EX-99.1 2 hhc_ex99-1.htm EX-99.1 hhc_Ex99-1

 

Exhibit 99.1

Picture 1

PRESS RELEASE

 

Contact Information:

David R. O’Reilly

Chief Financial Officer

(214) 741-7744

David.OReilly@howardhughes.com 

 

 

THE HOWARD HUGHES CORPORATION® REPORTS THIRD QUARTER 2016 RESULTS

 

Dallas, TX, November 8, 2016 – The Howard Hughes Corporation (NYSE: HHC) (the “Company”) announced operating results for the third quarter ended September 30, 2016. The attached financial statements, exhibits and reconciliations of non-GAAP measures provide the details of these results.

 

Third Quarter Highlights:

·

Net income attributable to common stockholders was $8.0 million or $0.19 per diluted common share.

·

Adjusted net income was $47.2 million, an increase of $18.7 million compared to the third quarter of 2015.

·

Furthered the revitalization of the Seaport District by obtaining approval for the Pier 17 and Tin Building Minor Modification, announcing that iconic Italian fashion store 10 Corso Como will open its only North American location in the district and welcoming iPic Theaters as the first anchor to open as part of the redevelopment.

·

Commenced construction of Two Merriweather, a 130,000 square-foot, Class A mixed-use office building in Downtown Columbia after successfully pre-leasing 75.0% of the office space.

·

Continued sales momentum at Ward Village with 35 new condominium contracts executed since the end of the second quarter, representing over 11.1% of the remaining inventory under construction as of June 30, 2016. Began construction of Ke Kilohana.

·

Strong third quarter MPC performance driven by Bridgeland with 12.2 acres of residential land sales, an increase of 110.3% compared to the same period in 2015, and by The Summit, our joint venture with Discovery Land in Summerlin, which contracted 21 custom lots for approximately $94.3 million in land sales during the third quarter 2016.

·

Successfully completed a $238.7 million refinancing at Ward Village, extending the initial maturity to September 12, 2021 and at Two Merriweather,  obtaining a $33.2 million non-recourse construction loan maturing on October 7, 2020.

·

Announced the appointment of David R. O’Reilly to the position of Chief Financial Officer effective October 17, 2016.

 

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“We had a solid third quarter as we continued to increase cash flow across the portfolio and make progress in delivering value at our strategic developments while strengthening our MPCs. In Las Vegas, by bringing the NHL practice facility to Downtown Summerlin, we continue to further distinguish the community as the premier place to live in the region while also increasing visitors to our downtown,” said David R. Weinreb, Chief Executive Officer. “I am particularly pleased at the progress we have made towards the revitalization of the Seaport District. During the quarter, we announced that iconic Italian fashion store 10 Corso Como will be coming to the Seaport as our retail anchor, opened iPic Theaters as our first cornerstone tenant and received approval to move and reconstruct the Tin Building as part of the Minor Modification.”

 

“We continue to advance our plans at Ward Village where Waiea, our first residential tower, is nearing completion. We expect to start closing on condominium unit sales and welcoming new homeowners within the next couple of weeks. In addition, we celebrated the topping out of Anaha, our second building, which is on schedule for completion by mid-summer 2017. It is gratifying to see our vision for this vibrant community beginning to take shape.”

 

Third Quarter Financial Results

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended September 30, 

 

Nine Months Ended September 30, 

(In thousands, except per share amounts)

    

2016

    

2015

    

2016

    

2015

Net income attributable to common stockholders

 

$
7,973

 

$
156,224

 

$
158,708

 

$
100,838

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic income per share:

 

$
0.20

 

$
3.96

 

$
4.02

 

$
2.55

 

 

 

 

 

 

 

 

 

 

 

 

 

Diluted income per share:

 

$
0.19

 

$
0.76

 

$
3.72

 

$
1.01

 

 

 

 

 

 

 

 

 

 

 

 

 

Adjusted net income

 

$
47,242

 

$
28,509

 

$
260,231

 

$
85,892

 

 

 

 

 

 

 

 

 

 

 

 

 

Adjusted income per diluted share:

 

$
1.10

 

$
0.66

 

$
6.09

 

$
2.00

 

As we complete and place our developments into service, non-cash depreciation and amortization expense associated with these cash-generative commercial real estate properties is a material component of our net income. Adjusted net income is a non-GAAP measure that excludes depreciation and amortization expense, provision for impairment, non-cash warrant liability gains and losses, gain on acquisition of our joint venture partner’s interest and gains or losses on sales of operating properties. For additional information, please see the reconciliation of Adjusted Net Income to Net Income (loss) attributable to common stockholders in the Supplemental Information contained on page 11 of this earnings release.

 

Business Segment Operating Results

 

Operating Assets Segment Highlights

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended September 30, 

 

Nine Months Ended September 30, 

(In thousands)

    

2016

    

2015

    

2016

    

2015

Retail, Office, Multi-family and Hospitality NOI (a)

 

$
30,694

 

$
31,905

 

$
98,341

 

$
87,498

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating Assets REP EBT

 

 
(34,316)

 

 
(1,198)

 

 
(24,893)

 

 
(7,332)

 

 

 

 

 

 

 

 

 

 

 

 

 

Adjusted Operating Assets REP EBT

 

$
24,116

 

$
24,903

 

$
80,919

 

$
67,045

(a)

Includes our share of NOI from our non-consolidated equity method ventures (our “income-producing Operating Assets”).  These amounts exclude NOI from properties that are substantially closed for redevelopment and properties sold during the periods.

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Net operating income (“NOI”) from our income-producing Operating Assets is presented in our Supplemental Information to this earnings release. For a reconciliation of Operating Assets NOI to Operating Assets real estate property earnings before taxes (“REP EBT”), Operating Assets REP EBT to GAAP-basis net income (loss) and Adjusted Net Income to Net Income, please refer to the Supplemental Information contained in this earnings release.

 

We calculate Adjusted Operating Assets REP EBT, which excludes depreciation and amortization and development-related demolition, marketing costs and provision for impairment, as they do not represent operating costs for stabilized real estate properties.

 

Operating assets REP EBT decreased $33.1 million to $(34.3) million, compared to $(1.2) million for the third quarter 2015. During the third quarter 2016, we implemented a plan to sell Park West, a 249,177 square foot open-air shopping, dining and entertainment destination in Peoria, Arizona that is one of our non-core operating assets. A sale will allow us to redeploy the net cash proceeds from this unleveraged property into our core six assets. As a result, we incurred a $35.7 million provision for impairment on this property.

 

The decrease in NOI from income-producing Operating Assets in the third quarter 2016 compared to the third quarter 2015 is primarily driven by headwinds in the Houston economy that have negatively impacted occupancy and conference business at The Woodlands Resort & Conference Center and our two recently opened hotels in The Woodlands. The increase in NOI from income-producing Operating Assets in the nine months ended September 30, 2016 compared to the same period in the prior year is primarily due to Downtown Summerlin and the openings of one Summerlin office and two multi-family properties in 2015.

 

On July 20, 2016, we purchased our joint venture partner’s 18.57% interest in Millennium Six Pines Apartments (formerly known as Millennium Woodlands Phase II) for $4.0 million which resulted in a gain of $27.1 million relating to the step-up to fair value of the assets acquired. 

 

On September 26, 2016, we announced the signing of a 20-year ground lease for a to-be-built practice facility in Downtown Summerlin® for the newly awarded NHL franchise in Las Vegas. The two-rink practice facility will be built on a 4.6-acre parcel located in Downtown Summerlin. Groundbreaking on the new facility took place last month with an expected completion date of August 2017.

 

On September 8, 2016, we announced that iconic Italian fashion retailer 10 Corso Como will be coming to the Seaport District. Founded in Milan in 1991 by style visionary and former fashion editor Carla Sozzani, 10 Corso Como pioneered a new retail model as the world’s original concept store. 10 Corso Como New York will be located in the historic area of the Seaport District and contain approximately 13,000 square feet that will be designed by American artist Kris Ruhs. The New York store will be 10 Corso Como’s only U.S. location and is consistent with the other offerings curated to date that will include culinary experiences from renowned restaurateurs Jean-Georges Vongerichten and the Momofuku Group led by David Chang, iPic Theaters, McNally Jackson Books and the new Pier 17® highlighted by its 1.5-acre rooftop, overlooking the East River of Manhattan that will be programmed as a year-round destination, home to a seasonal summer concert series as well as a winter village and a cultural entertainment gathering for all New Yorkers and visitors. On October 13, 2016, iPic Theaters, the nation's ultimate movie going experience, opened as the first anchor in the revitalized Seaport District in their first New York location. The new iPic is Manhattan’s first new commercial multiplex movie theater opened in over a decade.

