Howard Hughes (HHH) 21 Nov 222022 Q3 Earnings call transcript

Good day, and welcome to The Howard Hughes Corporation Third Quarter Earnings Call. [Operator Instructions] Please not that this event is being recorded.

I would now like to turn the conference over to Eric Holcomb, SVP of Investor Relations. Please go ahead.

Good morning, and welcome to the Howard Hughes Corporation's third quarter 2022 earnings call. Counsel. David Chief Executive Head Financial and Riley, are President; Jay of today Peter Olea, Carlos Officer; General me O'Reilly, Officer; Chief Cross, Operations; With Dave Striph,

direct to measures Before supplemental reconciliations you relation you we today package most download third our include release our that of comparable discussed GAAP earnings both would in earnings supplemental begin, like package. can to website The will howardhughes.com directly I be our their measures. where press and financial quarter non-GAAP to release and financial

present Certain or are that statements meaning laws. made are today within statements discuss not of expectations in company's the federal securities tense the the the that forward-looking

reasonable believes reflect no forward-looking Although give in will the assurance that expectations the these that achieved. company we assumptions, expectations can based reflected upon be such statements are

Please earnings forward-looking actual our could quarter statements between in press factors our filings forward-looking release cause for see third in statement risk that factors differences SEC the the disclaimer material results. and and

We under required unless update by to are forward-looking any law.\ not statements duty

O'Reilly. turn now David our CEO, over to will the call I

highlight Ward cover will Thank earnings you, off the To provide everyone, Eric. of overview in update call, for thank quarter Seaport. a the performance, our today's provide going results an assets, projects brief in call. of then will I'm our to start Village. third our third Cross Good Jay joining master on our performance Striph operating Dave you plan communities segment and of our morning, on quarter development and

the up of will results Olea we financial lines open Q&A. Carlos a for review our Finally, provide before

divested for despite rose the profit start-up the net relative the Building. asset related assets. elevated revenue equity XX% and segments of a economic And before these results same operating the Tin the period costs impact EBT NOI each Seaport, at quarter, operating Looking generated operating increased well XXXX At losses despite of to and the remained MPC to performed ongoing headwinds. in XX% really at our the

total of of with At Ko'ula Ward XX%. Village, units revenue completed a we condominium million, profit XXX closed on strong of gross generating a net [ph] and $XXX

presales having with at more at September, presold tower, condo of than of demand, met exceptional which units. XX% launched Kalae, our we already was the addition, In tenth end the

Overall, quarter our both withstand results, year-to-date portfolio, which to and are this one-of-a-kind our a resiliency strong business are of economic testament and we today. volatility our to experiencing continues like the model

entire [indiscernible] into performance some first ranked recognized all sustainability sector the Howard commitment and to to progress leads group. in Before on integrated inclusive category. are Americas number results, of a a are practices, communities Howard Hughes Hughes the ecstatic communities. congratulate sustainable to diversified I'm across our which U.S. being listed the companies as are were environmental diversified social peer throughout our one want worldwide also deeper I and made country our further We the efforts practices for of dive our that who real recognized. estate leader whose efforts I and best benchmark team the these best ESG assessments [indiscernible] and and

to purchasing We at Houston of supply keep had despite and lot the demand. prompting future to continue Las our new another looking with and MPCs. quarter housing land core low replenish market. Now up headwinds our remained In markets considerable to homebuilders levels, Vegas, in strong historically inventories

of homes recorded revenue. relative MPCs $XX prices. to before our demand builder increase was last taxes at earnings Overall, during sales our for significantly XX% quarterly home continued land a results year. in depreciation strong with new seen new This to and continue in unprecedented down to million were in compared see Although participation reflected growth MPCs prices price premium levels in we our XXXX, solid the

Bridgeland sale price both sold Bridgeland, Hills, land which participation Houston, near builder a in in X% saw a which in posted to we to strong $XXX,XXX. In the revenue, million, $XXX,XXX. to In doubling by sales, improvement acre XX% steady details and the last XX% acre Woodland fueled EBT increase per grew to XX-acre a in price residential complemented commercial this versus with Bridgeland's increased contributed XX% year-over-year Together land were market. at results, XX%, the Hills, of grew EBT increase year. and a $XX.X EBT XX% per price improvement a acres residential a Woodland Looking a by and

reached partner, the venture the for XX% lots combined in increase West sold increase summit, A and year. from to values also custom one to $X.X launch participation third summit an our a in At Summerlin with a one as of one saw closed which Phase only the X strong. prior the of million this during price quarter, pad Discovery we Shifting Summerlin. compares per X quarter price We we home July. XX-acre builder lot premier joint new gated remain the residential implied revenue agreement nearly custom to acre. XX% super sold community of Land lot XXXX. out, staggering last With

As part home of acres expansion, this will of be used custom develop XX sites. to we XX which land, contributed additional

in inherent which a MPC land land value fair in equity strong million Our ultra future community. earnings, value contribution, in signifying the $XX.X resulted to sales this of luxury up gain was marked

West where for Finally, a celebrated Douglas official week just Valley, we we new last in Phoenix, name unveiled the Teravalis. Ranch, groundbreaking

lots in first work known first to continue contract [Florida], as formerly homebuilders. We the Trillium village, infrastructure the diligently to install the community's to to X,XXX needed

