Howard Hughes (HHH) 28 Feb 232022 Q4 Earnings call transcript

Good morning, and welcome to The Howard Hughes Corporation Fourth Quarter 2022 Earnings Conference Call. [Operator Instructions].

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

Good morning, and welcome to The Howard Hughes Corporation's Fourth 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 financial their measures Before tense the be supplemental statements reconciliations statements measures. the you you discussed GAAP we package download fourth relation our directly include release our not Certain that of earnings both would earnings supplemental begin, present like meaning package. can to federal today the most company's today to or are website, The that of forward-looking will howardhughes.com, laws. I within the made our where comparable in press securities discuss expectations and financial in are that quarter non-GAAP to release and

that statements Please that earnings Although can we factors results. SEC will in risk fourth forward-looking factors statements no in filings expectations material between and the in upon our our based forward-looking the reasonable be reflected company the expectations actual differences are the these assumptions, release could such and believes disclaimer for achieved. assurance that give statement cause see press forward-looking quarter

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

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

development by Ward performance will from who segment Welcome Master Thank recap a projects our our of Jay call. everyone. Eric, for the today, in you, and quarter to followed good our Dave and begin with our the to Village. updates cover earnings Planned Communities I'm remarks in cover fourth our highlights morning, On on year provide of will going Seaport. operating assets, our Striph the call Cross outstanding

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

resiliency results and short were home and was periods and revenue. to by Considering of assets, I portfolio our by solid MPC builder the which to demonstrated am ability off per record our our withstand year economic of aided year exceptional results of Highlights $XXX strong price HHC. unique nothing participation a sales, residential report inflation of continue and falling the were capped new acre XXXX another million, of for fourth included price quarter of uncertainty. headlined to that pleased EBT rising prove outstanding its year

the foot $XXX million XX% operating NOI Our experience Building. continue assets units revenue the Seaport, to $XXX Village, net condo X% in a gross over of from number exceptional of delivered sell losses nearly and NOI Ward reducing traffic year-over-year, the pace significantly record rose XXXX. a with of At and increase increasing million, contracting delivering impact Tin an And to record sales, at revenue the before margins. strong equity of losses we

and assets We million cost project condo strong NOI continue XXX,XXX operating XXX space well believe unlock we office will our on square stabilization. to and including our balance feet able as deployment a completed our multifamily of NOI $XX these well project. assets commenced with XXX,XXX significant we and combined into estimate of delivered of of were have single-family substantial on as currently projected of flow the Further, these on The construction as retail a deliver $XX first the X.X% stabilized square over results cash new projects, X%. yield we million term. that X In considerable we will units. long feet of eighth XXXX, rent value at capital residential yield With condominium, office generating for operating as cost sheet, projects implied and operating

price deliver the sales fourth residential with per $XX and a increase continued solid we our strong quarter, generating to XX% into land EBT in Digging results, million acre. In segment. MPC of

of $XXX home quarter revenue which EBT participation of We of prices remain XXXX. to MPC also reflected our Ultimately, our contributed communities in million year the as builder strong. million, compared benefited full results results in record price an $XX the from reduction record to XX%

and success a of excluding declined to $XX result inventory, and of equity which $XX record as earnings builder million EBT acre lack in The by year-over-year from current year $XX its increase price tremendous million. strong driven and million full price was sold growth a participation increased revenue MPC land Summit, When This XXXX. per of compared past sales, ultimately XX%

Houston sold acre. delivered per residential another than acres Bridgeland outstanding XX region, quarter with price an our $XXX,XXX In at of more average

quarter. price participation revenue This in generated sites EBT X price in totaling closed fantastic record acre commercial which on by $XX in price $XX a builder sale for participation, an sold, also Bridgeland million headlined With continued nearly of acres, nearly than strong capped XX builder and the year Bridgeland, acres more million per We of $XXX,XXX the reported off increase performance revenue. MPC's the of of average highest history. the

we encompasses lot Woodlands, XX% at sold than acre. Woodland record 'A'ali'i, XX In in residential $X In a fourth million revenue per which lot million Hills, acre. we residential price waterfront reduction The sold, experienced of per the These in included offset by generated quarter XX% which The partially for Woodlands. X acres Lake increase in a a acres on $XX commenced lots closings sales custom more

average year, per revenue. and sale participation XX record acres strong builder of at price commercial a also we residential the For land our from price benefited $XXX,XXX sold first acre and

the superpad XX Out sale on during west acres totaling Summerlin, we sites, the quarter. in of closed X

in sale record the revenue. of nearly achieved per a massive acre a builder in this participation new price superpad that compared $X.X further we growth represented million and Although significant price when year-over-year year, reduction closed the prior to XXX-acre

another XX The sites include XX Discovery will later we mentioned, development in commence extremely home this II, upcoming equity venture lots during previously has year. in land As of limited and reduction sales million a acres significant remaining for inventory successful experienced pending year. Phase the joint This with $XX Land earnings Summit of the which from custom

attendance. Valley, Phoenix Finally, the official more late groundbreaking in stakeholders XXX of celebrated in our Teravalis West in key October with than we

first work than Floreo, in the on half credit village, grading residential the infrastructure venture will will currently million community's selling the diligently village. the to this for expect in of investments Floreo a and development, $XXX X,XXX this continue that joint second facility sales We this facilitate fund We lot lots. closed more in To needed development mass horizontal year. commence

at sales regions. across new Looking home all

further a in experienced sold. quarter with of a XXX we the expected, As homes total reduction