 

On October 19, 2016, we received approval for the Seaport District’s Pier 17 Minor Modification of the 2013 Uniform Land Use Review Procedure (“ULURP”) Approval which grants approval for the reconstruction of the

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Tin Building, the demolition of the Link Building and head house structure for the Pier 17 building, installation of the same façade treatment on the western elevation that was previously approved for the new Pier 17 Building, and the installation of a reconfigured service access drive.

 

Master Planned Communities Segment Highlights

 

Generally MPC revenues fluctuate during the year; therefore, a better measurement of performance is the full year impact instead of quarterly results.

 

A Summary of our MPC segment is shown below. For additional detail, please refer to pages 12 and 13 of this release.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Summary of MPC Land Sales Closed in the Three Months Ended September 30,

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Land Sales

 

Acres Sold

 

Price per acre

($ In thousands)

  

2016

  

2015

  

2016

  

2015

  

2016

  

2015

Bridgeland

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Residential

 

$
4,687

 

$
2,273

 
12.2

 
5.8

 

$
384

 

$
392

Commercial

 

 

 —

 

 
20,475

 

 —

 
160.2

 

 

 —

 

 
128

Total

 

 
4,687

 

 
22,748

 
12.2

 
166.0

 

 
384

 

 
137

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Summerlin

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Residential

 

 
16,525

 

 
19,334

 
31.7

 
36.9

 

 
521

 

 
524

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

The Woodlands

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Residential

 

 
10,581

 

 
10,481

 
19.9

 
14.2

 

 
532

 

 
738

Commercial

 

 

 —

 

 
6,837

 

 —

 
3.3

 

 

 —

 

 
2,072

Total

 

 
10,581

 

 
17,318

 
19.9

 
17.5

 

 
532

 

 
990

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total land sales closed in period

 

$
31,793

 

$
59,400

 
63.8

 
220.4

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Summary of MPC Land Sales Closed in the Nine Months Ended September 30,

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Land Sales

 

Acres Sold

 

Price per acre

($ In thousands)

  

2016

  

2015

  

2016

  

2015

 

2016

 

2015

Bridgeland

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Residential

 

$
13,557

 

$
8,346

 
36.2

 
21.3

 

$
375

 

$
392

Commercial

 

 

 —

 

 
20,475

 

 —

 
160.2

 

 

 —

 

 
128

Total

 

 
13,557

 

 
28,821

 
36.2

 
181.5

 

 
375

 

 
159

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Summerlin

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Residential

 

 
86,157

 

 
85,334

 
203.5

 
137.4

 

 
423

 

 
621

Commercial

 

 
348

 

 
3,136

 
10.0

 
3.6

 

 
35

 

 
871

Total

 

 
86,505

 

 
88,470

 
213.5

 
141.0

 

 
405

 

 
627

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

The Woodlands

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Residential

 

 
14,431

 

 
24,748

 
26.3

 
37.0

 

 
549

 

 
669

Commercial

 

 
10,405

 

 
8,891

 
4.3

 
9.2

 

 
2,420

 

 
966

Total

 

 
24,836

 

 
33,639

 
30.6

 
46.2

 

 
812

 

 
728

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total land sales closed in period

 

$
124,898

 

$
150,930

 
280.3

 
368.7

 

 

 

 

 

 

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Land sales closed in our MPC segment for the three months ended September 30, 2016 decreased $27.6 million or 46.5% to $31.8 million, compared to $59.4 million for the same period in 2015 primarily due to a $20.5 million commercial land sale at Bridgeland in 2015. Land sales revenue of $44.1 million recognized for three months ended September 30, 2016 included $10.2 million in revenue from closings in prior periods that was previously deferred and that met criteria for recognition in the current quarter. Land sales closed in our MPC segment for the nine months ended September 30, 2016 decreased $26.0 million or 17.2% to $124.9 million compared to $150.9 million for the same period in 2015. Land sales revenue of $147.2 million recognized for nine months ended September 30, 2016 included $16.4 million in revenue from closings in prior periods which was previously deferred and that met criteria for recognition in the current year.

 

Bridgeland’s residential land sales for the three and nine months ended September 30, 2016 were substantially higher compared to the same periods in 2015 due to increased demand from homebuilders, offset by a $20.5 million decrease in commercial land sales from 2015. For the nine months ended September 30, 2016, residential land sales at Bridgeland are 62.4% higher than the same period in the prior year, and we believe this trend will continue through the end of the year. While the broader Houston market remains impacted by moderated oil prices, particularly affecting the sales of higher priced homes, the Bridgeland submarket has shown improvement in the mid-range of the residential market. In October, Bridgeland reached a significant milestone and celebrated its 10th year anniversary.

 

Summerlin’s land sales for the three months ended September 30, 2016 were lower compared to the same period in 2015 due to the sale of one superpad in the third quarter 2016 compared to two superpads in the third quarter 2015. However, residential land sales in Summerlin for the nine months ended September 30, 2016 increased slightly to $86.2 million, compared to $85.3 million for the same period in 2015. The average price per superpad acre for the nine months ended September 30, 2016 of $408,000 is not comparable to the average price per acre of $544,000 for the same period in 2015 due to a $40.0 million bulk sale to a homebuilder for a large parcel in the first quarter 2016. This sale was unique as the homebuilder will be responsible for installing power and drainage facilities to the village, and unlike a typical sale, Summerlin is not obligated to incur any development costs within the boundaries of the parcel. Gross margin increased for the nine months ended September 30, 2016 compared to 2015 due to this sale of undeveloped land for which we incurred much lower development costs. In addition, as part of the transaction we negotiated a favorable adjustment to the builder price participation on the land we sold to the same homebuilder in 2006.

 

Land development began at The Summit, our joint venture with Discovery Land in our Summerlin MPC, in the second quarter 2015 and continues to progress on schedule based upon the initial plan. For the three months ended September 30, 2016, 38 custom residential lots had closed resulting in the recognition of $13.7 million Equity in earnings in Real Estate and Other Affiliates. As of September 30, 2016, contracted sales since inception are $204.6 of which $119.8 million had closed.

 

The Woodlands decrease in total land sales for the three months ended September 30, 2016 compared to the same period in 2015 is primarily due to a 3.3-acre medical office building land sale in the third quarter 2015 for $6.8 million. The $8.8 million decrease in total land sales for the nine months ended September 30, 2016 compared to the same period in 2015 is due to reduced residential sales of $10.3 million due to fewer closings, offset by a $1.5 million increase in commercial land sales. The reduced sales pace is due primarily to the downturn in the Houston economy resulting from moderated oil prices and the disproportionate impact this has had on the upper end of the housing market. Also contributing to the reduced price per acre and slower lot sales pace is the build-up of homebuilder vacant lot inventory levels.

 

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Strategic Developments Segment Highlights

 

We have condominiums for sale in Ward Village across five condominium projects, four of which are under construction: Waiea, Anaha, Ae‘o and Ke Kilohana. These four projects have a total unit count of 1,381, of which 1,101 were under contract as of September 30, 2016, including 35 units placed under contract in the third quarter, reducing the total number of unsold units under construction to 280.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Ward Village Towers Under Construction as of September 30, 2016

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

($ in millions)

    

Total Units

    

Under Contract

    

Percent of Units Sold

    

Total Projected Costs

    

Costs Incurred to Date

 

Estimated
Completion
Date

Waiea

 

 
174

 

 
160

 

 
92.0%

 

$
403.4

 

$
346.3

 

Q4 2016

Anaha

 

 
317

 

 
297

 

 
93.7%

 

 
401.3

 

 
207.8

 

2017

Ae'o

 

 
466

 

 
257

 

 
55.2%

 

 
428.5

(a)

 
53.8

 

2018

Ke Kilohana

 

 
424

 

 
387

 

 
91.3%

 

 
218.9

 

 
11.1

 

2019

Total under construction

 

 
1,381

 

 
1,101

 

 
79.7%

 

$
1,452.1

 

$
619.0

 

 

(a)

Also includes project costs for our flagship Whole Foods Market located on the same block.

 

The increase in condominium rights and unit sales for the three and nine months ended September 30, 2016 as compared to the same periods in 2015 is primarily related to revenue recognition at our Anaha condominium project for which we began recognizing revenue in the second quarter 2015. As condominium projects advance towards completion, revenue is recognized on qualifying sales contracts under the percentage of completion method of accounting. All development cost estimates presented herein are exclusive of land costs.

