenues and expenses directly associated with owning and operating real estate properties.
A discussion of our significant accounting policies, including further discussion of the accounting policies described below, can be found in Note 1 - Presentation of Financial Statements and Significant Accounting Policies in the Notes to Consolidated Financial Statements under Item 8 of this Form 10-K.
A discussion of our significant accounting policies, including further discussion of the accounting policies described below, can be found in Note 1 - Presentation of Financial Statements and Significant Accounting Policies in the Notes to Consolidated Financial Statements under Item 8 of this Annual Report.
The original 555-acre community (Phase I) is nearing completion and consists of approximately 270 homes including 32 condominiums. In 2022, the Company contributed an additional 54 acres (Phase II) to The Summit adjacent to the existing Summit community to develop approximately 28 custom home sites.
The original 555-acre community (Phase I) is nearing completion and expected to consist of approximately 245 homes and 32 condominiums. In 2022, the Company contributed an additional 54 acres (Phase II) to The Summit adjacent to the existing Summit community to develop approximately 28 custom home sites.
All of this indebtedness is without recourse to the Company, with the exception of the collateral maintenance obligation for Floreo. See Note 10 - Commitments and Contingencies in the Notes to Consolidated Financial Statements under Item 8 of this Form 10-K for additional information related to the Company’s collateral maintenance obligation.
All of this indebtedness is without recourse to the Company, with the exception of the collateral maintenance obligation for Floreo. See Note 11 - Commitments and Contingencies in the Notes to Consolidated Financial Statements under Item 8 of this Annual Report for additional information related to the Company’s collateral maintenance obligation.
See Note 10 - Commitments and Contingencies in the Notes to Consolidated Financial Statements under Item 8 of this Form 10-K for additional information related to the Company’s collateral maintenance obligation. Debt Compliance As of December 31, 2023, the Company was in compliance with all property-level debt covenants with the exception of five property-level debt instruments.
See Note 11 - Commitments and Contingencies in the Notes to Consolidated Financial Statements under Item 8 of this Annual Report for additional information related to the Company’s collateral maintenance obligation. Debt Compliance As of December 31, 2024, the Company was in compliance with all property-level debt covenants with the exception of five property-level debt instruments.
Our proportionate share of the debt of our unconsolidated ventures totaled $134.9 million as of December 31, 2023. All of this indebtedness is without recourse to the Company, with the exception of the collateral maintenance obligation for Floreo.
Our proportionate share of the debt of our unconsolidated ventures totaled $175.6 million as of December 31, 2024. All of this indebtedness is without recourse to the Company, with the exception of the collateral maintenance obligation for Floreo.
Debt As of December 31, 2023, the Company had $5.3 billion of outstanding debt and $1.0 billion of undrawn lender commitment available to be drawn for property development, subject to certain restrictions. Refer to Note 7 - Mortgages, Notes, and Loans Payable, Net in the Notes to Consolidated Financial Statements under Item 8 of this Form 10-K for additional detail.
Debt As of December 31, 2024, the Company had $5.1 billion of outstanding debt and $1.2 billion of undrawn lender commitment available to be drawn for property development, subject to certain restrictions. Refer to Note 8 - Mortgages, Notes, and Loans Payable, Net in the Notes to Consolidated Financial Statements under Item 8 of this Annual Report for additional detail.
We recognized equity earnings of $24.8 million and received cash distributions of $15.1 million in 2023, compared to equity losses of $30.0 thousand and no cash distributions in 2022. Floreo Land development is currently underway at Floreo, our joint venture with Trillium Development Holding Company, LLC.
We recognized equity losses of $16.8 million and received cash distributions of $4.9 million in 2024, compared to equity earnings of $24.8 million and cash distributions of $15.1 million in 2023. Floreo Land development is currently underway at Floreo, our joint venture with Trillium Development Holding Company, LLC.
A reconciliation of Operating Assets segment EBT to Operating Assets NOI is presented in the table below. Refer to the Seaport section for a reconciliation of Seaport segment EBT to Seaport NOI.
A reconciliation of Operating Assets segment EBT to Operating Assets NOI is presented in the table below.
Total cost remaining to be paid net of debt and buyer deposits consists of $88.0 million related to substantially completed projects, $36.9 million related to projects with estimated completion dates within the next 12 months, and $114.6 million related to projects with estimated completion dates in 2025 and 2026.
Total cost remaining to be paid net of debt and buyer deposits consists of $37.0 million related to substantially completed projects, $125.6 million related to projects with estimated completion dates within the next 12 months, and $74.6 million related to projects with estimated completion dates in 2026 and 2027.
Completed Condominiums As of December 31, 2023, our six completed condominiums, Ae‘o, Ke Kilohana, Anaha, Waiea, ‘A‘ali‘i, and Kō‘ula, are completely sold. Condominiums Under Construction As of December 31, 2023, 97.9% of the units at our three towers under construction, Victoria Place, The Park Ward Village, and Ulana Ward Village, are under contract.
Completed Condominiums Ward Village As of December 31, 2024, our seven completed condominiums, Ae`o, Ke Kilohana, Anaha, Waiea, ‘A‘ali‘i, Kō‘ula, and Victoria Place, are completely sold. Condominiums Under Construction Ward Village As of December 31, 2024, 97.3% of the units at our three towers under construction, The Park Ward Village, Ulana Ward Village, and Kalae, are under contract.
This strong performance is a testament to our premier communities and best-in-class assets, further highlighting the strength of our unique business model. In our MPCs, a year-over-year increase of 45% in new homes sales in our communities, led to heightened demand and home builder interest for new land parcels as the year progressed.
This strong performance is a testament to our premier communities and best-in-class assets, further highlighting the strength of our unique business model. In our MPCs, we experienced heightened demand and home builder interest for new land parcels.
Please see the Reconciliation of MPC Land Sales Closed to GAAP Land Sales Revenue table below which reconciles Total residential and commercial land sales closed to Land sales revenue for the years ended December 31, 2023 and 2022.
Please see the summary of MPC land sales table above which reconciles total residential and commercial land sales closed to MPC land sales revenue recognized for the years ended December 31, 2024 and 2023.
For additional information on income taxes, see Note 12 - Income Taxes in the Notes to Consolidated Financial Statements under Item 8 of this Form 10-K.
For additional information on income taxes, see Note 13 - Income Taxes in the Notes to Consolidated Financial Statements under Item 8 of this Annual Report.
This reflects price moderation from all-time highs in 2022. HHH 2023 FORM 10-K | 45 MANAGEMENT’S DISCUSSION AND ANALYSIS RESULTS OF OPERATIONS Table of Contents Index to Financial Statements MPC Equity Investments The Summit The Summit, our joint venture with Discovery, offers a mix of custom lots, single-family homes, and clubhouse suites in our Summerlin MPC.