Partners JDM million. quarter, to interest portion Teravalis $XX JDM's takes third in the non-flurial approximately or for XX% million. the of This interest repurchasing $XX ownership total exercised X% Teravalis, incremental ownership on approximately option its final During

to JDM which and acres comprises X,XXX XX-XX HHC a [indiscernible] the joint of Teravalis. continue in venture approximately first have

home sales. at Looking new

favorable Summerlin, compared Hills. sharp In XX% a of year. new also decline to As the when was to representing remained with home experienced line new expected, new XXXX continue rate, mortgage In were quarter Woodland communities reduction This which inflation lower Houston, recessionary the with our a sold, quarter prior pace is home total Bridgeland, of affordability. the saw are in and sales the XX% in to within which decline unprecedented XXXX. however, sales were third we of experienced behind home trail reduction recorded homes a the sales. Overall, with XXXX. levels, impacting attributable Clearly, largely in home high home XXX a which sales and of in result in the volumes a this record fears,

they're pace well solid in chain Despite homebuilders price to to Additionally, homes supply as are in approvals new municipal reduction homes. able we deliver demand for continue encounter which as points. to disruptions sales, which the slow higher impacting continue the at see

moving contributed in often states purchasing It as sales realized cost in levels to have As allows from increases builder these revenue as inflationary participation higher prices power. strong tend constraints. of them to further of better This buyers and price strong the rates who to median mortgage has well withstand are this all rising communities home our year.

home compared the was of an As in increase an or nearly home Similarly, median to in example, median year-over-year. quarter, XX% $XXX,XXX, $XXX,XXX Summerlin in Bridgeland was increase XX% a price prior price the the third year. the

our lower-priced points, new in [fears]. more homes meet variety homebuyers budgets. buyers are MPCs, to offer headwinds various by price impacted providing and rates of seeing wide options be multiple are their we mortgage at likely where homes we Throughout prospective a Conversely, to recessionary

we record balance. have all right our with working homebuilders markets, the of to in However, we with inventories low core are our actively ensure

of periods in which continue land are the lot programs, As sales mind, the we're some may term price a as the we future. underlying discipline increasing affordable this reduced in at homes designed near short the new purpose developing sales for the encounter meet result, to With selling target of of land additional only of we our pace to in points demand.

people remain MPCs be our continue commutes work-life amenities, improved which strong, to of highly extremely of our balance. will quality believe value short unmatched intrinsic and abundant long-term offer communities, and to desirable an attracted life, we The

to Shifting over the Seaport.

anticipated our Building with advance to opening continue by to most notably Tin the Jean-Georges. neighborhood, of historic We this the revitalize highly vision

are We around for food and at world, Jean-Georges. the from Building. one than everyone partner, XX more renowned Tin a make our With joint [time] together venture something this the extremely beverage experiences marketplace different with to there's pleased World reality, chef,

sales In and much soft that we're and crowds ramped employees. the with train we progress opening grand up from a acclaim opening launched opening, was in to pleased which early for onboard media. making late operating foot large With August, report and met grand the September, to steady In our traffic Tin strong I'm our the Building, efforts additional hours. and official celebrated we since

end the that anticipate will more capacity days, Building a As of by full we we're adding operate service the result, the at Tin year. and

by quarter successful Pier driven had foot an events private significant summer extremely and we increase in At XX, with concert strong another series. traffic

XX XX which concepts, of lineup, out, Rooftop. were This quarter's which to netted guests over XXX,XXX the included sold

All customer concession higher businesses. well restaurants helped into of as drive revenues volumes increased as this and retail our

prior strong XX% drive per in a sales helping our quarter, we increase As result, versus saw foot restaurant a year a square improvement. the year-over-year to NOI

period Seaport. Overall, a the revenue company's which the we income million XX% due increased of net quarter, Seaport Tin the significant the This during the same the improvement million at totaled Seaport to start-up $X.X million the over last Overall, generating in quarter, in increase losses, resulted $XX of reflecting $XX operating to before the equity Building. primarily progress see share year. of

see expect come and months now New Tin volumes open, we hottest entertainment the in to experience and growth more destination. to ahead dining With more City's continued Building as York people the in

continue closer to financial should Seaport's this segment bring benefit going of and All stabilization. the forward to the help to results

operating I'll Head to turn of that, Dave to results. asset Operations, our the segment over review call Striph, the With

David. to you, from operating delivered decline segment Riverwalk which same X% million Thank NOI sale year-over-year. excluding primarily Woodlands-based was net up New income, $X outlet of million period a assets, asset $X the These quarter, This the was X% year's million the assets, our quarter, $X including divested prior $XX X the of last generated hotels operating the million year. assets due or In Orleans. the was these in and noncore or third

