Howard Hughes (HHH) 2024 Southwest IDEAS Conference summary

Strategic vision and business model

• Focuses on long-term community building, owning and developing large master planned communities across the U.S. for decades, rather than short-term development and sale.

• Maintains significant land holdings, enabling control over supply and recurring cash flow to fund future developments.

• Operates as a 'forever owner,' integrating commercial, residential, and community amenities to enhance value.

• Seven major communities span office, retail, multifamily, and condo assets, with a perpetual cycle of value creation.

• Historical yield on cost is 9% and return on equity is 18%.

Portfolio highlights and development pipeline

• Major communities include The Woodlands, Bridgeland, Summerlin, Ward Village, and Terra Vallis, each with unique scale and growth plans.

• Over 35,000 acres remain for development, supporting 10–50 years of future projects.

• Commercial portfolio is 94% leased for retail, 95% for multifamily, and 88% for office, with some locations exceeding 90%.

• Condo business in Hawaii has delivered $4B in revenue with 25–30% gross margins; three more towers are under construction, and additional luxury towers are planned.

• New Ritz-Carlton Residences in The Woodlands are 70% sold, achieving record prices in Houston.

Financial performance and outlook

• Operating income from assets is $250M, with a three-to-five-year target of $350M as projects stabilize.

• 2024 segment earnings: $330M from master planned communities, $760M from condo sales (27–28% margin), and $257M recurring income from operating assets.

• Introduced 'adjusted operating cash flow' as a new overarching metric for forward-looking guidance.

• Share buybacks are under active consideration, with capital allocation decisions evaluated against potential returns.

• 2025 guidance expects continued strong earnings in master planned communities and record operating asset performance.