Howard Hughes (NYSE: HHH) outlines holding company pivot and $2.1B Vantage deal
Filing Impact
Filing Sentiment
Form Type
10-K
Rhea-AI Filing Summary
Howard Hughes Holdings Inc. describes its evolution from a pure-play real estate developer into a diversified holding company built around three segments: Operating Assets, Master Planned Communities (MPCs), and Strategic Developments.
In 2025, the company sold 9,000,000 newly issued shares to Pershing Square for
The filing highlights a large U.S. real estate platform, including roughly 101,000 gross acres of MPCs across five states, 77 operating assets, and substantial condominium pipelines in Hawai‘i and Texas. It reports
Positive
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Insights
Strategic pivot toward a leveraged holding-company model with significant execution risk.
Howard Hughes is repositioning from a real estate-focused operator to a diversified holding company. The Pershing Square equity infusion of
The underlying real estate engine remains substantial, with large MPC land banks, 77 operating assets, and significant pre-sold condominium pipelines, supporting recurring cash flow and self-funded development. At December 31, 2025, total debt was about
Risks are extensive: cyclicality in housing and commercial real estate, entitlement and regulatory hurdles, climate and cybersecurity exposure, and dependence on homebuilders and joint-venture partners. The filing also flags concentrated influence from Pershing Square and uncertainties around realizing anticipated benefits from the new strategy and the Vantage deal. Future disclosures on integration progress, leverage trends, and segment performance will be important for understanding how this pivot affects long-term earnings and balance-sheet resilience.
UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K
(MARK ONE)
For the fiscal year ended December 31 , 2025
or
For the transition period from to
Commission File Number 001-41779
(Exact name of registrant as specified in its charter)
| (State or other jurisdiction of incorporation or organization) | (I.R.S. Employer Identification Number) | ||||
(Address of principal executive offices, including zip code)
Registrant’s telephone number, including area code (281) 719-6100
Securities registered pursuant to Section 12(b) of the Act:
| Title of each class: | Trading Symbol(s) | Name of each exchange on which registered: | |||||||||||||||
Securities registered pursuant to Section 12(g) of the Act: None
Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes ☒ No ☐
Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes ☐ No ☒
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
| ☒ | Accelerated filer | ☐ | Emerging growth company | Non-accelerated filer | ☐ | Smaller reporting company | |||||||||||||||||||||||||||||||||||
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Indicate by check mark whether the registrant has filed a report on and attestation to its management’s assessment of the effectiveness of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its audit report. ☒
If securities are registered pursuant to Section 12(b) of the Act, indicate by check mark whether the financial statements of the registrant included in the filing reflect the correction of an error to previously issued financial statements. ☐
Indicate by check mark whether any of those error corrections are restatements that required a recovery analysis of incentive-based compensation received by any of the registrant’s executive officers during the relevant recovery period pursuant to §240.10D-1(b). ☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). Yes ☐ No ☒
As of June 30, 2025, the aggregate market value of the registrant’s common stock held by non-affiliates of the registrant was approximately $2.2 billion based on the closing sale price as reported on the New York Stock Exchange on June 30, 2025, the last trading day of the registrant’s second quarter.
The number of shares of common stock, $0.01 par value, outstanding as of February 12, 2026 was 59,636,343 .
DOCUMENTS INCORPORATED BY REFERENCE Portions of the registrant’s Proxy Statement for its 2026 Annual Meeting of Stockholders are incorporated by reference in Items 10, 11, 12, 13, and 14 of Part III of this Annual Report on Form 10-K. The registrant intends to file its Proxy Statement with the Securities and Exchange Commission within 120 days of the registrant’s fiscal year ended December 31, 2025.
Table of Contents Index to Financial Statements | |||||
| TABLE OF CONTENTS | Page | |||||||
PART I | ||||||||
Item 1. | Business | 4 | ||||||
Item 1A. | Risk Factors | 10 | ||||||
Item 1B. | Unresolved Staff Comments | 24 | ||||||
Item 1C. | Cybersecurity | 24 | ||||||
Item 2. | Properties | 25 | ||||||
Operating Assets | 25 | |||||||
Master Planned Communities | 29 | |||||||
Strategic Developments | 30 | |||||||
Item 3. | Legal Proceedings | 32 | ||||||
Item 4. | Mine Safety Disclosure | 32 | ||||||
PART II | ||||||||
Item 5. | Market for Registrant’s Common Equity, Related Stockholder Matters, and Issuer Purchases of Equity Securities | 33 | ||||||
Item 6. | [Reserved] | 34 | ||||||
Item 7. | Management’s Discussion and Analysis of Financial Condition and Results of Operations | 35 | ||||||
Overview | 36 | |||||||
Results of Operations | 39 | |||||||
Liquidity and Capital Resources | 51 | |||||||
Critical Accounting Policies and Estimates | 55 | |||||||
Recently Issued Accounting Pronouncements and Developments | 55 | |||||||
Item 7A. | Quantitative and Qualitative Disclosures about Market Risk | 56 | ||||||
Item 8. | Financial Statements and Supplementary Data | 57 | ||||||
Management's Report on Internal Control over Financial Reporting | 58 | |||||||
Report of Independent Registered Public Accounting Firm | 59 | |||||||
Financial Statements | 61 | |||||||
Consolidated Balance Sheets | 61 | |||||||
Consolidated Statements of Operations | 62 | |||||||
Consolidated Statements of Comprehensive Income (Loss) | 63 | |||||||
Consolidated Statements of Equity | 64 | |||||||
Consolidated Statements of Cash Flows | 65 | |||||||
Notes to Consolidated Financial Statements | 67 | |||||||
Schedule III - Real Estate and Accumulated Depreciation | 105 | |||||||
Item 9. | Changes in and Disagreements with Accountants on Accounting and Financial Disclosure | 109 | ||||||
Item 9A. | Controls and Procedures | 109 | ||||||
Item 9B. | Other Information | 109 | ||||||
Item 9C. | Disclosure Regarding Foreign Jurisdictions that Prevent Inspections | 109 | ||||||
PART III | ||||||||
Item 10. | Directors, Executive Officers, and Corporate Governance | 110 | ||||||
Item 11. | Executive Compensation | 110 | ||||||
Item 12. | Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters | 110 | ||||||
Item 13. | Certain Relationships and Related Transactions, and Director Independence | 110 | ||||||
Item 14. | Principal Accountant Fees and Services | 110 | ||||||
PART IV | ||||||||
Item 15. | Exhibits and Financial Statement Schedule | 111 | ||||||
Item 16. | Form 10-K Summary | 114 | ||||||
Table of Contents Index to Financial Statements | |||||
CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS
Throughout this Annual Report on Form 10-K (Annual Report), references to the “Company,” “HHH,” “we,” “us,” and “our” refer to Howard Hughes Holdings Inc. and its consolidated subsidiaries, unless the context requires otherwise. This Annual Report contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934 (Exchange Act). All statements other than statements of historical fact included in this Annual Report are forward-looking statements. We claim the protection of the Safe Harbor contained in the Private Securities Litigation Reform Act of 1995 for forward-looking statements. Forward-looking statements give our current expectations relating to our financial condition, results of operations, plans, objectives, future performance, or business. You can identify forward-looking statements by the fact that they do not relate strictly to current or historical facts. These statements may include words such as “anticipate,” “believe,” “estimate,” “expect,” “forecast,” “intend,” “likely,” “may,” “plan,” “project,” “realize,” “should,” “transform,” “will,” “would,” and other statements of similar expression. Forward-looking statements should not be relied upon. They give our expectations about the future and are not guarantees.
Forward-looking statements include statements regarding:
–the expected changes to our strategy following the transactions with Pershing Square
–accelerated growth in our core Master Planned Communities assets
–expected performance of our stabilized, income-producing properties and the performance and stabilization timing of properties that we have recently placed into service or are under construction
–forecasts of our future economic performance
–expected capital required for our operations and development opportunities for our properties
–planned acquisitions, including the acquisition of Vantage, and our ability to integrate and realize the economic benefits of acquired businesses
–impact of technology on our operations and business
–expected performance of our segments
–expected commencement and completion for property developments and timing of sales or rentals of certain properties
–estimates of our future liquidity, development opportunities, development spending and management plans; and
–descriptions of assumptions underlying or relating to any of the foregoing
These statements involve known and unknown risks, uncertainties, and other factors that may cause our actual results, performance, and achievements to materially differ from any future results, performance, and achievements expressed or implied by such forward-looking statements. Factors that could cause actual results to differ materially from those expressed or implied by the forward-looking statements include:
–our ability to realize the anticipated benefits of the transactions with Pershing Square and our new strategy of becoming a diversified holding company
–our ability to identify and consummate transactions as part of our strategy of becoming a diversified holding company
–risks inherent in acquiring or making investments in operating companies, especially companies in industries unrelated to our existing real estate business
–our ability to satisfy the conditions to closing and consummate the proposed acquisition of Vantage (Vantage Transaction), integrate it into our operations, and realize the financial benefits currently anticipated from such acquisition
–our ability to realize the anticipated benefits of the spinoff of Seaport Entertainment Group Inc. that we completed in 2024
–macroeconomic conditions such as volatility in capital markets, unstable economic and political conditions within the U.S. and foreign jurisdictions, geopolitical conflicts, and a prolonged recession in the national economy, including any adverse business or economic conditions in the homebuilding, condominium-development, retail, and office sectors
–changes in trade policies, including tariffs or duties on construction or homebuilding materials, potential retaliatory actions by other countries, and related impacts on market conditions and business activity
–our inability to obtain operating and development capital for our properties, including our inability to obtain or refinance debt capital from lenders and the capital markets
–interest rate volatility and inflation
–the availability of debt and equity capital
–our ability to compete effectively, including the potential impact of heightened competition for tenants and potential decreases in occupancy at our properties
–general inflation, including core and wage inflation; commodity and energy price and currency volatility; as well as monetary, fiscal and policy interventions in anticipation of our reaction to such events, including changes in interest rates
HHH 2025 FORM 10-K | 2
Table of Contents Index to Financial Statements | |||||
–mismatch of supply and demand, including interruptions of supply lines
–extreme weather conditions or climate change, including natural disasters, that may cause property damage or interrupt business
–the impact of water and electricity shortages
–contamination of our property by hazardous or toxic substances
–terrorist activity, acts of violence, or breaches of our or our vendors’ data security
–losses that are not insured or exceed the applicable insurance limits
–our ability to lease new or redeveloped space
–our ability to obtain the necessary governmental permits for the development of our properties and necessary regulatory approvals pursuant to an extensive entitlement process involving multiple and overlapping regulatory jurisdictions, which often require discretionary action by local governments
–increased construction costs exceeding our original estimates, delays or overruns, claims for construction defects, or other factors affecting our ability to develop, redevelop or construct our properties
–regulation of the portion of our business that is dedicated to the formation and sale of condominiums, including regulatory filings to state agencies, additional entitlement processes, and requirements to transfer control to a condominium association’s board of directors in certain situations, as well as potential defaults by purchasers on their obligations to purchase condominiums
–fluctuations in regional and local economies, the impact of changes in interest rates on residential housing and condominium markets, local real estate conditions, tenant rental rates, and competition from competing retail properties and the internet
–inherent risks related to disruption of information technology networks and related systems, including cyber security attacks
–our ability to attract and retain key personnel
–our ability to collect rent and attract tenants
–our indebtedness, including our $750,000,000 5.375% senior unsecured notes due 2028, $650,000,000 4.125% senior unsecured notes due 2029 and $650,000,000 4.375% senior unsecured notes due 2031, contain restrictions that may limit our ability to operate our business
–our directors’ involvement or interests in other businesses, including real estate activities and investments
–our inability to control certain of our properties due to the joint ownership of such property and our inability to successfully attract desirable strategic partners
–our dependence on the operations and funds of our subsidiaries, including The Howard Hughes Corporation
–catastrophic events or geopolitical conditions, such as international armed conflicts, or the occurrence of epidemics or pandemics; and
–the other risks described in Item 1. Business, Item 1A. Risk Factors and Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations of this Annual Report
Any factor could, by itself, or together with one or more other factors, adversely affect our business, results of operations, plans, objectives, future performance, or financial condition. Other factors not described in this Annual Report also could cause results to differ from our expectations. Given these risks and uncertainties, you are cautioned not to place undue reliance on such forward-looking statements. These forward-looking statements present our estimates and assumptions only as of the date of this Annual Report. Except as may be required by law, we undertake no obligation to modify or revise any forward-looking statements to reflect events or circumstances occurring after the date of this Annual Report.
HHH 2025 FORM 10-K | 3
| BUSINESS | Table of Contents Index to Financial Statements | ||||
| PART I | ||
Item 1. Business
| OVERVIEW | ||
Business Overview Howard Hughes Holdings Inc. (HHH or the Company) is a holding company that owns a real estate development subsidiary, The Howard Hughes Corporation (HHC). Through HHC, the Company operates a large‑scale, mixed‑use real estate platform focused on the development of master planned communities (MPCs), the investment in strategic real estate development opportunities, and the ownership and operation of income‑producing properties. Our award-winning assets include one of the nation's largest portfolios of MPCs, spanning approximately 101,000 gross acres across five states. We create some of the most sought-after communities in the country by curating an environment tailored to meet the needs of our residents and tenants. This unique business model allows us to seek attractive risk-adjusted returns while maintaining a sharp focus on sustainability to ensure our communities are equipped with the resources to last several decades.