HHH 2024 FORM 10-K | 43 MANAGEMENT’S DISCUSSION AND ANALYSIS RESULTS OF OPERATIONS Table of Contents Index to Financial Statements MPC Equity Investments The Summit The Summit, our joint venture with Discovery Land Company, offers a mix of custom lots, single-family homes, and clubhouse suites in our Summerlin MPC.
HHH 2023 FORM 10-K | 56 MANAGEMENT’S DISCUSSION AND ANALYSIS LIQUIDITY AND CAPITAL RESOURCES Table of Contents Index to Financial Statements Financing Activities Net cash provided by financing activities was $548.7 million in 2023 and net cash used in financing activities was $222.3 million in 2022.
HHH 2024 FORM 10-K | 51 MANAGEMENT’S DISCUSSION AND ANALYSIS LIQUIDITY AND CAPITAL RESOURCES Table of Contents Index to Financial Statements Financing Activities Net cash used in financing activities of continuing operations was $27.8 million in 2024 and net cash provided by financing activities was $537.8 million in 2023.
(b) The retail portion of this project has been placed in service and is 56% leased. (c) There will be approximately 26,800 square feet of retail space as part of this project. (d) There will be approximately 32,100 square feet of retail space as part of this project.
(b) The retail portion of this project has been placed in service and is 56% leased. (c) Ulana Ward Village will include approximately 32,100 square feet of retail space. (d) The Park Ward Village will include approximately 26,800 square feet of retail space. (e) Kalae will include approximately 2,000 square feet of retail space.
HHH 2023 FORM 10-K | 44 MANAGEMENT’S DISCUSSION AND ANALYSIS RESULTS OF OPERATIONS Table of Contents Index to Financial Statements MPC Segment EBT increased $58.4 million compared to the prior-year period primarily due to higher superpad land sales and price per acre in Summerlin, higher equity earnings of $24.1 million, primarily related to The Summit, and higher capitalized interest, partially offset by lower builder price participation of $10.8 million in all MPCs.
HHH 2024 FORM 10-K | 42 MANAGEMENT’S DISCUSSION AND ANALYSIS RESULTS OF OPERATIONS Table of Contents Index to Financial Statements MPC segment EBT increased $7.7 million compared to the prior-year period primarily due to higher superpad land sales and price per acre in Summerlin, partially offset by lower equity earnings, primarily related to The Summit, lower commercial land sales at Bridgeland, and no residential or commercial land sales in The Woodlands.
The following provides further details for Ward Village as of December 31, 2023: Units Closed Units Under Contract Total Units Total % of Units Closed or Under Contract Completion Date Completed Waiea (a) 177 — 177 100.0 % Q4 2016 Anaha (a) 317 — 317 100.0 % Q4 2017 Ae‘o (a) 465 — 465 100.0 % Q4 2018 Ke Kilohana (a) 423 — 423 100.0 % Q2 2019 ‘A‘ali‘i (a) 750 — 750 100.0 % Q4 2021 Kō‘ula (b) 565 — 565 100.0 % Q3 2022 Under Construction Victoria Place — 349 349 100.0 % Q4 2024 The Park Ward Village (c) — 512 545 93.9 % 2026 Ulana Ward Village (d) — 696 696 100.0 % 2025 Predevelopment Kalae (e) — 287 329 87.2 % 2027 (a) The retail portions of these projects are 100% leased and have been placed in service.
The following provides further detail for all condominium projects as of December 31, 2024: Location Units Closed Units Under Contract Total Units Total % of Units Closed or Under Contract Completion Date Completed Waiea (a) Honolulu, HI 177 — 177 100.0 % Q4 2016 Anaha (a) Honolulu, HI 317 — 317 100.0 % Q4 2017 Ae`o (a) Honolulu, HI 465 — 465 100.0 % Q4 2018 Ke Kilohana (a) Honolulu, HI 423 — 423 100.0 % Q2 2019 ‘A‘ali‘i (a) Honolulu, HI 750 — 750 100.0 % Q4 2021 Kō'ula (b) Honolulu, HI 565 — 565 100.0 % Q3 2022 Victoria Place Honolulu, HI 349 — 349 100.0 % Q4 2024 Under construction Ulana Ward Village (c) Honolulu, HI — 696 696 100.0 % 2025 The Park Ward Village (d) Honolulu, HI — 527 545 96.7 % 2026 Kalae (e) Honolulu, HI — 305 329 92.7 % 2027 The Ritz-Carlton Residences (f) The Woodlands, TX — 78 111 70.3 % 2027 Predevelopment The Launiu (g) Honolulu, HI — 283 485 58.4 % 2028 (a) The retail portions of these projects are 100% leased and have been placed in service.
For additional information regarding these lawsuits, see Note 10 - Commitments and Contingencies in the Notes to Consolidated Financial Statements under Item 8 of this Form 10-K.
Refer to Note 11 - Commitments and Contingencies in the Notes to Consolidated Financial Statements under Item 8 of this Annual Report for additional information.
The following table summarizes our share of affiliate debt and cash as of December 31, 2023: thousands Company’s Share of Unconsolidated Ventures’ Debt Company’s Share of Unconsolidated Ventures’ Cash Operating Assets The Metropolitan $ 40,200 $ 604 Stewart Title of Montgomery County, TX — 401 Woodlands Sarofim 1,188 141 TEN.m.flats 49,205 503 Master Planned Communities The Summit 7,699 15,858 Floreo 36,510 905 Seaport The Lawn Club — 40 Tin Building by Jean-Georges — 5,191 Jean-George Restaurants 76 4,062 Ssäm Bar — 15 Strategic Developments HHMK Development — 10 KR Holdings — 487 West End Alexandria — 153 Total $ 134,878 $ 28,370 HHH 2023 FORM 10-K | 59 MANAGEMENT’S DISCUSSION AND ANALYSIS CRITICAL ACCOUNTING POLICIES Table of Contents Index to Financial Statements CRITICAL ACCOUNTING POLICIES The preparation of financial statements in accordance with GAAP requires management to make informed judgments, assumptions, and estimates that affect the reported amounts of assets, liabilities, revenues, and expenses.
The following table summarizes our share of affiliate debt and cash as of December 31, 2024: thousands Company’s Share of Unconsolidated Ventures’ Debt Company’s Share of Unconsolidated Ventures’ Cash Operating Assets The Metropolitan $ 40,200 $ 699 Stewart Title of Montgomery County, TX — 900 Woodlands Sarofim 1,163 134 TEN.m.flats 49,205 503 Master Planned Communities The Summit 7,687 5,198 Floreo 77,360 5,399 Strategic Developments West End Alexandria — 4,967 Other — 41 Total $ 175,615 $ 17,841 HHH 2024 FORM 10-K | 54 MANAGEMENT’S DISCUSSION AND ANALYSIS CRITICAL ACCOUNTING POLICIES AND ESTIMATES Table of Contents Index to Financial Statements CRITICAL ACCOUNTING POLICIES AND ESTIMATES The preparation of financial statements in accordance with GAAP requires management to make informed judgments, assumptions, and estimates that affect the reported amounts of assets, liabilities, revenues, and expenses.
