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MORTGAGES, NOTES AND LOANS PAYABLE, NET
 12 Months Ended
Dec. 31, 2020
Debt Disclosure [Abstract]  
Mortgages, Notes and Loans Payable, Net
7. Mortgages, Notes and Loans Payable, Net

Financing Activity The Company’s borrowing activity is summarized as follows:
thousandsInitial / Extended Maturity (a)Interest RateCarrying Value
Balance at December 31, 2019$4,096,470 
Issuances:
Senior Notes due 2028August 20285.38%(c)750,000 
Special Improvement District bondsOctober 20496.00%22,750 
Borrowings:
Revolver LoanSeptember 20231.79%(b)67,500 
9950 Woodloch Forest DriveMarch 20252.09%(b),(d)63,500 
A’eo RetailOctober 20252.90%(b)30,640 
Ke Kilohana RetailOctober 20252.90%(b)9,360 
Draws on existing mortgages, notes and loans payable556,166 
Repayments:
Revolver LoanSeptember 20231.79%(b),(c)(67,500)
The Woodlands Towers at the WaterwayJune 2020/June 20213.68%(b),(d)(63,500)
Three Hughes LandingSeptember 20204.33%(b),(c)(60,766)
Two MerriweatherOctober 2020/October 20214.23%(b),(c)(30,557)
100 Fellowship DriveMay 20223.23%(b)(49,978)
HHC 242 Self-StorageDecember 2021/December 20224.33%(b),(c)(5,499)
HHC 2978 Self-StorageDecember 2021/December 20224.33%(b),(c)(5,395)
Downtown SummerlinJune 20233.88%(b),(c),(e)(255,297)
Lakefront NorthDecember 2022/December 20233.73%(b),(c)(40,062)
Seaport DistrictJune 20246.10%(c)(250,000)
Bridgeland Credit FacilityOctober 2022/October 20244.23%(b),(c)(50,000)
The Woodlands Master Credit FacilityOctober 2022/October 20244.23%(b),(c)(50,000)
Two SummerlinOctober 2022/October 20254.25%(b),(c)(32,803)
Repayments on existing mortgages, notes and loans payable(20,055)
Other:
Special Improvement District bond assumptionsDecember 2020/October 2049
5.00% - 6.00%
(10,122)
Deconsolidation of 110 North WackerApril 2022/April 20244.73%(b),(f)(326,835)
Deferred financing costs, net9,352 
Balance at December 31, 2020$4,287,369 
(a)Maturity dates presented represent initial maturity dates and the extended or final maturity dates as contractually stated. HHC has the option to exercise extension periods at the initial maturity date, subject to extension terms that are based on current property performance projections. Extension terms may include minimum debt service coverage, minimum occupancy levels or condominium sales levels, as applicable and other performance criteria. In certain cases, due to property performance not meeting covenants, HHC may have to pay down a portion of the loan to obtain the extension.
(b)The interest rate presented is based on the one-month LIBOR, three-month LIBOR or Prime rate, as applicable, which was 0.14%, 0.24% and 3.25%, respectively, at December 31, 2020. Interest rates associated with loans which have been paid off reflect the interest rate at December 31, 2019.
(c)On August 18, 2020, the Company issued $750 million in senior notes due August 2028 (the Senior Notes due 2028), which will pay interest semi-annually at a rate of 5.375% per annum payable on August 1st and February 1st of each year, beginning on February 1, 2021. The Senior Notes due 2028 will be unsecured senior obligations of the Company and will be guaranteed by certain subsidiaries of the Company. The Company used the net proceeds from this issuance, together with cash on hand, for the repayment of existing indebtedness of approximately $807.9 million and recorded a loss on extinguishment of debt of approximately $13.2 million.
(d)On March 26, 2020, the Company closed on a partial refinance of the bridge loan for The Woodlands Towers at the Waterway and The Woodlands Warehouse for $137.0 million. In conjunction with the partial refinance, the original loan was paid down by $63.5 million and 9950 Woodloch Forest Drive tower was split into a new loan.
(e)On June 22, 2020, the Company modified the existing Downtown Summerlin loan, extending the financing by three years to June 22, 2023 at a rate of LIBOR plus 2.15% in exchange for a pay-down of $33.8 million to a total commitment of $221.5 million.
(f)As of September 30, 2020, the Company derecognized a $326.8 million balance on 110 North Wacker’s variable-rate debt that was subject to interest rate collars. Refer to Note 2 - Real Estate and Other Affiliates for additional information.
Additional Financing Activity in 2020 On January 7, 2020, the Company closed on a $43.4 million construction loan for the development of Creekside Park The Grove. The loan bears interest at LIBOR plus 1.75% with an initial maturity date of January 7, 2024, and a one-year extension option.