In 2025, the Company began executing a long-term strategy to transition from a pure-play real estate company to a diversified holding company. On May 5, 2025, the Company sold 9,000,000 newly issued shares of the Company’s common stock to Pershing Square for an aggregate purchase price of $900 million, with the expectation that the proceeds from the transaction would be used to acquire or make investments in other operating companies (Pershing Square Issuance).
On December 18, 2025, we announced that we have entered into a definitive agreement to acquire 100% of Vantage Group Holdings Ltd. (Vantage), a privately held specialty insurance and reinsurance company, for cash consideration of approximately $2.1 billion. The transaction remains subject to regulatory approvals and other customary closing conditions, and is expected to close in the second quarter of 2026. If completed, the combination of HHH’s corporate holding structure and Vantage’s insurance expertise creates the opportunity to advance the insurance company’s growth using reinvested real estate cash flows while continuing to invest in HHH’s core real estate development business.
Refer to Note 1 - Presentation of Financial Statements and Significant Accounting Policies and Note 2 - Pershing Square in the Notes to Consolidated Financial Statements under Item 8 of this Annual Report for additional information.
Available Information HHH was incorporated in Delaware on August 11, 2023, and its predecessor, The Howard Hughes Corporation (HHC), was incorporated in Delaware on July 1, 2010.
Our website address is www.howardhughes.com. Our Annual Report on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K, and other publicly filed documents, including all exhibits filed therewith, are available and may be accessed free of charge through the Investors section of our website under the Financial Reporting subsection, as soon as reasonably practicable after those documents are filed with, or furnished to, the Securities and Exchange Commission (SEC) at www.sec.gov. Also available through the Investors section of our website are reports filed by our directors and executive officers on Forms 3, 4, and 5, and amendments to those reports. Our website and included or linked information on the website are not incorporated into this Annual Report on Form 10-K. From time to time, we use our website as a means of disclosing material information and for complying with our disclosure obligations under SEC Regulation FD (Fair Disclosure). Accordingly, investors should monitor the Investors section of our website in addition to following the Company’s press releases, SEC filings, public conference calls, presentations and webcasts.
HHH 2025 FORM 10-K | 4
| BUSINESS | Table of Contents Index to Financial Statements | ||||
| BUSINESS SEGMENTS | ||
HHH operates through three business segments: Operating Assets, MPCs, and Strategic Developments. We create a continuous value-creation cycle through operational and financial synergies associated with these three business segments. In our MPC segment, we plan, develop, and manage small cities and large-scale, mixed-use communities, in markets with strong long-term growth fundamentals. This business focuses on the horizontal development of residential land. The improved acreage is then sold to homebuilders who build and sell homes to new residents. New homeowners create demand for commercial developments, such as retail, office, multifamily, and hospitality offerings. We build these commercial properties through our Strategic Developments business at the appropriate times, which helps mitigate development risk, using the cash flow harvested from the sale of land to homebuilders. Once the commercial developments are completed, the assets transition to our Operating Assets segment, which increases recurring Net Operating Income (NOI), further funding our Strategic Developments. New office, retail, and other commercial amenities make our MPC residential land more appealing to buyers and increase the velocity of land sales at premiums that typically exceed the broader market. This increased demand for residential land generates more cash flow from MPCs, thus continuing the value-creation cycle.
The following further describes our three business segments and provides a general description of the assets comprising these segments. Refer to Item 2. Properties for additional detail on individual properties, including assets by reportable segment, geographic location, and predominant use at December 31, 2025. This section should be referred to when reading Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations, which contains information about our financial results and operating performance for our business segments. Financial information about each of our segments is presented in Note 19 - Segments in the Notes to Consolidated Financial Statements under Item 8 of this Annual Report.
| Operating Assets | ||
We have developed many of the assets in our Operating Assets segment since the Company’s inception in 2010. As of December 31, 2025, we had 77 Operating Assets, including our investments in unconsolidated ventures, consisting of 13 retail properties, 37 office properties, 18 multifamily properties, and 9 other operating properties or investments. Excluding our projects under construction, we own approximately 9.3 million square feet of retail and office space and 5,855 multifamily units.
The long-term value of our Operating Assets is driven by their concentration in our MPCs, where we have a competitive advantage. We believe that these assets have the potential for future growth by increasing rental rates, absorbing remaining vacancy, and changing the tenant mix in retail centers to improve gross sales revenue of our tenants, thereby increasing rents. Revenue is primarily generated through rental services and is directly impacted by trends in rental rates and operating costs.
For certain assets, we believe there are opportunities to improve operating performance through redevelopment or repositioning. Redevelopment plans for these assets may include office, retail, or residential space, shopping centers, movie theaters, parking complexes, or open space. These opportunities will require new capital investment and vary in complexity and scale. The redevelopment opportunities range from those that would have minimal disruption to the property to those requiring partial or full demolition of existing structures for new construction. Factors we evaluate in determining whether to redevelop or reposition an asset include the following: (1) existing and forecasted demographics surrounding the property; (2) competition related to existing and/or alternative uses; (3) existing entitlements of the property and our ability to change them; (4) compatibility of the physical site with proposed uses; and (5) environmental considerations, traffic patterns, and access to the properties.
We generally transfer an operating asset that is being repositioned or redeveloped into our Strategic Developments segment when we close operations at a property and/or begin construction on the redevelopment project. Upon completion of construction or renovation of a development or redevelopment, the asset is fully or partially placed in service and transferred back into our Operating Assets segment.
HHH 2025 FORM 10-K | 5
| BUSINESS | Table of Contents Index to Financial Statements | ||||
| Master Planned Communities | ||
As of December 31, 2025, our portfolio of MPCs was comprised of Summerlin in Las Vegas; The Woodlands, The Woodlands Hills and Bridgeland in the Houston region; and Teravalis in the Phoenix region. Our MPC segment includes the development and sale of residential and commercial land, primarily in large-scale, long-term projects. These developments often require decades of investment and continued focus on the changing market dynamics surrounding these communities. We believe that the long-term value of our MPCs remains strong because of their competitive positioning in their respective markets, our in-depth experience in diverse land-use planning, and the fact that we have substantially completed the entitlement processes within the majority of our communities.
Our MPCs have won numerous awards for design excellence and for community contribution. Summerlin and Bridgeland were again ranked by RCLCO, capturing tenth and eleventh top-selling master planned communities in the nation, respectively, for the year ended December 31, 2025.
We expect the competitive position, desirable locations, and land development expertise to drive the long-term growth of our MPCs. As of December 31, 2025, our MPCs, including Floreo, our unconsolidated joint venture in the Phoenix region, include approximately 34,000 acres of land available for sale or development. Residential sales, which are generated primarily from the sale of finished lots and undeveloped superpads to residential homebuilders and developers, include standard and custom parcels designated for detached and attached single-family homes and range from entry-level to luxury homes. Superpad sites are generally 10- to 25-acre parcels of unimproved land where we develop and construct the major utilities (water, sewer, and storm drainage) and roads to the borders of the parcel, and the homebuilder completes the on-site utilities, roads, and finished lots. Revenue is also generated through builder price participation with homebuilders.
We also occasionally sell or lease land for commercial development when we deem its use will not compete with our existing properties or our development strategy. Commercial sales include land parcels designated for retail, office, hospitality, high-density residential projects (condominiums and apartments), services, and other for-profit activities, as well as those parcels designated for use by government, schools, and other not-for-profit entities.
| Strategic Developments | ||
Our Strategic Developments segment consists of various development or redevelopment projects, including developments within our MPCs that will transition to Operating Assets upon completion and condominium towers at Ward Village in Hawai‘i and The Woodlands. Many of these developments require extensive planning and expertise in large-scale and long-range development to maximize their highest and best uses. The strategic process is complex and unique to each asset and requires ongoing assessment of the changing market dynamics prior to the commencement of construction. We must study each local market, determine the highest and best use of the land and necessary improvements to the area, obtain entitlements and permits, complete architectural design and construction drawings, secure tenant commitments, and obtain and commit sources of capital.
We are in various stages of predevelopment or execution of our strategic plans for many of these assets based on market conditions. As of December 31, 2025, five properties were under construction and not yet placed into service. We generally obtain construction financing to fund a significant amount of the costs associated with developing these assets.
HHH 2025 FORM 10-K | 6
| BUSINESS | Table of Contents Index to Financial Statements | ||||
| COMPETITIVE STRENGTHS AND COMPETITION | ||
Our assets are located across the United States, with the vast majority of the assets in Operating Assets segment located within our MPCs. This helps us achieve scale and, in most cases, critical mass, which leads to pricing power in lease and vendor negotiations; increased ability to attract, hire, and retain the best local leadership and leasing teams; flexibility to meet changing customer demands; and enhanced ability to identify and capitalize on emerging opportunities. Our MPCs, including Floreo, our unconsolidated joint venture, contain approximately 21,000 residential acres of land remaining to be developed and sold in high-demand geographic areas. In addition to the residential land, our MPCs contain approximately 13,000 acres designated for commercial development or sale to non-competing users such as hospitals.
Competitive Strengths We distinguish ourselves from other real estate companies through the following competitive strengths:
–Self-Funded Business Plan. One of our key differentiators is our ability to self-fund significant portions of our new development without having to dispose of our recently completed developments. Our residential land sales, recurring NOI, and profits on the sales of condominium units generate substantial amounts of free cash flow, which is used to fund the equity required to execute our many development opportunities. From time to time, we may also allocate a portion of this cash flow to support the growth and capitalization of any newly acquired businesses, such as the proposed Vantage acquisition, while maintaining the capacity to fund our existing development opportunities. Furthermore, we are not required to pay dividends, nor are we restricted from investing in any asset type, amenity, or service, unlike many other real estate companies, which are limited in their activities because they have elected to be taxed as a real estate investment trust (REIT). We believe our structure currently provides us with significant financial and operating flexibility to maximize the value of our portfolio.
–Track Record of Value Creation. We have completed development of various office, retail, and multifamily properties since 2011. These developments are projected to generate a 8.8% yield on cost, a significant spread over market cap rates which, in turn, has generated meaningful value for our stockholders. These returns exclude condominium developments as they do not result in recurring NOI. We have either opened or started construction on 11 condominium towers, with approximately 99% of the units sold or pre-sold as of December 31, 2025.
–Unique, Diverse Portfolio. We own a portfolio with many diverse market-leading assets with a combination of steady cash flow and longer-term value creation opportunities.
–Significant Value Creation Opportunity. We believe we have found the optimal mix of price point and product in the Honolulu market for condominium development as evidenced by the demand for our condominium projects. As of December 31, 2025, we have two condominium towers under construction that are 96% pre-sold representing $1.5 billion of contracted future revenue and three condominium towers in predevelopment that are 66% pre-sold representing $2.0 billion of contracted future revenue. Additionally, the State of Hawai’i has approved amendments to the local development rules to include updated guidelines for smart growth in areas including Ward Village. The Company estimates this amendment increases its potential residential entitlements in Ward Village between 2.5 to 3.5 million gross square feet, which could be used for the development of additional condominium towers in future years.
–Flexible Balance Sheet. We ended the year with $1.5 billion of cash on hand. As of December 31, 2025, our total debt equaled approximately 48% of the book value of our total assets, which we believe is significantly less than our market value. Our net debt, which includes our share of debt of unconsolidated ventures less cash and Special Improvement District and Municipal Utility District receivables, equaled approximately 39% of our total enterprise value. Unconsolidated ventures refer to partnerships or joint ventures primarily for the development and operation of real estate assets.
–Sustainability Strategy. Our communities provide an exceptional lifestyle that has made them among the most sought-after places to live and work in the country. Sustained migration into The Woodlands, Bridgeland, and Summerlin reinforces that thoughtful planning is highly attractive as residents, CEOs, and commercial tenants are seeking and expecting a committed approach to sustainability and community health and wellness. We integrate sustainability initiatives into the planning, development, and operation of our MPCs by promoting access to green spaces, reducing energy use and carbon emissions, conserving water, protecting biodiversity, and supporting healthy living. We pursue sustainability certifications, including Leadership in Energy and Environmental Design (LEED), where appropriate by asset type and market conditions, and voluntarily report on our sustainability efforts through the annual Global Real Estate Sustainability Benchmark (GRESB) and S&P Global Corporate Sustainability Assessment. Additional details are available in our most recent annual Sustainability Report, which can be found in the Investors section of the Company’s website (https://investor.howardhughes.com/news-events/presentations).
HHH 2025 FORM 10-K | 7
| BUSINESS | Table of Contents Index to Financial Statements | ||||
Competition The nature and extent of our competition depends on the type of property involved. With respect to our Operating Assets segment, we primarily compete for retail, office, and multifamily tenants. We believe the principal factors that retailers consider in making their leasing decisions include: (1) consumer demographics; (2) age, quality, design, and location of properties; (3) neighboring real estate projects that have been developed or that we, or others, may develop in the future; (4) diversity of retailers and anchor tenants at shopping center locations; (5) management and operational expertise; and (6) rental rates. The principal factors influencing tenant leasing decisions for our office space include: (1) rental rates; (2) attractive views; (3) amenities; (4) walkable retail; (5) commute time; (6) efficiency of space; and (7) demographics of the available workforce. For residential tenants of our multifamily properties in our Operating Assets segment, we believe the principal factors that impact their decision of where to live are: (1) walkability/proximity to work; (2) amenities; and (3) the best value for their money.