Net New Home Sales Median Home Sales Price thousands except percentages 2023 2022 % Change 2023 2022 % Change Bridgeland 985 566 74.0 % $ 477 $ 525 (9.1) % Summerlin 1,071 775 38.2 % 696 722 (3.6) % The Woodlands (a) 5 32 (84.4) % 1,565 1,285 21.8 % The Woodlands Hills 228 201 13.4 % 478 429 11.4 % Total 2,289 1,574 45.4 % (a) New home sales in The Woodlands are not expected to be significant as residential land development is nearing completion.
Net New Home Sales Median Home Sales Price thousands except percentages 2024 2023 % Change 2024 2023 % Change Bridgeland 938 985 (4.8) % $ 465 $ 477 (2.5) % Summerlin 1,038 1,071 (3.1) % 692 696 (0.6) % The Woodlands (a) 9 5 80.0 % 2,249 1,565 43.7 % The Woodlands Hills 249 228 9.2 % 419 478 (12.3) % Total 2,234 2,289 (2.4) % (a) New home sales in The Woodlands are not expected to be significant as residential land development is nearing completion.
Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations The following discussion should be read in conjunction with our Consolidated Financial Statements and the related notes filed as a part of this Annual Report. This discussion contains forward-looking statements that involve risks, uncertainties, assumptions, and other factors, including those described in Part I, Item 1A .
Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations The following discussion should be read in conjunction with our Consolidated Financial Statements and the related notes filed as a part of this Annual Report on Form 10-K (Annual Report).
HHH 2023 FORM 10-K | 52 MANAGEMENT’S DISCUSSION AND ANALYSIS RESULTS OF OPERATIONS Table of Contents Index to Financial Statements Strategic Developments Projects The following describes the status of our major construction projects and announced Strategic Developments projects as of December 31, 2023.
HHH 2024 FORM 10-K | 47 MANAGEMENT’S DISCUSSION AND ANALYSIS RESULTS OF OPERATIONS Table of Contents Index to Financial Statements Strategic Developments Projects The following describes the status of our major construction projects as of December 31, 2024. These properties will be transferred to the Operating Assets segment upon completion of construction, unless otherwise noted below.
We began construction in the third quarter of 2023 and anticipate project completion in the third quarter of 2024. We expect to reach projected annual stabilized NOI of $1.8 million by 2027. The Woodlands 1 Riva Row 1 Riva Row will be a 268-unit multi-family property and will consist of studio, one-, two-, and three-bedroom units.
As such, projected annual stabilized NOI is not applicable for this project. We began construction in the third quarter of 2024, and anticipate project completion in the second quarter of 2025. 1 Riva Row This will be a 268-unit multifamily property and will consist of studio, one-, two-, and three-bedroom units.
Condominium revenue is recognized when construction of the condominium tower is complete and unit sales close, leading to potentially significant variability in revenue recognized between periods.
Condominiums Condominium revenue is recognized when construction of the condominium tower is complete and unit sales close, leading to potentially significant variability in revenue recognized between periods. For all Ward Village condominium units, sales contracts are subject to a 30-day rescission period.
Risk Factors and elsewhere in this Annual Report. These factors and others not currently known to us could cause our financial results in 2023 and subsequent fiscal years to differ materially from those expressed in, or implied by, those forward-looking statements.
These factors and others not currently known to us could cause our financial results in 2024 and subsequent fiscal years to differ materially from those expressed in, or implied by, those forward-looking statements. You are cautioned not to place undue reliance on this information which speaks only as of the date of this report.
HHH 2023 FORM 10-K | 53 MANAGEMENT’S DISCUSSION AND ANALYSIS RESULTS OF OPERATIONS Table of Contents Index to Financial Statements We broke ground on our eighth condominium project, The Park Ward Village, in October 2022, expect to complete construction in 2026. The Park Ward Village will consist of 545 studio, one-, two-, and three-bedroom residences.
HHH 2024 FORM 10-K | 48 MANAGEMENT’S DISCUSSION AND ANALYSIS RESULTS OF OPERATIONS Table of Contents Index to Financial Statements We broke ground on Kalae in June 2024 and expect to complete construction in 2027. Kalae will consist of 329 one-, two-, and three-bedroom residences.
Changes for monetary amounts between periods presented are calculated based on the amounts in thousands of dollars stated in our consolidated financial statements and then rounded to the nearest million. Therefore, certain changes may not recalculate based on the amounts rounded to the nearest million. We are primarily focused on creating shareholder value by increasing our per-share net asset value.
Therefore, certain changes may not recalculate based on the amounts rounded to the nearest million. We are primarily focused on creating stockholder value by increasing our per-share net asset value.
For additional information, refer to Note 7 - Mortgages, Notes, and Loans Payable, Net in the Notes to Consolidated Financial Statements under Item 8 of this Form 10-K.
Refer to Note 10 - Derivative Instruments and Hedging Activities in the Notes to Consolidated Financial Statements under Item 8 of this Annual Report for additional information.
HHH 2023 FORM 10-K | 43 MANAGEMENT’S DISCUSSION AND ANALYSIS RESULTS OF OPERATIONS Table of Contents Index to Financial Statements Master Planned Communities Segment EBT The following table presents segment EBT for MPC for the years ended December 31: MPC Segment EBT thousands 2023 2022 $ Change Master Planned Community land sales (a) $ 370,185 $ 316,065 $ 54,120 Other land, rental, and property revenues 17,278 20,539 (3,261) Builder price participation (b) 60,989 71,761 (10,772) Total revenues 448,452 408,365 40,087 Master Planned Communities cost of sales (140,050) (119,466) (20,584) Operating costs (53,420) (54,439) 1,019 Total operating expenses (193,470) (173,905) (19,565) Segment operating income (loss) 254,982 234,460 20,522 Depreciation and amortization (418) (394) (24) Interest income (expense), net 64,291 50,305 13,986 Other income (loss), net (102) 23 (125) Equity in earnings (losses) from unconsolidated ventures 22,666 (1,407) 24,073 Segment EBT $ 341,419 $ 282,987 $ 58,432 (a) MPC land sales include deferred revenue from land sales closed in a previous period that met criteria for recognition in the current period and excludes amounts deferred from current period land sales that do not yet meet the recognition criteria.
