Howard Hughes Holdings Inc.

I would now like to hand the conference over to your speaker today, Eric Holcomb, SVP of Investor Relations. Please go ahead.

Aloha from Honolulu and welcome to Howard Hughes Holdings Third Quarter 2024 Earnings Call. With me today are David O'Reilly, Chief Executive Officer, Jay Cross, President, Carlos Alea, Chief Financial Officer, Dave Strife, President of Asset Management and Operations, and Joe Villain, General Counsel. Before we begin, I would like to direct you to our website, howardhughes.com, where you can download both our third quarter earnings press release and our supplemental package. The earnings release and supplemental package include reconciliations of non-GAAP financial measures that will be discussed today in relation to their most directly comparable GAAP financial measures. Certain statements made today that are not in the present tense or that discuss the company's expectations are forward-looking statements within the meaning of the federal securities laws. Although the company believes that the expectations reflected in such forward-looking statements are based upon reasonable assumptions, we can give no assurance that these expectations will be achieved. Please see the forward-looking statement disclaimer in our third quarter earnings press release and the risk factors in our SEC filings for factors that could cause material differences between forward-looking statements and actual results. We are not under any duty to update forward-looking statements unless required by law. I will now turn the call over to our CEO, David O'Reilly.

Thank you, Eric. Hello, everyone, and welcome to our third quarter earnings call. On our call today, I'm going to begin with a recap of the quarter and cover the segment highlights for our master plan communities. Dave Strife will cover the performance of our operating assets, followed by remarks from Jay, who will provide updates on our strategic development projects. Finally, Carlos is going to review our updated full year guidance and the balance sheet before we open up the lines for Q&A. For the third quarter, we reported exceptional results across our entire portfolio. further exemplifying the resilience of our unique business model and our continued ability to defy the narrative for the national real estate market. Turning to our segment results, in MPCs, we continue to experience elevated home builder demand for new acreage, which contributed to a significant increase in residential land sales revenue. These land sales, which were achieved at a near record price per acre, led to a record quarterly MPC EBT. Our operating assets delivered strong 8% year-over-year NOI growth with meaningful increases for each property type, most notably in office and multifamily. And strategic developments demand for our premier condos in Ward Village and the Woodlands continued at a solid pace, with 29 units contracted, representing more than $57 million of future revenue. Here in Hawaii, we completed Victoria Place just last week. Closings are expected to commence tomorrow, which we now expect to generate $760 million of revenue with 27 to 28% gross margins in the fourth quarter. With all of these incredible results, we are raising our full year guidance in each segment. Looking deeper at our MPC segment results, we reported record MPC EBT of $145 million in the third quarter, which included the sale of 191 acres of residential land across our communities at an impressive average price per acre of $1 million. Land sales were again led by Summerlin, where we closed on the sale of 129 acres of super pads for an average price of $1.3 million per acre. Land sales in Houston were also strong, with 62 acres sold in Bridgeland and the Woodland Hills, representing a 41% year-over-year increase. Overall, land sale revenues totaled $198 million in the quarter, or 163% increase year-over-year, with our average residential price per acre increasing 13%. New home sales across our NPCs remained solid in the third quarter, with nearly 500 homes sold. Although this represented a 19% year-over-year decline, the reduction was almost entirely related to reduced inventory of finished homes available for sale in Summerlin. As evidenced in the second quarter, several neighborhoods were closed out, but these were not offset with new inventory. In fact, at the end of the third quarter, our home builders in Summerlin had 30% fewer floor plans available for sale as compared to the prior year. The reduction in inventory is temporary, however, as we expect several new Summerlin neighborhoods with additional housing inventory will come online in the fourth quarter, and a record number of new neighborhoods will open in 2025. It's important to note that we do not consider this temporary reduction in home sales to be an indicator of declining demand for future land sales. Instead, we remain very bullish on the outlook, as home builder demand for our land has not abated, and many of our partners continue to report strong results, healthy home buyer interest, and increases in new orders. Within our communities, our home builder partners are working hard to meet the elevated demand. but the inventories of finished new homes and of vacant lots remain significantly undersupplied. Since the end of last year, new home inventories in Bridgeland and Summerlin have been in decline and are currently one month or less in both MPCs, well below the national average of approximately two months. Vacant developed lots, or VDLs, remain well below equilibrium, which we believe is approximately 20 months of supplies. At the end of the third quarter, Summerlin VDLs were 11 months and Bridgeland VDLs were 12 months. Overall, with these dynamics at play and mortgage rates on the decline, we expect continued positive momentum within our MPCs. As a result, for the near term, we have raised the midpoint of our 2024 full-year MPC EBT guidance by 10%, headlined by what we expect will be record residential land sales achieved at a record price per acre. Carlos will discuss this in more detail in a few moments. With that, I'm going to turn the call over to Dave Strife for a view of our operating assets.