With respect to our MPC segment, we compete with other landholders and residential and commercial property developers primarily in the development of properties within Las Vegas, Nevada; the greater Houston, Texas area; and Phoenix, Arizona markets. Significant factors that we believe allow us to compete effectively in this business include:
–the size and scope of our MPCs
–our strong reputation within the industry and years of experience serving our communities
–the recreational and cultural amenities available within our communities
–the commercial centers in our communities, including the properties that we own and/or operate or may develop
–our relationships with homebuilders
–the proximity of our developments to major metropolitan areas
With respect to our Strategic Developments segment, our direct competitors include other commercial property developers and other owners of commercial real estate that engage in similar businesses. We also compete with residential condominium developers. With significant existing entitlements, we hold an advantage over many of our competitors in our markets in that we already own or have significant influence over, substantial acreage for development. We also own the majority of square feet of each product type in many of our markets.
| HUMAN CAPITAL | ||
As of December 31, 2025, the Company employed approximately 500 individuals, with the majority serving in full-time roles across various U.S. locations. Our employees are fundamental to our core operations and represent a vital asset to the organization. The ongoing effectiveness of our strategy and the generation of sustainable value for the company are contingent upon our capacity to attract, develop, and retain exceptional talent.
Our commitment to community building is reflected in the creation of spaces that empower employees to prosper both professionally and personally. To further promote growth, employees have access to a variety of valuable resources. These include tuition reimbursement programs, support for managing student debt, and financial wellness workshops, all aimed at enhancing financial literacy and stability. Customized training initiatives focus on professional development as well as compliance and ethics education, reinforcing our dedication to integrity and career advancement throughout the organization. In 2025, the Company invested in various training initiatives, including the introduction of our leadership development program. This initiative underscores our ongoing investment in developing future leaders and supporting the professional aspirations of our workforce.
Our talent management processes are structured to ensure that the appropriate skills are aligned with the correct roles at the optimal time. We monitor voluntary and involuntary turnover, as well as time to fill for critical positions, to assess the effectiveness of our recruiting, onboarding, and retention initiatives. This allows us to adjust our talent strategies as needed.
The company's comprehensive benefits program includes robust healthcare coverages including voluntary benefits for unexpected life events, wellness incentives for all life stages, up to 12 weeks of fully paid parental leave, adoption and surrogacy support, a 401(k)-match program for retirement planning, and other plans like commuter benefits and pet insurance to meet the needs of our diverse workforce. The Company remains deeply committed to community impact through our HHCares program, which supported 178 local charities in 2025 through monetary donations and employee volunteerism. Our employees collectively volunteered approximately 3,150 hours, showcasing their dedication to strengthening communities where we live and work.
At HHH, we recognize that our people are at the heart of our organization and the communities we serve. By investing in their development, well-being, and community impact, we continue to build a foundation for success that drives meaningful change.
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| REGULATORY MATTERS | ||
A portion of our business is dedicated to the development and sale of condominiums. Condominiums are generally regulated by an agency of the state in which they are located or where the condominiums are marketed to be sold. In connection with our development and offering of condominium units for sale, we must submit regulatory filings to various state agencies and engage in an entitlement process by which real property owned under one title is converted into individual units. Responses or comments on our condominium filings may delay our ability to sell condominiums in certain states and other jurisdictions in a timely manner, or at all. In addition, approval to develop real property sometimes requires political support and generally entails an extensive entitlement process involving multiple and overlapping regulatory jurisdictions and often requires discretionary action by local governments. Real estate projects must generally comply with local land development regulations and may need to comply with state and federal regulations. We incur substantial costs to comply with legal and regulatory requirements.
Various local, state, and federal statutes, ordinances, rules and regulations concerning building, health and safety, site and building design, environment, zoning, sales and similar matters apply to and/or affect the real estate development industry. Our ability to obtain or renew permits or approvals and the continued effectiveness of permits already granted or approvals already obtained depends on factors beyond our control, such as changes in federal, state, and local policies, rules and regulations, and their interpretations and application.
There is a variety of legislation being enacted, or considered for enactment, at the federal, state, and local levels relating to energy and climate change. This legislation relates to items such as carbon dioxide emissions control and building codes that impose energy efficiency standards. New building code requirements that impose stricter energy efficiency standards could significantly increase our cost to construct buildings. As climate change concerns continue to grow, legislation and regulations of this nature are expected to continue and become more costly to comply with. We may be required to apply for additional approvals or modify our existing approvals because of changes in local circumstances or applicable law. Energy-related initiatives affect a wide variety of companies throughout the United States and the world and, because our operations are heavily dependent on significant amounts of raw materials, such as lumber, steel, and concrete, they could have an indirect adverse impact on our operations and profitability to the extent the manufacturers and suppliers of our materials are burdened with expensive cap and trade and similar energy-related taxes and regulations. Governmental regulation also affects sales activities, mortgage lending activities, and other dealings with consumers. Further, government agencies routinely initiate audits, reviews, or investigations of our business practices to ensure compliance with applicable laws and regulations, which can cause us to incur costs or create other disruptions in our business that can be significant. We may experience delays and increased expenses as a result of legal challenges to our proposed communities, whether brought by governmental authorities or private parties.
Under various federal, state, and local laws and regulations, an owner of real estate is liable for the costs of remediation of certain hazardous substances, including petroleum and certain toxic substances (collectively hazardous substances) on such real estate. These laws often impose such liability without regard to whether the owner knew of, or was responsible for, the presence of such hazardous substances. The costs of remediation of such substances may be substantial, and the presence of such substances, or the failure to remediate such substances, may adversely affect the owner’s ability to sell such real estate or to obtain financing using such real estate as collateral. Other federal, state, and local laws, ordinances and regulations require abatement or removal of asbestos-containing materials in the event of demolition or certain renovations or remodeling, the cost of which may be substantial for certain redevelopments, and also govern emissions of and exposure to asbestos fibers in the air. Federal and state laws also regulate the operation and removal of underground storage tanks. In connection with our ownership, operation, and management of certain properties, we could be held liable for the costs of remedial action with respect to these regulated substances or tanks or related claims.
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Item 1A. Risk Factors
The risks and uncertainties described below are those that we deem currently to be material, and do not represent all of the risks that we face. Additional risks and uncertainties not presently known to us or that we currently do not consider material may in the future become material and impair our business operations. If any of the following risks actually occur, our business could be materially harmed, and our financial condition and results of operations could be materially and adversely affected. Our business, prospects, financial condition, or results of operations could be materially and adversely affected by the following:
| RISKS RELATED TO OUR INDUSTRY, MARKET, AND CUSTOMERS | ||
Our performance and the market value of our securities are subject to risks associated with our investments in real estate assets and with trends in the real estate industry.
Our economic performance and the value of our real estate assets, and consequently the market value of the Company’s securities, are subject to the risk that our properties may not generate revenues sufficient to meet our operating expenses or other obligations. A deficiency of this nature would adversely impact our financial condition, results of operations, cash flows, the quoted trading price of our securities, and our ability to satisfy our debt service obligations.
A downturn in the housing market or decline in general economic conditions could adversely affect our business, financial condition, and operations.
We believe that new home sales are an important indicator of future demand for our superpad sites, lots, and condominium units. Demand for new homes is sensitive to changes in economic conditions such as the level of employment, consumer confidence, consumer income, the availability of financing, and interest rate levels. The prior economic downturn severely affected both the number of homes that could be sold in our MPCs and the prices for which homebuilders could sell them. We cannot predict when another economic downturn in the housing market will occur. If there were another economic downturn in the housing market or in general economic conditions, the resulting decline in demand for new homes and condominium units would likely have a material adverse effect on our business, financial condition, and results of operations.
Our condominium sales are sensitive to interest rates and the ability of consumers to obtain mortgage financing.
The ability of the ultimate buyers of condominiums to finance their purchases is generally dependent on their personal savings and availability of third-party financing. Consequently, the demand for condominiums could be adversely affected by increases in interest rates, unavailability of mortgage financing, increasing housing costs, and unemployment levels. Levels of income and savings, including retirement savings, available to condominium purchasers can be affected by declines in the capital markets. Any significant increase in the mortgage interest rates or decrease in available credit could reduce consumer demand for housing, and result in fewer condominium sales, which may have an adverse effect on our business, financial condition, and results of operations.
Purchasers may default on their obligations to purchase condominiums.
We enter into contracts for the sale of condominium units that generally provide for the payment of a substantial portion of the sales price at closing when a condominium unit is ready to be delivered and occupied. A significant amount of time may pass between the execution of a contract for the purchase of a condominium unit and the closing thereof. The rate of defaults may increase from historical levels due to the personal finances of purchasers being negatively impacted as a result of changing macroeconomic and other conditions, including slow growth or recession, interest rate volatility, trade policies, high unemployment, inflation, and/or tighter credit. Defaults by purchasers to pay any remaining portions of the sales prices for condominium units under contract may have an adverse effect on our business, financial condition, and results of operations.
Downturn in tenants’ businesses may reduce our revenues and cash flows.
A tenant may experience a downturn in its business, due to a variety of factors including rising inflation or supply chain issues, which may weaken its financial condition and result in its failure to make timely rental payments or result in defaults under our leases. The rate of defaults may increase from historical levels due to tenants’ businesses being negatively impacted by interest rate volatility or trade policies. In the event of default by a tenant, we may experience delays in enforcing our rights as the landlord and may incur substantial costs in protecting our investment.
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We may be negatively impacted by the consolidation or closing of anchor stores.
Many of our mixed-use properties are anchored by “big box” tenants. We could be adversely affected if these or other anchor stores were to consolidate, close, or enter into bankruptcy. Given the current economic environment for certain retailers, there is a heightened risk that an anchor store could close or enter into bankruptcy. Any losses resulting from the bankruptcy of any of our existing tenants could adversely impact our financial condition. Even if we own the anchor space, we may be unable to re-lease this area or to re-lease it on comparable terms. The loss of these revenues could adversely affect our results of operations and cash flows. Further, the temporary or permanent loss of any anchor would likely reduce customer traffic in the retail center, which could lead to decreased sales at other retail stores. Rents obtained from other tenants may be adversely impacted as a result of co-tenancy clauses in their leases. One or more of these factors could cause the retail center to fail to meet its debt service requirements. The consolidation of anchor stores may also negatively affect lease negotiations and current and future development projects.
We may be unable to renew leases or re-lease available space.
We cannot provide any assurance that existing leases will be renewed, available space will be re-leased, or that our rental rates will be equal to or above the current rental rates. If the average rental rates for our properties decrease, existing tenants do not renew their leases, or available space is not re-leased, our financial condition, results of operations, cash flows, and our ability to satisfy our debt service obligations at the affected properties could be adversely affected.
Significant competition could have an adverse effect on our business.
The nature and extent of the competition we face depend on the type of property. With respect to our MPCs, we compete with other landholders and residential and commercial property developers in the development of properties in the respective MPC regions. Numerous residential and commercial developers, some with greater financial and other resources, compete with us in seeking resources for development and prospective purchasers and tenants. Competition from other real estate developers may adversely affect our ability to attract purchasers and sell residential and commercial real estate, sell undeveloped rural land, attract and retain experienced real estate development personnel, or obtain construction materials and labor. These competitive conditions can make it difficult to sell land at desirable prices and can adversely affect our results of operations and financial condition.
There are numerous shopping facilities that compete with our operating retail properties in attracting retailers to lease space. In addition, retailers at these properties face continued competition from other retailers, including internet retailers, retailers at other regional shopping centers, outlet malls and other discount shopping centers, discount shopping clubs, and catalog companies. Competition of this type could adversely affect our results of operations and financial condition. In addition, we compete with other major real estate investors with significant capital for attractive investment and development opportunities. These competitors include REITs and private institutional investors.
The concentration of our properties in certain states may make our revenues and the value of our assets vulnerable to adverse changes in local economic conditions.
Many of the properties we own are located in the same or in a limited number of geographic regions, including Arizona, Texas, Hawai‘i, Nevada, and Maryland. Our operations at the properties in these states are generally subject to significant fluctuations by various factors that are beyond our control such as the regional and local economy, which may be negatively impacted by material relocation by residents, industry slowdowns, plant closings, increased unemployment, lack of availability of consumer credit, levels of consumer debt, housing market conditions, adverse weather conditions, natural disasters, climate change and other factors, as well as the local real estate conditions, such as an oversupply of, or a reduction in demand for, retail space or retail goods and the availability and creditworthiness of current and prospective tenants.
In addition, some of our properties are subject to various other factors specific to those geographic areas. For example, tourism is a major component of both the local economies in Hawai‘i and Nevada. Ward Village, which is located in Honolulu, Hawai‘i, and Summerlin, which is located in Las Vegas, Nevada, may be impacted by the local and global tourism industry. These properties are susceptible to many factors that affect travel and tourism related to Hawai‘i and Las Vegas, including cost and availability of air services and the impact of any events that disrupt air travel to and from these regions. Moreover, these properties may be affected by risks such as acts of terrorism and natural disasters, including major fires, floods, and earthquakes, as well as severe or inclement weather, which could also decrease tourism activity in Las Vegas or Hawai‘i.
Further, Summerlin is to some degree dependent on the gaming industry, which could be adversely affected by changes in consumer trends and preferences and other factors over which we have no control. The gaming industry is characterized by an increasingly high degree of competition among a large number of participants, including riverboat casinos, dockside
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casinos, land-based casinos, video lottery, sweepstakes, and poker machines, many of which are located outside of Las Vegas. Furthermore, competition from internet lotteries, sweepstakes, and other internet-wagering gaming services, which allow their customers to wager on a wide variety of sporting events and play Las Vegas-style casino games from home or in non-casino settings, could negatively impact the population in the Las Vegas area.