HHH 2024 FORM 10-K | 41 MANAGEMENT’S DISCUSSION AND ANALYSIS RESULTS OF OPERATIONS Table of Contents Index to Financial Statements Master Planned Communities Segment EBT The following table presents segment EBT for MPC for the years ended December 31: MPC Segment EBT thousands 2024 2023 $ Change Master Planned Community land sales (a) $ 453,195 $ 370,185 $ 83,010 Other land, rental, and property revenues 17,707 17,278 429 Builder price participation (b) 52,023 60,989 (8,966) Total revenues 522,925 448,452 74,473 Master Planned Communities cost of sales (169,191) (140,050) (29,141) Operating costs (52,736) (53,420) 684 Total operating expenses (221,927) (193,470) (28,457) Segment operating income (loss) 300,998 254,982 46,016 Depreciation and amortization (438) (418) (20) Interest income (expense), net 60,473 64,291 (3,818) Other income (loss), net — (102) 102 Equity in earnings (losses) from unconsolidated ventures (11,899) 22,666 (34,565) Segment EBT $ 349,134 $ 341,419 $ 7,715 (a) MPC land sales include deferred revenue from land sales closed in a previous period that met criteria for recognition in the current period and excludes amounts deferred from current period land sales that do not yet meet the recognition criteria.
(c) These amounts represent 100% of Floreo EBT. The Company owns a 50% interest in Floreo. Refer to Note 2 - Investments in Unconsolidated Ventures in the Notes to Consolidated Financial Statements under Item 8 of this Form 10-K for a description of the joint venture and further discussion.
Refer to Note 3 - Investments in Unconsolidated Ventures in the Notes to Consolidated Financial Statements under Item 8 of this Annual Report for a description of the joint venture and further discussion.
MPC Land Inventory The following table summarizes MPC land inventory activity: thousands Bridgeland Columbia (a) Summerlin Teravalis The Woodlands The Woodlands Hills Total MPC Balance December 31, 2021 $ 520,153 $ 16,625 $ 931,724 $ 510,541 $ 187,418 $ 116,307 $ 2,282,768 Development expenditures (b) 189,752 — 161,540 195 14,844 29,771 396,102 MPC Cost of sales (32,746) — (64,183) — (12,310) (10,227) (119,466) MUD reimbursable costs (c) (145,995) — — — (110) (24,521) (170,626) Transfer to Strategic Developments and Operating Assets Segments (777) — (12,424) — (4,433) — (17,634) Other 8,537 — (2,146) 33,810 (53) 234 40,382 Balance December 31, 2022 538,924 16,625 1,014,511 544,546 185,356 111,564 2,411,526 Development expenditures (b) 222,268 — 144,041 225 4,514 32,585 403,633 MPC Cost of sales (40,533) — (77,068) — (13,289) (9,160) (140,050) MUD reimbursable costs (c) (172,120) — — — (1,200) (25,688) (199,008) Transfer to Strategic Development and Operating Assets Segments (4,530) (16,625) (4,073) — (3,226) — (28,454) Other (10,978) — 2,516 53 497 5,938 (1,974) Balance December 31, 2023 $ 533,031 $ — $ 1,079,927 $ 544,824 $ 172,652 $ 115,239 $ 2,445,673 (a) Columbia MPC land development is complete and the sale of remaining land or development of additional commercial assets will occur as the market dictates.
MPC Land Inventory The following table summarizes MPC land inventory activity: thousands Bridgeland Columbia (a) Summerlin Teravalis The Woodlands The Woodlands Hills Total MPC Balance December 31, 2022 $ 538,924 $ 16,625 $ 1,014,511 $ 544,546 $ 185,356 $ 111,564 $ 2,411,526 Development expenditures (b) 222,268 — 144,041 225 4,514 32,585 403,633 MPC Cost of sales (40,533) — (77,068) — (13,289) (9,160) (140,050) MUD reimbursable costs (c) (172,120) — — — (1,200) (25,688) (199,008) Transfer to Strategic Development and Operating Assets Segments (4,530) (16,625) (4,073) — (3,226) — (28,454) Other (10,978) — 2,516 53 497 5,938 (1,974) Balance December 31, 2023 533,031 — 1,079,927 544,824 172,652 115,239 2,445,673 Development expenditures (b) 204,542 — 186,163 573 5,853 30,848 427,979 MPC Cost of sales (47,056) — (113,844) — (117) (8,174) (169,191) MUD reimbursable costs (c) (178,701) — — — (877) (20,087) (199,665) Transfer to Strategic Development and Operating Assets Segments (1,218) — — — 11,399 — 10,181 Other (1,367) — 1,491 (16) 583 (4,006) (3,315) Balance December 31, 2024 $ 509,231 $ — $ 1,153,737 $ 545,381 $ 189,493 $ 113,820 $ 2,511,662 (a) Columbia MPC land development is complete and the sale of remaining land or development of additional commercial assets will occur as the market dictates.
The Company’s effective tax rate is typically impacted by non-deductible executive compensation and other permanent differences as well as state income taxes, which cause the Company’s effective tax rate to deviate from the federal statutory rate.
Income Taxes thousands except percentages 2024 2023 Income tax expense (benefit) $ 80,184 $ 26,418 Income (loss) before income taxes $ 365,399 $ 109,828 Effective tax rate 21.9 % 24.1 % The Company’s effective tax rate is typically impacted by non-deductible executive compensation and other permanent differences as well as state income taxes, which cause the Company’s effective tax rate to deviate from the federal statutory rate.
Management’s Discussion and Analysis of Financial Condition and Results of Operations of The Howard Hughes Corporation’s Annual Report Form 10-K for the year ended December 31, 2022. All references to numbered Notes are to specific Notes to our Consolidated Financial Statements included in this Annual Report and which descriptions are incorporated into the applicable response by reference.
All references to numbered Notes are to specific Notes to our Consolidated Financial Statements included in this Annual Report and which descriptions are incorporated into the applicable response by reference.
Sales contracts for condominium units are subject to a 30-day rescission period, and the buyers are typically required to make an initial deposit at signing and an additional deposit 30 days later at which point their total deposit becomes non-refundable.
The buyers are required to make an initial deposit at signing and an additional deposit 30 days later at which point their total deposit becomes non-refundable. Buyers are then required to make a final deposit within approximately 90 days of our receipt of their second deposit.
This section of our Form 10-K discusses 2023 and 2022 items and year-to-year comparisons between 2023 and 2022. Discussion of 2021 and year-to-year comparisons between 2022 and 2021 that are not included in this Form 10-K can be found in Part II, Item 7.
Discussion of 2022 and year-to-year comparisons between 2023 and 2022 that are not included in this Annual Report can be found in Part II, Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations in the Company’s Annual Report on Form 10-K for the year ended December 31, 2023.
Index Page Overview 39 Results of Operations 42 Operating Assets 42 Master Planned Communities 44 Seaport 49 Strategic Developments 52 Corporate Income, Expenses, and Other Items 55 Liquidity and Capital Resources 56 Critical Accounting Policies 60 Recently Issued Accounting Pronouncements and Developments 60 HHH 2023 FORM 10-K | 38 MANAGEMENT’S DISCUSSION AND ANALYSIS OVERVIEW Table of Contents Index to Financial Statements OVERVIEW General Overview Please refer to Item 1.