The mid- pressures, leased this amenitized due many multifamily the multifamily demographics across these market to properties. assets believe range lease-up our well newest and NOI the end the This increase representing assets, of our a improvement portfolio in was quarter, year. strong as versus our prior primarily was as which largest high at increase were today rising well the performance in We the attractiveness communities a experiencing the of multifamily is properties rents testament the At to stabilized XX% properties. highly of quarterly U.S. are seen XX% $XX our upscale, MPCs at as of affordability. as despite all strong result of our in the our produced million, to

these same leasing growth. to With we compared demand our nearly continue rentals of XX% our quarter, MPCs, effective markets. increased and average in some highest the see exceptional period robust when in to third multifamily the percentages strong for on rent we rents in-place and commanded our the year, last rent In

began at we the quarters. multifamily which the units and as drive our is to new strong completed Columbia, coming at During in initial leasing meaningful incremental these NOI in are Summerlin Starling demand. projects Bridgeland, see projects additional construction we growth latest under experiencing Downtown quarter, continue multifamily to opportunities completed development, Bridgeland, and With

in Class Office [ph] year. of our and well increased talented who of and a In was are new we high demand and result A as quality free see life. looking Woodlands markets environment companies Downtown the rent of business-friendly office primarily million improvement heightened from X% the activity Columbia. roll-off for of prior a to leasing pool the as buildings versus in employees with Summerlin, continue NOI $XX the of This these

Our with premier tenants. and amenity office urban new assets, to which walkable and shopping, entertainment to a continue offer access convenient attract high-quality dining setting

we executed office Forest feet As feet the nearly and bringing new in square this in XX,XXX [XXXX] quarter, square to XX% evidenced, leased. Woodlands, during XX,XXX the leases Woodland third including building

Jay with tower, will completion talk seeing had XXXX that pre-leasing our more A its similar about this ahead Class a moment. office of year. in Pavilion, later success unprecedented In Summerlin, newest we've

Ward $XX pandemic. million improved remainder occupancy $X XXXX to at a with from to reduction all NOI of with reflected during well markets. the year. prior our portfolio associated a of Village retail due million compared recovery of payments COVID in were performed the one-time This was The our which retail, primarily In decrease rent

fan representing attendance to year the lifted. the a generated Finally, million Vegas outsized played current as Ballpark NOI, period. Las prior compared restrictions the of in $X.X year million in the COVID as well $X The poor was during quarter, were decline of primarily XXXX reduction weather games fewer to due after

turn Jay Cross. With that, I will President, our to now over it

and Thank good morning. you, Dave,

of we completed Houston, we our quarter, third latest Columbia. tower, Village, condo and Downtown At at development make multifamily launched Kalae. Ko'ula, presales with construction great Vegas development progress condo Ward sixth the our in pipeline our office continued and medical to Las buildings office During we and at

Starting Central, quarter, initial which with residents mid-September the and we during the the Houston, first Bridgeland we largest with lease-up completed XXX-year in at experienced X Bridgeland, quarter was already leased XX% projects Starling in multifamily of our solid development a welcomed complex end. as of

late longest Memorial heart the Texas we with Building delivered lastly, House, Kirby which in Ice the of ahead September construction Hermann in And Woodlands, is the we in Office foot build-to-suit of In This Woodlands. boasts acceleration. Medical opened XX,XXX the of a square located venue, bar the much which completed schedule.

continue Medical quarter. we build-to-rent expect completed in to Woodlands, we good also project, be make underway. in Park construction [Wingspan], Creekside single-family in (inaudible), our with progress which the fourth initial Elsewhere well Houston, with continues the will to XXX Plaza In advance

start residents early XXXX. expect welcoming We in to

office This Grocery store Green Just vision, to first at site Vision timber Central. will also anchored development. announced in HEB first develop last will our week, will XX-acre be and our mass be include we which by mixed-use plans also Village our project

more these begins provide construction will We projects XXXX. information in as on early

XX% square XXXX another and are end has leased negotiation of completion In A building in already October. XX% nearing or Las the tremendous This Summerlin. Downtown with our Vegas, newest in lease demand tower Class office we was seen LOI of Pavilion, at XXX,XXX foot

We building the late complete expect in be this will fourth quarter.

also Valley. are XXX-unit Echo, unlike progress Summerlin. steady our offering lead development This will Vegas making other Las We Tanager with newest be multifamily in silver any in the

its quarter in this the XXXX. We project first will first expect welcome residents of

XX,XXX This nearing XXX first ground located of space. units Columbia, multifamily completion. October We I've also floor retail in project, to Merriweather our already our square welcomed platinum newest lead with Switching the Downtown Marlow, complex in is another have will District leasing started feet and residents.

the building next the In and medical is office destinations (inaudible) already District, and this serve third This MPC. XX,XXX wellness quarter as our construction development the commenced on for during foot well. we XX% health Lakefront square will as

expect We complete early in XXXX. construction to

quickly Looking at the Seaport.

and in late Building In design at As and celebrated Street]. brand its completed initial continued David [Water the we Tin mentioned, Uplands, the XXX September. opening development foundation construction

vigorously order was However, early during in challenging filed approval hearing lawsuit granted the summer, project but to the you keep and New pending and City that believe a information work. with efforts York's continue case the this to becomes construction December. the continue of third-party available. paused no We site have merit as remediation time, of was a temporary have Until been we a contest restraining We'll apprised will is more claims. allowed

million units million Turning in during generated for closing Ward $XXX.X mid-September. XXX We the $XXX was of completed in Hawaii. in condo including Ko'ula, quarter, at the revenue to Village sale which

sold XX representing XXX end, subsequent will million revenue. fourth quarter $XXX remaining. end, units reflected another on an condos we closed These tower to net As XX% accrual, quarter our be And additional of in quarter was closings with earnings. this in

sold third quarter, revenue. closed XX% This we another X at tower the quarter on for the 'A'ali'i, In units ended many. $X.X XX in million with units also generating

the and towers units at have XX the housing headwinds strong. market, Ulana during We contracted remained the activity Park these presales Despite in Ward quarter. Village at

