Howard Hughes (HHH) Q3 2024 earnings summary

Executive summary

• Achieved record financial and operational results in Q3 2024, with net income from continuing operations rising to $125 million for the nine months ended September 30, 2024, and strong performance across all segments, including record residential land sales and robust operating asset NOI.

• Completed the spinoff of Seaport Entertainment Group, refocusing as a pure-play real estate company centered on master planned communities and core assets.

• Strong demand for residential land in MPCs, with 191 acres sold at an average price of $1 million per acre, a 13% year-over-year increase.

• Completed Victoria Place in Hawaii, with bulk condo closings expected to generate $760 million in Q4 revenue at 27%-28% gross margins; all six completed Ward Village towers are 100% sold, and four under construction are 97.7% under contract.

• Contracted to sell 29 condominium units for $57 million in future revenue; The Ritz-Carlton Residences, The Woodlands, broke ground with 69% of units pre-sold.

Financial highlights

• Total revenues from continuing operations were $767.1 million for the nine months ended September 30, 2024, up from $595.8 million year-over-year; Q3 2024 revenues were $327.1 million, up from $228.5 million in Q3 2023.

• Net income attributable to Howard Hughes Holdings Inc. was $43.5 million for the nine months ended September 30, 2024, compared to a net loss of $585.9 million in the prior-year period.

• Operating income from continuing operations was $302.1 million for the nine months ended September 30, 2024, up from $111.3 million year-over-year; Q3 operating income reached $198.3 million, up from $59.4 million.

• Operating Asset NOI reached $249 million as of Q3 2024, with a projected stabilized NOI of $354 million from existing and under-construction assets; Q3 NOI was $64.8 million, up 8% year-over-year.

• Recognized $90 million other income from insurance settlement related to Waiea construction dispute.

Outlook and guidance

• Raised full-year 2024 MPC EBT guidance to a mid-point of $330 million, now expected to be down only 1%-6% year-over-year versus prior guidance of a 10%-15% decline.

• Full-year Operating Assets NOI guidance increased to a mid-point of $257 million, up 5%-8% year-over-year.

• Condo sales revenue guidance raised to $755–$765 million, with gross margins of 27%–28%, driven by Victoria Place closings.

• Cash G&A guidance tightened to $83–$88 million, excluding Seaport spinoff expenses.

• Ward Village towers under construction and in pre-sales represent $3.1 billion in future contracted revenue.