Index Page Overview 37 Results of Operations 40 Operating Assets 40 Master Planned Communities 42 Strategic Developments 47 Corporate Income, Expenses, and Other Items 50 Liquidity and Capital Resources 51 Critical Accounting Policies and Estimates 55 Recently Issued Accounting Pronouncements and Developments 55 HHH 2024 FORM 10-K | 36 MANAGEMENT’S DISCUSSION AND ANALYSIS OVERVIEW Table of Contents Index to Financial Statements OVERVIEW Seaport Entertainment Spinoff On July 31, 2024, the spinoff of Seaport Entertainment Group Inc. and its subsidiaries (Seaport Entertainment or SEG) was completed.
MPC – MPC EBT totaled $341.4 million in 2023, a $58.4 million increase compared to $283.0 million in the prior year. – The increase in EBT was primarily due to increased residential land sales in Summerlin, a higher overall residential price per acre in our MPCs, and higher equity earnings at The Summit primarily related to Phase II land inventory.
MPC – MPC EBT totaled income of $349.1 million in 2024, a $7.7 million increase compared to income of $341.4 million in the prior year. – The increase in EBT was primarily due to higher superpad land sales and price per acre in Summerlin, partially offset by lower equity earnings at The Summit, lower commercial land sales in Bridgeland, and lower residential and commercial land sales in The Woodlands.
Total development costs are expected to be approximately $55.5 million, which will be partially financed with a $27.8 million construction loan. We began construction in the fourth quarter of 2022 and anticipate project completion in the first quarter of 2024. We expect to reach projected annual stabilized NOI of $4.3 million by 2027.
Bridgeland One Bridgeland Green This will be a 49,501-square-foot office property. Total development costs are expected to be approximately $35.4 million. We began construction in the second quarter of 2024, and anticipate project completion in the second quarter of 2025. We expect this property to reach projected annual stabilized NOI of $1.8 million by 2028.
You are cautioned not to place undue reliance on this information which speaks only as of the date of this report. We are not obligated to update this information, whether as a result of new information, future events or otherwise, except as may be required by law.
We are not obligated to update this information, whether as a result of new information, future events or otherwise, except as may be required by law. This section of our Annual Report discusses 2024 and 2023 items and year-to-year comparisons between 2024 and 2023.
As of December 31, 2023, we have entered into contracts for 512 units, representing 93.9% of total units. We broke ground on our ninth condominium project, Ulana Ward Village, in January 2023 and expect to complete construction in 2025. Ulana Ward Village, which is 100.0% presold, will consist of 696 studio, one-, two-, and three-bedroom units.
We broke ground on The Park Ward Village in October 2022 and expect to complete construction in 2026. The Park Ward Village will consist of 545 studio, one-, two-, and three-bedroom residences. As of December 31, 2024, we have entered into contracts for 527 units, representing 96.7% of total units.
The Woodlands EBT increased $8.4 million compared to the prior period. – MPC sales, net of MPC cost of sales increased $6.2 million primarily due to the following activity. – increase in commercial acres sold, with 8.4 acres sold at an average price of $646,000 in 2023, compared to no acres sold in 2022 – increase in residential acres sold, with 9.8 acres sold in Aria Isle, an exclusive gated community, at an average price of $2.5 million per acre in 2023, compared to 7.4 acres sold at an average price of $3.0 million per acre in 2022 – Operating costs decreased $4.7 million due to higher legal fees in the prior year, primarily related to the flood litigation. – Builder price participation decreased $1.6 million as fewer homes were closed with sales prices over the predetermined breakpoint necessary for participation revenue in the current period.
The Woodlands EBT decreased $12.9 million compared to the prior year. – MPC sales, net of MPC cost of sales decreased $15.4 million primarily due to the following activity. – decrease in residential acres sold, with no acres sold in 2024, compared to 9.8 acres sold in Aria Isle, an exclusive gated community, at an average price of $2.5 million per acre in 2023.
Therefore, we use this statistic where relevant in our discussion of MPC operating results herein. Net new home sales reflect home sales made by homebuilders, less cancellations.
Although our business does not involve the sale or resale of homes, we believe that net new home sales are an important indicator of future demand for our superpad sites and finished lots. Therefore, we use this statistic where relevant in our discussion of MPC operating results herein. Net new home sales reflect home sales made by homebuilders, less cancellations.
Cash Flows Year Ended December 31, thousands 2023 2022 Cash provided by (used in) operating activities $ (258,482) $ 325,254 Cash provided by (used in) investing activities (336,143) (220,695) Cash provided by (used in) financing activities 548,745 (222,259) Operating Activities Each segment’s relative contribution to our cash flows from operating activities will likely vary significantly from year to year given the changing nature of our development focus.
Cash Flows Year Ended December 31, thousands 2024 2023 Cash provided by (used in) operating activities of continuing operations $ 447,751 $ (215,154) Cash provided by (used in) investing activities of continuing operations (430,705) (345,665) Cash provided by (used in) financing activities of continuing operations (27,754) 537,809 Net cash provided by (used in) discontinued operations (43,846) (22,870) Operating Activities Each segment’s relative contribution to our cash flows from operating activities will likely vary significantly from year to year given the changing nature of our development focus.
Below is a reconciliation of segment EBT to MPC Net Contribution for the years ended December 31: thousands 2023 2022 $ Change MPC segment EBT $ 341,419 $ 282,987 $ 58,432 Plus: Master Planned Communities cost of sales 140,050 119,466 20,584 Depreciation and amortization 418 394 24 MUD and SID bonds collections, net (a) 136,409 131,126 5,283 Distributions from unconsolidated ventures 15,050 — 15,050 Less: MPC development expenditures (403,633) (396,102) (7,531) Equity in (earnings) losses from unconsolidated ventures (22,666) 1,407 (24,073) MPC Net Contribution $ 207,047 $ 139,278 $ 67,769 (a) SID collections are shown net of SID transfers to buyers in the respective periods.
HHH 2024 FORM 10-K | 45 MANAGEMENT’S DISCUSSION AND ANALYSIS RESULTS OF OPERATIONS Table of Contents Index to Financial Statements Below is a reconciliation of segment EBT to MPC Net Contribution for the years ended December 31: thousands 2024 2023 $ Change MPC segment EBT $ 349,134 $ 341,419 $ 7,715 Plus: Master Planned Communities cost of sales 169,191 140,050 29,141 Depreciation and amortization 438 418 20 MUD and SID bonds collections, net (a) 107,031 136,409 (29,378) Proceeds from sale of MUD receivables 176,680 — 176,680 Distributions from unconsolidated ventures 4,896 15,050 (10,154) Less: MPC development expenditures (427,979) (403,633) (24,346) Equity in (earnings) losses from unconsolidated ventures 11,899 (22,666) 34,565 MPC Net Contribution $ 391,290 $ 207,047 $ 184,243 (a) SID collections are shown net of SID transfers to buyers in the respective periods.