 

On August 17, 2016, along with our joint-venture partner, we announced the launch of a 130-acre, mixed-use development at Circle T Ranch, a scenic, 2,500-acre, master planned community in Westlake, Texas, that is located within the 18,000-acre AllianceTexas development. The development, which is situated at the junction of SH 114 and SH 170, will include more than two million square feet of mixed-use office, retail and entertainment space and will be anchored by the recently announced 500,000-square-foot corporate campus for the Charles Schwab Corporation, one of the nation’s largest financial service providers.

 

We began construction of Two Merriweather, a Class A mixed-use office building, in the third quarter 2016. Two Merriweather will consist of 100,000 square feet of office and 30,000 square feet of retail space. Total estimated development costs are approximately $41 million. As of September 30, 2016, we have incurred $3.3 million of development costs. As of October 20, 2016, 57.7% of the total project and 75.0% of the office space is pre-leased.

 

For a more complete description of the status of our developments, please refer to “Item 2 - Management’s Discussion and Analysis of Financial Condition and Results of Operations” beginning on page 33 of our Form 10-Q for the three and nine months ended September 30, 2016.

 

Balance Sheet and Other Quarterly Activity

Simultaneously with the buyout of our partner’s interest in Millennium Six Pines Apartments (formerly known as Millennium Woodlands Phase II) on July 20, 2016, we secured a new $42.5 million fixed rate loan at 3.39% maturing August 1, 2028. This new loan replaced the joint venture’s existing $37.7 million loan and funded the purchase of our partner’s interest.

 

On September 29, 2016, we completed a $238.7 million refinancing of the debt maturing September 29, 2016 for Ward Village®. The new non-recourse term loan bears interest at one-month LIBOR plus 2.50% and has an initial maturity of September 12, 2021 with two, one-year extension options. We swapped $119.4

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million of the loan to a fixed rate of 3.64% through its initial maturity date, representing an all-in interest rate of approximately 3.33% based on the current one-month LIBOR rate. The financing is secured by the existing Ward Village commercial properties, excluding condominium towers currently under development, and allows for the future release of collateral to develop additional residential condominium towers and retail properties across the master planned community.

 

In connection with starting construction of Two Merriweather, on October 7, 2016 we closed on a $33.2 million non-recourse construction loan for this project, bearing interest at one-month LIBOR plus 2.50% with an initial maturity date of October 7, 2020 and a one-year extension option.

 

*Non-recourse debt means that the debt is non-recourse to The Howard Hughes Corporation but is collateralized by a real estate asset and/or is recourse to the subsidiary entity owning such asset.

 

About The Howard Hughes Corporation®

The Howard Hughes Corporation owns, manages and develops commercial, residential and mixed-use real estate throughout the U.S. Our properties include master planned communities, operating properties, development opportunities and other unique assets spanning 16 states from New York to Hawai‘i. The Howard Hughes Corporation is traded on the New York Stock Exchange under HHC with major offices in New York, Columbia, MD, Dallas, Houston, Las Vegas and Honolulu. For additional information about HHC, visit www.howardhughes.com or find us on Facebook,  Twitter,  Instagram, and LinkedIn.  

                  

Safe Harbor Statement

Statements made in this press release that are not historical facts, including statements accompanied by words such as “will,” “believe,” “expect,” “enables,” “realize”, “plan,” “intend,” “assume,” “transform” and other words of similar expression, are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These statements are based on management’s expectations, estimates, assumptions, and projections as of the date of this release and are not guarantees of future performance. Actual results may differ materially from those expressed or implied in these statements. Factors that could cause actual results to differ materially are set forth as risk factors in The Howard Hughes Corporation’s filings with the Securities and Exchange Commission, including its Quarterly and Annual Reports. The Howard Hughes Corporation cautions you not to place undue reliance on the forward-looking statements contained in this release. The Howard Hughes Corporation does not undertake any obligation to publicly update or revise any forward-looking statements to reflect future events, information or circumstances that arise after the date of this release.

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THE HOWARD HUGHES CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

UNAUDITED

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended September 30, 

 

Nine Months Ended September 30, 

 

(In thousands, except per share amounts)

    

2016

    

2015

    

2016

    

2015

 

Revenues:

 

 

 

 

 

 

 

 

 

 

 

 

 

Condominium rights and unit sales

 

$
115,407

 

$
78,992

 

$
362,613

 

$
200,362

 

Master Planned Community land sales

 

 
44,128

 

 
45,423

 

 
147,168

 

 
138,937

 

Minimum rents

 

 
44,910

 

 
37,814

 

 
128,255

 

 
109,997

 

Builder price participation

 

 
4,483

 

 
6,680

 

 
15,631

 

 
20,285

 

Tenant recoveries

 

 
11,657

 

 
10,706

 

 
33,108

 

 
31,074

 

Hospitality revenues

 

 
14,088

 

 
11,772

 

 
46,126

 

 
35,256

 

Other land revenues

 

 
2,595

 

 
4,617

 

 
8,387

 

 
11,055

 

Other rental and property revenues

 

 
3,538

 

 
7,438

 

 
11,335

 

 
20,729

 

Total revenues

 

 
240,806

 

 
203,442

 

 
752,623

 

 
567,695

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Expenses and other income:

 

 

 

 

 

 

 

 

 

 

 

 

 

Condominium rights and unit cost of sales

 

 
83,218

 

 
47,573

 

 
237,759

 

 
126,747

 

Master Planned Community cost of sales

 

 
21,432

 

 
19,674

 

 
66,128

 

 
67,806

 

Master Planned Community operations

 

 
9,216

 

 
10,349

 

 
26,616

 

 
32,295

 

Other property operating costs

 

 
16,535

 

 
16,680

 

 
47,513

 

 
54,459

 

Rental property real estate taxes

 

 
7,033

 

 
6,908

 

 
21,110

 

 
19,676

 

Rental property maintenance costs

 

 
3,332

 

 
3,094

 

 
9,217

 

 
8,738

 

Hospitality expenses

 

 
12,662

 

 
8,767

 

 
37,379

 

 
26,738

 

Provision for doubtful accounts

 

 
1,940

 

 
1,007

 

 
4,629

 

 
3,082

 

Demolition costs

 

 
256

 

 
1,024

 

 
1,218

 

 
2,637

 

Development-related marketing costs

 

 
4,716

 

 
7,639

 

 
15,586

 

 
19,476

 

General and administrative

 

 
21,128

 

 
18,526

 

 
61,505

 

 
57,095

 

Other income, net

 

 
(432)

 

 
659

 

 
(9,858)

 

 
(1,204)

 

Gain on sale of 80 South Street Assemblage

 

 
(70)

 

 

 —

 

 
(140,549)

 

 

 —

 

Depreciation and amortization

 

 
23,322

 

 
24,998

 

 
71,246

 

 
71,577

 

Provision for impairment

 

 
35,734

 

 

 —

 

 
35,734

 

 

 —

 

Total expenses, net of other income

 

 
240,022

 

 
166,898

 

 
485,233

 

 
489,122

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating income

 

 
784

 

 
36,544

 

 
267,390

 

 
78,573

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest income

 

 
196

 

 
109

 

 
900

 

 
516

 

Interest expense

 

 
(16,102)

 

 
(15,212)

 

 
(48,628)

 

 
(43,143)

 

Warrant liability (loss) gain

 

 
(7,300)

 

 
123,640

 

 
(21,630)

 

 
57,450

 

Gain on acquisition of joint venture partner’s interest

 

 
27,087

 

 

 —

 

 
27,087

 

 

 —

 

Gain on sale of The Club at Carlton Woods

 

 

-

 

 
29,073

 

 

 -

 

 
29,073

 

Equity in earnings from Real Estate and Other Affiliates

 

 
13,493

 

 
295

 

 
35,700

 

 
3,164

 

Income before taxes

 

 
18,158

 

 
174,449

 

 
260,819

 

 
125,633

 

Provision for income taxes

 

 
10,162

 

 
18,237

 

 
102,088

 

 
24,795

 

Net income

 

 
7,996

 

 
156,212

 

 
158,731

 

 
100,838

 

Net (income) loss attributable to noncontrolling interests

 

 
(23)

 

 
12

 

 
(23)

 

 

 —

 

Net income attributable to common stockholders

 

$
7,973

 

$
156,224

 

$
158,708

 

$
100,838

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic income per share:

 

$
0.20

 

$
3.96

 

$
4.02

 

$
2.55

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Diluted income per share:

 

$
0.19

 

$
0.76

 

$
3.72

 

$
1.01

 

 

8

 

 

THE HOWARD HUGHES CORPORATION

CONDENSED CONSOLIDATED BALANCE SHEETS

UNAUDITED

 