Summerlin, XX% reduction lower decline. Woodland magnitude in XXXX. attributable XX%, Bridgeland in XX% respectively. The and were home record also the In saw For homebuilders our the recorded compared lower of MPC The X,XXX which sales year, a but to a Houston, much homes, was sales largely XX% and to representing a sold Hills, in reduction

is sales to increased reduced the This home reduced offering home buyers. existing has year, effect interest traffic in and on a cancellation encourage To and on many new of rates inventory. resulted in incentives communities and sales throughout rates sales homebuilder positive increasing our are having increased partners our

While far it and given optimistic markets remains sales our very early, XXXX. of we're thus pace in the in cautiously MPCs increased

to short as see Carlos a minute, a inventories will ahead many respect purchase future near the additional in term only Houston, continue term, discuss to selling we underlying our we to sold discipline guidance Phoenix XXXX in but and demand meet remaining eager lows. at Las our lot expect homebuilders do reduction with meet to With of land historic are in land of the the Long in years Vegas acres our to sales, in land demand.

a wait-and-see in are builders many we now, as subside will mode, this right year. for throughout However, we expect which progress

sales land seen anticipate a year prior the we normalized more this result, to decline pandemic. a As will to level

that named the rooftop. Venue Worldwide Outdoor #X The rooftop was City inventory. Shifting We over year. was to The any experienced was increase #X foot we At not the increase XX year more was by of Pier of compared tickets Top XX, posted our this York apparent included by incredible this Concert limited Red strong nearly Club more a series the the traffic series, the XX% prior the to year's previous ticket year with than the success sold Seaport shows recently and with Top Bull at than particularly or Seaport. so XXX,XXX during XX% New in in Music to success which Summer a year concert this

During Seaport. managed the return all restaurants our of and locals the saw to year, tourists increased demand as

an space had increase and summer, most in also private the in to notably Alexander We available Building in the a remaining agreement. events, leased XX-year Market the Wang under Fulton we

opening was in accolades with curated marketplace, media. has year XX,XXX a from the Building. grand with foot square highlight without The of significant the the met been This Jean-Georges, the doubt Tin in partnership visitors one-of-a-kind of

losses reduced operations per help improve in fourth in fully increased this going up, ramping achieved which encountered forward. expect operations we Although we labor-related hours and We will equity ultimately hours for week to of some full-scale and venue performance significant quarter, operating X-day contributed December. operations the to challenges the

Overall, increase revenue XX% million, generated to the a full of compared year $XX Seaport XXXX.

premier Seaport iconic losses as highlights entertainment the $X equity million firmly improvement and in Excluding losses Building opening, year-over-year. a at destination NOI since its this XX% itself Tin York This dining of generated improved or is establishing the neighborhood, appeal New City. which

to now over Striph. the I'll back Dave call hand

including you, their unconsolidated our and assets the expectations Thank our NOI, delivering David. continued $XX of fourth exceeding from quarter, performance, solid the ventures. In operating million contribution

X% a a relative record $XXX of XXXX. increase generated we year, full to the which represented NOI million, For

our $XX of fourth NOI increased and Excluding of seen quarter divested portfolio, and our assets, full which NOI was in multifamily X% year-over-year. $XX million generated increase significant retail hospitality Most million. year NOI

primarily For The properties the XX% Downtown rapid increase, lease-up Woodlands and a represented the new Columbia. year, driven by this strong of in

in-place the by also Our strong impacted across results favorably portfolio. rent growth blended XX% were

at quality in our is properties Our to highly a amenitized our stabilized highest testament leased, the of which some year-end locations. assets of markets, their the and rents our were product XX% command and

to named these the and multifamily place fourth completed best in Columbia, which and projects towards to our assets, as expect continue Bridgeland, projects Summerlin, in under markets, demand With new Downtown into incremental recently late is in growth meaningful strong we quarter, placed completed Marlow service including the we we in which quarter stabilization. leasing and are Similarly, began at XX% in leased With years the Starling and of America. is construction was best-in-class the units third as coming year-end. additional already in move as develop in rent at Bridgeland NOI by

NOI In year $XX office, we produced million million. $XXX quarter NOI full and of fourth of

some a These quarter, Woodloch of this Forest. reflected strong earlier X% in The year-over-year Woodlands Columbia. and XXXX the occurred was primarily the of abatements were at Downtown by which XXXX reductions For reduction, partially offset result tenant expiration vacancies, lease-up rent and which and the XXXX Merriweather in

largely were offset full new year, the year. vacancies leasing slightly, the the NOI throughout up aforementioned portfolio. office tenant For by and in was expirations abatement momentum These earlier from the benefiting

feet executed Downtown square During XXXX, and square feet square approximately Woodlands, in including feet Summerlin. XXX,XXX of or feet Columbia XXX,XXX XXX,XXX in square we in leases, new expanded XXX,XXX office The

employees see which We elevated office. demand continue expect off. their we expect burn flight today's in build-outs Overall, year strong this strong momentum to the back benefit into our in a free to and continue assets, a momentum office XXXX from With employers in and ahead. continued XXXX and see periods into to is as world-class get to beyond on strong testament amenity-rich performance to completed a leasing as quality to focus market, rent office the leasing later the and bring leasing

development reflected million $XX Park of Center primarily in a Ward prior retail of the which decommissioning in increased NOI and result quarter, a In X% to operating reduced was expenses reduction of to the prepare year Hawaii compared the footage square as retail, related the the to Condominiums. Village for fourth