Markets and the local economies surrounding our properties in Columbia, Maryland are heavily influenced by government spending and activity. A reduction of government spending in this market generally could decrease the demand for housing and retail space in this geographic region.
The Woodlands, The Woodlands Hills, and Bridgeland in the Houston, Texas region depend significantly on the energy sector. Our success depends to a large extent upon the business activity, population, income levels, employment trends, and real estate activity in and around Houston, Texas. In the event that oil prices fall and remain depressed for a sustained period, demand may decrease for housing and commercial space in The Woodlands, Bridgeland, and The Woodlands Hills.
Additionally, Summerlin and Teravalis may be negatively impacted by changes in temperature due to climate change, increased stress on water supplies caused by climate change and population growth and other factors over which we have no control.
If any or all of the factors discussed above were to occur and result in our inability to sell or lease our residential and commercial property in any of these geographic regions, it would likely have a material adverse effect on our business, financial condition, and results of operations.
Our business model includes entering into joint venture arrangements with strategic partners, and our strategic partners may have different interests than us.
We currently have, and intend to enter into, additional joint venture partnerships. These joint venture partners may bring local market knowledge and relationships, development experience, industry expertise, financial resources, financing capabilities, brand recognition, and credibility or other competitive advantages. In the future, we may not have sufficient resources, experience and/or skills to locate desirable partners. We also may not be able to attract partners who want to conduct business in the locations where our properties are located, and who have the assets, reputation, or other characteristics that would optimize our development opportunities.
While we generally participate in making decisions for our jointly owned properties and assets, we might not always have the same objectives as the partner in relation to a particular asset, and we might not be able to formally resolve any issues that arise. In addition, actions by a partner may subject property owned by the joint venture to liabilities greater than those contemplated by the joint venture agreements, be contrary to our instructions or requests or result in adverse consequences. We cannot control the ultimate outcome of any decision made by our partners, which may be detrimental to our interests.
The bankruptcy or, to a lesser extent, financial distress of any of our joint venture partners could materially and adversely affect the relevant property or properties. If this occurred, we would be precluded from taking some actions affecting the estate of the other investor without prior court approval which would, in most cases, entail prior notice to other parties and a hearing. At a minimum, the requirement to obtain court approval may delay the actions we would or might want to take. If the relevant joint venture through which we have invested in a property has incurred recourse obligations, the discharge in bankruptcy of one of the other partners might result in our ultimate liability for a greater portion of those obligations than would otherwise be required.
Because real estate is illiquid, we may not be able to sell properties when in our best interest.
Real estate investments generally, and in particular large office and mixed-use properties like those that we develop and construct, often cannot be sold quickly. The capitalization rates at which properties may be sold could be higher than historic rates, thereby reducing our potential proceeds from the sale. Consequently, we may not be able to alter our portfolio promptly in response to changes in economic or other conditions. All of these factors reduce our ability to respond to changes in the performance of our investments and could adversely affect our business, financial condition, and results of operations.
Some of our properties are subject to potential natural or other disasters.
A number of our properties are located in areas that are subject to natural or other disasters, including hurricanes, floods, earthquakes, and oil spills. We cannot predict the extent of damage that may result from such adverse weather events, which depend on a variety of factors beyond our control. Some of our properties, including Houston-area MPCs and Ward
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Village, are located in regions that could be affected by increases in sea levels, the frequency or severity of hurricanes and tropical storms, or environmental disasters, whether such events are caused by global climate changes or other factors. Additionally, adverse weather events can cause widespread property damage and significantly depress the local economies in which the Company operates and have an adverse impact on the Company’s business, financial condition, and operations.
| RISKS RELATED TO OUR BUSINESS OPERATIONS, INFRASTRUCTURE, AND STRATEGIC MATTERS | ||
Our MPC segment is highly dependent on homebuilders.
We are highly dependent on our relationships with homebuilders to purchase superpad sites and lots at our MPCs. Our business will be adversely affected if homebuilders do not view our MPCs as desirable locations for homebuilding operations or due to a change in demand, our inability to achieve certain pricing arrangements, or upon an overall decline in general market conditions. Also, some homebuilders may be unwilling or unable to close on previously committed lot purchases due to our failure to meet certain conditions in our agreements or otherwise. As a result, we may sell fewer lots and in certain instances suspend any of our MPC developments. This would result in lower land sales revenues, which could have an adverse effect on our financial position and results of operations.
We are exposed to risks associated with the development, redevelopment, or construction of our properties.
Our development, redevelopment, and construction activities expose us to risks such as:
–inability to obtain construction financing for the development or redevelopment of properties
–increased construction costs for a project that exceed our original estimates due to increases in materials, labor, or other costs, which could make completion of the project less profitable because market rents or condominium prices may not increase sufficiently to compensate for the increased construction costs
–supply chain issues and increased difficulty in workforce recruitment which may lead to construction delays and increased project development costs
–claims for construction defects after a property has been developed
–poor performance or nonperformance by any of our joint venture partners or other third parties on whom we rely
–health and safety incidents and site accidents
–easement restrictions which may impact our development costs and timing
–compliance with building codes and other local regulations
–the inability to secure tenants necessary to support commercial projects
If any of the aforementioned risks were to occur during the development, redevelopment, or construction of our properties, it could have a substantial negative impact on the project’s success and result in a material adverse effect on our financial condition or results of operations.
Our development projects may subject us to certain liabilities.
We may hire and supervise third-party contractors to provide construction, engineering, and various other services for wholly owned development projects or development projects undertaken by real estate ventures in which we hold an equity interest. Certain of these contracts are structured such that we are the principal rather than the agent. As a result, we may assume liabilities in the course of the project and be subjected to, or become liable for, claims for construction defects, negligent performance of work or other similar actions by third parties we have engaged.
Adverse outcomes of disputes or litigation could negatively impact our business, results of operations, and financial condition, particularly if we have not limited the extent of the damages to which we may be liable, or if our liabilities exceed the amounts of the insurance that we carry. Moreover, our tenants and condominium owners may seek to hold us accountable for the actions of contractors because of our role even if we have technically disclaimed liability as a legal matter, in which case we may determine it necessary to participate in a financial settlement for purposes of preserving the tenant or customer relationship or to protect our corporate brand. Acting as a principal may also mean that we pay a contractor before we have been reimbursed by our tenants or have received the entire purchase price of a condominium unit from the purchaser. This exposes us to additional risks of collection in the event of a bankruptcy, insolvency, or a purchaser default. The reverse can occur as well, where a contractor we have paid files for bankruptcy protection or commits fraud with the funds before completing a project which we have funded in part or in full.
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Cybersecurity risks and incidents, such as a breach of the Company’s privacy or information security systems, or those of our vendors or other third parties, could compromise our information and expose us to liability, which would cause our business and reputation to suffer.
In the ordinary course of our business, we collect and store sensitive data, including intellectual property, our proprietary business information and that of our tenants and business partners and personally identifiable information of our employees on our networks. The collection and use of personally identifiable information are governed by federal and state laws and regulations. Privacy and information security laws continue to evolve and may be inconsistent from one jurisdiction to another. Compliance with all such laws and regulations may increase our operating costs and adversely impact our ability to market our properties and services.
Additionally, we rely on our information technology systems to be able to monitor and control our operations, adjust to changing market conditions and implement strategic initiatives. We own and manage some of these systems but also rely on third parties for a range of products and services. Any disruptions in or the failure of our own systems, or those managed by third parties, to operate as expected could adversely affect our ability to access and use certain applications and could, depending on the nature and magnitude of the problem, adversely affect our operating results by limiting our ability to effectively monitor and control our operations, adjust to changing market conditions, and implement strategic initiatives.
The security measures that we and our vendors put in place cannot provide absolute security, and the information technology infrastructure we and our vendors use may be vulnerable to criminal cyber-attacks or data security incidents.
Any such incident could compromise our networks or our vendors’ networks (or the networks or systems of third parties that facilitate our business activities or our vendors’ business activities), and the information we or our vendors store could be accessed, misused, publicly disclosed, corrupted, lost, or stolen, resulting in fraud, including wire fraud related to our assets, or other harm. Moreover, if a data security incident or breach affects our systems or our vendors’ systems, whether through a breach of our systems or a breach of the systems of third parties, or results in the unauthorized release of personally identifiable information, our reputation and brand could be materially damaged, and we may be exposed to a risk of loss or litigation and possible liability, including, without limitation, loss related to the fact that agreements with our vendors, or our vendors’ financial condition, may not allow us to recover all costs related to a cyber-breach for which they alone are responsible or for which we are jointly responsible, which could result in a material adverse effect on our business, results of operations, and financial condition.
Like many companies, we and our third party vendors have been impacted by security incidents in the past and will likely experience security incidents of varying degrees. While we do not believe these incidents have had a material impact to date, privacy and information security risks have generally increased in recent years because of the proliferation of new technologies, such as ransomware, and the increased sophistication and activities of perpetrators of cyber-attacks. The rapid evolution and increased adoption of artificial intelligence technologies may also intensify our privacy and information security risks. Further, there has been a surge in widespread cyber-attacks during and since the COVID-19 pandemic, and the use of remote work environments and virtual platforms may increase our risk of cyber-attack or data security breaches. In light of the increased risks, we have dedicated substantial additional resources of expense, labor, and time to strengthening the security of our computer systems. In the future, we may expend additional resources to continue to enhance our information security measures and/or to investigate and remediate any information security vulnerabilities. Despite these steps, there can be no assurance that we will not suffer a significant data security incident in the future, that unauthorized parties will not gain access to sensitive data stored on our systems, or that any such incident will be discovered in a timely manner. Any failure in or breach of our information security systems, those of third-party service providers, or a breach of other third-party systems that ultimately impacts our operational or information security systems as a result of cyber-attacks or information security breaches could result in potentially serious harm to our business and results of operations.
Global economic and political instability, geopolitical conflicts, and changes in U.S. trade policies, including tariffs, could adversely affect our business, financial condition, or results of operations.
Our business could be adversely affected by unstable economic and political conditions within the U.S. and foreign jurisdictions, geopolitical conflicts, and changes in trade policies. For example, the ongoing conflict between Russia and Ukraine, conflicts in the Middle East, and uncertainty regarding future trade relations between the U.S. and key trading partners could disrupt global supply chains, increase material costs, and contribute to inflationary pressures. While we do not have direct customer or supplier relationships in these regions, sanctions, export controls, cyberattacks, and disruptions to energy markets could indirectly impact our supply chain and the cost of goods necessary for construction.
In particular, recent executive actions and trade policies implemented or proposed by the current U.S. administration, including the imposition or threat of significant tariffs on imported goods, including construction materials and other critical
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supplies, could increase our costs and reduce availability of necessary materials. These tariffs, as well as potential retaliatory measures by other countries, may further impact global trade flows, exacerbate inflation, and contribute to interest rate volatility or general economic uncertainty. Such factors could negatively impact our business partners, employees, and customers or otherwise adversely affect our financial condition and results of operations.
Some of our directors are involved in other businesses including real estate activities and public and/or private investments and, therefore, may have competing or conflicting interests with us.
Certain of our directors have and may in the future have interests in other real estate business activities and may have control or influence over these activities or may serve as investment advisors, directors, or officers. These interests and activities, and any duties to third parties arising from such interests and activities, could divert the attention of such directors from our operations. Additionally, certain of our directors are engaged in investment and other activities in which they may learn of real estate and other related opportunities in their non-director capacities. Our Code of Business Conduct and Ethics applicable to our directors expressly provides, as permitted by Section 122(17) of the Delaware General Corporation Law (the DGCL), that our non-employee directors are not obligated to limit their interests or activities in their non-director capacities or to notify us of any opportunities that may arise in connection therewith, even if the opportunities are complementary to, or in competition with, our businesses. Accordingly, we have no expectation that we will be able to learn of or participate in such opportunities. If any potential business opportunity is expressly presented to a director exclusively in his or her director capacity, the director will not be permitted to pursue the opportunity, directly or indirectly through a controlled affiliate in which the director has an ownership interest, without the approval of the independent members of our board of directors.
In 2024, we completed the spinoff of Seaport Entertainment Group Inc. into an independent publicly traded company, and we may not achieve some or all of the Spinoff’s expected benefits.
On July 31, 2024, we completed the spinoff of Seaport Entertainment Group Inc. (the Spinoff), as an independent, publicly traded company. In structuring and completing the Spinoff, we anticipated certain benefits that may not be achieved, may be delayed, or may be less advantageous than we anticipate for a variety of reasons. Following the Spinoff, we may be more susceptible to market fluctuations and other adverse events than prior to the Spinoff, and our business is less diversified than the combined businesses prior to the Spinoff.
| RISKS RELATED TO OUR NEW HOLDING COMPANY STRATEGY AND OUR RELATIONSHIP WITH PERSHING SQUARE | ||
Pershing Square has the ability to influence our policies and operations and its interests may not in all cases be aligned with other stockholders.
Pershing Square beneficially owns approximately 46.7% of our outstanding common stock as of February 12, 2026. Mr. William Ackman, the Chief Executive Officer of Pershing Square, is the Executive Chairman of our board of directors. Additionally, Mr. Ryan Israel, the Chief Investment Officer of Pershing Square, is our Chief Investment Officer and a member of our board of directors, and Mr. Ben Hakim, the President of Pershing Square, is a member of our board of directors.
On May 5, 2025, HHH entered into a Share Purchase Agreement (Purchase Agreement), by and between HHH and Pershing Square Holdco, L.P. (PS Holdco), pursuant to which HHH sold to PS Holdco 9,000,000 newly issued shares of the Company’s common stock for an aggregate purchase price of $900 million. In connection with the Purchase Agreement, we also entered into several other agreements with Pershing Square, including a Services Agreement and a Shareholder Agreement.