As to XX% fourth and in of In and ground in start October, the presold. late the park, Ulana we Ulana construction brought we was XX, was quarter. expect the XX% September on presold park

through tower late than Kalae more how for momentum have and units in we quarter. for presold this quality as the presales at of our we strong demand already condo housing significant progressed September, With fourth tenth launched see tower, expect XX% presales and to the we

in which XXXX be provide significant by pipeline. is used the are nonrefundable XXXX, Place, to future the cash These of towers developments represent has presales to All meaningful well expected some will that profit revenue out of deposits. as in company, and secured to sold Victoria contributions time, as for future our projects fully 'XX these fund which been

hand that, to CFO, I Carlos with call will the over our And Olea.

Thank you, Jay.

strength despite the strong benefit the market. communities throughout quarter third our demonstrate business results the Our to from demand estate we model continue headwinds of real in our as in

during during summary, period. year the million million third the diluted per of In net income share compared quarter, $XXX.X share diluted reported to per income $X.XX net or $X.X $X.XX prior or of

participation favorable in EVP Bridgeland, primarily was residential and per (inaudible) strong an million, sales is the equity appreciation acre of pad year-on-year, Our (inaudible) sold by Summerlin. from [summer]. the increase of average in reduced price builder and MPC driven generating revenue, price despite super improvement This the XX% strong contribution

delivered assets $XX operating of Our multifamily with improvements and office. in million NOI

year-on-year represented X% Riverwalk, reduction of increased operating when our a million hospitality the impact (inaudible) this excluding X%. audit While the of $X.X and assets or assets NOI collection

Village, Ward XX% some $XXX.X strong in at of a projects continue margin condo condo million our profit pace we units, At and for in of resulting XXX call development. the presales

Seaport, NOI a loss building. the $X.X a recorded we've been as million costs result primarily of we that At startup

and our have increase seen XX% we restaurants, prior private to events year by and the concerts increase foot compared in traffic sales evidenced as a revenue for tremendous However, in period. managed

business are very we pleased quarter Overall, and in our the performance segments with the of year-to-date. third

for be the Notwithstanding and rate the to our we closings year-on-year significant transaction. XX% to In more our fourth assets [indiscernible] XX% the of guidance of guidance with to MPC prior EBT increased compares landfill large year in the XX% timing only favorably quarter, due conditions year the which decline can for will Together spite operating EBT our favorable and full uncertain we segment. market, XXXX reduction. to in now expect full inherently XX% for market challenges outlook a have MPC MPC, housing of

In now contemplated NOI guidance, operating NOI prior full to retail and We assets, will year reduction. new lease-up XXXX. improvement and office multifamily, increase relative year-on-year in expect which our X% with to to strong favorable growth compared brand (inaudible) results. Discipline leases a [ph] X%

price With value. per stock $XX in an respect end to of shares repurchased available the which of quarter, we still is its share These buyback XXX,XXX the below were $XX, nearly million. since shares average the capacity. for at $XX.X during At have third well repurchased we quarter, million of

sheet. our had At with Looking Ko'ula, in balance to fourth plenty October, of which on were quarter, development of at than end cash quarter, us completed The advance XXX providing early timing in hand. of our million $XXX we of additional the $XXX the more of will capital nearly in million cash of the flow generate pipeline. units

end remaining anticipated million we Columbia equity expect new in early development $XXX the the our projects office XXXX. Wingspan was of or close year this financings which later fund quarter, third for Bridgeland the will to needed and before in At the building, medical contribution

at From due near-term and $X.X a debt with maturities we perspective, have XX% or end billion in approximately limited of later. the the XXXX outstanding quarter

On million $XXX a construction of development loan the Village on the for the in we financing closed side, Hawaii. Ward Park

rate swap a rate our of either significantly this interest is our fixed environment, that to or During rate, fixed note rising XX% risk. which to important is it debt mitigates

the like I David. call back to over to turn that, With would

shareholders. that read state by Thank portion on read Eric, first and answering by Carlos. by of question? by let's be with Eric questions And call. going start They're to few were the that, you first technology the you, the generated We'll our the will Holcomb. begin Q&A voted

David. Sure,

covenant take you the give is, on you to Carlos, question one? update and want first debt The that compliance? an do can

ratio square. quarter, and did Landing debt you, the Landing, Eric. one two Thank service four Sure. we coverage not Hughes per for need [indiscernible] the Hughes third In

ratio have material first the assets trigger So liquidity say impact or of let of that is meeting me assets have them can use that ability to the which none cannot the on the we run generated trap, the cash stay consequence our cash corporate, be to our but a at because a operate to assets. them and the means by sold to assets up to that the

burns buildings, early cure with move of we're in outs the X working so re-lease that issue the to of first an that our - to tenant result issue related first renewal The as re-rent, will is in X out. the the case pre-rent Waterway the actively while is