On March 5, 2020, the Company modified and extended the $61.2 million loan for Three Hughes Landing. The new $61.0 million loan bears interest at one-month LIBOR plus 2.60%, with a maturity of September 5, 2020, at which point the Company has the option to extend the Three Hughes Landing loan for an additional 12 months.

On March 27, 2020, the Company closed on a $356.8 million construction loan for the development of Kō'ula. The loan bears interest at LIBOR plus 3.00% with an initial maturity date of March 27, 2023, and a one-year extension option.

On May 20, 2020, the Company extended the remaining $280.3 million of the bridge loan for The Woodlands Towers at the Waterway and The Woodlands Warehouse for six months at LIBOR plus 2.35%, with an option for an additional six-month extension at LIBOR plus 2.90%, extending the final maturity to June 30, 2021.

Financing Activity in 2021 On February 2, 2021, the Company issued $650 million in 4.125% senior notes due 2029 (the 2029 Notes) and $650 million in 4.375% senior notes due 2031 (the 2031 notes, and together with the 2029 Notes, the Notes). The Notes will pay interest semi-annually on February 1 and August 1 of each year, beginning on August 1, 2021. The Notes will be unsecured senior obligations of the Company and will be guaranteed by certain subsidiaries of the Company.

The Company will use the net proceeds from the offering, as well as available cash on hand, to repurchase all of its $1 billion 5.375% senior notes due 2025, plus any accrued and unpaid interest, pursuant to a tender offer announced in January 2021; repay all of the approximately $280 million outstanding under its loans for 1201 Lake Robbins and The Woodlands Warehouse maturing June 2021; and pay all premiums, fees and expenses related to the foregoing. On February 2, 2021, the Company repurchased $512.5 million of its $1 billion 5.375% senior notes and intends to repurchase the remainder of these notes on March 15, 2021. In February 2021, the Company repaid all of the approximately $280 million outstanding under its loans for 1201 Lake Robbins and The Woodlands Warehouse maturing June 2021.

Mortgages, Notes and Loans Payable Mortgages, notes and loans payable, net are summarized as follows:
December 31,
thousands20202019
Fixed-rate debt:
Unsecured 5.375% Senior Notes due 2025
$1,000,000 $1,000,000 
Unsecured 5.375% Senior Notes due 2028
750,000 — 
Secured mortgages, notes and loans payable590,517 884,935 
Special Improvement District bonds34,305 23,725 
Variable-rate debt:
Mortgages, notes and loans payable (a)1,945,344 2,229,958 
Unamortized bond issuance costs(4,355)(5,249)
Unamortized deferred financing costs (b)(28,442)(36,899)
Total mortgages, notes and loans payable, net$4,287,369 $4,096,470 
(a)As of December 31, 2020, $649.9 million of variable-rate debt has been swapped to a fixed rate for the term of the related debt. As of December 31, 2019, $630.1 million of variable-rate debt has been swapped to a fixed rate for the term of the related debt and an additional $184.3 million of variable-rate debt was subject to interest rate collars. As of both December 31, 2020, and December 31, 2019, $75.0 million of variable-rate debt was capped at a maximum interest rate. See Note 9 - Derivative Instruments and Hedging Activities for additional information.
(b)Deferred financing fees are amortized to interest expense over the terms of the respective financing agreements using the effective interest method (or other methods which approximate the effective interest method).

Senior Secured Credit Facility On September 18, 2018, certain wholly-owned subsidiaries of the Company entered into a $700.0 million loan agreement, which provides for a $615.0 million term loan (the Term Loan) and an $85.0 million revolver loan (the Revolver Loan and together with the Term Loan, the Senior Secured Credit Facility or the Loans). The Loans bear interest at one-month LIBOR plus 1.65% and mature September 18, 2023. The Borrowers have a one-time right to request an increase of $50.0 million in the aggregate amount of the Revolver Loan commitment. Concurrent with the funding of the Term Loan on September 21, 2018, the Company entered into a swap agreement to fix 100% of the outstanding principal of the Term Loan to an overall rate equal to 4.61%. As of December 31, 2020, the Company had no outstanding borrowings under the Revolver Loan.
The Loans are secured by a first priority security interest in certain of the Company’s properties. In connection with the Loans, the Company provided the administrative agent, on behalf of the lenders, a non-recourse carve-out guarantee and a hazardous materials indemnity agreement.