$XX of during year, prior Village year, Overall, the from markets. performed percentages with the at the improved For to modest with associated X% in portfolio the COVID-XX payments our due million recovery retail the were our of was NOI primarily occupancy pandemic. This all onetime well XXXX. of retail leasing to reduction remainder a which reduction and full rent was compared or Ward

building, ventures unconsolidated almost is from improvement sold quarter increased which for operating year. Finally, the at was in This and the North XXX our fourth the losses the of full share during XXXX. absence of XX% first from of office NOI XX% Wacker quarter net the entirely

Jay the Cross. our I to President, call turn will now over

foot and XXXX advance Thanks, and to which morning, the is Creekside ground pipeline the XXX,XXX quarter, square projects Medical a square development leased; already in everyone. of medical space; a in which building development multifamily Summerlin, square our XX% Woodlands. Columbia including Dave, in XX,XXX Plaza, Marlow, office includes tower office XXX-unit X with feet good retail completion Downtown Downtown continued and In The floor of here office XX,XXX we a fourth multifamily Pavilion, foot

on provide these $XX time All were completed as on incremental budget, buildings projects, are which green more upon to are stabilization. of than of and NOI projected and designated million

to complex be in projects completed continue progress Bridgeland; the under South year; single-family during on medical of third including in which in downtown second multifamily a our new also construction XXX-unit and XXX-unit good for expected construction Tanager Lake We Columbia, make the to in other Echo, development our the Downtown quarter quarter. Wingspan, office building rent Summerlin started this

the medical 'XX. completed be will Lake We building South expect in office and early Wingspan

XXX,XXX South expect the quarter, which will Summerlin In fourth square year completed early X-story this 'XX. the we office, be on later a foot building, construction office we commenced or

feet and believe products the for Class encompassing XXXX company portfolio A of XXX and NOI was new demand $XX are strong from to the space in of this Las these to stabilization. of a multifamily projects X upon projects Downtown our Valley, we an year expected XXX,XXX complement standpoint office of retail Combined square completion nicely nearly incremental Vegas see underway, projects development annual all with our to and Summerlin. X the contribute continue million office excellent Overall, with We will development in units.

Seaport. the at quickly Looking

becomes voided fourth and ruled to keep the pending We lawsuit as Landmark's the a requiring the construction a continued which efforts we cease all work Commission request for We'll decision strongly filed for of disagree apprised and hearing an of corridor XXX subsequently this appeal. continue during petitioners a us you work. the full In at We Preservation information approval the the paused Landmark approval, court's was Street due project. to quarter, the granted, Water favor with of A week. allowed construction site scheduled challenged more the court work January, stay and in to third-party foundation available. but which

the Ward to these revenue. which sales units of $XXX we Village. units tremendous Shifting related year, quarter, net was net the for X units of remaining million. contributing of generated condo in the generating Waiea closed we sold over We net fourth Ko'ula of tower, At the condo the last the completion closed Ko'ula, sold. was million revenue. million sixth net revenue. these combined unit At on $XX revenue majority in condo of where XXX were XXX our quarter, another units 'A'ali'i, fourth end $XXX XXX XX% million $XXX and year, at year-end, of closing 'A'ali'i in are Also had sold. The at XX% to of

XXXX. construction tower XXXX. to in well Village, year complete making are Victoria commenced are the and XXXX. the Ward expect ended is track Victoria we Place on and we presold, Park early we Place as great XX% tower in this front, which headway Park the On XXX% to deliver in Village presold as the Ward construction late at

to presold. September. units community's we buildings presold rapid XXXX. units dedicated of In construction in with This late condo launched a the of January, on million consisting during only Village's and units XXX ninth we also the presales, XXX Finally, of remaining launched for year-end. pace Ulana, our XX% consisting are early ended at X fully project started at sales condo experience closed with construction the remarkably Ulana new XX of respect tenth housing, loan workforce continue where project presales on year XX% project. we Ward $XXX to building

contracting billion. we of had a a value sell with units to XXXX, condo than more year in X,XXX Overall, $X.X sales record

This bottom completion nonrefundable and XXX which units presales provide a the are in construction is which funding in these by their of development to significant revenue, advance upon deposits. accounted contribution future. to new secured meaningful line projects Our HHC's represents for under projects incremental and