Thanks, Carlos.

parameters project? and The question second now cost rising return the [T-bills] on new forward work? at model what moving X% development with for still Jay? or with is rates the a Does X%, X% are

mean, Well, being like increased revenue planned strength benefit a most still by project we're it's the squeezed avoid also everyone outperform our terms we which and overbuilding. higher in construction more us by very of much than by allows and costs decision. I of else, communities, that rates cap master project to

can So value where if the and long feasible market risk-adjusted we based develop believe our economics. and always continue current to portfolio, favorable the project's and possible, add economics we'll on are factors to in it term, appropriate

noting combine value It's important each their the they greater of drive of how enviable that worth our also these terms of important projects own, the bank. and on community are land rest in to in are impact

drives lot our that decisions. a So of

Thanks, Jay.

question Investor page, have set your of key on Third is metrics. you a Relations

an Could be of those great its on historical reported provide of on One example to as number XX%. well. An actual be equity could numbers for verified? project you this how be would return guidance Carlos? some and is

then Thanks, it and We first, the very is Eric. move example. to we'll - said helpful. I on

we So on project. debt that a by the (inaudible) this in it's return, divided the is update And service essentially, quarterly something cash cash-on-cash a the basis. equity

us this time, So returns have And been sold. all had those the quarter. over is And that the as will again, what of the including and cash of right result now, XX. it assets developed updated being is be quoted number XX% were by we cash June every

level principal $X.X of the of you not net the minus of return directly one of XX% to NOI find debt such calculated the example, Edge, in of Lakes using million, the of publish property that's taking found, cash-on-cash the can million but a less in get we has by which for our in Woodlands, One million, Edge. One do which return, which supplemental the in supplemental. million of is which projects the $X.X debt to get service project one Lakes by rate the a in Now multifamily NOI stabilized $X.X is $X.X million, $X.X amount the is we and section service, the divided the how And cash, $X.X that cash, in XX% free that to $X.X equity million of

Thanks, Great. Carlos.

how is, you take in your think question foot Next we retail after value to square Hawaii should X of million the of one? about do fully stabilized? want Dave, that

of that street there it. years, given across for the Well, for feel I a from is in X a assets. mix a beach at pretty assets the have my I have between legacy and Downtown halfway of just vertical lived Waikiki. location irreplaceable. then I and older feel It's base Sure. We XXX-acre park, like good Honolulu retail our The mind new MPC, currently

rates around the somewhere we to do we this just newer, continue from we And at continue more triple it on replace with to our product better net. When the older this, of into move average increase. base neighborhood, to condo expect we community, rental retail develop people the increased we around as and $XX retail the $XX demolish performance triple As buildings. net

has maker Okay. power the land negotiations. as Does its one more maintain Do We'll change sales? [stake] who a the price regarding Thanks, price a in taker Dave. take -- All new economic these not position right. company conditions and question.

our demonstrate past We the price a if with Look, prepared can but keep economic we PCs. like won't had quarter's maker. to homebuilders we're I pay, going quarter, result, price of to experience acre that our Clearly, I land a clearly home still only remarks, past to price we sold sales. that to don't And continue environment in underlying as increasing sell per think this we up said willing we're all we this tough are sell. in

precious don't wait resource, Summerlin, precious like in very given quarter we will any or continue we're going because that And an Las have to have any in today the We area to we're land year. price constrained. if much of the appreciate given Vegas, sitting which limited that on we outside is resource in like especially

about seen haven't we we'll seen said, year. excited rest of this see that we're With and what deterioration. for increases, the We've

Thanks, have Can we'll Sarah, David. first for open please? the that, lines with we the All right. Q&A. question,

Thank you.

question Our go Paolone JPMorgan. Anthony comes with from first Please ahead.

$XX question - Thank to XXXX. just price And go, year-to-date. think want of that And builder get away on to I million base we I guess because year about might high/ just the next pricing first as seems for Or how different? get stuff to the perhaps you. could My running that whatever the is like sold try it ahead? around does ahead think should looking where I think, just participations like, was of number kind about Because just that be risk pretty we fade that

that in in expectations our return sort very we're the zero. past that our expectations. right at the really But appreciate this think relative be giving that, 'XX any levels. would elevated I do a it's a year, high, without on selling normalized to would last year position to do you of that price, to should going this quarters. This on question more to I'm good is do that to And you not clearly be I and question, several and absolute number this call. over best answer And that Look, a at if Tony, great is It's land we're asking. because guidance my outsized

years. very upgrades invest driven participation and each and home seen appreciation a sales favorable price price over view pay homes, in for of builder in quarters in premiums, the for to us, which in people several we've Luckily their the has underlying past continue our MPCs,

just you of kind from where coming presales, a get XX% that demand understand. I about of in that Okay. tough the Thanks on Can just question and that. for comfort talk just condo month done? market. then is a the rest a And in maybe the

Yes, absolutely.