The Woodlands and Bridgeland Credit Facility On October 17, 2019, the Company closed on a $250.0 million credit facility secured by land and certain other collateral in The Woodlands and Bridgeland MPCs. The loan provides for a $100.0 million term loan and a $150.0 million revolver loan. The loan bears interest at one-month LIBOR plus 2.50% with an initial maturity of October 17, 2022 and two one-year extension options. As of December 31, 2020, the Company had $50.0 million of outstanding borrowings under the revolver portion of the loan.

Special Improvement District Bonds The Summerlin MPC uses SID bonds to finance certain common infrastructure improvements. These bonds are issued by the municipalities and are secured by the assessments on the land. The majority of proceeds from each bond issued is held in a construction escrow and disbursed to the Company as infrastructure projects are completed, inspected by the municipalities and approved for reimbursement. Accordingly, the SID bonds have been classified as debt, and the Summerlin MPC pays the debt service on the bonds semi‑annually. As Summerlin sells land, the buyers assume a proportionate share of the bond obligation at closing, and the residential sales contracts provide for the reimbursement of the principal amounts that the Company previously paid with respect to such proportionate share of the bond. For the year ended December 31, 2020, one new SID bond was issued and obligations of $10.1 million were assumed by buyers.

Debt Compliance

Quarter-ended March 31, 2020:
–There were no instances of non-compliance.

Quarter-ended June 30, 2020:
–During the second quarter of 2020, the COVID-19 pandemic necessitated temporary closure of some of the Company’s Operating Assets, primarily retail and hospitality properties. As a result of the decline in interim operating results for certain of these properties, as of June 30, 2020, the Company did not meet the debt service coverage ratio required to maintain the outstanding Senior Secured Credit Facility Revolver Loan balance of $61.3 million. The Company cured this failure with the repayment of the Revolver Loan in August 2020.
–As of June 30, 2020, the Company did not meet the debt service coverage ratios for two loan agreements related to the Self-Storage Operating Assets. Both loans, which totaled $10.9 million, were fully repaid in August 2020.
–As of June 30, 2020, the Company did not meet a semi-annual operating covenant within the $62.5 million loan for The Woodlands Resort and Conference Center and subsequently completed a modification of the loan terms with the lender to receive a waiver of the $24.1 million repayment to cure. As part of the modification, the loan balance became fully recourse to The Woodlands Land Development Company.

Quarter-ended September 30, 2020:
–As of September 30, 2020, the Company did not meet the debt service coverage ratio for the $615.0 million Term Loan portion of the Senior Secured Credit Facility and as a result, the Company subsequently completed a modification of the loan terms which resolved the failure.