We began construction in the third quarter of 2022 and anticipate project completion in the second quarter of 2024. We expect to reach projected annual stabilized NOI of $3.2 million by 2027. Summerlin Meridian Meridian (formerly Summerlin South Office) will be a 147,000 square foot office property.
The Woodlands Grogan’s Mill Retail This will be a 38,378-square-foot retail property. Total development costs are expected to be approximately $8.6 million. We began construction in the third quarter of 2024, and anticipate project completion in the second quarter of 2025. We expect this property to reach projected annual stabilized NOI of $0.9 million by 2028.
All units are designated as workforce housing units and are being offered to local residents who meet certain maximum income and net worth requirements. Predevelopment Condominiums We launched public presales of our tenth condominium project, Kalae, in September 2022. Kalae will consist of 329 one-, two-, and three-bedroom residences.
We broke ground on Ulana Ward Village in January 2023 and expect to complete construction in 2025. Ulana Ward Village, which is 100% presold, will consist of 696 studio, one-, two-, and three-bedroom units. All units are designated as workforce housing units and are being offered to local residents who meet certain maximum income and net worth requirements.
Operating Assets NOI increased $7.9 million compared to the prior-year period primarily due to the following: – Multi-family NOI increased $7.3 million primarily driven by continued lease-up at our newer properties, Marlow in Downtown Columbia and Starling at Bridgeland, rent growth across our portfolio, and winter weather-related insurance recoveries. – Office NOI increased $6.6 million primarily due to continued lease-up activity and abatement expirations at various properties in The Woodlands, most notably at 9950 Woodloch Forest and Lakefront North, and one-time lease termination fees at 1725 Hughes Landing.
Operating Assets NOI increased $14.9 million compared to the prior-year period primarily due to the following: – Office NOI increased $6.4 million primarily due to strong leasing activity and abatement expirations at various properties in The Woodlands and Summerlin, most notably at 9950 Woodloch Forest and 1700 Pavilion, partially offset by decreases related to lower occupancy at 1725 Hughes Landing and certain properties in Downtown Columbia, as well as initial operating losses at Meridian in Summerlin. – Retail NOI increased $4.2 million primarily due to the collection of previously reserved accounts receivable in Ward Village as well as improved occupancy in the ground floor retail at Juniper and Marlow in Downtown Columbia and Kō'ula in Ward Village. – Multifamily NOI increased $6.0 million primarily due to continued lease-up at our newer properties, Marlow in Downtown Columbia, Starling at Bridgeland, and Tanager Echo in Summerlin, partially offset by winter-weather-related insurance recoveries in 2023.
Segment EBT The following table presents segment EBT for Strategic Developments for the years ended December 31: Strategic Developments Segment EBT thousands 2023 2022 $ Change Condominium rights and unit sales $ 47,707 $ 677,078 $ (629,371) Rental revenue 379 — 379 Other land, rental, and property revenues 1,901 2,685 (784) Total revenues 49,987 679,763 (629,776) Condominium rights and unit cost of sales (55,417) (483,983) 428,566 Operating costs (21,908) (19,001) (2,907) Real estate taxes (3,147) (1,052) (2,095) Total operating expenses (80,472) (504,036) 423,564 Segment operating income (loss) (30,485) 175,727 (206,212) Depreciation and amortization (3,963) (5,319) 1,356 Interest income (expense), net 16,074 17,073 (999) Other income (loss), net 690 1,799 (1,109) Equity in earnings (losses) from unconsolidated ventures 142 868 (726) Gain (loss) on sale or disposal of real estate and other assets, net 236 90 146 Segment EBT $ (17,306) $ 190,238 $ (207,544) Strategic Developments segment EBT decreased $207.5 million compared to the prior-year period primarily due to the following: – Condominium sales, net of cost of sales decreased $187.4 million, excluding the change in remediation costs of $13.4 million discussed below, due to the timing of condominium closings, including the completion of Kō'ula in the third quarter of 2022, and pricing reductions in 2023 at ‘A‘ali‘i and Kō'ula to facilitate the close-out of remaining units.
Segment EBT The following table presents segment EBT for Strategic Developments for the years ended December 31: Strategic Developments Segment EBT thousands 2024 2023 $ Change Condominium rights and unit sales $ 778,616 $ 47,707 $ 730,909 Rental revenue 459 379 80 Other land, rental, and property revenues 4,321 1,901 2,420 Total revenues 783,396 49,987 733,409 Condominium rights and unit cost of sales (582,574) (55,417) (527,157) Operating costs (17,670) (21,908) 4,238 Real estate taxes (2,480) (3,147) 667 Total operating expenses (602,724) (80,472) (522,252) Segment operating income (loss) 180,672 (30,485) 211,157 Depreciation and amortization (7,255) (3,963) (3,292) Interest income (expense), net 18,603 16,074 2,529 Other income (loss), net 90,534 690 89,844 Equity in earnings (losses) from unconsolidated ventures 251 142 109 Gain (loss) on sale or disposal of real estate and other assets, net — 236 (236) Segment EBT $ 282,805 $ (17,306) $ 300,111 Strategic Developments segment EBT increased $300.1 million compared to the prior-year period primarily due to the following: – Condominium sales, net of cost of sales increased $203.8 million, primarily due to the timing of condominium closings.
Net cash used in operating activities was $258.5 million in 2023 and net cash provided by operating activities was $325.3 million in 2022.
Net cash provided by operating activities of continuing operations was $447.8 million in 2024 and net cash used in operating activities of continuing operations was $215.2 million in 2023.
In 2023, our financing activity included draws on existing mortgages of $384.4 million, an additional draw of $200.0 million on the Secured Bridgeland Notes, refinancings of $161.0 million, and repayments of $48.4 million. As of December 31, 2023, we have $1.0 billion of undrawn lender commitment available to be drawn for property development, subject to certain restrictions.
As of December 31, 2024, we had $596.1 million of cash and cash equivalents, $317.0 million of undrawn capacity on our Secured Bridgeland Notes, and $1.2 billion of undrawn lender commitments available to be drawn for property development, subject to certain restrictions.
These assets under construction represent 268 multi-family units, 696 condominium units, and 99,100 square feet of retail space. Corporate – Net expenses related to Corporate income, expenses, and other items decreased $217.3 million compared to the prior-year period primarily due to a decrease in income tax expense.
These properties represent 440 condominium units and approximately 96,000 square feet of retail and office space. Corporate – Net expenses related to Corporate income, expenses, and other items increased $104.6 million compared to the prior-year period primarily due to a $53.8 million increase in income tax expense and a $48.7 million loss on sale of Municipal Utility District (MUD) receivables.
Together with Victoria Place, which is fully sold out and expected to be delivered in late 2024, these projects were 96% pre-sold at year-end and represent more than $2.6 billion of future contracted revenue that will be recognized as these projects are completed. 2024 Outlook Proceeding into 2024, we maintain a positive long-term outlook for our businesses.