Pursuant to the terms of the Services Agreement, Pershing Square will support the Company’s new diversified holding company strategy by providing services to the Company, such as (i) investment advisory services, (ii) making recommendations with respect to hedging, balance sheet optimization, and capital allocation, (iii) executing transactions, (iv) assisting the Company with business and corporate development functions, (v) making voting recommendations for the Company’s investments, (vi) assisting with and advising on fundraising, (vii) monitoring operations of the Company and its investments, subject to the day-to-day authority and responsibility of management of the Company, (viii) providing recommendations for persons to serve as designees or deputies of the Chief Investment Officer, (ix) engaging and supervising third-party service providers, (x) making dividend payment recommendations, and (xi) providing other services as may be agreed upon. The Services Agreement has an initial ten-year term and will have successive renewal terms of ten years. The Company pays Pershing Square a quarterly base advisory fee of $3.75 million and a quarterly variable advisory fee equal to 0.375% of the excess value of the quarter-end stock price of the Company’s common stock minus
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the reference price of $66.15, multiplied by existing share count as of the transaction date, which will not increase with the issuance of new shares of common stock.
Among other things, the Shareholder Agreement provides that, at any meeting of stockholders where directors are to be elected, (a) so long as PS Holdco, Pershing Square and their respective affiliates, including investment funds managed by one or more affiliates (collectively, the Purchaser Group), beneficially own at least 17.5% of the outstanding shares of Common Stock on a fully diluted basis, PS Holdco may nominate for election a number of directors equal to 25% of the total number of members of the Board as constituted after giving effect to such election, rounded up (e.g., three directors in the case of an 11-member Board) (such director, a PS Board Designee), and (b) so long as the Purchaser Group beneficially owns less than 17.5% but at least 10% of the outstanding shares of Common Stock on a fully diluted basis, PS Holdco may nominate for election a number of PS Board Designees equal to 10% of the total number of members of the Board as constituted after giving effect to such election, rounded up (e.g., two directors in the case of an 11-member Board). If the Purchaser Group owns less than 10% of the outstanding shares of Common Stock on a fully diluted basis, PS Holdco no longer has the right to nominate any PS Board Designees. William A. Ackman, Ben Hakim, and Ryan Israel currently serve as the PS Board Designees.
Accordingly, Pershing Square has the ability to influence our policies and operations, including the appointment of management, business development and investment strategies, future issuances of our common stock or other securities, the payment of dividends, if any, on our common stock, the incurrence or modification of debt by us, amendments to our amended and restated certificate of incorporation and amended and restated bylaws and the entering into of extraordinary transactions, and its interests may not in all cases be aligned with other stockholders’ interests.
Our recent shift in business strategy, including the planned acquisition of Vantage, will create additional and different risks than those we face in our existing real estate business.
Since the announcement of our transaction with Pershing Square in May 2025, we have been executing on our strategy to become a diversified holding company, including by entering into the Purchase and Sale Agreement with Vantage on December 17, 2025, pursuant to which the Company will acquire Vantage for a purchase price of $2.1 billion (subject to certain adjustments). As part of this strategy, we expect to acquire controlling stakes in high-quality, durable growth public and private operating companies while continuing to invest in and grow our core real estate development and Master Planned Communities business. In embarking on this changed strategy, we are subject to risks such as being unable to identify and consummate transactions (including the Vantage Transaction) as part of the new strategy, as well as risks inherent in acquiring or making investments in operating companies, especially companies in industries unrelated to our existing real estate business. Sources of risk arising from these types of transactions include financial, accounting, tax, and regulatory challenges; difficulties with integration, business retention, execution of strategy, unforeseen liabilities or market conditions; and other managerial or operating risks and challenges. Any future transactions could also subject us to risks such as failure to obtain appropriate value, post-closing claims being levied against us, and disruption to our other businesses during the negotiation or execution process or thereafter. Risk-mitigating provisions that we put in place in the course of negotiating and executing these transactions, such as due diligence efforts and indemnification provisions, may not be sufficient to fully address these risks and contingencies.
We may be unable to realize the anticipated benefits of the transactions with Pershing Square, the Vantage Transaction, and/or our new strategy, which could adversely impact our financial condition, results of operations, cash flows, the quoted trading price of our securities, and our ability to satisfy our debt service obligations.
| FINANCIAL RISKS | ||
Our indebtedness and changing interest rates could adversely affect our business, prospects, financial condition, or results of operations and prevent us from fulfilling our obligations under our senior unsecured notes and loan agreements.
As of December 31, 2025, our total consolidated debt was approximately $5.1 billion of which $2.1 billion was recourse to the Company or one of its subsidiaries. In addition, as of December 31, 2025, we had $6.6 million of recourse guarantees associated with undrawn financing commitments. As of December 31, 2025, our proportionate share of the debt of our unconsolidated ventures was $215.5 million based upon our economic interest. All of this indebtedness is without recourse to the Company, with the exception of the collateral maintenance obligation for Floreo.
Subject to the limits contained in the indentures governing the $600 million Bridgeland Notes due 2029, the $750 million 5.375% senior unsecured notes due 2028, the $650 million 4.125% senior unsecured notes due 2029, and the $650 million 4.375% senior unsecured notes due 2031 (collectively, the senior unsecured notes), and any limits under our
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other debt agreements, we may need to incur substantial additional indebtedness from time to time, including project indebtedness for developments by our subsidiaries. If we incur additional indebtedness or experience an adverse change in interest rates, the risks related to our level of indebtedness could intensify. Specifically, an increased level of indebtedness could have important consequences, including:
–making it more difficult for us to satisfy our obligations with respect to our indebtedness, including the senior unsecured notes and loan agreements
–limiting our ability to obtain additional financing to fund future working capital, capital expenditures, debt service requirements, execution of our business strategy, or finance other general corporate requirements
–requiring us to make non-strategic divestitures, particularly when the availability of financing in the capital markets is limited, which may adversely impact sales prices
–requiring a substantial portion of our cash flow to be allocated to debt service payments instead of other business purposes, thereby reducing the amount of cash flow available for working capital, capital expenditures, acquisitions, dividends, and other general corporate purposes
–increasing our vulnerability to general adverse economic and industry conditions, including increases in interest rates, particularly given that certain indebtedness bears interest at variable rates
–limiting our ability to capitalize on business opportunities, reinvest in and develop properties, and to react to competitive pressures and adverse changes in government regulations
–placing us at a disadvantage compared to other less leveraged competitors, if any
–limiting our ability, or increasing the costs, to refinance indebtedness
–resulting in an event of default if we fail to satisfy our obligations under our indebtedness, which default could result in all or part of our indebtedness becoming immediately due and payable and, in the case of our secured debt, could permit the lenders to foreclose on our assets securing such debt
The indentures governing our senior unsecured notes, the loan agreements, and our other debt agreements contain restrictions that may limit our ability to operate our business.
The indentures governing our senior unsecured notes contain certain restrictions that may limit our ability to operate. In addition, the loan agreements contain representations and covenants customary for loan agreements of this type, including financial covenants related to maintenance of interest coverage ratios and loan-to-value ratios with respect to the certain mortgaged properties, taken as a whole. The loan agreements also contain customary events of default, certain of which are subject to cure periods. These restrictions limit our ability or the ability of certain of our subsidiaries to, among other things:
–incur indebtedness or issue equity
–create certain liens
–pay dividends on, redeem, or repurchase capital stock or make other restricted payments
–make investments
–incur obligations that restrict the ability of our subsidiaries to make dividend or other payments to us
–consolidate, merge, or transfer all, or substantially all, of our assets
–enter into or amend lease or other agreements or transactions without consent
–substitute collateral, if applicable, due to product and geographic concentrations
–enter into transactions with our affiliates
–create or designate unrestricted subsidiaries
Additionally, certain of our debt agreements also contain various restrictive covenants, including minimum net worth requirements, maximum payout ratios on distributions, minimum debt yield ratios, minimum fixed charge coverage ratios, minimum interest coverage ratios and maximum leverage ratios. The restrictions under the indentures and/or other debt agreements could limit our ability to finance our future operations or capital needs, make acquisitions, or pursue available business opportunities.
We may be required to take action to reduce our debt or act in a manner inconsistent with our business objectives and strategies to meet such ratios and satisfy the covenants in our debt agreements. Events beyond our control, such as changes in economic and business conditions, may affect our ability to do so. We may not be able to meet the ratios or satisfy the covenants in our debt agreements, and we cannot provide any assurance that our lenders will waive any failure to do so. A breach of any of the covenants in, or our inability to maintain the required financial ratios, under our debt agreements would likely result in a default under such debt agreements, which may accelerate the principal and interest payments of the debt and, if such debt is secured, result in the foreclosure on certain of our assets that secure such debt. A breach of any of the covenants in, or our inability to maintain the required financial ratios, under our debt agreements also would prevent us from borrowing additional money under such agreements that include revolving credit facilities. A default under any of our debt agreements could, in turn, result in defaults under other obligations and result in other creditors accelerating the payment of other obligations and foreclosing on assets securing such obligations, if any. Any such defaults could materially impair our financial condition and liquidity. In addition, if the lenders under any of our debt
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agreements or other obligations accelerate the maturity of those obligations, we cannot assure that we will have sufficient assets to satisfy our obligations under the notes or our other debt.
We may be unable to develop and expand our properties without sufficient capital or financing.
Our business objective includes the development and redevelopment of our properties, particularly those in our Strategic Developments segment, which we may be unable to do if we do not have, cannot obtain, or cannot generate sufficient capital from MPC land sales or operations, debt capital from lenders or the capital markets, or government incentives, such as tax increment financing, to proceed with planned development, redevelopment, or expansion activities. We may be unable to access or acquire financing due to the market volatility and uncertainty. We may be unable to obtain an anchor store, mortgage lender and property partner approvals that are required for any such development, redevelopment, or expansion. We may abandon redevelopment or expansion activities already underway that we are unable to complete due to the inability to secure additional capital to finance such activities. This may result in charge-offs of costs previously capitalized. In addition, if redevelopment, expansion, or reinvestment projects are unsuccessful, the investment in such projects may not be recoverable, in full or in part, from future operations or sale resulting in impairment charges.
Adverse changes in our credit ratings could increase our financing costs and limit market access.
We and certain of our subsidiaries may be evaluated by one or more nationally recognized credit rating agencies. Ratings reflect each agency’s assessment of factors such as liquidity, leverage, capital structure, cash flow stability, asset quality, business profile, corporate governance, and market conditions, and they can be downgraded, placed on negative watch, revised in outlook, or withdrawn at any time. A downgrade or other adverse action, or the announcement of a review, could increase interest rates and fees on new or existing debt; narrow the pool of investors willing or permitted to invest in our securities; require additional collateral, tighter covenants, shorter maturities, or other unfavorable terms; and reduce the trading price and liquidity of our securities. These outcomes could raise our overall cost of capital, constrain access to bank and capital markets, reduce financial flexibility, and impair execution of our strategy and our ability to meet obligations, any of which could materially adversely affect our business, financial condition, results of operations, and cash flows.
We may be unable to refinance our indebtedness on favorable terms, or at all.
We have a substantial amount of indebtedness, a significant portion of which will mature in the coming years. Our strategy assumes continued access to the debt capital markets and other financing sources to refinance existing indebtedness, including property‑level mortgage loans, construction and development facilities, and unsecured or recourse borrowings, often before maturity. Our ability to refinance our indebtedness on favorable terms, or at all, depends on factors beyond our control, including conditions in the credit and capital markets (such as interest rates, spreads, and lender appetite for real estate and construction lending); our leverage, liquidity, interest coverage and credit ratings; the performance and values of properties securing our debt and our broader portfolio; changes in banking and other financial regulations; and broader macroeconomic, geopolitical, and industry developments.
If we cannot refinance maturing indebtedness on acceptable terms, we may be forced to seek alternative financing on less favorable terms, use more of our available liquidity, sell assets, on disadvantageous terms or at unfavorable times in the market, delay or cancel development, redevelopment, or other capital projects, or issue equity or equity‑linked securities that could be dilutive to existing stockholders. Even if refinancing is available, it may be at higher interest rates or subject to more restrictive covenants, which could increase our interest expense, reduce our financial flexibility, and constrain our ability to invest in our existing properties and development pipeline or pursue new investment opportunities. Failure to refinance, repay, or otherwise address maturing indebtedness could lead to defaults, acceleration, foreclosure on collateral, and potential cross defaults or cross accelerations, any of which could materially adversely affect our business, financial condition, results of operations, cash flows, and ability to service our debt.
The Company is dependent on the operations and funds of its subsidiaries, including The Howard Hughes Corporation.
The Company has no business operations of its own, and the Company’s only significant assets are the outstanding equity interests of its subsidiaries, including The Howard Hughes Corporation. As a result, the Company relies on cash flows from its subsidiaries, including HHC, to meet its financial obligations, including to service any debt obligations that the Company may incur from time to time in the future. Legal and contractual restrictions in agreements governing future indebtedness of any of the Company’s subsidiaries, as well as the financial condition and future operating requirements of any such subsidiaries, in each case, including HHC, may limit such subsidiaries’ ability to distribute cash to the Company. If HHC or any of the Company’s other subsidiaries is limited in its ability to distribute cash to the Company, or if the earnings or other available assets of the Company’s subsidiaries are not sufficient to pay distributions or make loans to
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the Company in the amounts or at the times necessary for the Company to meet its financial obligations, then the Company’s business, financial condition, cash flows, results of operations, and reputation may be materially adversely affected.