Quarter-ended December 31, 2020:
–As of December 31, 2020, the Company did not meet the debt service coverage ratio for the $615.0 million Term Loan portion of the Senior Secured Credit Facility and as a result, the excess net cash flow after debt service from the underlying properties became restricted. The restricted cash cannot be used for general corporate purposes but can continue to be used to fund operations of the underlying assets.
Other than disclosed above, as of December 31, 2020, the Company was in compliance with all financial covenants included in the agreements governing its indebtedness.
Mortgages, Notes, and Loans Payable Balances by Property The following table presents the Company’s mortgages, notes and loans payable by property, presented within each segment in order of extended maturity date:
Carrying Value
December 31,
thousandsInitial / Extended Maturity (a)Interest Rate20202019
Operating Assets
Three Hughes LandingMarch 20204.33 %(b)$— $59,822 
The Woodlands Towers at the WaterwayJune 20203.68 %(b),(c)— 336,570 
1201 Lake RobbinsJune 20212.49 %(b)273,070 — 
The Woodlands WarehouseJune 20212.49 %(b),(c)7,230 7,230 
Downtown SummerlinSeptember 2020 / September 20213.88 %(b)— 259,179 
Two MerriweatherOctober 2020 / October 20214.23 %(b)— 28,216 
Outlet Collection at RiverwalkOctober 20213.50 %(b)28,679 30,615 
100 Fellowship DriveMay 20223.23 %(b)— 47,916 
20/25 Waterway AvenueMay 20224.79 %12,855 13,131 
Millennium Waterway ApartmentsJune 20223.75 %51,946 53,032 
HHC 242 Self-StorageDecember 2021 / December 20224.33 %(b)— 5,499 
HHC 2978 Self-StorageDecember 2021 / December 20224.33 %(b)— 5,395 
Lake Woodlands Crossing RetailJanuary 20231.94 %(b)12,329 12,163 
Lakeside RowJuly 2022 / July 20232.39 %(b)31,566 23,958 
Senior Secured Credit FacilitySeptember 20234.61 %(c)615,000 615,000 
Two Lakes EdgeOctober 2022 / October 20232.40 %(b)66,198 38,214 
The Woodlands Resort & Conference CenterDecember 2021 / December 20233.00 %(b)62,500 62,500 
Lakefront NorthDecember 2022 / December 20233.73 %(b)— 32,731 
9303 New TrailsDecember 20234.88 %10,763 11,196 
4 Waterway SquareDecember 20234.88 %31,519 32,789 
Creekside Park WestMarch 2023 / March 20242.39 %(b)14,719 8,505 
The Lane at WaterwayAugust 2023 / August 20241.89 %(b),(d)22,167 1 
6100 MerriweatherSeptember 2022 / September 20242.89 %(b)62,040 36,418 
Juniper ApartmentsSeptember 2022 / September 20242.89 %(b)65,808 34,610 
Tanager ApartmentsOctober 2021 / October 20242.50 %(b)39,744 29,165 
9950 Woodloch Forest DriveMarch 20252.09 %(b)71,106 — 
Two SummerlinOctober 2022 / October 20254.25 %— 33,183 
Ae‘o RetailOctober 20252.90 %(b)30,532 — 
Ke Kilohana RetailOctober 20252.90 %(b)9,327 — 
3831 Technology Forest DriveMarch 20264.50 %20,686 21,137 
Kewalo Basin HarborSeptember 20272.89 %(b)11,562 11,110 
Millennium Six Pines ApartmentsAugust 20283.39 %42,500 42,500 
3 Waterway SquareAugust 20283.94 %46,224 47,647 
One Lakes EdgeMarch 20294.50 %69,440 69,440 
AristocratSeptember 20293.67 %37,093 38,055 
Creekside Park ApartmentsOctober 20293.52 %37,730 37,730 
One Hughes LandingDecember 20294.30 %50,815 52,000 
Two Hughes LandingDecember 20304.20 %48,000 48,000 
Other SID BondsDecember 2030
6.00% - 6.05%
(e)2,785 3,441 
8770 New TrailsJune 2021 / January 20324.89 %(f)35,417 15,124 
Constellation ApartmentsJanuary 20334.07 %24,200 24,200 
Hughes Landing RetailDecember 20363.50 %34,328 35,000 
Columbia Regional BuildingFebruary 20374.48 %24,244 24,664 
Las Vegas BallparkDecember 20394.92 %48,173 51,231 
Operating Assets Total2,052,295 2,338,317 
Master Planned Communities     
The Woodlands Master Credit FacilityOctober 2022 / October 20242.64 %(b),(g)75,000 107,500 
Bridgeland Credit FacilityOctober 2022 / October 20242.64 %(b),(g)75,000 107,500 
Summerlin South SID BondsJune 2025 - October 2049
5.00% - 6.05%
(h)31,520 20,284 
Master Planned Communities Total181,520 235,284 
Carrying Value
December 31,
thousandsInitial / Extended Maturity (a)Interest Rate20202019
Seaport District
250 Water StreetNovember 2022 / November 20233.64 %(b)100,000 100,000 
Seaport DistrictJune 20246.10 %— 250,000 
Seaport District Total100,000 350,000 
Strategic Developments
‘A‘ali‘iJune 2022 / June 20234.10 %(b)154,601 30,717 
Kō‘ulaMarch 2023 / March 20243.14 %(b)65,282 — 
110 North WackerApril 2022 / April 20244.73 %(b),(i)— 184,300 
Creekside Park The GroveJanuary 2024 / January 20251.89 %(b)16,468 — 
Strategic Developments Total236,351 215,017 
Senior Notes due 2025March 20255.38 %1,000,000 1,000,000 
Senior Notes due 2028August 20285.38 %750,000 — 
Unamortized bond issuance costs (4,355)(5,249)
Unamortized deferred financing costs (28,442)(36,899)
Total mortgages, notes and loans payable$4,287,369 $4,096,470 
(a)Maturity dates presented represent initial maturity dates and the extended or final maturity dates as contractually stated. HHC has the option to exercise extension periods at the initial maturity date, subject to extension terms that are based on current property performance projections. Extension terms may include minimum debt service coverage, minimum occupancy levels or condominium sales levels, as applicable and other performance criteria. In certain cases, due to property performance not meeting covenants, HHC may have to pay down a portion of the loan to obtain the extension.
(b)The interest rate presented is based on the one-month LIBOR, three-month LIBOR or Prime rate, as applicable, which was 0.14%, 0.24% and 3.25%, respectively, at December 31, 2020. Interest rates associated with loans which have been paid off reflect the prior year interest rate.
(c)100.0% of the outstanding principal of the $615.0 million Term Loan is swapped to a fixed rate equal to 4.61%.
(d)Millennium Phase III Apartments was renamed to The Lane at Waterway.
(e)Includes SID bonds related to Downtown Summerlin, Hockey Ground Lease, Two Summerlin, Tanager Apartments and Las Vegas Ballpark.
(f)Concurrent with the closing of the $35.5 million construction loan for 8770 New Trails in 2019, the Company entered into an interest rate swap which is designated as a cash flow hedge. The Loan bears interest at one-month LIBOR plus 2.45% but it is currently swapped to a fixed rate equal to 4.89%.
(g)The Woodlands and Bridgeland Credit Facility is secured by land and certain other collateral in The Woodlands and Bridgeland MPCs with a combined maximum facility amount of $250 million.
(h)Includes SID bonds with various maturity dates ranging from June 2025 to October 2049 and interest rates ranging from 5.00% to 6.05%.
(i)As of September 30, 2020, the Company derecognized a $326.8 million balance on 110 North Wacker’s variable-rate debt that was subject to interest rate collars. Refer to Note 2 - Real Estate and Other Affiliates for additional information.