 

 

 

 

 

 

 

 

 

September 30, 

 

December 31, 

(In thousands, except share amounts)

 

2016

    

2015

Assets:

 

 

 

 

 

 

Investment in real estate:

 

 

 

 

 

 

Master Planned Community assets

 

$
1,660,523

 

$
1,642,842

Land

 

 
314,400

 

 
322,462

Buildings and equipment

 

 
1,900,172

 

 
1,772,401

Less: accumulated depreciation

 

 
(242,034)

 

 
(232,969)

Developments

 

 
976,209

 

 
1,036,927

Net property and equipment

 

 
4,609,270

 

 
4,541,663

Investment in Real Estate and Other Affiliates

 

 
78,890

 

 
57,811

Net investment in real estate

 

 
4,688,160

 

 
4,599,474

Cash and cash equivalents

 

 
653,041

 

 
445,301

Accounts receivable, net 

 

 
38,241

 

 
32,203

Municipal Utility District receivables, net

 

 
171,691

 

 
139,946

Notes receivable, net

 

 
69

 

 
1,664

Deferred expenses, net

 

 
64,053

 

 
61,804

Prepaid expenses and other assets, net

 

 
820,240

 

 
441,190

Property held for sale

 

 
34,888

 

 

 —

Total assets

 

$
6,470,383

 

$
5,721,582

 

 

 

 

 

 

 

Liabilities:

 

 

 

 

 

 

Mortgages, notes and loans payable

 

$
2,847,002

 

$
2,443,962

Deferred tax liabilities

 

 
156,882

 

 
89,221

Warrant liabilities

 

 
329,390

 

 
307,760

Uncertain tax position liability

 

 
19,987

 

 
1,396

Accounts payable and accrued expenses

 

 
603,237

 

 
515,354

Total liabilities

 

 
3,956,498

 

 
3,357,693

 

 

 

 

 

 

 

Equity:

 

 

 

 

 

 

Preferred stock: $.01 par value; 50,000,000 shares authorized, none issued

 

 

 —

 

 

 —

Common stock: $.01 par value; 150,000,000 shares authorized, 39,851,036 shares issued and 39,838,975 outstanding as of September 30, 2016 and 39,714,838 shares issued and outstanding as of December 31, 2015

 

 
398

 

 
398

Additional paid-in capital

 

 
2,856,335

 

 
2,847,823

Accumulated deficit

 

 
(321,507)

 

 
(480,215)

Accumulated other comprehensive loss

 

 
(23,818)

 

 
(7,889)

Treasury stock, at cost, 12,061 shares as of September 30, 2016 and 0 shares as of December 31, 2015

 

 
(1,295)

 

 

 —

Total stockholders' equity

 

 
2,510,113

 

 
2,360,117

Noncontrolling interests

 

 
3,772

 

 
3,772

Total equity

 

 
2,513,885

 

 
2,363,889

Total liabilities and equity

 

$
6,470,383

 

$
5,721,582

 

 

9

 

 

Supplemental Information

 

September 30, 2016

 

As our three segments, Master Planned Communities, Operating Assets and Strategic Developments, are managed separately, we use different operating measures to assess operating results and allocate resources among these three segments. The one common operating measure used to assess operating results for our business segments is real estate property earnings before taxes (“REP EBT”). REP EBT, as it relates to our business, is defined as net income (loss) excluding general and administrative expenses, corporate other income, corporate interest income, and corporate interest and depreciation expense, provision for income taxes, warrant liability gain (loss), gains or losses on sales of operating properties, and gain on acquisition of joint venture partner interest. We present REP EBT because we use this measure, among others, internally to assess the core operating performance of our assets. However, REP EBT should not be considered as an alternative to GAAP net income (loss).

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Reconciliation of REP EBT to GAAP income (loss) before taxes

 

Three Months Ended September 30, 

 

Nine Months Ended September 30, 

(In thousands)

    

2016

    

2015

    

2016

    

2015

REP EBT

 

$
34,498

 

$
55,190

 

$
354,521

 

$
139,178

General and administrative

 

 
(21,128)

 

 
(18,526)

 

 
(61,505)

 

 
(57,095)

Corporate interest expense, net

 

 
(13,263)

 

 
(13,262)

 

 
(39,358)

 

 
(39,709)

Warrant liability (loss) gain

 

 
(7,300)

 

 
123,640

 

 
(21,630)

 

 
57,450

Corporate other income expense, net

 

 
123

 

 
(222)

 

 
6,190

 

 
1,304

Gain on sale of The Club at Carlton Woods

 

 

 —

 

 
29,073

 

 

 —

 

 
29,073

Gain on acquisition of joint venture partner's interest

 

 
27,087

 

 

 —

 

 
27,087

 

 

 —

Corporate depreciation and amortization

 

 
(1,859)

 

 
(1,444)

 

 
(4,486)

 

 
(4,568)

Income before taxes

 

$
18,158

 

$
174,449

 

$
260,819

 

$
125,633

We also adjust GAAP net income (loss) for non-cash warrant liability gains and losses and depreciation and amortization. The presentation of Adjusted net income is consistent with other companies in the real estate business who also typically report an earnings measure that excludes depreciation and amortization and other non-operating related items.

 

 

 

 

 

 

 

 

 

 

 

 

 

Reconciliation of Adjusted net income  to Net income

 

Three Months Ended September 30, 

 

Nine Months Ended September 30, 

(loss) attributable to common stockholders

 

2016

 

2015

 

2016

 

2015

(In thousands)

 

 

 

 

 

 

 

 

 

 

 

 

Adjusted Net Income

 

$
47,242

 

$
28,509

 

$
260,231

 

$
85,892

Depreciation and amortization

 

 
(23,322)

 

 
(24,998)

 

 
(71,246)

 

 
(71,577)

Provision for impairment

 

 
(35,734)

 

 

 -

 

 
(35,734)

 

 

 -

Warrant liability (loss) gain

 

 
(7,300)

 

 
123,640

 

 
(21,630)

 

 
57,450

Gain on acquisition of joint venture partner's interest

 

 
27,087

 

 

 -

 

 
27,087

 

 

 -

Gain on sale of The Club at Carlton Woods

 

 

 -

 

 
29,073

 

 

 -

 

 
29,073

Net income attributable to common stockholders

 

$
7,973

 

$
156,224

 

$
158,708

 

$
100,838

10

 

 

When a development property is placed in service, depreciation is calculated for the property ratably over the estimated useful lives of each of its components; however, most of our recently developed properties do not reach stabilization for 12 to 36 months after being placed in service due to the timing of tenants taking occupancy and subsequent leasing of remaining unoccupied space during that period. As a result, operating income, earnings before taxes (EBT) and net income will not reflect the ongoing earnings potential of newly placed in service operating assets during this transition period to stabilization. Accordingly, we calculate Adjusted Operating Assets REP EBT, which excludes depreciation and amortization and development-related demolition and marketing costs and provision for impairment, as they do not represent operating costs for stabilized real estate properties.

The following table reconciles Adjusted Operating Assets REP EBT to Operating Assets REP EBT:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Reconciliation of Adjusted Operating Assets REP EBT to

 

Three Months Ended September 30,

 

 

Nine Months Ended September 30,

 

Operating Assets REP EBT (in thousands)

   

2016

  

2015

 

 

2016

    

2015

 

Adjusted Operating Assets REP EBT

 

$
24,116 

 

$
24,903

 

 

$
80,919

 

$
67,045

 

Provision for impairment

 

 
(35,734)

 

 

 —

 

 

 
(35,734)

 

 

 —

 

Depreciation and amortization

 

 
(20,732)

 

 
(22,936)

 

 

 
(64,546)

 

 
(64,585)

 

Demolition costs

 

 
(16)

 

 
(798)

 

 

 
(494)

 

 
(2,411)

 

Development-related marketing costs

 

 
(1,950)

 

 
(2,367)

 

 

 
(5,038)

 

 
(7,381)

 

Operating Assets REP EBT

 

$
(34,316)

 

$
(1,198)

 

 

$
(24,893)

 

$
(7,332)

 

 

 

 

11

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Summary of MPC Land Sales Closed in the Three Months Ended September 30,

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Land Sales

 

Acres Sold

 

Number of Lots/Units

 

Price per acre

 

Price per lot

($ In thousands)

  

2016

  

2015

  

2016

  

2015

  

2016

  

2015

  

2016

  

2015

  

2016

 

2015

Bridgeland

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Residential

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Single family - detached

 

$
4,687

 

$
2,273

 
12.2

 
5.8

 
69

 
34

 

$
384

 

$
392

 

$
68

 