We are subject to risks associated with hedging arrangements.
We enter into interest rate swap agreements and other interest rate hedging contracts, including caps and cash settled forward starting swaps, to mitigate or reduce our exposure to interest rate volatility, or to satisfy lender requirements. These agreements expose us to additional risks, including a risk that counterparties of these hedging and swap agreements will not perform. There also could be significant costs and cash requirements involved to fulfill our obligations under a hedging agreement. In addition, our hedging activities may not have the desired beneficial impact on interest rate exposure and have a negative impact on our business, financial condition, and results of operations.
We may not realize the value of our tax assets.
Certain provisions of the Internal Revenue Code could limit our ability to fully utilize certain tax assets if we were to experience a change in control. As of December 31, 2025, we had approximately $708.6 million of federal net operating loss carryforwards. If certain change in control events were to occur, the cash flow benefits we might otherwise have received could be decreased.
Inflation has adversely affected us in recent years, and could continue to adversely affect us in future periods, by increasing costs beyond what we can recover through price increases.
In recent years, the U.S. economy has experienced relatively high levels of inflation. Inflation can adversely affect us by increasing costs of land, materials, and labor, which we have experienced in recent years due to higher inflation rates. Although we believe that sources of supply for raw materials and components are generally adequate, it is difficult to predict what effects price increases may have in the future. In addition, significant inflation is often accompanied by higher interest rates, which have a negative impact on demand for homes in our MPCs and demand for our condominium projects, and our ability to refinance existing indebtedness on favorable terms, or at all, due to higher borrowing costs. In an inflationary environment, depending on the homebuilding industry and other economic conditions, we may be precluded from raising land prices enough to keep up with the rate of inflation, which could significantly reduce our profit margins. In recent years we have been experiencing increases in the prices of labor and materials above the general inflation rate. Our inability to offset increasing costs due to inflation through price increases to customers could have a material adverse effect on our results of operations, financial conditions, and cash flows.
Some potential losses are not insured.
We carry comprehensive liability, fire, flood, earthquake, terrorism, extended coverage, and rental loss insurance on all of our properties. We believe the policy specifications and insured limits of these policies are adequate and appropriate. There are some types of losses, including lease and other contract claims, which generally are not insured. If an uninsured loss or a loss in excess of insured limits occurs, we could lose all or a portion of the capital invested in a property, as well as the anticipated future revenue from the property. If this happens, we might remain obligated for any mortgage debt or other financial obligations related to the property.
| REGULATORY, LEGAL AND ENVIRONMENTAL RISKS | ||
Our development, construction, and sale of condominiums are subject to state regulations and may be subject to claims from the condominium owner’s association at each project.
A portion of our business is dedicated to the development and sale of condominiums. Condominiums are generally regulated by an agency of the state in which they are located or where the condominiums are marketed to be sold. In connection with our development and offering of condominium units for sale, we must submit regulatory filings to various state agencies and engage in an entitlement process by which real property owned under one title is converted into individual units. Responses or comments on our condominium filings may delay our ability to sell condominiums in certain states and other jurisdictions in a timely manner, or at all. Further, we will be required to transfer control of a condominium association’s board of directors once we trigger one of several statutory thresholds, with the most likely triggers being tied to the sale of not less than a majority of units to third-party owners. Transfer of control can result in claims with respect to deficiencies in operating funds and reserves, construction defects, and other condominium-related matters by the condominium association and/or third-party condominium unit owners. Any material claims in these areas could negatively
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affect our reputation in condominium development and ultimately have a material adverse effect on our business, financial condition, and results of operations.
Development of properties entails a lengthy, uncertain and costly entitlement process.
Approval to develop real property sometimes requires political support and generally entails an extensive entitlement process involving multiple and overlapping regulatory jurisdictions and often requires discretionary action by local governments. Real estate projects must generally comply with local land development regulations and may need to comply with state and federal regulations. We incur substantial costs to comply with legal and regulatory requirements. An increase in legal and regulatory requirements may cause us to incur substantial additional costs, or in some cases cause us to determine that the property is not feasible for development. In addition, our competitors and local residents may challenge our efforts to obtain entitlements and permits for the development of properties. The process to comply with these regulations is usually lengthy and costly, may not result in the approvals we seek and can be expected to materially affect our development activities.
Government regulations and legal challenges may delay the start or completion of the development of our communities, increase our expenses, or limit our homebuilding or other activities.
Various local, state, and federal statutes, ordinances, rules, and regulations concerning building, health and safety, site and building design, environment, zoning, sales, and similar matters apply to and/or affect the real estate development industry. In addition, our ability to obtain or renew permits or approvals and the continued effectiveness of permits already granted or approvals already obtained depends on factors beyond our control, such as changes in federal, state, and local policies, rules, and regulations, and their interpretations and application.
Municipalities may restrict or place moratoria on the availability of utilities, such as water and sewer taps. If municipalities in which we operate take such actions, they could have an adverse effect on our business by causing delays, increasing our costs, or limiting our ability to operate in those municipalities. These measures may reduce our ability to open new MPCs and to build and sell other real estate development projects in the affected markets, including with respect to land we may already own, and create additional costs and administrative requirements, which in turn may harm our future sales, margins, and earnings.
Governmental regulation affects not only construction activities but also sales activities, mortgage lending activities, and other dealings with consumers. Further, government agencies routinely initiate audits, reviews, or investigations of our business practices to ensure compliance with applicable laws and regulations, which can cause us to incur costs or create other disruptions in our business that can be significant. Further, we may experience delays and increased expenses as a result of legal challenges to our proposed communities, whether brought by governmental authorities or private parties.
We may be subject to increased compliance costs to comply with new and contemplated government regulations relating to energy standards and climate change.
A variety of legislation is being enacted, or considered for enactment, at the federal, state, and local levels relating to energy and climate change. This legislation relates to items such as carbon dioxide emissions control and building codes that impose energy efficiency standards. New building code requirements that impose stricter energy efficiency standards could significantly increase our cost to construct buildings. Such environmental laws may affect, for example, how we manage storm water runoff, wastewater discharges, and dust; how we develop or operate on properties on or affecting resources such as wetlands, endangered species, cultural resources, or areas subject to preservation laws; and how we address contamination. As climate change concerns continue to grow, legislation and regulations of this nature are expected to continue and to make compliance more costly. In addition, it is possible that some form of expanded energy efficiency legislation may be passed by the U.S. Congress or federal agencies and certain state legislatures, which may, despite being phased in over time, significantly increase our costs of building MPCs and the sale price to our buyers and adversely affect our sales volumes. We may be required to apply for additional approvals or modify our existing approvals because of changes in local circumstances or applicable law.
Energy-related initiatives affect a wide variety of companies throughout the U.S. and the world. Because our operations are heavily dependent on significant amounts of raw materials, such as lumber, steel, and concrete, energy-related initiatives could have an indirect adverse impact on our operations and profitability to the extent the manufacturers and suppliers of our materials are burdened with expensive cap and trade and similar energy-related taxes and regulations. Noncompliance with environmental laws could result in fines and penalties, obligations to remediate, permit revocations, and other sanctions.
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We may be subject to potential costs to comply with environmental laws.
Future development opportunities may require additional capital and other expenditures to comply with laws and regulations relating to the protection of the environment. Under various federal, state, or local laws, ordinances, and regulations, a current or previous owner or operator of real estate may be required to investigate and clean up hazardous or toxic substances released at a property and may be held liable to a governmental entity or to third parties for property damage or personal injuries and for investigation and clean-up costs incurred by the parties in connection with the contamination. These laws often impose liability without regard to whether the owner or operator knew of, or was responsible for, the release of the hazardous or toxic substances. The presence of contamination or the failure to remediate contamination may adversely affect the owner’s ability to sell or lease real estate or to borrow using the real estate as collateral. Other federal, state, and local laws, ordinances, and regulations require abatement or removal of asbestos-containing materials in the event of demolition or certain renovations or remodeling, the cost of which may be substantial for certain redevelopments, and also govern emissions of and exposure to asbestos fibers in the air. Federal and state laws also regulate the operation and removal of underground storage tanks. In connection with our ownership, operation, and management of certain properties, we could be held liable for the costs of remedial action with respect to these regulated substances or tanks or related claims.
We cannot predict with any certainty the magnitude of any expenditures relating to environmental compliance or the long-range effect, if any, on our operations. Compliance with such laws has not had a material adverse effect on our operating results or competitive position in the past but could have such an effect on our operating results and competitive position in the future.
Compliance with the Americans with Disabilities Act may be a significant cost for us.
The Americans with Disabilities Act of 1990, as amended (ADA), requires that all public accommodations and commercial facilities, including office buildings, meet certain federal requirements related to access and use by disabled persons. Other federal, state, and local laws may require modifications to or restrict further renovations of our properties with respect to such accesses. Noncompliance with the ADA or similar or related laws or regulations could result in the U.S. government imposing fines or private litigants being awarded damages against us. Such costs may adversely affect our business, financial condition, and results of operations.
Catastrophic events, including climate change, may adversely affect our business.
As a result of climate change, we may experience extreme weather and changes in precipitation and temperature, all of which may result in physical damage or a decrease in demand for our properties located in the areas affected by these conditions. Should the impact of climate change be material in nature or occur for lengthy periods of time, our financial condition or results of operations would be adversely affected. In addition, many state and local governments are adopting or considering adopting regulations requiring that property owners and developers include in their development or redevelopment plans resiliency measures to address climate-change related risks. We may be required to incur substantial costs if such regulations apply to any of our properties. Additionally, COVID-19 disrupted our business and a resurgence of it, or another pandemic, could have a material adverse effect on our business, financial performance and condition, operating results, and cash flows.
Water and electricity shortages could have an adverse effect on our business, financial condition, and results of operations.
Drought conditions and increased temperatures in the Phoenix, Arizona and Las Vegas, Nevada, regions could cause our master planned communities in these regions to experience water and electricity shortages. The lack or reduced availability of electricity or water in these regions may make it more difficult or expensive for us to obtain approvals for new developments and could limit, impair or delay our ability to develop or sell, or increase the cost of developing, our land in these master planned communities.
Tax increases and changes in tax rules may adversely affect our financial results.
As a company conducting business with physical operations throughout North America, we are exposed, both directly and indirectly, to the effects of changes in U.S., state, and local tax rules. Taxes for financial reporting purposes and cash tax liabilities in the future may be adversely affected by changes in such tax rules.
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| GENERAL RISKS | ||
Loss of key personnel could adversely affect our business and operations.
We depend on the efforts of key executive personnel. The loss of the services of any key executive personnel could adversely affect our business and operations. While we believe we have proper succession planning and are confident we could attract and train new personnel if necessary, this could impose additional costs and hinder our business strategy.
Possible terrorist activity or other acts of violence could adversely affect our financial condition and results of operations.
Future terrorist attacks in the U.S. or other acts of violence may result in declining economic activity, which could harm the demand for goods and services offered by tenants and the value of our properties and might adversely affect the value of an investment in our securities. Such a resulting decrease in retail demand could make it difficult to renew or re-lease properties at lease rates equal to or above historical rates. Terrorist activities or violence also could directly affect the value of our properties through damage, destruction or loss, and the availability of insurance for such acts, or of insurance generally, might be lower or cost more, which could increase our operating expenses and adversely affect our financial condition and results of operations. To the extent that tenants are affected by future attacks, their businesses similarly could be adversely affected, including their ability to continue to meet obligations under their existing leases. Any one of these events might decrease demand for real estate, decrease or delay the occupancy of new or redeveloped properties, and limit access to capital or increase the cost of capital.
Our stock price may be volatile.
The trading price of our common stock may be volatile due to the stock market’s routine periods of large or extreme volatility. This volatility often has been unrelated or disproportionate to the operating performance of particular companies, including ours. Factors that could affect our trading price include the following:
–results of operations that vary from the expectations of securities analysts and investors, including our ability to consummate and achieve the anticipated benefits of the Vantage Transaction
–changes in expectations as to our future financial performance, including financial estimates and investment recommendations by securities analysts and investors
–announcements by us or our competitors of new significant real-estate developments, acquisitions, joint ventures, other strategic relationships or actions, capital commitments, or responses to these events
–changes in general economic or market conditions, including increases in interest rates, or trends in our industry or markets
–future sales of our common stock or other securities
–guidance, if any, that we provide to the public, any changes in this guidance, or our failure to meet this guidance
–the sustainability of an active trading market for our stock
–changes in accounting principles
–events or factors resulting from natural disasters, war, acts of terrorism, or responses to these events
These broad market and industry fluctuations may adversely affect the market price of our common stock, regardless of our actual operating performance. In addition, price volatility may be greater if the public float and trading volume of our common stock is low. In the past, following periods of market volatility, stockholders have instituted securities class action litigation. If we were involved in securities litigation, it could have a substantial cost and divert resources and the attention of executive management from our business regardless of the outcome of such litigation.
We are exposed to risks related to the adoption and use of artificial intelligence (AI).