The weighted-average interest rate on the Company’s mortgages, notes and loans payable, excluding interest rate hedges, was 4.34% as of December 31, 2020, and 4.75% as of December 31, 2019.
HHC’s mortgages, notes and loans payable are secured by the properties listed in the table above and are non-recourse except for the following:
thousandsRecourse %Amount
Recourse to HHC
Senior Notes due 2025100 %$1,000,000 
Senior Notes due 2028100 %750,000 
1201 Lake Robbins100 %273,070 
‘A‘ali‘i25 %38,650 
250 Water Street35 %35,000 
Juniper Apartments25 %16,452 
Kō‘ula25 %16,320 
6100 Merriweather25 %15,510 
Outlet Collection at Riverwalk50 %14,339 
Tanager25 %9,936 
Lakeside Row25 %7,892 
The Woodlands Warehouse100 %7,230 
Total recourse to HHC2,184,399 
Recourse to The Woodlands Land Development Company (TWLDC) (a)
The Woodlands Resort & Conference Center100 %62,500 
Two Lake's Edge25 %16,550 
9950 Woodloch Forest20 %14,221 
The Lane at Waterway35 %7,759 
Lake Woodlands Crossing Retail50 %6,164 
Creekside Park The Grove25 %4,117 
Creekside Park West25 %3,680 
Total recourse to TWLDC114,991 
Total$2,299,390 
(a)This debt is partially recourse to The Woodlands Land Development Company which is a wholly owned subsidiary of HHC.

Certain of the Company’s loans contain provisions which grant the lender a security interest in the operating cash flow of the property that represents the collateral for the loan. Certain mortgage notes may be prepaid subject to a prepayment penalty equal to a yield maintenance premium, defeasance, or a percentage of the loan balance. As of December 31, 2020, land, buildings and equipment and developments with a net book value basis of $4.5 billion have been pledged as collateral for HHC’s mortgages, notes and loans payable. 

Scheduled Maturities The following table summarizes the contractual obligations relating to the Company’s mortgages, notes and loans payable as of December 31, 2020, based on extended maturity dates:
thousandsMortgages, notes and loans payable principal payments
2021$321,712 
202277,689 
20231,091,049 
2024430,490 
20251,136,625 
Thereafter1,262,601 
Total principal payments4,320,166 
Unamortized deferred financing and bond issuance costs(32,797)
Total mortgages, notes and loans payable$4,287,369