I hand would will over our Carlos to Olea, like the our CFO, now financial to who results. review call

full upper XX% fourth despite lower continued in the to In was guidance, of market of favorable record headwinds, resulting exceeded Thank for our contributed our guidance our year summary, XXXX produced quarter, which you, which fourth everyone. and than In was This in results continued morning, million we performance, which in the MPCs good at quarter end our anticipated our strong of EBT full $XX Jay, a expectations. results $XXX result XXXX XX% the recent year-over-year most only million. year and EBT XX% reduction. to

divested this NOI recent Our the a asset year-over-year. operating full million. record which X% assets year XXXX, $XX quarter Compared favorably X% increased of with contemplated NOI increase. to to our million delivered most during a excluding When of increase, NOI X% which guidance assets, X% compares fourth to represented operating $XXX

we projected XX.X%. in our Village, which This year-over-year ventures profit condo $XXX NOI the Tin to XX% of and fourth the the Ward guidance gross quarter, XX% overall condo recorded exceeded profit generated we full from Building. XX%. excluding unconsolidated also $XX in expectations, million At gross and quarter margins margins At year of ranging contributed to losses of XXXX million which improvement from XX.X% when in of the of Seaport,

new forward to stabilization. As opening late grand move operates from starts significant resulted asset this and expected, at full in the towards but asset we capacity in this quarter, equity fourth September sizable going as improvement anticipate losses

of we This represents of came Lastly, rate to reduction pre-transformation compared million, pleased XX% guidance in performance in a of Overall, our XXXX. full in at are XXXX. lower million $XX million than million reported year our our $XXX to G&A approximately more run $XX end we which with G&A very $XX the range.

market as XXXX Looking long-term forward, our some we outlook but ongoing about the near-term very businesses, a anticipate we result for in positive headwinds. remain of challenges do

and acreage. demand new will the we current new reduced impact MPC soft for home In our residential sales housing market expect segment, homebuilder

to will XX% compared MPC result, to decline we a expect As XXXX. XX% EBT

this EBT going from Although portfolio MPC multifamily generated operating to sizable drive forward. levels of the a earnings during growth this experienced comparable the assets, earnings more are to momentum years, levels XXXX. our remain recent is NOI throughout outsized normal reduction In and and favorable we in anticipate XXXX

In of we office, loss XXXX. year-over-year however, expect during reduction to modest NOI tenants a some office a due primarily

and asset feet than during office periods into success later our X% XXXX, many build-out space those contribution project more office limit XXXX, X% XXXX and down assets will renovation times Although of square in be leases included tremendous of had NOI across portfolio NOI XXX,XXX in operating we leasing to the new excluding up will growth XXXX. Overall, from we in until divested year-over-year. vacant

are another near successful the condo closings expected to 'A'ali'i XXXX, remaining until After XX% of and at driven condo year XXXX, reduced is term next delivered at Village tower, respectively. will sales Ward we XXXX. Ko'ula, In as our during closings which be condo sales by sold, XX% be Place, in Victoria and early profit and units not expect of

a to to million XXXX and with As sales sales $XX XX%. Condo expected between revenue. million, gross XXXX range range are million materially expected compensation Victoria expect are result, with expected approximately finally, And XX% in G&A noncash in in $XXX million which increase condo between $XX a to generate and margin million million. anticipated closings $XX and $X Place to in of excludes approximately cash XXXX, $XX stock between we

at dispositions. Looking asset

now quarter. $XX of asset the as the were a XX-year During as this $XX Total Collection Creekside during subject a were interest to Village $XX at we sales lease million million, XXX net for Wacker Woodlands Lake retail a million, total and proceeds for fourth million Crossing sold the proceeds year, gain Riverwalk in million. $XXX Outlet with with sale basis ground with Crossing earlier net properties, from quarter, disposition With Lake the HHC. only XXXX Woodlands million. combined Green $XX X has the of in generated North in well our fourth Together $XX including

with the Turning development $X.X the maturities remaining outstanding in deploy our debt At a end us million We capital XXXX only perspective, quarter, million. years billion fund to current of due have XX% needed at of our to and to the in projects end the X cash, year fourth positioned $XXX pipeline. of which million the equity our of ended the into was we the $XXX $XXX balance or approximately well sheet. year contribution leaves with From later. next

million closed for nearly we of for million $XXX During maturity developments billion the fourth horizontal resulted latest debt, mitigates debt rising and significantly not our achievement loans fixed, $XXX a but including construction financing years, quarter, only rate, risk of being loan rate of Bridgeland. a access This our capped $X XXX% in swapped financings, average to this tremendous in permanent development it debt or fixed in $XXX in extended our to to which our weighted X environment. also million

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

Thank you, Carlos.

for the up the our Q&A, of exceptional XXXX. Before I we just lines assets in want reiterate performance open to

outsized therefore forward the has a reduced for encounter market achieved business some our do XXXX, we'll sales. And see we returns believe model have condo short challenges that various unique term, tower Looking market we not historically and may cycles. throughout we closes in while that

an portfolio the asset ahead well of pipeline assets have development company with ahead. net the exceptional a in us, robust for of We new positions growth years value which of

is America. know the top and The The our of ranked Woodlands speak in accolades for more XX of accident strong development in continue our for pipeline, the And and best with our country, to come. continued and become to again ranked XXXX, safest we success and place in jobs was the is Summerlin rent HHC. in Columbia As city communities the yet to rated the best selling company's to once placed best results that the the no continues America. communities the best in to is MPCs attractiveness in to apparent, live our more it was place

Holcomb, start portion have few read questions been begin call. a Eric We'll of first Safe that will the the which by Technology, generated Q&A let's by answering Now by be Eric, question?