We are subject to various risks associated with the adoption and utilization of AI technologies by both our company and our competitors. The inherent complexity and rapid evolution of AI technology may hinder our ability to effectively implement these capabilities, potentially leading to significant costs without corresponding benefits to our business or customer value. Our AI implementations may result in errors or unintended outcomes due to algorithmic flaws, inadequate training data, or inherent biases, which could expose us to liability and reputational damage. Additionally, we face competitive risks if our adoption of AI or other machine learning technologies is not done timely or as effectively as that of our competitors. AI technology also presents unique challenges related to data privacy, cybersecurity, and ethical considerations, which could impact our business operations. The regulatory landscape is continuously evolving, with new laws and regulations being proposed or enacted by various jurisdictions. Compliance with these diverse requirements could increase our operational costs, and any actual or perceived regulatory violations could subject us to enforcement
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actions, penalties, and reputational harm. The combined effect of these interrelated risks could materially and adversely affect our business operations, financial condition, and competitive position.
The technologies or models we rely upon may undergo major updates or shifts while our AI features are already live in the market. Such updates could force us to retrain or redeploy our own AI systems at inopportune times, increasing our costs and delaying upgrades or product releases. Furthermore, the vendor might unexpectedly discontinue certain features or stop supporting the version on which our platform depends. Any such mid-deployment disruption could result in downtime, diminished accuracy or usability, and ultimately damage our brand reputation and customer experience.
The Company may not obtain the anticipated benefits of the holding company structure.
If circumstances prevent the Company from taking advantage of the strategic and business opportunities that it expects to realize from the holding company structure, the Company would nevertheless bear the costs incurred in connection with the holding company structure, which could adversely affect the Company’s business, financial condition, cash flows, and results of operations.
Anti-takeover provisions in our certificate of incorporation, our by-laws, Delaware law, Shareholder Agreement, Standstill Agreement, and certain other agreements may prevent or delay an acquisition of us, which could decrease the trading price of our common stock.
Our certificate of incorporation and bylaws contain the following limitations:
–the inability of our stockholders to act by written consent
–restrictions on the ability of stockholders to call a special meeting without 15% or more of the voting power of the issued and outstanding shares entitled to vote generally in the election of our directors
–rules regarding stockholder proposals and director nominations
–the right of our board of directors to issue preferred stock without stockholder approval
–a requirement that, to the fullest extent permitted by law, certain proceedings against or involving us or our directors or officers be brought exclusively in the Court of Chancery in the State of Delaware
–that certain provisions may be amended only by the affirmative vote of at least 66 2/3% of the shares of common stock entitled to vote generally in the election of directors
In addition, we are a Delaware corporation, and Section 203 of the DGCL applies to us. In general, Section 203 prevents an interested stockholder from engaging in certain business combinations with us for three years following the date that person becomes an interested stockholder subject to certain exceptions. The statute generally defines an interested stockholder as any person that is the owner of 15% or more of the outstanding voting stock or is our affiliate or associate and was the owner of 15% or more of outstanding voting stock at any time within the three-year period immediately before the date of determination.
In connection with the Pershing Square Issuance, we granted a waiver of the applicability of the provisions of Section 203 of the DGCL to Pershing Square Capital Management, L.P., PS Management GP, LLC and William A. Ackman (together, Pershing Square) with respect to Pershing Square’s purchase of our common stock in connection therewith. Also, in connection with the Pershing Square Issuance, we also entered into the Standstill Agreement.
Pursuant to the Standstill Agreement, (i) Pershing Square agreed not to acquire beneficial ownership of more than 47.0% of our common stock and (ii) for all matters being voted on at a stockholder meeting or in a consent solicitation that the Board recommends that stockholders approve, the voting power of the shares held by PS Holdco, Pershing Square and their respective affiliates will be limited to 40% of the total voting power of our outstanding common stock (the voting cap), with the excess of any shares held by them over the voting cap (the excess shares) to be voted in proportion to the votes cast by unaffiliated stockholders. The voting cap applies across all matters, except with respect to voting to elect PS Board Designees, for which no voting cap applies. For all matters being voted on at a stockholder meeting or in a consent solicitation that the Board has recommended that stockholders not approve, PS Holdco, Pershing Square and their respective affiliates may vote all of their shares “against” such matter, or it may vote their shares up to the voting cap “for” such matter, with the excess shares to be voted them in proportion to the votes cast by unaffiliated stockholders.
As such, Pershing Square, a large holder that is able to affect matters requiring approval by Company stockholders, including the election of directors and approval of mergers or other business combination transactions. The Board’s Corporate Governance Guidelines also reflect that it will grant to any stockholder a waiver of the applicability of Section 203 of the DGCL to the acquisition of up to 40% of the Company’s outstanding voting stock upon the request of such stockholder, subject to the Board’s fiduciary duties and applicable law.
These anti-takeover provisions could make it more difficult for a third party to acquire us, even if the third-party’s offer may be considered beneficial by many of our stockholders. As a result, our stockholders may be limited in their ability to obtain
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a premium for their shares. These provisions could limit the price that investors might be willing to pay in the future for shares of our common stock.
Item 1B. Unresolved Staff Comments
None.
Item 1C. Cybersecurity
Risk Management and Strategy The HHH cybersecurity program is an enterprise-wide, risk-based program that is designed to support the security, confidentiality, integrity, and availability of our systems and information. We conduct periodic assessments of the cybersecurity program to identify and manage material cybersecurity threats and risks using internal teams and independent third parties. The assessment results are used to develop appropriate cybersecurity controls best practices and risk mitigation strategies, which are then implemented throughout the Company.
We rely on our systems and networks to support our business activities. As some networks and systems are managed by third parties, the HHH cybersecurity program also includes evaluation and monitoring of cybersecurity risks associated with its use of third-party service providers. We also leverage third-party experts and vendors to help manage our cybersecurity program, audit the effectiveness of our existing cybersecurity controls, and make recommendations for improvements and best practices. We utilize a Managed Detection and Response service that provides threat intelligence, technology, and specialist expertise to protect our systems and networks from cyber threats. We require all third parties with access to our information systems or data to maintain industry standard cybersecurity programs and to report actual or suspected security incidents to us.
Governance Management is responsible for measuring and managing cybersecurity risk, specifically the prevention, mitigation, detection, and remediation of cybersecurity incidents as well as the Company’s overall information security strategy, policy, and operations. The cybersecurity program is executed by the Company’s Senior Vice President of IT Governance, Risk, and Compliance , who has over 15 years of cybersecurity experience in overseeing and managing cybersecurity risk. He is also responsible for maintaining and, in the event of an actual or suspected security incident, executing the Company’s incident response plan.
HHH 2025 FORM 10-K | 24
| PROPERTIES | Table of Contents Index to Financial Statements | ||||
Item 2. Properties
Our corporate headquarters is located in The Woodlands, Texas. We also maintain offices at certain of our properties nationwide, including Honolulu, Hawai‘i; Columbia, Maryland; Las Vegas, Nevada; and Scottsdale, Arizona. We believe our present facilities are sufficient to support our operations.
| OPERATING ASSETS | ||
In our Operating Assets segment, we own a variety of asset types including approximately 9.3 million square feet of retail and office properties, 5,855 wholly and partially owned multifamily units, and wholly and partially owned other properties and investments. Our assets in this segment are primarily located in and around Houston, Texas (The Woodlands and Bridgeland); Columbia, Maryland (Columbia); Las Vegas, Nevada (Summerlin); and Honolulu, Hawai‘i (Ward Village).
The following table summarizes certain metrics of our office assets within our Operating Assets segment as of December 31, 2025:
| Office Assets | Rentable Square Feet | % Leased | Annualized Base Rent (thousands) (a) | Annualized Base Rent Per Square Foot (a) | Effective Annual Rent (thousands) (b) | Effective Annual Rent per Square Foot (b) | Year Built / Acquired / Redeveloped | |||||||||||||||||||
| The Woodlands | ||||||||||||||||||||||||||
| One Hughes Landing | 201,268 | 78% | $2,524 | $16.99 | $3,681 | $24.78 | 2013 | |||||||||||||||||||
| Two Hughes Landing | 200,255 | 61% | 2,799 | 23.36 | 4,324 | 36.09 | 2014 | |||||||||||||||||||
| Three Hughes Landing | 325,810 | 98% | 9,049 | 28.48 | 13,626 | 42.88 | 2016 | |||||||||||||||||||
| 1725 Hughes Landing Boulevard | 340,611 | 69% | 3,430 | 16.40 | 4,885 | 23.35 | 2015 | |||||||||||||||||||
| 1735 Hughes Landing Boulevard | 319,456 | 95% | 8,071 | 26.71 | 11,996 | 39.70 | 2015 | |||||||||||||||||||
| 2201 Lake Woodlands Drive | (c) | 22,259 | —% | — | — | — | — | 2011 | ||||||||||||||||||
| Lakefront North | 258,058 | 100% | 7,425 | 28.77 | 11,881 | 46.04 | 2018 | |||||||||||||||||||
| 8770 New Trails | (c) | 180,000 | 100% | — | — | — | — | 2020 | ||||||||||||||||||
| 9303 New Trails | 98,283 | 51% | 1,102 | 21.98 | 1,767 | 35.25 | 2011 | |||||||||||||||||||
| 3831 Technology Forest Drive | 106,104 | 93% | 1,960 | 19.94 | 3,092 | 31.46 | 2014 | |||||||||||||||||||
| The Woodlands Towers at The Waterway | 1,395,599 | 100% | 45,024 | 32.43 | 69,213 | 49.85 | 2019 | |||||||||||||||||||
| 3 Waterway Square | 227,617 | 91% | 3,200 | 15.51 | 4,872 | 23.62 | 2013 | |||||||||||||||||||
| 4 Waterway Square | 217,952 | 90% | 804 | 4.73 | 1,242 | 7.32 | 2011 | |||||||||||||||||||
| 6 Waterway | (d) | 141,763 | 82% | 1,887 | 23.29 | 2,757 | 34.01 | 2024 | ||||||||||||||||||
| 1400 Woodloch Forest | 94,931 | 85% | 2,636 | 32.85 | 2,846 | 35.48 | 2011 | |||||||||||||||||||
| 4,129,966 | ||||||||||||||||||||||||||
| Bridgeland | ||||||||||||||||||||||||||
| One Bridgeland Green | 49,502 | 80% | 568,544 | 43.27 | 824,774 | 62.77 | 2025 | |||||||||||||||||||
| 49,502 | ||||||||||||||||||||||||||
| Columbia | ||||||||||||||||||||||||||
| Columbia Office Properties | 67,066 | 72% | 1,302 | 27.05 | 1,517 | 31.51 | 2004 / 2007 | |||||||||||||||||||
| 10285 Lakefront Medical Office | 85,380 | 50% | 1,063 | 24.77 | 1,469 | 34.21 | 2024 | |||||||||||||||||||
| One Mall North | 99,806 | 37% | 1,190 | 31.81 | 1,329 | 35.52 | 2016 | |||||||||||||||||||
| One Merriweather | 209,950 | 94% | 8,151 | 41.18 | 8,656 | 43.73 | 2017 | |||||||||||||||||||
| Two Merriweather | 124,639 | 96% | 4,496 | 42.54 | 4,649 | 43.98 | 2017 | |||||||||||||||||||
| 6100 Merriweather | 326,237 | 98% | 11,809 | 40.56 | 12,176 | 41.82 | 2019 | |||||||||||||||||||
| Merriweather Row | 925,584 | 74% | 18,890 | 28.81 | 19,670 | 30.00 | 2012 / 2014 | |||||||||||||||||||
| 1,838,662 | ||||||||||||||||||||||||||
| Summerlin | ||||||||||||||||||||||||||
| Aristocrat | (c) | 181,534 | 100% | — | — | — | — | 2018 | ||||||||||||||||||
| Meridian | 147,602 | 46% | 877 | 34.20 | 877 | 34.20 | 2024 | |||||||||||||||||||
| 1700 Pavilion | 265,898 | 94% | 11,654 | 47.57 | 12,137 | 49.54 | 2022 | |||||||||||||||||||
| One Summerlin | 207,292 | 85% | 7,794 | 44.74 | 8,187 | 47.00 | 2015 | |||||||||||||||||||
| Two Summerlin | 147,139 | 100% | 5,984 | 40.67 | 6,472 | 43.98 | 2018 | |||||||||||||||||||
| 949,465 | ||||||||||||||||||||||||||
| Total | 6,967,595 | |||||||||||||||||||||||||
(a)Annualized Base Rent is calculated as the monthly Base Minimum Rent for the property at December 31, 2025, multiplied by 12. Annualized Base Rent Per Square Foot is the Annualized Base Rent for the property at December 31, 2025, divided by the average occupied square feet.
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(b)Effective Annual Rent includes base minimum rent and common area maintenance recovery revenue. Effective Annual Rent Per Square Foot is the Effective Annual Rent divided by the average occupied square feet.
(c)These properties are entirely leased by a single tenant. Therefore, the Annualized Base Rent and Effective Annual Rent details have been excluded for competitive reasons. The lease for the single tenant at 2201 Lake Woodlands Drive expired in December 2025.
(d)In 2025, this property was rebranded to 6 Waterway (formerly Waterway Plaza II).
