Howard Hughes Holdings Profile
The Howard Hughes Corporation, together with its subsidiaries, develops master planned communities (MPCs) and residential condominiums.
The company creates some of the most sought-after communities in the country by curating an environment tailored to meet the needs of its residents and tenants. The company creates a unique and continuous value-creation cycle through operational and financial synergies associated with its three primary business segments of Operating Assets, MPCs and Strategic Developments. In its MPC segment, the company plans, develops and manages small cities and large-scale, mixed-use communities, in markets with strong long-term growth fundamentals.
The company’s assets are located across the United States with the vast majority of the assets in its Operating Assets segment located within its MPCs. The company’s MPCs, including its Floreo joint venture, span approximately 118,000 gross acres, with approximately 25,000 residential acres of land remaining to be developed and sold in high-demand geographic areas. In addition to the residential land, its MPC segment contains approximately 13,000 acres designated for commercial development or sale to non-competing users, such as hospitals.
Segments
The company operates through four business segments: Operating Assets, MPCs, Strategic Developments, and Seaport.
Operating Assets
As of December 31, 2022, the company had 75 Operating Assets, including its investments in unconsolidated ventures, consisting of 12 retail properties, 35 office properties, 15 multi-family properties and 13 other operating properties or investments. Excluding the company’s projects under construction, it owns approximately 8.8 million square feet of retail and office space and 5,030 multi-family units.
In 2022, the company completed the sale of three retail properties, Outlet Collection at Riverwalk, Lake Woodlands Crossing and Creekside Village Green, as well as its interest in the 110 North Wacker office property.
The company generally transfers an operating asset that is being repositioned or redeveloped into its Strategic Developments segment when it closes operations at a property and/or begin construction on the redevelopment project.
Master Planned Communities
As of December 31, 2022, the company owned the MPCs of Summerlin in Las Vegas; The Woodlands, The Woodlands Hills and Bridgeland in the Houston region; Teravalis in the Phoenix region; and Columbia in Maryland. The company’s MPC segment includes the development and sale of residential and commercial land, primarily in large-scale, long-term projects. These developments often require decades of investment and continued focus on the changing market dynamics surrounding these communities.
As of December 31, 2022, the company’s MPCs, including its Floreo unconsolidated joint venture near Phoenix, Arizona, encompass approximately 118,000 gross acres of land and include approximately 37,000 acres of land available for sale or development. Residential sales, which are generated primarily from the sale of finished lots and undeveloped superpads to residential homebuilders and developers, include standard and custom parcels designated for detached and attached single-family homes, and range from entry-level to luxury homes. Superpad sites are generally 10 to 25-acre parcels of unimproved land where it develops and constructs the major utilities (water, sewer and storm drainage) and roads to the borders of the parcel and the homebuilder completes the on-site utilities, roads and finished lots. Revenue is also generated through builder price participation with homebuilders.
The company also occasionally sells or leases land for commercial development. Commercial sales include land parcels designated for retail, office, hospitality, high-density residential projects (e.g., condominiums and apartments), services and other for-profit activities, as well as those parcels designated for use by government, schools and other not-for-profit entities.
Seaport
The Seaport spans approximately 473,000 square feet and several city blocks, including Pier 17, the Tin Building, the Historic District and the 250 Water Street development. Seaport segment is part non-stabilized operating asset, part development project and part operating business. Due to the range of asset types, the company categorizes the businesses in the Seaport segment into the following groups: Landlord Operations, Managed Businesses, the Tin Building and Events and Sponsorships.
Throughout 2022, the company has continued to execute on its long-term vision for the Seaport. The company owns 100% of the Tin Building which is leased 100% to the Tin Building by Jean-Georges joint venture, a managed business in which the company has an equity ownership interest.
In October 2020, the company announced its comprehensive proposal for the redevelopment of 250 Water Street, which includes the transformation of this underutilized full-block surface parking lot into a mixed-use development that will include affordable and market-rate apartments, community-oriented spaces and office space. This project, which includes approximately 547,000 zoning square feet, presents a unique opportunity at the Seaport to redevelop this site into a vibrant mixed-use asset, provide long-term viability to the South Street Seaport Museum and deliver much-needed affordable housing and economic stimulus to the area. In May 2021, the company received approval from the New York City Landmarks Preservation Commission (LPC) on its proposed design for the 250 Water Street site. HHC received final approvals in December 2021 through the New York City Uniform Land Use Review Procedure known as ULURP, which will allow the necessary transfer of development rights to the parking lot site. Also in December 2021, an amendment to the Seaport ground lease was executed giving HHC extension options, at the discretion of HHC, for an additional 48 years from its current expiration in 2072 until 2120. The company received a building foundation permit from the New York City Department of Buildings and began initial foundation work and remediation in the second quarter of 2022.
Strategic Developments
The company’s Strategic Developments segment consists of 14 development or redevelopment projects, including developments within its 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. 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. The company must study each local market, determine the highest and best use of the land and necessary improvements to the area, obtain entitlements and permits, complete architectural design and construction drawings, secure tenant commitments and obtain and commit sources of capital.
The company is in various stages of predevelopment or execution of its strategic plans for many of these assets based on market conditions. As of December 31, 2022, the company had six properties under construction and not yet placed into service.
Environmental Strategy and Performance
The company worked with DNV GL Business Assurance USA, Inc. to externally confirm its energy consumption, water consumption, greenhouse gas emissions, and waste data. Leadership in Energy and Environmental Design (LEED), U.S. Environmental Protection Agency’s (EPA) ENERGY STAR and BOMA 360 certifications validate its use of sustainable design, construction and operations principles that result in reduced resource usage, decreased emissions and better well-being for building occupants. The company achieved 16 ENERGY STAR certifications, 10 BOMA 360 certifications, 1 LEED certification, 2 LEED precertifications and 10 LEED registered projects, raising its total count to 82 active and pending certifications.
In 2022, the company was recognized by Global Real Estate Sustainability Benchmark (GRESB) for its sustainability leadership, earning the top ranking in the U.S. Diversified Listed peer group for the 2022 GRESB Real Estate Assessment’s Standing Investments Benchmark. The company was also recognized as Sector Leader in the Americas Diversified category for its sustainability performance and best practices within the real estate industry. HHC’s first-place peer group ranking was determined by its strong portfolio-wide performance across topics of sustainability, inclusion and transparency. Two key scoring components of the Real Estate Assessment include management and performance. The management component measures an entity’s overall strategy and leadership, approach to stakeholder engagement, and policies and processes. The performance component measures an entity’s environmental and social performance.
History
The Howard Hughes Corporation, a Delaware corporation, was founded in 2010. The company was incorporated in 2010.