Thanks, David.

that to considering be one? do in The a will today at first want Carlos, is, take point dividend you the you future? question some

harvest cash because capital. create HHC or the to this like value, we did early Well, cash some raise of XXXX and stock towards discount we the intrinsic largest when is without everyone. back new At the in need of significant exceeded where the pipeline we to we Thank stock of free we free it if consider use buybacks benefits to a is to plans and cash the do but biggest end we returns, needs flow that dividend one development best and forward of can buy to risk-adjusted our didn't implement self-funding believe the make sense, the dividend, And to business flow developments XXXX, going of as increasing you, have as NAV. that our point, we intend a see our any our to continue Eric, our not could invest fund now. morning, do model, development to good

Carlos. Thanks,

of cuts is, University, you that can cities X and to water top of Buckeye give David, State this the the to an Second issue is please water will question X Buckeye According take question? largest you by overview have authorities want in in Arizona XXXX. Arizona? the water do

Summerlin for into has. Look, over so years Sure. we've in The than Arizona a a overall moving will Nevada Arizona, relied the continue usage water is first thoroughly certificate XXXX. about per supply, answering of where we're the which Floreo, last which the technology what assured homes, environments, of and strongly is And executing in less as way. is a divided decreased but Summerlin, has we to X,XXX of water population the experts has about ago. Clearly, to our it XX In complete. inherent Floreo receiving village support XX an one Vegas Phoenix, water on Teravalis from Las leading collaborating this past with in that Floreo we to Teravalis in that have and local, much into in years the our and the is external going Shifting as for years, desert today of acres secured of awarded great has as desert XXX-year X and community capita experience are acquisition Teravalis, usage and water a that the of in it's We been while. right innovation are our environments. to in question management as already supply issues development modern access leaders was to investigated doubled assured water our the make take well been XXX-year by development before X the and years to certificate planned. XX full state of XX ahead balance step really analysis we're of X,XXX phases, first is Look, sure phases. State introduction that the is

investors. these to going own are long-term We We're live in and communities.

to live communities. go Our in in communities. these are kids going to employees Their school these

see of all of We are communities. the the absolutely committed need to to making sure that we these protect precious resources we that success

able confident incredibly that acquired we land. to execute we're outlaid and that attention, we're full way be when our to going we the has it it So

Thanks, David.

you Third be? in on properties technical an default still there question Carlos? today to is, give any debt update compliance? can about Are or

Thank you, Eric.

ability compliance, to triggers simply operate them are service They meet X While Hughes are get ratios. Hughes cash So that properties with that to assets we drop, liquidity noncompliance for These other to prospects cannot had X do all not that for corporate, into debt X will that the it extension off, our have a still as a and we None the asset. had Square, for. of have simply the impact the of because instance or pre-rent. vacates really landing, X no the expect we because the Waterway back be at year cured an don't restrictions. and that they can And so be Landing related Further, and instances Landing tenant X of compliance operation have cash that second which by our will on it year-end, burns active to Hughes any has did quarter in we coverage this of the flows the use material means

does operating anymore. four, for another office rate not in that that be ago environment have make example the Carlos. changed apartment or decisions I Number right. one year specific a building an An projects? would a All planned higher sense interest for on was might you,

Thanks, impact decisions. on components not our they it and project. Sure. to asset, cost comes of capital, basis of projects, capitalized our the interest weighted when Well, of an the really Eric. Where of turn impact average allocation rates main do has capital an to have cost which for higher development a in they're the one on get

So internally, we meet every X weeks.

weeks. process seriously, We very, have that where a or we X all risk-adjusted regardless thought to and that the and highest returns. the up, Capital brought initially capital we rigorous every achieve were very a projects meets allocate we appropriately evaluate very approved It's projects of, the of Allocation Committee they take of that

All doesn't our company what and is Carlos. The decide David? have And to details the company and please its give keep? monopoly properties MPCs? question sales on the Thanks, the from asset sell today last in Woodlands. right. commercial to on Generally does to what How a prefer

And communities. do Well, we within continue to the way transformation can focus execute commercial the opportunity that space on of bottom that it see and do them developed noncore, day areas think impacts didn't announced free creation every by therefore where of great shifted those said one-off feels were the can we operates. It's the the That's when centers, able we advantage. million a had our center references add are those question. a And other that we we properties. these develop And and downtown a competitive XXXX we plan, throughout the intend Green we absolutely. perfect that Woodland a committed going were I'd monopoly a ownership have to noncore. back we it to a the generating going outsized that to that one And question were yields office-based said in late outside keep. plan advantage transformation deemed outsized on the to answer we those the city incredible I and assets communities tremendous control and gain. company. developments. strip monopoly, a accelerate assets a have but our retail Creekside The we $XX flow keeping Yes, we strip profit to a should that cash assets city of center we where and But community retail line it's of at for we multifamily to shareholders we centers Lake that having on and Village sell a competitive example Crossings those Both not

live we'll David. right. now. the Thanks, move All Gary, to Q&A

[Operator Instructions].