$
67

Commercial

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Not-for-profit

 

 

 —

 

 
20,475

 

 —

 
160.2

 

 —

 

 —

 

 

 —

 

 
128

 

 

 —

 

 

 —

Total

 

 
4,687

 

 
22,748

 
12.2

 
166.0

 
69

 
34

 

 
384

 

 
137

 

 
68

 

 
67

$ Change

 

 
(18,061)

 

 

 

 
(153.8)

 

 

 
35

 

 

 

 
247

 

 

 

 

 
1

 

 

 

% Change

 

 
(79.4%)

 

 

 

 
(92.7%)

 

 

 
102.9%

 

 

 

 
180.3%

 

 

 

 

 
1.5%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Maryland Communities

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

No land sales

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Summerlin

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Residential

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Superpad sites

 

 
15,000

 

 
17,754

 
30.9

 
36.1

 
75

 
160

 

 
485

 

 
492

 

 
200

 

 
111

Custom lots

 

 
1,525

 

 
1,580

 
0.8

 
0.8

 
2

 
2

 

 
1,906

 

 
1,975

 

 
763

 

 
790

Total

 

 
16,525

 

 
19,334

 
31.7

 
36.9

 
77

 
162

 

 
521

 

 
524

 

 
215

 

 
119

$ Change

 

 
(2,809)

 

 

 

 
(5.2)

 

 

 
(85)

 

 

 

 
(3)

 

 

 

 

 
96

 

 

 

% Change

 

 
(14.5%)

 

 

 

 
(14.1%)

 

 

 
(52.5%)

 

 

 

 
(0.6%)

 

 

 

 

 
80.7%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

The Woodlands

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Residential

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Single family - detached

 

 
10,581

 

 
5,609

 
19.9

 
9.2

 
79

 
32

 

 
532

 

 
610

 

 
134

 

 
175

Single family - attached

 

 

 —

 

 
4,872

 

 —

 
5.0

 

 —

 
56

 

 

 —

 

 
974

 

 

 —

 

 
87

Commercial

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Medical

 

 

 —

 

 
6,837

 

 —

 
3.3

 

 —

 

 —

 

 

 —

 

 
2,072

 

 

 —

 

 

 —

Total

 

 
10,581

 

 
17,318

 
19.9

 
17.5

 
79

 
88

 

 
532

 

 
990

 

 
134

 

 
119

$ Change

 

 
(6,737)

 

 

 

 
2.4

 

 

 
(9)

 

 

 

 
(458)

 

 

 

 

 
15

 

 

 

% Change

 

 
(38.9%)

 

 

 

 
13.7%

 

 

 
(10.2%)

 

 

 

 
(46.2%)

 

 

 

 

 
12.6%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total land sales closed in period

 

$
31,793

 

$
59,400

 
63.8

 
220.4

 
225

 
284

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net recognized (deferred) revenue

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

  Bridgeland

 

$
2,523

 

$
(11,361)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

  Summerlin

 

 
7,649

 

 
(2,633)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total net recognized (deferred) revenue (a)

 

 
10,172

 

 
(13,994)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Special Improvement District revenue

 

 
2,163

 

 
17

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total land sales revenue - GAAP basis

 

$
44,128

 

$
45,423

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(a)

Represents revenues on sales closed in prior periods where revenue was previously deferred and met criteria for recognition in the current periods, offset by revenues deferred on sales closed in the current period.

12

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Summary of MPC Land Sales Closed in the Nine Months Ended September 30,

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Land Sales

 

Acres Sold

 

Number of Lots/Units

 

Price per acre

 

Price per lot

 

($ In thousands)

  

2016

  

2015

  

2016

  

2015

  

2016

  

2015

  

2016

  

2015

  

2016

 

2015

 

Bridgeland

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Residential

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Single family - detached

 

$
13,557

 

$
8,346

 
36.2

 
21.3

 
201

 
94

 

$
375

 

$
392

 

$
67

 

$
89

 

Commercial

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Not-for-profit

 

 

 —

 

 
20,475

 

 —

 
160.2

 

 —

 

 —

 

 

 —

 

 
128

 

 

 —

 

 

 —

 

Total

 

 
13,557

 

 
28,821

 
36.2

 
181.5

 
201

 
94

 

 
375

 

 
159

 

 
67

 

 
89

 

$ Change

 

 
(15,264)

 

 

 

 
(145.3)

 

 

 
107

 

 

 

 
216

 

 

 

 

 
(22)

 

 

 

 

% Change

 

 
(53.0%)

 

 

 

 
(80.1%)

 

 

 
113.8%

 

 

 

 
135.8%

 

 

 

 

 
(24.7%)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Maryland Communities

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

No land sales

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Summerlin

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Residential

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Superpad sites

 

 
81,987

 

 
63,784

 
201.1

 
117.2

 
943

 
393

 

 
408

(a)

 
544

 

 
87

 

 
162

 

Single family - detached

 

 

 —

 

 
13,650

 

 —

 
14.9

 

 —

 
75

 

 

 —

 

 
916

 

 

 —

 

 
182

 

Custom lots

 

 
4,170

 

 
7,900

 
2.4

 
5.3

 
7

 
13

 

 
1,738

 

 
1,491

 

 
596

 

 
608

 

Commercial

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Not-for-profit

 

 
348

 

 

 —

 
10.0

 

 —

 

 —

 

 —

 

 
35

 

 

 —

 

 

 —

 

 

 —

 

      Other

 

 

 —

 

 
3,136

 

 —

 
3.6

 

 —

 

 —

 

 

 —

 

 
871

 

 

 —

 

 

 —

 

Total

 

 
86,505

 

 
88,470

 
213.5

 
141.0

 
950

 
481

 

 
405

 

 
627

 

 
91

 

 
177

 

$ Change

 

 
(1,965)

 

 

 

 
72.5

 

 

 
469

 

 

 

 
(222)

 

 

 

 

 
(86)

 

 

 

 

% Change

 

 
(2.2%)

 

 

 

 
51.4%

 

 

 
97.5%

 

 

 

 
(35.4%)

 

 

 

 

 
(48.6%)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

The Woodlands

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Residential

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Single family - detached

 

 
14,431

 

 
19,468

 
26.3

 
31.2

 
105

 
112

 

 
549

 

 
624

 

 
137

 

 
174

 

Single family - attached

 

 

 —

 

 
5,280

 

 —

 
5.8

 

 —

 
65

 

 

 —

 

 
910

 

 

 —

 

 
81

 

Commercial

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Not-for-profit

 

 

 —

 

 
733

 

 —

 
5.0

 

 —

 

 —

 

 

 —

 

 
147

 

 

 —

 

 

 —

 

Medical

 

 
10,405

 

 
6,837

 
4.3

 
3.3

 

 —

 

 —

 

 
2,420

 

 
2,072

 

 

 —

 

 

 —

 

      Other

 

 

 —

 

 
1,321

 

 —

 
0.9

 

 —

 

 —

 

 

 —

 

 
1,468

 

 

 —

 

 

 —

 

Total

 

 
24,836

 

 
33,639

 
30.6

 
46.2

 
105

 
177

 

 
812

 

 
728

 

 
137

 

 
140

 

$ Change

 

 
(8,803)

 

 

 

 
(15.6)

 

 

 
(72)

 

 

 

 
84

 

 

 

 

 
(3)

 

 

 

 

% Change

 

 
(26.2%)

 

 

 

 
(33.8%)

 

 

 
(40.7%)

 

 

 

 
11.5%

 

 

 

 

 
(2.1%)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total land sales closed in period

 

$
124,898

 

$
150,930

 
280.3

 
368.7

 
1,256

 
752

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net recognized (deferred) revenue

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

  Bridgeland

 

$
2,435

 

$
(11,361)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

  Summerlin

 

 
13,941

 

 
(4,740)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total net recognized (deferred) revenue (b)

 

 
16,376

 

 
(16,101)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Special Improvement District revenue

 

 
5,894

 

 
4,108

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total land sales revenue - GAAP basis

 

$
147,168

 

$
138,937

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(a)

Please see discussion below. 

(b)

Represents revenues on sales closed in prior periods where revenue was previously deferred and met criteria for recognition in the current periods, offset by revenues deferred on sales closed in the current period.

 

13

 

 

Operating Assets Net Operating Income

 

We believe that NOI is a useful supplemental measure of the performance of our Operating Assets because it provides a performance measure that, when compared year-over-year, reflects the revenues and expenses directly associated with owning and operating real estate properties and the impact on operations from trends in occupancy rates, rental rates, and operating costs. We define NOI as revenues (rental income, tenant recoveries and other income) less expenses (real estate taxes, repairs and maintenance, marketing and other property expenses). NOI also excludes straight line rents and tenant incentives amortization, net interest expense, ground rent amortization, demolition costs, amortization, depreciation, development-related marketing costs and equity in earnings from Real Estate and Other Affiliates.

