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Sep 30, 2024
Howard Hughes Q3 2024 Earnings Report
Howard Hughes Holdings Inc. reported strong third quarter 2024 results, driven by record MPC EBT and improved operating assets NOI, leading to increased full-year guidance across all segments.
Key Takeaways
Howard Hughes Holdings Inc. reported a net income of $96.5 million for the third quarter of 2024, with diluted EPS of $1.95. The company achieved a record MPC EBT of $145 million, a 184% year-over-year increase in residential land sales revenue, and an 8% year-over-year increase in Operating Assets NOI to $65 million. The company also completed the spinoff of Seaport Entertainment Group and raised its full-year guidance for MPC EBT and Operating Assets NOI.
Net income from continuing operations per diluted share increased to $1.95, up from $0.64 in the prior year.
Master Planned Community (MPC) EBT reached a new quarterly record of $145 million, driven by a 184% year-over-year increase in residential land sales revenue.
Total Operating Assets NOI increased 8% year-over-year to $65 million, primarily due to strong office and multi-family performance.
The company contracted to sell 29 condominium units in Ward Village® and The Woodlands®, representing $57 million in future revenue.
Howard Hughes
Howard Hughes
Howard Hughes Revenue by Segment
Revenue by Segment
Condominium Rights & Unit Sales Revenue
CapyFin.comMPC Land Sales Revenue
CapyFin.comRental Revenue
CapyFin.comOther Land, Rental & Property Revenue
CapyFin.comBuilder Price Participation Revenue
CapyFin.com Forward Guidance
Howard Hughes Holdings Inc. anticipates continued strong performance for the full year 2024, with increased guidance for MPC EBT and Operating Assets NOI, and higher projected condo sales revenues.
Positive Outlook
- MPC EBT is expected to significantly benefit from solid demand for new homes and strong residential land sales across MPCs, with a raised mid-point guidance of approximately $330 million.
- Operating Assets NOI is projected to be a new full-year segment record, increasing 5% to 8% year-over-year with a mid-point of approximately $257 million, driven by increased occupancy at new multi-family developments and improved retail leasing.
- Condo sales revenues are now expected to range between $755 million and $765 million, with gross margins between 27% to 28%, primarily from Victoria Place.
- Strong leasing momentum in the office portfolio is expected to benefit from new leases.
- The company anticipates continued momentum and incremental land sales in Bridgeland and The Woodlands Hills®.
Challenges Ahead
- Growth in residential land sales revenue for 2024 is expected to be largely offset by reduced EBT associated with exceptional commercial land sales and builder price participation during 2023.
- Limited inventory of custom lots available to sell at Aria Isle in The Woodlands and The Summit in Summerlin due to their significant past success.
- Free rent periods on many new office leases are expected to partially offset strong leasing momentum.
- The impact of some tenant vacancies in the office portfolio.
- Approximately $10 million to $20 million of Victoria Place condo sales revenues are expected to occur in the first quarter of 2025 due to timing of closings.