is Our Paolone first Anthony JPMorgan. with question from

also capital off start Any thoughts allocation or buybacks just in And uses or sales this thoughts I'll XXXX? side. asset disposition on Maybe general for capital just where for and you year? plans the then left other share around

but We those It's sales noncore strip evaluating all anything don't now left really, question. planned, have have Tony, of kind dispositions. of the for retail, our thanks MPCs or completed we've David. those we're don't anything asset potential noncore always that outside we of of

all of where It's centers. the the pipeline the those outsized and be. some and we capital and see could see where of maybe we'll see retail sale of strong still capital. of that say capital of feel times be the smaller majority We could the a our that use market going risk-adjusted very those it's depend always what development going how intrinsic returns, strategy lookout vast this generate environment the on to price allocate we is allocated can tough that pricing one-off So below for opportunities formulaic terms drops We're But or going if our to value. arise, And programmatic on there. where get there. capital we those allocation share in to

to on the environment based now. right and are market pretty dynamic what We some adjust nimble -- be have

capital guess the on follow-up And I then side. Okay. one

process thought building in starting around spec. office Vegas on Las the an Just

one another how demand that Just lease-up. you have using the just you for in that's capital there and And just space? about thought

market. lease They're buildings, the not missing X felt and buildings Cross. product. we mid-rise a This are is X-story take office -- very continue Vegas product, XXXX the and were of is that which best not segment simpler in we office typical so is that well Jay having and a XXXX one. and I'll a the Summerlin Vegas to market X perhaps by product feel And Class for south have Village intrinsic didn't we available we which keeps or sector. product in X that on Downtown. any And in the that's A we XX, what strength, that have we If another of call we it marketplace. Vegas' what wouldn't the was something, given is the we're start that in X Spec important Las building years us

So that it's to the ground, only do but well we're building. we're just with going coming optimistic out of this very

that a like the quarter-to-quarter. think know into a in I as you off more year. what of your on I'm just backdrop mix trying XXXX, big muted of it in about put then of assume? And pricing just here pretty what type a do plays U.S. that But to terms just housing Like role started guidance terms foot market this we macro Okay. for does context and just MPCs, of

a back from Clearly, be results what that we'll quarter to and remarks, in that We've really coming fourth you been U.S. of able the in this in with his Carlos optimistic been And cautiously wanted the seen I year home January achieve level past it's that earlier, like It's results. sales XXX X now, would consistent our in outsized environment, we guidance really the years 'XX have Tony. EBT only right sales, I I keep in Yes. felt seen within at as a incredible said And especially we an which, maintain XXXX -- land remarks, we we've guidance about good see our housing years. And And quarters already that's couple sales. as past our saw MPC years, with and homes. when those market we where February reverting to changing pretty as seen of an to this those is mentioned the years we're kind tell MPCs. my to therefore, with or selling discipline we from level quarter. up market, we to And perspective, about thought exceeded pandemic. very And home underlying underlying has sales unusual home of we've mentioned year. what came we're meaningfully and results down of the see prepared several out our rapidly

data starting we're a see continue. with But I to a yet that modest XXXX. pleased know think pretty don't hopeful uptick I we've they'll the to So we're and in early trend. seen results call enough it that so far

And guess, year and for Okay. question just Floreo? the Floreo. this last with regards to assumed Teravalis have then from, you and do I MPCs What for on

lots contract Well, XXXX. But to until of lots we close we're the with all X,XXX able to year we're that the finish during infrastructure assuming to going those close be won't we them. associated

XXXX contribution in very in modest guidance see from that we So Florida.

question is from with Alexander Piper Sandler. Goldfarb Next

David, questions here. So two

to back sales to Anthony's the question home back going going just and First, trend. on

I guys we that EBIT be XXX would said take this sort implies of run to which MPC year, down you XX% that a think if XX%, rate.

has earn at think will where rationalize few selling intuitively, today a just I that's go but acre of XXX to question you're why the guys because fewer you it's be My we historic. the you is above that is gone more? where are acres fewer case XXX down acre sort so value still the higher the but points? sell that because historically, acres still this per versus to I'm years is trying value up per it'd more, but up, at sales market could And is, ago. going home price think would a land

in for be Communities great grow. or the a 'XX achieve generate per greater continues these prepared one to higher we'll achieve that We I same to price earlier, why we it an moment years. perpetuate acre, great because which And it's this during that that compared It's our results. were MPC the remarks have feel don't I is the was should Planned that next I Summerlin, quarter, and 'XX dirt a we demand those Alex, able that time all-time it our several the we to to we'll point, part in consistently the a of probably close think accelerate past EBT for $X.X able or million continues know to going acre, to but have can high. with results don't as year. price And fewer Yes, great acres know left, Master think to sell for acre per be at that spoke that we'll and we is we good that we're next stressed I per

it's press. the in Okay. the second the is back been And going Obviously, question just then issue. to Arizona water