 

We use NOI to evaluate our operating performance on a property-by-property basis because NOI allows us to evaluate the impact that factors such as lease structure, lease rates and tenant base, which vary by property, have on our operating results, gross margins and investment returns.

 

Although we believe that NOI provides useful information to the investors about the performance of our Operating Assets due to the exclusions noted above, NOI should only be used as an alternative measure of the financial performance of such assets and not as an alternative to GAAP net income (loss).

14

 

 

Operating Assets NOI and REP EBT

 

 

 

Three Months
Ended September 30,

 

 

 

 

Nine Months
Ended September 30,

 

 

 

(In thousands)

    

2016

    

2015

 

Change

 

2016

    

2015

    

Change

Retail

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Columbia Regional

 

$
422

 

$
535

 

$
(113)

 

$
1,024

 

$
1,000

 

$
24

Cottonwood Square

 

 
170

 

 
189

 

 
(19)

 

 
530

 

 
494

 

 
36

Creekside Village Green (a)

 

 
380

 

 
314

 

 
66

 

 
1,169

 

 
539

 

 
630

Downtown Summerlin (a)

 

 
4,020

 

 
2,507

 

 
1,513

 

 
12,261

 

 
6,700

 

 
5,561

Hughes Landing Retail (a)

 

 
822

 

 
400

 

 
422

 

 
2,345

 

 
786

 

 
1,559

1701 Lake Robbins

 

 
90

 

 
111

 

 
(21)

 

 
274

 

 
296

 

 
(22)

Lakeland Village Center (b)

 

 

 —

 

 

 —

 

 

 —

 

 
56

 

 

 —

 

 
56

Landmark Mall (c)

 

 
(202)

 

 
(116)

 

 
(86)

 

 
(526)

 

 
(302)

 

 
(224)

Outlet Collection at Riverwalk (d)

 

 
1,424

 

 
1,726

 

 
(302)

 

 
3,656

 

 
4,845

 

 
(1,189)

Park West (e)

 

 
411

 

 
211

 

 
200

 

 
1,346

 

 
1,386

 

 
(40)

Ward Village (f)

 

 
5,149

 

 
6,370

 

 
(1,221)

 

 
17,039

 

 
19,385

 

 
(2,346)

20/25 Waterway Avenue

 

 
442

 

 
437

 

 
5

 

 
1,282

 

 
1,384

 

 
(102)

Waterway Garage Retail

 

 
184

 

 
186

 

 
(2)

 

 
480

 

 
539

 

 
(59)

Total Retail

 

 
13,312

 

 
12,870

 

 
442

 

 
40,936

 

 
37,052

 

 
3,884

Office

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

10-70 Columbia Corporate Center (g)

 

 
2,631

 

 
2,925

 

 
(294)

 

 
8,701

 

 
9,449

 

 
(748)

Columbia Office Properties (h)

 

 
(16)

 

 
263

 

 
(279)

 

 
(133)

 

 
342

 

 
(475)

One Hughes Landing (j)

 

 
1,457

 

 
1,475

 

 
(18)

 

 
4,462

 

 
4,112

 

 
350

Two Hughes Landing (i)

 

 
322

 

 
2,528

 

 
(2,206)

 

 
2,979

 

 
3,380

 

 
(401)

Three Hughes Landing (b)

 

 
(251)

 

 

 —

 

 
(251)

 

 
(409)

 

 

 —

 

 
(409)

1725 Hughes Landing Boulevard (b)

 

 
817

 

 

 —

 

 
817

 

 
(330)

 

 

 —

 

 
(330)

1735 Hughes Landing Boulevard (b)

 

 
1,531

 

 

 —

 

 
1,531

 

 
956

 

 

 —

 

 
956

2201 Lake Woodlands Drive

 

 
(42)

 

 
(32)

 

 
(10)

 

 
(113)

 

 
(119)

 

 
6

9303 New Trails (d)

 

 
401

 

 
476

 

 
(75)

 

 
1,257

 

 
1,459

 

 
(202)

110 N. Wacker

 

 
1,525

 

 
1,519

 

 
6

 

 
4,576

 

 
4,577

 

 
(1)

ONE Summerlin (a)

 

 
691

 

 
(148)

 

 
839

 

 
1,529

 

 
(317)

 

 
1,846

3831 Technology Forest Drive

 

 
600

 

 
487

 

 
113

 

 
1,515

 

 
1,415

 

 
100

3 Waterway Square (j)

 

 
1,545

 

 
1,499

 

 
46

 

 
4,938

 

 
4,670

 

 
268

4 Waterway Square (j)

 

 
1,485

 

 
1,520

 

 
(35)

 

 
4,786

 

 
4,462

 

 
324

1400 Woodloch Forest (k)

 

 
367

 

 
485

 

 
(118)

 

 
1,294

 

 
1,248

 

 
46

Total Office

 

 
13,063

 

 
12,997

 

 
66

 

 
36,008

 

 
34,678

 

 
1,330

Multi-family

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Millennium Six Pines Apartments (l)

 

 
513

 

 

 —

 

 
513

 

 
513

 

 

 —

 

 
513

Millennium Waterway Apartments (m)

 

 
704

 

 
1,106

 

 
(402)

 

 
2,327

 

 
3,151

 

 
(824)

One Lakes Edge (a)

 

 
967

 

 
688

 

 
279

 

 
2,623

 

 
147

 

 
2,476

85 South Street

 

 
141

 

 
144

 

 
(3)

 

 
391

 

 
359

 

 
32

Total Multi-family

 

 
2,325

 

 
1,938

 

 
387

 

 
5,854

 

 
3,657

 

 
2,197

Hospitality

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Embassy Suites at Hughes Landing (b)

 

 
929

 

 

 —

 

 
929

 

 
2,498

 

 

 —

 

 
2,498

The Westin at The Woodlands (b)

 

 
(24)

 

 

 —

 

 
(24)

 

 
585

 

 

 —

 

 
585

The Woodlands Resort & Conference Center (n)

 

 
520

 

 
3,006

 

 
(2,486)

 

 
5,663

 

 
8,518

 

 
(2,855)

Total Hospitality

 

 
1,425

 

 
3,006

 

 
(1,581)

 

 
8,746

 

 
8,518

 

 
228

Total Retail, Office, Multi-family, and Hospitality

 

 
30,125

 

 
30,811

 

 
(686)

 

 
91,544

 

 
83,905

 

 
7,639

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

The Woodlands Ground leases

 

 
378

 

 
330

 

 
48

 

 
1,046

 

 
856

 

 
190

The Woodlands Parking Garages

 

 
(129)

 

 
(184)

 

 
55

 

 
(320)

 

 
(455)

 

 
135

Other Properties

 

 
971

 

 
951

 

 
20

 

 
2,920

 

 
2,827

 

 
93

Total Other

 

 
1,220

 

 
1,097

 

 
123

 

 
3,646

 

 
3,228

 

 
418

Operating Assets NOI - Consolidated and Owned

 

 
31,345

 

 
31,908

 

 
(563)

 

 
95,190

 

 
87,133

 

 
8,057

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Redevelopments

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

South Street Seaport (b) (o)

 

 
186

 

 
(22)

 

 
208

 

 
(624)

 

 
(423)

 

 
(201)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Dispositions

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

The Club at Carlton Woods (p)

 

 

 —

 

 
751

 

 
(751)

 

 

 —

 

 
(942)

 

 
942

Total Operating Assets NOI - Consolidated

 

 
31,531

 

 
32,637

 

 
(1,106)

 

 
94,566

 

 
85,768

 

 
8,798

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Straight-line lease amortization (q)

 

 
2,550

 

 
408

 

 
2,142

 

 
9,632

 

 
2,632

 

 
7,000

Demolition costs (r)

 

 
(16)

 

 
(798)

 

 
782

 

 
(494)

 

 
(2,411)

 

 
1,917

Development-related marketing costs

 

 
(1,950)

 

 
(2,367)

 

 
417

 

 
(5,038)

 

 
(7,381)

 

 
2,343

Provision for impairment

 

 
(35,734)

 

 

 —

 

 
(35,734)

 

 
(35,734)

 

 

 —

 

 
(35,734)

Depreciation and Amortization

 

 
(20,732)

 

 
(22,936)

 

 
2,204

 

 
(64,546)

 

 
(64,585)

 

