Howard Hughes Q1 Earnings Call Highlights

Key Points

• Howard Hughes posted a strong Q1, with master planned community EBT up 33% to $84 million, driven by higher land sales in Bridgeland and Summerlin. Management said the company is “harvesting scarcity” by monetizing entitled land at attractive prices.
• The company is shifting investor focus away from quarterly earnings toward longer-term value, especially land holdings and future cash generation. It also removed annual guidance because of the pending Vantage acquisition.
• Liquidity and balance sheet strength remain key, with $1.8 billion in cash and recent refinancing adding liquidity and extending maturities. Management said current liquidity plus Pershing Square’s preferred commitment fully funds the Vantage deal and supports the development pipeline.

Howard Hughes NYSE: HHH reported what executives described as a strong first quarter of 2026, with management emphasizing higher land sales, continued operating asset growth and a shift in how the company wants investors to evaluate the business as it moves toward becoming a broader holding company anchored by real estate and insurance.

On the company’s earnings call, Chief Executive Officer David O’Reilly said first-quarter land sales and master planned community earnings before taxes were ahead of internal expectations. He added that, absent the pending acquisition of Vantage, the company would have raised its annual guidance for master planned community EBT. However, O’Reilly said Howard Hughes has removed annual guidance from its earnings release because of the pending Vantage transaction and will instead focus on longer-term objectives by platform.

“It was a strong start to 2026,” O’Reilly said. “The real estate engine did exactly what we needed to do. It grew cash, it provided pricing power, and it converted more land into long-duration income.”

Master planned communities drive first-quarter results

O’Reilly said master planned community EBT was $84 million in the first quarter, up 33% from the year-earlier period, driven by higher residential land sales.

In Bridgeland, the company closed 62 acres at an average price of $688,000 per acre, compared with 37 acres at $605,000 per acre last year. Net new home sales in Bridgeland rose 12%. In Summerlin, custom lots averaged $7.2 million per acre, while super pads averaged $1.8 million per acre. New home sales in Summerlin increased 6%.

O’Reilly said the results reflected the company’s ability to convert scarce, entitled and developer-ready land into cash at attractive prices in markets where it effectively controls supply.

“We’re not selling land. We’re harvesting scarcity,” O’Reilly said.

Executive Chairman Bill Ackman said the company is changing the metrics it highlights because traditional quarterly earnings multiples do not appropriately capture the value of Howard Hughes’ land holdings. He said the company wants investors to focus on cash generated from land sales and the value of the remaining land, rather than applying a multiple to one quarter’s land-sale profit.

Ackman said the company will provide a residual value of remaining acreage that is undiscounted and uninflated, using current achieved land values. He characterized that approach as conservative, arguing that land values in the company’s communities have historically appreciated at rates above the discount rate he would apply.

Operating assets and condos remain key cash-flow components

O’Reilly said Operating Asset net operating income grew 2% year over year and 7% on a trailing 12-month same-store basis. Multifamily and office were the main drivers of same-store growth, supported by leasing activity and the expiration of rent abatements.

The company also introduced adjusted maintenance-free cash flow, which O’Reilly said is intended to provide a clearer view of recurring property-level cash flow available for redeployment.

At Ward Village, Howard Hughes completed Ulana and broke ground on The Launiu, which O’Reilly said is already 70% presold. Across the platform, the company has about $5 billion of estimated future GAAP revenue at sellout. Condo gross profit was roughly breakeven in the first quarter, as expected, and O’Reilly said it should increase meaningfully in the second quarter with closings at The Park Ward Village.

O’Reilly noted that condo profit recognition will remain “lumpy” because it is recorded in large blocks when towers deliver, even though project economics are often largely locked in through presales. He described the condo business as a “self-financing capital recycling tool,” with buyer deposits and non-recourse construction loans funding much of the development cost.

Balance sheet and Vantage acquisition remain central themes

Howard Hughes ended the quarter with $1.8 billion of cash, consisting of $907 million at the HHH level and $929 million at the HHC level, O’Reilly said. During the quarter, the company completed a $1 billion refinancing at what he called the tightest credit spreads in its history, extending maturities and adding $230 million of incremental liquidity. It also closed a $300 million mortgage at Downtown Summerlin.

O’Reilly said the company’s liquidity, together with Pershing Square’s preferred commitment, fully funds the Vantage acquisition and supports the current development pipeline.

Chief Investment Officer Ryan Israel said management estimates Howard Hughes’ current intrinsic value at about $104 per share, compared with a share price of roughly $65 at the time of the presentation. He said nearly 80% of that estimated value comes from the Howard Hughes Communities real estate business, with about 20% tied to the company’s expected economic ownership of Vantage.

Israel said management believes intrinsic value could grow to about $211 per share by 2030. He said the company expects to generate $2.5 billion to $3 billion of cash over the next five years that could be allocated to higher-return opportunities, particularly insurance.

Ackman said the company intends to reinvest excess cash into businesses other than real estate, while still funding assets needed to support the quality and growth of its communities.

New board member adds insurance expertise

The call also introduced Marc Grandisson, who joined the Howard Hughes board the day before the call. Ackman said Grandisson, the former CEO of Arch Capital Group, brings significant insurance operating experience as the company prepares to acquire Vantage.

Grandisson said he was joining to help the board understand and oversee the insurance business, describing underwriting discipline, capital allocation and talent as essential to long-term performance.

“I’m very happy that we got to this landing and really looking forward to help the whole team develop your collective vision of running a diversified platform with insurance being an anchor,” Grandisson said.

Q&A focuses on Pershing Square, real estate strategy and Phoenix land

During the question-and-answer session, JPMorgan analyst Anthony Paolone asked whether recent Pershing Square capital market activity had direct implications for Howard Hughes. Ackman said Pershing Square views Howard Hughes as part of its permanent capital platform and intends to be a “forever owner,” but noted Pershing Square is contractually limited to owning 47% of Howard Hughes shares.

Paolone also asked whether the growing importance of insurance could lead Howard Hughes to sell real estate assets such as multifamily properties. Ackman said the company will continue to build assets needed to make its communities attractive, but may examine whether some non-core stabilized assets are better owned by others.

Piper Sandler analyst Alexander Goldfarb asked whether anything could delay the Vantage transaction. Ackman said the deal is expected to close in the second quarter, with a Delaware regulatory hearing scheduled for May 19.

Goldfarb also asked about the potential for data centers or power generation on the company’s West Phoenix land. Ackman said Howard Hughes has an “extremely open mind” about West Phoenix and described the asset as potentially well suited to large-scale technology-related development because of its scale and access to power and water.

BMO Capital Markets analyst John Kim asked whether the new land and condo valuation metrics could incentivize management to hold back sales to maximize price. O’Reilly said the company’s approach is to sell enough land to match homebuilder demand without oversupplying builders or constraining affordability.

“We’re not selling assets to maximize any metric,” O’Reilly said. “We’re selling assets to maximize the value of the company.”

Ackman closed the call by saying Howard Hughes is undergoing an important transition that management believes will create more shareholder value over time, supported by its real estate cash generation, the pending Vantage acquisition and Grandisson’s addition to the board.

About Howard Hughes NYSE: HHH

Howard Hughes Holdings Inc, together with its subsidiaries, operates as a real estate development company in the United States. It operates in four segments: Operating Assets; Master Planned Communities (MPCs); Seaport; and Strategic Developments. The Operating Assets segment consists of developed or acquired retail, office, and multi-family properties along with other retail investments. Its MPCs segment develops, sells, and leases residential and commercial land designated for long-term community development projects in and around Las Vegas, Nevada; Houston, Texas; and Phoenix, Arizona.

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