increase through It's fluctuates of published So compared sales across strong and of seeing increase still is primarily to about our couple of a the gallery to of U.S. Asian island. we're to mainland a XX% or of for seen towers, the past buyers. past our still demand we've talked local about in towers couple XX% It's mix buyers our modest Japan, an very demand and and we largely consistent the It's we've buyers, consistent. Tokyo percent saw here there. out half what

feel In very and number a go short the selling terms to deposits the window quarter, you we that's there's optimism of climb good remaining a had that rest contracting that, so many a can we it contract, will Look, this XX% hard. of and our continue for for days the of takes while those throughout always And year. building, very feel to great. this we

Okay. Water tied And can up a in Street, I that's just in the then could, XXX it's on I last debt know does But I that. December, that lot longer? that Or Got we if And understand answer? how an get out one, have mean some you it. lawsuit. just on drag

Just you trying what to that. understand do with

fight of an will timing, the believe it. and the will training I or sure it communicate to it the really this is be can't happen strongly vigorously. what ability suit comment as our without court we listed have merit, the to that system. update order, temporary on get to in on we And we're absolutely timing going We a

is approval which value of increase had The value. has the we've but nothing that's since loan loan done put that we rights, we the there, was [air] the the in that -- transfer have feel the on especially the of given that by asset, place, supported completely

to were we like to debt, merit. without be believe feel we again, we whether we So that lifted, is temporary not going have restraining able the or refinance which, said, strong we're that

you. it. Okay, Thank got

Alexander with Goldfarb question Piper next ahead. Sandler. comes go from Please Our

morning. to know affected. me go up, want talk are XXXX if the guess more home where land that year. guidance, about the good as We all down appreciate some your high land Woodland you continue closes, enough end, prices your to this, sale took you is obviously But know appreciate expected or bulk going not to of know I'm that David, your comments be super you probably and it's I that going. a this more Hills low to I'm going much you land question pads which Hey, as is sales don't guys -- well end to is -- up sales quarter-to-quarter impacts, high-end the my mix

immune that mortgage far general, that in communities impacted. world, not your the like from but are sounds X% But less you're it

because the So land can just holding operations perspective some you better. the give pricing well, maybe the sales up NOI, like it is the business sounds going are of

don't land sales about to you I'm And we or like we from see weaknesses what the of year, where -- willing have there is per trying builders pricing don't they're now because next to major need be as pay are plan a really they declines where you're hearing and we the So that's because communities, are? about prices thinking because so want are. of sort just to lot really to be in think acre should the your the in they they buyers inventory

and the maybe performing to communities I'm than relative your just out there? the how trying MPC share communities market sense because of you're increasing to your average offer more are a get

it's Alex, I as our and I that great try our and think can. best in one to question, it's homebuyers and MPCs. answer that Look, I'll homebuilder want a partners be

improved for homebuilder buyer land. living short demand life, lower We unmatched commutes, our work-life that's and, of of balance have driven just incredible so amenities, many cost quality decisions a and an home therefore,

are sales slow. home Clearly,

rates. interest higher have We

We're continue much spot communities. having in on and a inflationary recession. potential an We believe the I quality have [indiscernible] than of based different downturn outperforming, we've outperform housing the last. in been pressures, to I believe this our It's impact. we'll

in last of comes household the Houston, data new look at at is today. homes formation. the out argue months the And of housing where Phoenix, today, that different supply, we we're million that and ahead national almost months developed homes in [Fannie] X.X lot hands is completely if some to inventories And XX, we're we're homebuilders (inaudible) we equilibrium. built would of you which short couple of about X.X that And had and lows. [Freddie] we're X into in that trend downturn, to XX, record of with and meaningfully X record vacant low research, Going estimate our million here at XX Summerlin, in I of

seen the and the saw that for and have our result the demand strength to remainder take homes. being low the continued confidence guidance land inventories, this record our quarter this homebuilders up in we've I in outperformance year of So for think we communities, able of is the the

that and cycle, a in past X% the resale unlike into their are to way mortgage We the the of market rush people to fewer into And a coming Alex, too trade on home resales those market. where home their in a X. inventory out as sitting a buyer locked see new have many fewer aren't choice

coming market choice. new as into have this with homes buyers left really new So their

Okay.

So you David, let me this. ask

as of really being the low you what as versus that end Is aren't sales end sales you portfolio out far by XX%? land break a or seeing your your out land said of Just it however XX% of seeing target the impact it land aren't If -- are of the goes to want impacted? is your that mortgages X% is the or an homes, it portfolio, homes impacted, mention starter percent break lower-end to being homes upper sort trying of breakout your much that towards it the an you impact? get how

Yes.

is So our of demand. to meet the the home land and fill sale pocket underlying strategy sales deepest to

I quarter-over-quarter. still the land end, And next lots So could land see that several home it starter that to our are purchasing the more to in results to more that homes. homes will for more prepared homes. adjust given any on less remarks, more higher-end directed seen could to meet sold our think we'll based starter that sales quarters, those to the we've quarter, driving in demand directed or And be be to sales that mentioned and we the the

all it's incumbent available that I'm to communities. the maximizes we we've But of maximizes communities. vibrancy new about sure, and this, sure that the on do we this, of us, and points our that absorption we our can on ground in best price the we the into we talked push have welcome It to families make all Alex, of community maximizes diversity the and

we all times. ground points So our the have price at lots those that to make meet on to sure job is all