 
39

Write-off of lease intangibles and other

 

 

 —

 

 
(439)

 

 
439

 

 

 —

 

 
(593)

 

 
593

Other income, net

 

 
13

 

 

 —

 

 
13

 

 
3,126

 

 

 —

 

 
3,126

Equity in earnings from Real Estate Affiliates

 

 
(209)

 

 
289

 

 
(498)

 

 
2,617

 

 
1,333

 

 
1,284

Interest, net

 

 
(9,769)

 

 
(7,992)

 

 
(1,777)

 

 
(29,022)

 

 
(22,095)

 

 
(6,927)

Total Operating Assets REP EBT (s)

 

$
(34,316)

 

$
(1,198)

 

$
(33,118)

 

$
(24,893)

 

$
(7,332)

 

$
(17,561)

15

 

 

Operating Assets NOI and REP EBT

 

 

 

Three Months
Ended September 30,

 

 

 

Nine Months
Ended September 30,

 

 

(In thousands)

    

2016

    

2015

 

Change

 

2016

    

2015

    

Change

Operating Assets NOI - Equity and Cost Method Investments

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Grandview SHG, LLC (b)

 

$
590

 

$

 —

 

$
590

 

$
899

 

$

 —

 

$
899

Millennium Six Pines Apartments (l)

 

 
(83)

 

 
496

 

 
(579)

 

 
1,537

 

 
503

 

 
1,034

Stewart Title Company

 

 
891

 

 
330

 

 
561

 

 
1,411

 

 
1,329

 

 
82

Summerlin Baseball Club

 

 
28

 

 
211

 

 
(183)

 

 
628

 

 
780

 

 
(152)

The Metropolitan Downtown Columbia (a)

 

 
(174)

 

 
652

 

 
(826)

 

 
2,759

 

 
283

 

 
2,476

Woodlands Sarofim # 1

 

 
278

 

 
465

 

 
(187)

 

 
1,070

 

 
1,194

 

 
(124)

Total NOI - equity investees

 

 
1,530

 

 
2,154

 

 
(624)

 

 
8,304

 

 
4,089

 

 
4,215

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Adjustments to NOI (t)

 

 
(1,978)

 

 
(805)

 

 
(1,173)

 

 
(8,040)

 

 
(2,260)

 

 
(5,780)

Equity Method Investments REP EBT

 

 
(448)

 

 
1,349

 

 
(1,797)

 

 
264

 

 
1,829

 

 
(1,565)

Less: Joint Venture Partner's Share of REP EBT

 

 
239

 

 
(1,060)

 

 
1,299

 

 
(263)

 

 
(2,243)

 

 
1,980

Equity in earnings from Real Estate and Other Affiliates

 

 
(209)

 

 
289

 

 
(498)

 

 
1

 

 
(414)

 

 
415

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Distributions from Summerlin Hospital Investment (u)

 

 

 —

 

 

 —

 

 

 —

 

 
2,616

 

 
1,747

 

 
869

Segment equity in earnings from Real Estate and Other Affiliates

 

$
(209)

 

$
289

 

$
(498)

 

$
2,617

 

$
1,333

 

$
1,284

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Company's Share of Equity Method Investments NOI

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Grandview SHG, LLC

 

$
207

 

$

 —

 

$
207

 

$
315

 

$

 —

 

$
315

Millennium Six Pines Apartments (l)

 

 
(67)

 

 
404

 

 
(471)

 

 
1,252

 

 
410

 

 
842

Stewart Title Company

 

 
446

 

 
165

 

 
281

 

 
706

 

 
665

 

 
41

Summerlin Baseball Club

 

 
14

 

 
105

 

 
(91)

 

 
314

 

 
390

 

 
(76)

The Metropolitan Downtown Columbia

 

 
(87)

 

 
327

 

 
(414)

 

 
1,380

 

 
142

 

 
1,238

Woodlands Sarofim # 1

 

 
56

 

 
93

 

 
(37)

 

 
214

 

 
239

 

 
(25)

Total NOI - equity investees

 

$
569

 

$
1,094

 

$
(525)

 

$
4,181

 

$
1,846

 

$
2,335

 

 

 

 

 

 

 

 

 

 

 

 

Economic

 

As of September 30, 2016

(In thousands)

    

Ownership

    

Total Debt

 

Total Cash

Grandview, LLC

 
35.00

%

$
36,000

 

$
18,244

Stewart Title Company

 
50.00

%

 

 —

 

 
218

Summerlin Baseball Club

 
50.00

%

 
33

 

 
1,745

The Metropolitan Downtown Columbia

 
50.00

%

 
70,000

 

 
281

Woodlands Sarofim # 1

 
20.00

%

 
5,690

 

 
950

(a)

NOI increase for the quarter ended September 30, 2016 as compared to 2015 relates to an increase in occupancy and/or stabilization of the property.

(b)

Please refer to Condensed Consolidated Financial Statements on Form 10-Q for further discussion.

(c)

The NOI losses in 2016 and 2015 are due to a decline in occupancy as the property loses tenants in anticipation of its redevelopment.

(d)

The NOI decrease is due to higher than normal tenant recoveries in 2015.

(e)

NOI increase for the nine month period ended September 30, 2016 is due to an increase in occupancy. 

(f)

The decrease in NOI is due to rent abatement for a tenant related to a lease modification, decrease in occupancy related to a bankrupt tenant and decrease in occupancy due to pending redevelopment.

(g)

NOI decrease is due to a decrease in occupancy.

(h)

NOI decrease for the three and nine month period ended September 30, 2016 is due primarily to decreased occupancy related to water damage in 2015 and subsequent loss of tenants. Amounts settled with insurers with respect to the water damage are being held in escrow.

(i)

The NOI decrease for the three and nine months ended September 30, 2016 is due to the provision for doubtful accounts related to a tenant’s termination fee in third quarter 2016 and a large lease termination fee received in 2015.

(j)

NOI increase for the nine months ended September 30, 2016 is due to a decrease in real estate taxes and other operating expenses.

(k)

NOI decrease for the three months ended September 30, 2016 is due to lower occupancy.

(l)

Purchased our partner’s 18.57% interest in Millennium Six Pines Apartments (formerly known as Millennium Woodlands Phase II, LLC) July 2016 and consolidated property at that time.

(m)

NOI decrease is due to a decrease in rental rates to maintain occupancy during the lease up of Millennium Six Pines Apartments and One Lakes Edge.

(n)

NOI decrease for the three and nine months ended September 30, 2016 is due to lower occupancy and a decrease in conference center services.

(o)

NOI increase for the three months ended September 30, 2016 is due to increased occupancy. NOI decrease for the nine months ended September 30, 2016 is due to higher employment costs and professional expenses.

(p)

The Club at Carlton Woods was sold in September 2015.

(q)

The increase is primarily due to new leases at Downtown Summerlin and 1725-1735 Hughes Landing Boulevard which were placed in service in the fourth quarter 2015.

(r)

The decrease in demolition costs is due to completion of the interior demolition of the Fulton Market Building and demolition of Pier 17 at Seaport.

(s)

For a detailed breakdown of our Operating Asset segment REP EBT, please refer to Note 16 - Segments in the condensed consolidated financial statements.

(t)

Adjustments to NOI include straight-line rent and market lease amortization, demolition costs, depreciation and amortization and non-real estate taxes.

(u)

Distributions from the Summerlin Hospital are typically made one time per year in the first quarter.