These projects were 96% pre-sold at year end and represent more than $2.2 billion of future contracted revenue that will be recognized as these projects are completed. We also initiated presales for The Launiu, which contracted 283 units and was 58.4% pre-sold at year end.
HHH 2023 FORM 10-K | 57 MANAGEMENT’S DISCUSSION AND ANALYSIS LIQUIDITY AND CAPITAL RESOURCES Table of Contents Index to Financial Statements We expect to be able to meet our cash funding requirements with a combination of existing and anticipated construction loans, condominium buyer deposits, free cash flow from our Operating Assets and MPC segments, net proceeds from condominium sales, and our existing cash balances. thousands Estimated Remaining to be Spent Remaining Buyer Deposits/Holdback to be Drawn Debt to be Drawn (a) Costs Remaining to be Paid, Net of Debt and Buyer Deposits/Holdbacks to be Drawn (b) Operating Assets Columbia $ 33,197 $ — $ 9,747 $ 23,450 The Woodlands 1,916 — — 1,916 Bridgeland 31,790 — 30,961 829 Summerlin 23,936 — 18,133 5,803 Total Operating Assets 90,839 — 58,841 31,998 Strategic Developments Columbia 27,045 — 23,758 3,287 The Woodlands 146,443 — 93,299 53,144 Summerlin 70,041 — 45,762 24,279 Ward Village (b) 1,010,730 147,201 736,731 126,798 Total Strategic Developments 1,254,259 147,201 899,550 207,508 Total $ 1,345,098 $ 147,201 $ 958,391 $ 239,506 (a) Refer to Note 7 - Mortgages, Notes, and Loans Payable, Net in the Notes to Consolidated Financial Statements under Item 8 of this Form 10-K for additional information on debt.
We expect to be able to meet our cash funding requirements with a combination of existing and anticipated construction loans, condominium buyer deposits, cash flow from our Operating Assets and MPC segments, net proceeds from condominium sales, and our existing cash balances. thousands Estimated Remaining to be Spent Remaining Buyer Deposits/Holdback to be Drawn Debt to be Drawn (a) Costs Remaining to be Paid, Net of Debt and Buyer Deposits/Holdbacks to be Drawn (b) Operating Assets Columbia $ 25,966 $ — $ 20,879 $ 5,087 The Woodlands 7,369 — 7,746 (377) Summerlin 41,130 — 37,780 3,350 Total Operating Assets 74,465 — 66,405 8,060 Strategic Developments The Woodlands 425,678 — 276,902 148,776 Bridgeland 21,223 — — 21,223 Ward Village 998,089 151,261 787,679 59,149 Total Strategic Developments 1,444,990 151,261 1,064,581 229,148 Total $ 1,519,455 $ 151,261 $ 1,130,986 $ 237,208 HHH 2024 FORM 10-K | 52 MANAGEMENT’S DISCUSSION AND ANALYSIS LIQUIDITY AND CAPITAL RESOURCES Table of Contents Index to Financial Statements (a) Refer to Note 8 - Mortgages, Notes, and Loans Payable, Net in the Notes to Consolidated Financial Statements under Item 8 of this Annual Report for additional information on debt.
The change in financing activities of $771.0 million was primarily due to a decrease in cash used related to principal payments on mortgages, notes, and loans payable of $815.9 million and repurchases of common shares of $403.9 million in 2022, with no similar activity in 2023.
The change in financing activities of $565.6 million was primarily due to a $659.9 million increase in cash used related to principal payments on mortgages, notes, and loans payable, primarily related to the payoff of the Victoria Place construction loan upon completion of the tower and pay down of the Secured Bridgeland Notes.
HHH 2023 FORM 10-K | 58 MANAGEMENT’S DISCUSSION AND ANALYSIS LIQUIDITY AND CAPITAL RESOURCES Table of Contents Index to Financial Statements Net Debt The following table summarizes our net debt on a segment basis as of December 31, 2023.
Net Debt The following table summarizes our net debt on a segment basis as of December 31, 2024.
Operating Assets NOI thousands 2023 2022 $ Change Total Operating Assets segment EBT $ (36,011) $ 41,234 $ (77,245) Add back: Depreciation and amortization 170,731 154,626 16,105 Interest (income) expense, net 127,388 89,959 37,429 Equity in (earnings) losses from unconsolidated ventures (2,969) (22,263) 19,294 (Gain) loss on sale or disposal of real estate and other assets, net (23,926) (29,588) 5,662 (Gain) loss on extinguishment of debt 96 2,230 (2,134) Impact of straight-line rent (2,256) (11,241) 8,985 Other 587 827 (240) Operating Assets NOI $ 233,640 $ 225,784 $ 7,856 The below table presents Operating Assets NOI by property type: Operating Assets NOI by Property Type thousands 2023 2022 $ Change Office $ 117,840 $ 111,210 $ 6,630 Retail 51,548 51,245 303 Multi-family 52,831 45,564 7,267 Other 10,489 12,711 (2,222) Redevelopments (a) (189) 280 (469) Dispositions (a) 1,121 4,774 (3,653) Operating Assets NOI $ 233,640 $ 225,784 $ 7,856 (a) Properties that were transferred to our Strategic Developments segment for redevelopment and properties that were sold are shown separately for all periods presented.
Operating Assets NOI thousands 2024 2023 $ Change Total Operating Assets segment EBT $ (28,455) $ (27,057) $ (1,398) Add back: Depreciation and amortization 169,040 161,138 7,902 Interest (income) expense, net 138,207 125,197 13,010 Equity in (earnings) losses from unconsolidated ventures (5,819) (2,968) (2,851) (Gain) loss on sale or disposal of real estate and other assets, net (22,907) (23,926) 1,019 (Gain) loss on extinguishment of debt 465 97 368 Impact of straight-line rent (4,770) (2,256) (2,514) Other (306) 337 (643) Operating Assets NOI $ 245,455 $ 230,562 $ 14,893 The below table presents Operating Assets NOI by property type: Operating Assets NOI by Property Type thousands 2024 2023 $ Change Office $ 124,594 $ 118,165 $ 6,429 Retail 54,163 49,981 4,182 Multifamily 58,827 52,831 5,996 Other 6,153 7,411 (1,258) Redevelopments (a) — (189) 189 Dispositions (a) 1,718 2,363 (645) Operating Assets NOI $ 245,455 $ 230,562 $ 14,893 (a) Properties that were transferred to our Strategic Developments segment for redevelopment and properties that were sold are shown separately for all periods presented.