Okay.

they're this in there. -- rates, condos like Like is probably assessment? they yes, mortgage a the question impact fair no. is sort et sounds sell no a to regardless Next immune cetera. of Hawaii, It there's Is that

quarter, presales and based on the that Park Ulana I continued we Ward this Ko'ula, as Kalae. [ph] launching say as continued Village well the would A'ali'i both out experienced at absorption in closing sales

haven't impact or of seen a change far, other any factors. we dampening meaningful or those of on based So demand

Okay. Final few anytime out The question. general is question. a Building in -- better [chores] does term. push Seaport. around obviously, this labor delay the Does the your near because the you. and Tin I it the market planned stabilization labor labor doesn't The by final appreciate you at to in mentioned years, going get seem this like

longer what's are guys assuming your to what's labor? So you far stabilization so gone now with profitability? Or a view given on

it's terms for time Alex, to It's the line it's of in what months. that quantify really changed not to tough Yes. me delay stabilization, has years,

from calling world my join folks the in that learned out the helping best we the chipping Tin to by be at new at with adding probably opinion expert Jean-Georges year, hiring coming this we're said, to the the early team and week, fully and and end January, are away of expect As and we every in to XX our Building. XX days X open

we pushed September, it be I that X X open stabilized. exactly we're to Absolutely. So X say becomes don't that of to X the We getting is map have liked will know been my be September. sure, days. to if But chipping now to to days because accurate would on enough ball instead good that stabilization January to in road expect away. off We we're a months. crystal the have open feel day that

what So could mean. it's quantify really this hard to

Thank you.

[Operator from Our go BWS question next Vahid Khorsand Instructions] Financial. Please comes with ahead.

Good morning.

follow-up Ward First, Village. on the a

couple a feedback as you sold there? in You Are units seeing to from process these and that associates QX. you're any seeing more in customers the from sales sales Ko'ula

by feedback Look, Bonnie team to process has an the that And led our continue excellence that that that I to our is Wedemeyer our it's results there up shown ability Village throughout constantly something improve think it. on sales job take try in that excellent our sell. I think to job the and to and at. does ground And Ward to

Are expand homebuilders space? single-family rental some bulk ways there exploring to months homes And reports were the you Hughes investors for were seeking Okay. footprint in buy some new out homes. last rental Howard in few for

Yes.

that's of about sized as to allow mark launch for price allow and building term, selling Bridgeland what it that very we We be of the to that. rent of not don't our spec land we think single-family that homes. make first these purpose I homebuilding in clearly evidence It's we're are flipping or lots long this these will set partners homebuilders the for homes. land Wingspan community, It's homebuilders building, sure maniacal is much our sell We for homes. typically pretty and do another and purpose. using this those

and community. that demand, and So community, We about can't for completed. wait there's our tremendous rent Wingspan we we optimistic look, project our phenomenon single-family But that we're get in Bridgeland. seen haven't think to

on is you maturity? Or Do deal coming to maturities plans Okay. are the that? up. cash and just to debt from to add want add you'd how there? And that are divert the going stock you -- the question refinance more last rate? Any debt regarding higher Anything to with flow buybacks interest

Our expectation higher, than standing. or near-term currently what proceeds we're at slightly about the lower maturities, will is slightly refinanced all similar always that and ahead be X thinking years either

the up that rates bit maturities current allow a gone the quite environment up. actually are though? I does mean, since coming But interest have

so far, comment. good. comfortable We with So that feel

you. Thank Okay,

It rates years. that several past and we're the similarly, the meaningfully up have NOI over achieving gone on rental also is the assets these

been ability to our its So to impeded not similar has proceeds date. refinance

Thank helpful. you. that’s okay.

next Our go John ahead. Kim comes Please from question Capital. BMO with

remind thinking Eric Can morning, good builder for the us guys, you segments. drivers John. participation on just It's you Can behind about price of Hey, that? the just dynamics and the

Sure. Yes, absolutely.

deposit, is a price XX%. a So is a contract to residual XX% participation, a land and on a super builder homebuilders, acre that's lot, a between that hard take-down typically we or price based signed and participation schedule, sell per when as which we known the pad whether typical in

homebuilder to home illustratively, we and where price price we XX%, assume if end thought land $XXX,XXX. participation we So the be that is builder a sold would

home depreciation, fact, So If, our home in $XXX,XXX that new of that premium result buyer or the $XXX,XXX. the that elects just finishes in is on is for participate their implied XX% XX% based higher, that of to land home a delta. of in price sold value example. other as areas quality put for drive there going to upgraded We're

$XXX,XXX the received sold participation. to check $XXX,XXX, if we price So builder a $XX,XXX home for we

helpful. upside the on strong safe kind online And of potential and given large in the Is price there's sold market. in buildup it to sold? last relatively the That's end fourth then when quarter just of and participation year assume those the prices pads come that based a super Okay. in houses the housing do are upper

continue they're we'll that going go participation, and think not that's see it is to me to predict X, when something the up, a X months what to to from price for could Eric, Sure, going they're I'm it's be willing XX love but be hard home predict. I'd really now. of or sold, to X, to