for. a You XXX-year to go you're spoke that about certificate trying

stories not something is user you years. water, also or of media, water about you also buildable outlook bigger necessarily the for have XX think housing. actually agriculture in about I the next the there's mentioned Then how rights the

a environment, cetera. and statements we really the there headlines media, So the you're this and amount of Or diligence therefore, underwrote? new? to obviously, putting in far, so according headlines would governor's that to everything about you all due have think case seem all seeing you are those -- always originally but even whenever you basically are that really new? try desert-type the it in scary, together water guys et just a And these see And what the develop on because is headlines nothing the are are have we here? that politically, done presumably going How should tremendous geologically, what's

that can those that from been issue the focus in but much tell been at confident gain Valley you forward across highly the see is West same the the would come the I want Howard over Phoenix done opportunity country. Hughes other I outcomes an had many and There's great And drought one the that how the since efforts continuation we're you our we've We I've information that governor local that we in with of state, an that water focus past the there of our tell in to several seen to can't drive. Vegas Buckeye, statements we've from changes acquisition. authorities city, that conservation this driving and wasn't. issue Valley Look, would the that new kind how traction Mayor country, that was water Las continues was we are much that great those Valley. this the cities West the it's across seen has Mayor what what -- in in developer and and that there on collaboration on that's of our going what that outcome been consistent is that no given of on can great momentum And We a great media they find the already collaboration understanding in to focused months live been Nevada work. view. Phoenix from terms allowing because a in up into of the of home Ducey because had affordable results Governor idea

with The BMO Capital is Markets. next Kim from question John

or guidance, guidance could On I for largely was you provide interest this expense wondering if is fixed on swapped your of year. most debt given

done. in think the G&A provide, terms is guidance profitability condo which NOI, about we've is EBT, I to we provided and that going of MPC all historically So what we're

a on pretty opportunity They're that's close line easily. calculation a number basis have forward pretty very the investors within analysts for most and detailed our And an of to get years item interest our think think I item I by are supplemental. line straightforward. our to

Okay.

year? a swaps as have expiring expire September. far your this what strategy exploration? that million do do as You And is upon swap What's have only this this you $XXX of the you

the And Yes. going this expiring now cash alternatives at we're That Carlos. for that that the we're right swap have the flows largest to expires. those only risk looking year, swap we John, already when is swap this is how actually. cover for

as mentioned policy question. capitalized another expecting in answer You What also capitalized to far are your you as interest in 'XX? interest

where spend today loans in how buildings. in I that of 'XX are our been assigned those the beyond on those dependent today. total have do start capitalize been buildings. cost in what's new announced into announced those we expected construction largely individual Those have interest many interest mean, we shown will be developments Capitalized

development pretty grow. I put into we That's development project can new expect development segment So includes that and project capitalized number the period. straightforward. total if when capitalized total is. strategic a pipeline, the you project, to announce added we a continue interest interest we projects asset new over think that change to that But the that cost total tell for within are development the the what And is that cost

Okay.

to assets. you be you color going occupancy operating catalyst provide leases the your activity local curious your And was year. markets, been if pick in any full what's fourth for have the could coming down, was I to on outperforming retaining the David, Moving conditions, of office MPCs. what within reflective but on market versus to on leasing up? And the quarter comments

Yes.

and would it you down, slowing seen to So look, don't I tell has XXXX, throughout we've see we what flight been quality. that a meaningful

to back that's to incentivize than think heat national kind on largely back we've get employers occupancy trying employees within I to have seen amenitized bringing to buildings. to we And are been. really reports because they're of what locations the office. most to higher their office amenity-rich the As our employees body office, back have make and focused And get easier great that it great

comfortability XXX,XXX leases we've we headquarters think square done as are optimism We Colombia in Woodloch driven business-friendly less states out-of-state XXX,XXX feet are over of commutes company those that in relocations, I flight what And and our different than new in and our company over continue quality I the done think year, by office done America live is we've buildings in we of into of in home. for meaningful building. Of employers' fiber It new full come that relocations in located to Woodlands. the gas residents amenity-rich, the that leases gas done the and traditional The The building, that higher-tax, a the we've in communities have seeing, Northeast-based XX,XXX our Forest, XXX,XXX market. that at Houston employers and XXX,XXX we've portfolio to here in well relocations, corporate has a best XXXX attract office into leaving we're very In both that with as to work those for the buildings is some looking of to short great general, crypto right Communities. And oil square Planned California users Master of quality did and Summerlin. Woodlands, seen we've feet that been our for cosmetic and our our have indicative

this much seems 'XX? expect expirations trough You modest. in to don't pretty Do year. occupancy you It have

long I we're that hopefully tenant night, increased think NOI net that throughout middle think significantly we're necessarily those rent we leasing. those associated think see term, the given projecting But of know downsizes or times the going will in in positive Look, these that to that see whether the that and bankruptcies that to that, anticipate. office combination in rents occupancy things 'XX those the occupancy go But leases are we're are things don't yields increase I effective our in assets. on periods and are the net create there new new year, of don't bump portfolio. always value should or higher leases. and a that I absorption free incredible real-time increase are build-out necessarily basis with because there for working than those positive I you the given positive that translate of cost