16

 

 

Commercial Properties NOI

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(In millions, except square feet/number of units and %)

 

Square
Feet/Number
of Units

 

% Occupied

 

% Leased

 

Three Months Ended September 30, 2016

 

Projected Annual
Stabilized NOI

 

Debt Balance as of
September 30, 2016

Commercial Properties - Stabilized

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Retail

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cottonwood Square

 
77,080

 
95.7

%  
95.7

%  

$
0.2

 

$
0.7

 

$

 —

Hughes Landing Retail

 
126,136

 
91.9

 
97.4

 

 
0.8

 

 
3.5

 

 
34.5

1701 Lake Robbins

 
12,376

 
100.0

 
100.0

 

 
0.1

 

 
0.4

 

 
4.6

Outlet Collection at Riverwalk

 
264,321

 
86.8

 
99.8

 

 
1.4

 

 
7.5

 

 
56.1

One Lakes Edge Retail

 
23,280

 
92.0

 
92.0

 

 

 —

 

 

 —

 

 

 —

Park West

 
249,363

 
80.2

 
80.2

 

 
0.4

 

 
1.8

 

 

 —

Ward Village

 
1,122,483

 
90.5

 
91.4

 

 
5.1

 

 
25.6

 

 
238.7

20/25 Waterway Avenue

 
50,062

 
100.0

 
100.0

 

 
0.4

 

 
1.6

 

 
13.9

Waterway Garage Retail

 
21,513

 
85.4

%  
100.0

%  

 
0.2

 

 
0.8

 

 

 —

Total Retail - Stabilized

 
1,946,614

 
89.2

%
92.0

%   

$
8.6

 

$
41.9

 

$
347.8

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Office

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

10-70 Columbia Corporate Center

 
898,965

 
84.4

%  
88.3

%  

$
2.6

 

$
12.4

 

$
100.0

Columbia Office Properties (a)

 
107,674

 
85.1

 
85.1

 

 

 —

 

 
0.5

 

 

 —

One Hughes Landing

 
197,719

 
100.0

 
100.0

 

 
1.5

 

 
5.3

 

 
52.0

Two Hughes Landing

 
197,714

 
93.8

 
96.3

 

 
0.3

 

 
5.1

 

 
48.0

1735 Hughes Landing Boulevard

 
318,170

 
100.0

 
100.0

 

 
1.5

 

 
7.5

 

 
52.5

9303 New Trails

 
97,553

 
82.8

 
86.7

 

 
0.4

 

 
1.8

 

 
12.5

110 N. Wacker

 
226,000

 
100.0

 
100.0

 

 
1.5

 

 
6.1

 

 
23.6

2201 Lake Woodlands Drive

 
24,119

 
25.8

 
25.8

 

 

 —

 

 

 —

 

 

 —

3831 Technology Forest Drive

 
95,078

 
100.0

 
100.0

 

 
0.6

 

 
1.9

 

 
22.5

3 Waterway Square

 
232,021

 
100.0

 
100.0

 

 
1.5

 

 
6.3

 

 
51.9

4 Waterway Square

 
218,551

 
100.0

 
100.0

 

 
1.5

 

 
5.5

 

 
36.5

1400 Woodloch Forest

 
95,667

 
95.8

 
96.9

 

 
0.4

 

 
1.2

 

 

 —

Total Office - Stabilized

 
2,709,231

 
92.4

%  
94.0

%   

$
11.8

 

$
53.6

 

$
399.5

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Multi-family

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

The Metropolitan Downtown Columbia

 
380

 
92.1

%  
92.1

%  

 
(0.1)

 

 
3.5

 

 

 —

Millennium Waterway Apartments

 
393

 
81.2

 
77.9

 

 
0.7

 

 
4.5

 

 
55.6

Millennium Six Pines Apartments

 
314

 
90.8

 
87.8

 

 
0.5

 

 
4.6

 

 
42.5

85 South Street

 
21

 
100.0

 
100.0

 

$
0.1

 

$
0.6

 

$

 —

   Total Multi-family

 
1,108

 
88.0

%  
86.0

%  

$
1.2

 

$
13.2

 

$
98.1

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Hospitality (b)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Grandview SHG, LLC

 
72

 
92.8

%  
92.8

%  

$
0.2

 

$

 —

 

$

 —

The Woodlands Resort & Conference Center

 
406

 
49.9

 
49.9

 

 
0.5

 

 
16.5

 

 
85.0

Total Hospitality - Stabilized

 
478

 
56.4

%  
56.4

%  

$
0.7

 

$
16.5

 

$
85.0

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total Commercial Properties - Stabilized

 

 

 

 

 

 

 

$
22.3

 

$
125.2

 

$
930.4

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Commercial Properties - Recently Developed And Not Yet Stabilized

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Retail

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Columbia Regional

 
88,556

 
77.4

%  
77.4

%  

$
0.4

 

$
2.2

 

$
22.2

Creekside Village Green

 
74,669

 
84.5

 
84.5

 

 
0.4

 

 
1.9

 

 

 —

Downtown Summerlin

 
1,006,471

 
80.8

 
86.0

 

 
4.0

 

 
26.3

 

 
299.4

Lakeland Village Center

 
83,444

 
36.3

 
40.6

 

 

 —

 

 
1.7

 

 
9.2

Total Retail - Not Stabilized

 
1,253,140

 
77.8

%  
82.3

%  

$
4.8

 

$
32.1

 

$
330.8

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Office

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three Hughes Landing

 
320,815

 
2.8

%  
9.0

%  

 
(0.3)

 

 
7.6

 

 
34.2

1725 Hughes Landing Boulevard

 
331,067

 
49.0

 
66.9

 

 
0.8

 

 
6.9

 

 
52.5

ONE Summerlin

 
206,279

 
61.4

 
63.6

 

$
0.7

 

$
5.7

 

$

 —

Total Office - Not Stabilized

 
858,161

 
34.7

%  
44.4

%  

$
1.2

 

$
20.2

 

$
86.7

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Multi-family

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

One Lakes Edge

 
390

 
66.2

%  
67.2

%  

$
1.0

 

$
7.5

 

$
71.9

   Total Multi-family - Not Stabilized

 
390

 
66.2

%  
67.2

%  

$
1.0

 

$
7.5

 

$
71.9

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Hospitality (b)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Embassy Suites at Hughes Landing

 
205

 
73.8

%  
73.8

%  

$
0.9

 

$
4.5

 

$
29.2

The Westin at The Woodlands

 
302

 
42.3

 
42.3

 

 

 —

 

 
10.5

 

 
57.2

    Total Hospitality - Not Stabilized

 
507

 
55.0

%  
55.0

%  

$
0.9

 

$
15.0

 

$
86.4

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total Commercial Properties - Not Stabilized

 

 

 

 

 

 

 

$
7.9

 

$
74.8

 

$
575.8

 

 

17

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(In millions, except square feet/number of units and %)

 

Square
Feet/Number
of Units

 

% Occupied

 

% Leased

 

Three Months Ended September 30, 2016

 

Projected Annual
Stabilized NOI

 

Debt Balance as of
September 30, 2016

Commercial Properties - Pending Redevelopment

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Retail

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Landmark Mall

 
440,325

 
31.5

 
31.5

 

$
(0.2)

 

$
(0.3)

 

$

 —

Total Retail - Pending Redevelopment

 
440,325

 
31.5

%  
31.5

%  

$
(0.2)

 

$
(0.3)

 

$

—

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Office

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

American City Building

 
117,098

 
3.4

 
3.4

 

$

N/A

 

$

N/A

 

$

 —

Total Office - Pending Redevelopment

 
117,098

 
3.4

%  
3.4

%  

$

N/A

 

$

N/A

 

$

 —

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total Commercial Properties - Pending Redevelopment

 

 

 

 

 

 

 

$
(0.2)

 

$
(0.3)

 

$

 —

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Under Construction or Renovation

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Retail

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

South Street Seaport

 
362,000

 

N/A

 

N/A

 

$

N/A

 

$

N/A

 

$

 —

Total Retail - Under Construction

 
362,000

 

N/A

%  

N/A

%  

$

N/A

 

$

N/A

 

$

 —

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Office

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

One Merriweather

 
199,000

 

N/A

 
48.9

%  

$

N/A

 

$
5.1

 

$
13.7

Two Merriweather

 
123,604

 

N/A

 
58.7

 

 

N/A

 

 
3.6

 

 

 —

Total Office - Under Construction

 
322,604

 

N/A

%  
52.6

%  

$

N/A

 

$
8.7

 

$
13.7

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Multi-family

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Constellation

 
124

 
14.5

%  
42.7

%  

$

N/A

 

$
1.1

 

$

 —

m.flats

 
437

 

N/A

 

N/A

 

 

N/A

 

 
4.0

 

 

 —

Total Multi-family - Under Construction

 
561

 
3.2

%
9.4

%  

$

N/A

 

$
5.1

 

$

 —

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Self Storage

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

HHC 242 Self Storage Facility

 
657

 

N/A

 

N/A

 

$

N/A

 

$
0.8

 

$
2.6

HHC 2978 Self Storage Facility

 
784

 

N/A

 

N/A

 

 

N/A

 

 
0.8

 

 
0.4

Total Self Storage - Under Construction

 
1,441

 

N/A

%

N/A

%

$

N/A

 

$
1.6

 

$
3.0

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total Commercial Properties - Under Construction

 

 

 

 

 

 

 

$

N/A

 

$
15.4

 

$
16.7

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total Commercial Properties

 

 

 

 

 

 

 

$
30.0

 

$
215.1

 

$
1,522.9

 

(a)

Excludes American City Building as it is reflected in the Commercial Properties – Pending Redevelopment section below.

(b)

Hospitality occupancy is the average occupancy for the quarter based on occupied rooms relative to total available rooms.

 

18