Significant variances for consolidated items not included in NOI or EBT are described below for the years ended December 31: thousands 2023 2022 $ Change Corporate income $ 60 $ 58 $ 2 General and administrative (91,193) (81,772) (9,421) Corporate interest expense, net (87,243) (88,394) 1,151 Gain (loss) on extinguishment of debt — (147) 147 Corporate other income (loss), net 3,143 982 2,161 Corporate depreciation and amortization (3,215) (3,684) 469 Other (13,383) (11,977) (1,406) Income tax (expense) benefit 163,735 (60,500) 224,235 Total Corporate income, expenses, and other items $ (28,096) $ (245,434) $ 217,338 Corporate income, expenses, and other items was favorably impacted compared to the prior-year period by the following: – Income tax expense decreased $224.2 million primarily due to a decrease in income before income taxes. – Corporate other income increased $2.2 million primarily related to the receipt of insurance proceeds.
Significant variances for consolidated items not included in NOI or EBT are described below for the years ended December 31: thousands 2024 2023 $ Change Corporate income $ 68 $ 60 $ 8 General and administrative (91,752) (86,671) (5,081) Gain (loss) on sale of MUD receivables (48,651) — (48,651) Corporate interest expense, net (80,446) (87,243) 6,797 Corporate other income (loss), net 764 3,143 (2,379) Corporate depreciation and amortization (3,066) (3,215) 149 Other (15,002) (13,302) (1,700) Income tax (expense) benefit (80,184) (26,418) (53,766) Total Corporate income, expenses, and other items $ (318,269) $ (213,646) $ (104,623) Corporate income, expenses, and other items was unfavorably impacted compared to the prior year by the following: – Income tax expense increased $53.8 million primarily due to an increase in Income before income taxes as well as a net increase in expense related to the revaluation of deferred tax assets and liabilities as a result of the spinoff of Seaport Entertainment Group Inc.
HHH 2023 FORM 10-K | 47 MANAGEMENT’S DISCUSSION AND ANALYSIS RESULTS OF OPERATIONS Table of Contents Index to Financial Statements MPC Net contribution increased $67.8 million for the year ended December 31, 2023, primarily due to higher MPC land sales and an increase in distributions from unconsolidated ventures.
MPC Net Contribution increased $184.2 million for the year ended December 31, 2024, primarily due to proceeds from the sale of MUD receivables and higher MPC land sales, partially offset by higher SID transfers to buyers, an increase in MPC development expenditures, and a decrease in distributions from unconsolidated ventures.
This change was also impacted by a $35.1 million increase in interest payments, partially offset by a $20.2 million increase in MUD receivable collections and a $14.4 million decrease in income tax payments. Investing Activities Net cash used in investing activities was $336.1 million in 2023 and net cash used in investing activities was $220.7 million in 2022.
These changes were partially offset by a $58.4 million increase in interest payments; a $31.6 million decrease in MUD receivable collections; and a $24.3 million increase in MPC development expenditures. Investing Activities Net cash used in investing activities of continuing operations was $430.7 million in 2024 and net cash used in investing activities was $345.7 million in 2023.
This growth was led by strong leasing velocity at our newest multi-family developments, as well as increased occupancy and absorption within our office portfolio.
This growth was led by strong leasing velocity at our newest multifamily developments, as well as record NOI at our office properties due to strong lease-up activity and abatement expirations in The Woodlands and Summerlin.
Strategic Developments – Strategic Developments EBT totaled a loss of $17.3 million in 2023, a $207.5 million decrease compared to income of $190.2 million in the prior year. – The decrease in EBT was primarily due to a $187.4 million decrease in profits from condominium sales.
Strategic Developments – Strategic Developments EBT totaled income of $282.8 million in 2024, a $300.1 million increase compared to a loss of $17.3 million in the prior year. – The increase in EBT was primarily due to a $203.8 million increase in profits from condominium sales and an $89.8 million increase in other income due to the receipt of insurance proceeds following the execution of a settlement agreement related to the construction defect claims at Waiea in the current year.
These decreases in cash used were partially offset by a decrease in proceeds from mortgages, notes, and loans payable of $443.5 million.
This activity was partially offset by an $84.0 million increase in proceeds from mortgages, notes, and loans payable.
Income Taxes thousands except percentages 2023 2022 Income tax expense (benefit) $ (163,735) $ 60,500 Income (loss) before income taxes $ (715,265) $ 245,136 Effective tax rate 22.9 % 24.7 % The Company’s effective tax rate for the year ended December 31, 2023, was 22.9% compared to 24.7% for the year ended December 31, 2022.
The Company’s effective tax rate for the year ended December 31, 2024, was 21.9% compared to 24.1% for the year ended December 31, 2023.

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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 changeThe following table summarizes principal cash flows on our debt obligations and related weighted-average interest rates by expected maturity dates as of December 31, 2023: Contractual Maturity Date thousands 2024 2025 2026 2027 2028 Thereafter Total Mortgages, notes, and loans payable $ 214,526 $ 527,478 $ 968,964 $ 298,601 $ 835,522 $ 2,507,519 $ 5,352,610 Weighted-average interest rate 5.64 % 5.08 % 4.84 % 4.59 % 4.45 % 4.20 % HHH 2023 FORM 10-K | 61 FINANCIAL STATEMENTS INDEX Table of Contents Index to Financial Statements
Biggest changeThe following table summarizes principal cash flows on our debt obligations and related weighted-average interest rates by expected maturity dates as of December 31, 2024: Contractual Maturity Date thousands 2025 2026 2027 2028 2029 Thereafter Total Mortgages, notes, and loans payable $ 421,202 $ 509,097 $ 415,717 $ 838,680 $ 1,270,240 $ 1,713,501 $ 5,168,437 Weighted-average interest rate 5.38 % 5.16 % 4.97 % 4.73 % 4.58 % 4.30 % HHH 2024 FORM 10-K | 56 FINANCIAL STATEMENTS INDEX Table of Contents Index to Financial Statements
Additionally, the interest rate caps and collars are on construction loans and mortgages with undrawn loan commitment of $31.9 million as of December 31, 2023, which will be covered by the interest rate cap and collar contracts upon drawing.
Additionally, the interest rate caps and collars are on construction loans and mortgages with undrawn loan commitment of $162.7 million as of December 31, 2024, which will be covered by the interest rate cap and collar contracts upon drawing.
Refer to Note 9 - Derivative Instruments and Hedging Activities in the Notes to Consolidated Financial Statements under Item 8 of this Form 10-K for additional detail. As of December 31, 2023, annual interest costs would increase approximately $10.8 million for every 1.00% increase in floating interest rates.
Refer to Note 10 - Derivative Instruments and Hedging Activities in the Notes to Consolidated Financial Statements under Item 8 of this Annual Report for additional detail. As of December 31, 2024, annual interest costs would increase approximately $3.2 million for every 1.00% increase in floating interest rates.
The Company had $1.8 billion of variable-rate debt outstanding at December 31, 2023, of which $250.7 million was swapped to a fixed rate through the use of interest rate swaps and $422.2 million had interest rate cap contracts in place.
The Company had $1.4 billion of variable-rate debt outstanding at December 31, 2024, of which $250.2 million was swapped to a fixed rate through the use of interest rate swaps and $827.2 million had interest rate cap contracts in place.

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