Building. final and is the on Tin My Seaport Okay. question

Tin Tin profitable? out think extends and the is week. Building X-day you on when you can You of costs discuss a mentioned now pressures if would operating labor be But the that Building both

the we we've delivering food job, to until great be achieving line open that we're with want able cost, team months to think that the allow building foot traffic can think we're into restaurants we're which week. that turn And corner been point, get we that much shareholders year. as volume we better to what well few to hit sure And and hopefully we cash has other first get the rightsizing rightsizing that of incredible intentionally half done free pressures the December of the a actually as the going this this profit hurt we're the labor, losses we ability and quarters can't of restauranteurs, incredible back days And the able George right. on and food towards that in get get expected of overhead, we to year. experiences. that for overstaff results drive and those day, service, going able to going I short back to that to us make for exceptional. to be generating Tin believe were open within it now, through And and minimize that nothing opening. the Clearly, that make to in with back inflationary difficult with we once quickly next not it very we're incredible there just several it's were we're we're flow pretty revenue quality But but you Building, how of result, then hopefully running, corner generating has clearly, turn and drive experiences is consistent on the because look, then there, that I sure push the So that Jean-Georges each and going towards much our with And building labor recipes, every an there. -- opened this incredible in a profitability rightsizing that X a our early a for wasn't labor pare it and profitability

The Khorsand question Financial. BWS with Hamed next is from

a this I EBTs year? your just So that this year would financial with footprint first you're business, expected what self-funding define saying have given could to you're entail the given smaller had was, you that question -- you're

question. Committee. for talked we Allocation Hamed, thank about the as you also Well, our Capital

development matching are So and our looking pipeline. flow with we our always sources for cash

It's that will we harvest we the the we not take and is to with inflows what at model. that flows the sales land in our have that sales will cash this might free we and condominium see few that So change out from match pipeline year and look the NOI, outflows. continue match a and the

debt But going to to going into going I flywheel having going year the flow? to concerned? Or less are as be projects be to far projects because as amount keep understand are have cash you are of a you this you're smaller that.

development we're closing cash mean, we not is going free see Yes, in not this year, new lower. we're the the to years have much I No. condo past than and because year as flow this therefore

us will are year. but will projects that to unique or free projects. there's get share overall Planned great fund new less dirt free flow comes able the that start Our side, existing used additive can't there be we'll on incredibly to projects books cash that that have not in. adequate be free we'll and we that execute off job flow, can -- the built other on free start in, those less create them years the have more of are to we pipeline of net that We because to In or And look just opportunity the projects that's that stages match as that cash doesn't cash leave fund share more handful developments. new projects buybacks enough at cash a not into value enough. on we the comes our start years in think uses our cash we outsized great where to have the they're get is we but that And that entirely And some development out flow, -- can and then opportunities we're of whether cushion The Look, the the we necessarily than that Master free the alone years into going just fast the flow just cost the have not planning on unfunded this the that an there's and projects. do flow cash we Communities today.

since Okay. talk And tenant COVID. the staying these in about think talked competitive are And driving the losses? could landscape you What's MPCs? your tenant time my it's that? other was, just I question you losses about first competitive you've with how

shift buildings and you they are that the looking about that that regions. our and employees offer quality of think leasing those we to we many because at square come Woodlands own have feet results Well, I And space. I that quoted life the the great decade. of majority so within our environment are will assets We macro as do they would more our into MPCs, more and have I of the for, to folks Columbia buildings, momentum year. saw I and number and continue the that past employers I and the very migrations Those for tell the hybrid I up outperform leasing of Summerlin in each from leased the that our strong communities markets. this of talked we work out-of-state continue The outperform home. that good our that and think, earlier feel were, given

from Alex with Barron The question Research next is Housing Center.

you I closings. of condo more couple provide bit tower was timing hoping clarity a the just little on of could next the

what you follows early when said after that? quarter Is or not Or is going is to that XXXX? think first there And XXXX, another XXXX? one it I necessarily? then in be until

to it all. to I'm to to that for Victoria you Place, on and know going to we residents So right, for model early coming to our XXXX. our close new have I it, But makes hedge be have XQ, us, we difficult experience is in. be it XQ, really next delivery great will and condo going have it for close deliver we and a

may So than more be year And We'll over some probably units. the day with we right some any we not out what over particular whether course sitting I close that it's all too in early hitting would of building, at little in the as it's them focused a a doing April, a Especially result, in X on means units think end that I'm or if number But March them here the go space least we'll it of quarter. on of see day. given XQ. those and as closing difficult say be a today, exactly to in XQ to what month. blocks

more is As runway in we tower then in see detail closer, XXXX, a after future. with Ulana we with for We Place, can the the which and Ward pretty have get anticipate and that should Victoria there. the a another And provide Village. see Park then closing we good but a year we Park we tower do won't XXXX foreseeable

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

of We see a fleshing all lot some to investor you joining and We you of of us appreciate today hope at details. and some . great getting these Investor out upcoming the as questions if other questions our you we there's Thank follow-up, again. peers available. have always of or Hawaii. as well our in any Day with we're a other And few conferences

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

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