Okay. That's switching condos. to fair. Maybe

the they expectation. On a came bit margins, in above

about? thinking Just the be we What drivers kind there? of should curious what were fourth quarter? closed the in And was how

think a said across little towers. we're is a average I margin XX% that bit. we've to always all it what targeting our around bounce on Look, tends And of

those have of the are which third are higher Some margin, second margin front row, than row, which towers row. lower typically a typically slightly and front a some are row

had appreciation we've on past And to margins. some these the price helped this In And sales about solidify and able we've gone get process has strong we quarter, expect the price think to Ko'ula. that increases general, of of through XX%. there, I as towers we especially were achieve

kind the like is curious, bit. provide I'm guys you segment, embedded -- fees there through for NOI walk there? termination just Or And just was that results? helpful. lease but down in same-store on one, last seems a ticked it any the little just breakout then year-over-year, the of the same-store me occupancy the numbers office in you That's up can

In the overall? or office

In the office.

Yes.

why occupancy. as comes cash seen the rent. increase a on is I by which absorption, leasing a GAAP we've new pay So positive rent. my we on And and same-store basis. our in can I GAAP But results rent, we free bills published. that's only absorption basis what positive can't in with with with published the office, pay noted cash

Thank Okay. you, guys.

The go ahead. Alex Center next question Housing comes Research from Please [ph] Barrón with

to focus a for Thanks guys. little Hi, new I my taking in plan on wanted questions. bit master the Phoenix.

can this long forget guys fact far sell the about or what of out? thinking how years we're all, what sort as term, And project over that year? talk would just First expected -- many many was as eventually rates run per rate up you of was if the are going would sell how lots

gave Clearly, to kind range. be you that out you're far, is drive plan pushing accurate, largest sell range a Yes. it's that question. time in truck great a that entirely difficult I And when in to and master it's the the could XX-year projected XX- to acres, XX,XXX one out you we it's our which community very through. of company projections a why No, that

we we're get our that Look, year. would to to be this able lots in sell X,XXX going are anticipating first hopeful to We it were that done homebuilders we 'XX.

shortages, of into lots some and time the to on 'XX hands actually moving those I think based now on the of in happen that get will homebuilders. just dirt the constraints ground get to ability labor

this in anything see Phoenix that demand. we're to to we're not undersupply a to rush met game. sell the again, and with but that need discount. going conversations a land of get homebuilders. And unless appropriate We be still be needs to still at We we're able see long in a price, in We for an great have rid at

my guess, with that long-term that short good market, attractive the That stress. long-term picture sort why because term, of mind -- obviously, And think, I we a agree a I of that's can lot I started Phoenix I think in is I said, Yes. was market. all off, questions is under

selling on starting builders work the the prices Like to those do curious, guys to the sort get where in off things of that the low for and guess, I'm -- homes would foot? anticipate to you builders of So need going I right price what you range those see lots how XXXX? for homes,

we're we're in entry-level Look, a homes lots lot and our $XXX,XXX is expectation $XXX,XXX that today, to, to to it, more to lot call to on which be talking acre. which is that per able modest, of for translates market going $XX,XXX based about sell $XX,XXX sizing

from early more plan that the we any and MPC, the the command new meaningful and based We've time again. new homes to Hills, in areas those time Woodland typically fourth continue really performance over develop, we priced And premium year of of a is the which are we in its time, believe, to residents that moderately master a quality you're on around welcoming the us. communities we and Teravalis. around stages expect selling, at Northeastern similar in of and premium residents, diversify Clearly, even only it to see compared in seen we're overall market us, homebuyers,

that amenities quality don't very sell lot per value that in we're from we're because the and need With appropriate per think much said, there's and We we're our not land make that unless we community to that desirability price the demand getting acre, homebuilders there desperate special. maintaining sell a situation. the land unless, and to going standards, price not again, we

Okay. Great.

size that size, in a would the be builder like terms so able community? And an minimum entry-level start of what's to lot lot

across number varying talking be same that we're the -- of home the building we sizes we're smaller It's XX to and all want of first (inaudible) range looking the at price subdivisions same about, lot prices XX point. so are all homes can homebuilders different XX don't that have different all with the the to varying size the phase don't of what I in and over lots I at board. the type that mean, now right of

in much So summer. job that we entry see and Even here diversity a if band to is versus level our new is the maintain diversity. homes that band that tighter wider in of

like at to Or be white all more start well? like And as attached expected to single-family be I'm is communities there XX-foot any they is But would lots? like launch? going type Okay. it saying

-- be that XX-foot up Our single-family. front as It be from now lots will foot expectation it is yes, will we and going have And right there. detached. can all

Got it.

Okay, luck, of thanks. best guys. you. Thank And

Thanks so much.

our remarks. David O'Reilly would conference back any question-and-answer I for concludes session. This to turn over the to closing like

and you forward event Investor thank our the us Please for near We joining Thank look additional seeing don't joining. always for shy, Relations questions, today. in be all you you to future. here in any there's to or help. If again we're follow-up

has conference Thank you for attending concluded. now presentation. today's The

disconnect. You now may