The Howard Hughes Corporation (“HHC”) (HHC, Financial)
The COVID-19 pandemic changed how many people work and live, and highlighted the value of HHC’s unique master planned community (“MPC”) assets. During the past two years, under the new management of David O’Reilly and Jay Cross as CEO and President respectively, HHC embarked on a transformation plan to become a leaner and more focused organization centered on the company’s core MPC business. Since embarking on the plan, HHC has generated $376 million in net proceeds from asset sales.
In 2021, HHC redeployed proceeds from non-core asset sales into the $600 million acquisition of a shovel-ready, 37,000-acre MPC called Douglas Ranch in Phoenix, Arizona. The site is entitled for 100,000 residential homes and 55 million square feet of commercial development.
As the world emerges from COVID-19, the migration to the suburbs, especially in lower-tax states, has continued as evidenced by strong MPC land sales in HHC’s top-ranked Summerlin and Woodlands MPCs. HHC’s operating assets, particularly its retail portfolio, have also recovered in 2021 and have returned to pre-COVID-19 levels. HHC’s Ward Village in Hawaii has now pre-sold 64% of its eighth condo tower only two months after launching sales.
We continue to believe that Howard Hughes’ uniquely well positioned MPCs and portfolio of high-quality operating assets will deliver substantial, shareholder-value-creating growth for years to come.
From Bill Ackman (Trades, Portfolio)'s Pershing Square 2021 annual letter.