The following table summarizes certain metrics of our retail properties within the Operating Assets segment as of December 31, 2025, and does not include any retail square footage in our multifamily assets:
| Retail Properties | Rentable Square Feet | % Leased | Annualized Base Rent (thousands) (a) | Annualized Base Rent Per Square Foot (a) | Year Built / Acquired / Redeveloped | |||||||||||||||
| The Woodlands | ||||||||||||||||||||
| Creekside Park West | 72,976 | 100% | $2,104 | $31.76 | 2019 | |||||||||||||||
| Grogan’s Mill Retail | 31,363 | 68% | 445 | 30.19 | 2025 | |||||||||||||||
| Hughes Landing Retail | 125,721 | 96% | 4,419 | 39.00 | 2015 | |||||||||||||||
| 1701 Lake Robbins | 12,376 | 100% | 551 | 44.49 | 2014 | |||||||||||||||
| 20/25 Waterway Avenue | 51,688 | 100% | 1,705 | 37.85 | 2011 | |||||||||||||||
| Waterway Square Retail | 21,513 | 100% | 876 | 40.83 | 2011 | |||||||||||||||
| 315,637 | ||||||||||||||||||||
| Bridgeland | ||||||||||||||||||||
| Village Green at Bridgeland Central | 27,944 | 90% | 661 | 32.33 | 2024 | |||||||||||||||
| Columbia | ||||||||||||||||||||
| Color Burst Park Retail | 12,410 | 100% | 588 | 47.42 | 2020 | |||||||||||||||
| Rouse Building | 89,199 | 100% | 2,285 | 25.62 | 2014 | |||||||||||||||
| 101,609 | ||||||||||||||||||||
| Summerlin | ||||||||||||||||||||
| Downtown Summerlin | (b) | 801,010 | 100% | 25,585 | 38.95 | 2014 / 2015 | ||||||||||||||
| Summerlin Grocery Anchored Center | 67,147 | 85% | 1,652 | 28.86 | 2024 | |||||||||||||||
| 868,157 | ||||||||||||||||||||
| Ward Village | ||||||||||||||||||||
| Ward Village Retail - Pending Redevelopment | 336,616 | 79% | 6,225 | 23.46 | 2002 | |||||||||||||||
| Ward Village Retail - New or Renovated | 500,015 | 84% | 19,268 | 45.64 | 2012 - 2023 | |||||||||||||||
| 836,631 | ||||||||||||||||||||
| Total | 2,149,978 | |||||||||||||||||||
(a)Annualized Base Rent is calculated as the monthly Base Minimum Rent for the property at December 31, 2025, multiplied by 12. Annualized Base Rent Per Square Foot is the Annualized Base Rent for the property at December 31, 2025, divided by the average occupied square feet.
(b)Excludes 381,767 square feet of anchors and 39,700 square feet of additional office space above our retail space.
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| PROPERTIES | Table of Contents Index to Financial Statements | ||||
The following tables summarize certain metrics of our multifamily Operating Assets as of December 31, 2025:
| Multifamily Assets | Ownership % | Units | Retail Square Feet | % Units Leased | Average Monthly Rate Per Unit | Average Monthly Rate Per Square Foot | Year Built / Acquired / Redeveloped | |||||||||||||||||||
| The Woodlands | ||||||||||||||||||||||||||
| Creekside Park | 100% | 292 | — | 92% | $1,845 | $1.88 | 2018 | |||||||||||||||||||
| Creekside Park The Grove | 100% | 360 | — | 94% | 1,789 | 1.82 | 2021 | |||||||||||||||||||
| One Lakes Edge | 100% | 390 | 22,971 | 94% | 2,478 | 2.51 | 2015 | |||||||||||||||||||
| Two Lakes Edge | 100% | 386 | 11,415 | 94% | 2,843 | 2.85 | 2020 | |||||||||||||||||||
| Millennium Six Pines | 100% | 314 | — | 90% | 2,015 | 2.10 | 2016 | |||||||||||||||||||
| Millennium Waterway | 100% | 393 | — | 92% | 1,838 | 2.04 | 2012 | |||||||||||||||||||
| The Lane at Waterway | 100% | 163 | — | 90% | 2,620 | 2.38 | 2020 | |||||||||||||||||||
| 1 Riva Row | 100% | 268 | — | 28% | 4,298 | 3.75 | 2025 | |||||||||||||||||||
| Bridgeland | ||||||||||||||||||||||||||
| Lakeside Row | 100% | 312 | — | 92% | 1,909 | 1.94 | 2019 | |||||||||||||||||||
| Starling at Bridgeland | 100% | 358 | — | 91% | 1,980 | 2.03 | 2022 | |||||||||||||||||||
| Wingspan | 100% | 263 | — | 89% | 2,542 | 2.03 | 2023 | |||||||||||||||||||
| Columbia | ||||||||||||||||||||||||||
| Juniper | 100% | 382 | 55,677 | 96% | 2,526 | 2.83 | 2020 | |||||||||||||||||||
| Marlow | 100% | 472 | 32,607 | 87% | 2,414 | 3.09 | 2022 | |||||||||||||||||||
| The Metropolitan | 50% | 380 | 13,591 | 96% | 2,382 | 2.52 | 2015 | |||||||||||||||||||
| TEN.m.flats | 50% | 437 | 28,026 | 97% | 2,439 | 2.75 | 2018 | |||||||||||||||||||
| Summerlin | ||||||||||||||||||||||||||
| Constellation | 100% | 124 | — | 95% | 2,562 | 2.29 | 2017 | |||||||||||||||||||
| Tanager | 100% | 267 | — | 100% | 2,468 | 2.54 | 2019 | |||||||||||||||||||
| Tanager Echo | 100% | 294 | — | 96% | 2,662 | 3.04 | 2023 | |||||||||||||||||||
| Total | 5,855 | 164,287 | ||||||||||||||||||||||||
The following tables summarize certain metrics of our other Operating Assets as of December 31, 2025:
| Other Assets | Ownership % | Asset Type | Size | % Leased | Year Built / Acquired / Redeveloped | ||||||||||||
| The Woodlands | |||||||||||||||||
| Hughes Landing Daycare | 100% | Other | N/A | N/A | 2019 | ||||||||||||
| Houston Ground Leases | 100% | Ground lease | N/A | N/A | Various | ||||||||||||
| Stewart Title of Montgomery County, TX | 50% | Title Company | N/A | N/A | — | ||||||||||||
| The Woodlands Warehouse | 100% | Warehouse | 125,801 sq ft | 100% | 2019 | ||||||||||||
| Woodlands Sarofim | 20% | Industrial | N/A | N/A | late 1980s | ||||||||||||
| Summerlin | |||||||||||||||||
| Hockey Ground Lease | 100% | Ground lease | N/A | N/A | 2017 | ||||||||||||
| Summerlin Hospital Medical Center | 5% | Hospital | N/A | N/A | 1997 | ||||||||||||
| Ward Village | |||||||||||||||||
| Kewalo Basin Harbor | 100% | Marina | 55 acres | N/A | 2019 | ||||||||||||
| Other | |||||||||||||||||
| Columbia Ground Leases | 100% | Ground lease | N/A | N/A | 2024 | ||||||||||||
| Parking Garages (a) | 100% | Garage | 9,696 spaces | N/A | Various | ||||||||||||
(a)Includes parking garages in The Woodlands, Columbia, and Ward Village.
HHH 2025 FORM 10-K | 27
| PROPERTIES | Table of Contents Index to Financial Statements | ||||
The following table summarizes our Operating Assets segment lease expirations:
| $ in thousands | Number of Expiring Leases (a) | Total Square Feet Expiring | Total Annualized Base Rent Expiring | % of Total Annual Gross Rent Expiring | ||||||||||||||||||||||
| Year | ||||||||||||||||||||||||||
| 2026 | 106 | 426,562 | $ | 17,332 | 4.2 | % | ||||||||||||||||||||
| 2027 | 124 | 1,017,147 | 43,550 | 10.7 | % | |||||||||||||||||||||
| 2028 | 93 | 578,094 | 28,422 | 6.9 | % | |||||||||||||||||||||
| 2029 | 92 | 834,163 | 42,334 | 10.4 | % | |||||||||||||||||||||
| 2030 | 87 | 918,064 | 47,772 | 11.7 | % | |||||||||||||||||||||
| 2031 | 58 | 543,220 | 27,574 | 6.7 | % | |||||||||||||||||||||
| 2032 | 44 | 1,292,975 | 68,058 | 16.7 | % | |||||||||||||||||||||
| 2033 | 43 | 709,240 | 36,225 | 8.9 | % | |||||||||||||||||||||
| 2034 | 31 | 411,409 | 21,250 | 5.2 | % | |||||||||||||||||||||
| 2035 | 51 | 559,942 | 23,664 | 5.8 | % | |||||||||||||||||||||
| 2036+ | 60 | 887,940 | 52,289 | 12.8 | % | |||||||||||||||||||||
| Total | 789 | 8,178,756 | $ | 408,470 | 100.0 | % | ||||||||||||||||||||
(a)Excludes leases with an initial term of 12 months or less.
HHH 2025 FORM 10-K | 28
| PROPERTIES | Table of Contents Index to Financial Statements | ||||
| MASTER PLANNED COMMUNITIES | ||
Our MPCs are located in and around Houston, Texas; Las Vegas, Nevada; and Phoenix, Arizona and are summarized in the following table as of December 31, 2025:
| Total Gross | Approx. No. | Remaining Saleable Acres | Estimated Price Per Acre (thousands) (b) | Projected Community Sell-Out Date | Projected Cash Margin (c) | |||||||||||||||||||||||||||
| Community | Location | Acres (a) | Residents | Residential | Commercial | Residential | Commercial | Residential | Commercial | Residential | ||||||||||||||||||||||
| Bridgeland | Cypress, TX | 11,506 | 29,000 | 1,234 | 1,093 | $662 | $767 | 2032 | 2046 | 89% | ||||||||||||||||||||||
| Summerlin | Las Vegas, NV | 22,500 | 132,000 | 1,978 | 494 | 1,719 | 1,378 | 2043 | 2039 | 81% | ||||||||||||||||||||||
| Teravalis | Phoenix, AZ | 33,810 | — | 15,908 | 10,531 | 832 | 206 | 2086 | 2086 | 81% | ||||||||||||||||||||||
| The Woodlands (d) | The Woodlands, TX | 28,545 | 124,800 | 64 | 685 | N/A | 1,020 | 2031 | 2034 | 96% | ||||||||||||||||||||||
| The Woodlands Hills | Conroe, TX | 2,055 | 3,793 | 624 | 181 | 391 | 511 | 2035 | 2032 | 87% | ||||||||||||||||||||||
| Total | 98,416 | 289,593 | 19,808 | 12,984 | ||||||||||||||||||||||||||||
| Floreo (e) | Phoenix, AZ | 3,029 | 35 | 1,061 | 116 | 836 | 335 | 2038 | 2032 | 52% | ||||||||||||||||||||||
(a)Encompasses the land located within the borders of the master planned community, including parcels already sold, saleable parcels, and non-saleable areas such as roads, parks and recreation areas, conservation areas, and parcels acquired during the year (if any).
(b)Residential and commercial pricing represents the Company's estimate of price per acre that will be achieved in 2026 per its land models.
(c)Projected cash gross margin represents the net cash margin expected to be received in the future and includes all future projected revenues less all remaining future projected cash development costs. The projected cash gross margin does not include remaining historical development costs incurred to date. Gross margin for each MPC may vary from period to period based on the locations of the land sold and the related costs associated with developing the land sold.
(d)The Woodlands residential land development is nearing completion.
(e)The Company owns a 50% interest in this unconsolidated venture, however the data above is presented at 100%. See below for additional detail.
| The Summit | ||
Within our Summerlin MPC, an exclusive luxury community named The Summit is being developed and managed through a joint venture with Discovery Land Company, a leading developer of luxury communities and private clubs. The original 555-acre community, which is expected to consist of approximately 245 homes and 32 condominiums, is nearing completion. In 2022, the Company contributed an additional 54 acres to The Summit adjacent to the existing Summit community to develop approximately 28 custom home sites. See Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations and Note 4 - Investments in Unconsolidated Ventures in the Notes to Consolidated Financial Statements under Item 8 of this Annual Report for further details.
| Floreo | ||
Floreo, the first village to be developed in our Teravalis MPC, is being developed and managed through a 50% joint venture. The 3,029-acre village is located in the greater Phoenix, Arizona area and is expected to consist of approximately 5,000 residential lots, commercial sites, as well as a planned business park. In late 2025, the Company welcomed the first residents and celebrated the grand opening of the community. See Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations and Note 4 - Investments in Unconsolidated Ventures in the Notes to Consolidated Financial Statements under Item 8 of this Annual Report for further details.
HHH 2025 FORM 10-K | 29
| PROPERTIES | Table of Contents Index to Financial Statements | ||||
| STRATEGIC DEVELOPMENTS | ||
We continue to plan, develop, and hold or seek development rights for unique properties primarily in Ward Village, The Woodlands, Bridgeland, Summerlin, Columbia, and Teravalis. We continue to execute our strategic plans for developing several of these assets with construction either actively underway or pending. Strategic Developments are transferred into our Operating Assets segment when the asset is placed in service.
The following table summarizes our Strategic Developments projects under construction as of December 31, 2025:
| $ in thousands | Asset Type | Location | Size (a) | Total Estimated Cost (b) | Estimated Completion | Estimated Stabilization Date | ||||||||||||||
| Strategic Developments Under Construction | ||||||||||||||||||||
| Bridgeland | ||||||||||||||||||||
| Memorial Hermann Medical Office | Office | Cypress, TX | 50,895 sq ft | $23,661 | Q2 2026 | 2029 | ||||||||||||||
| The Woodlands | ||||||||||||||||||||
| 7 Waterway (c) | Office | The Woodlands, TX | 186,369 sq ft | 39,181 | Q2 2026 | 2029 | ||||||||||||||
| Condominiums | ||||||||||||||||||||
| Under Construction | ||||||||||||||||||||
| Kalae | Condominium | Honolulu, HI | 329 units / 2,000 sq ft | 623,745 | 2028 | N/A | ||||||||||||||
| The Park Ward Village | Condominium | Honolulu, HI | 545 units / 26,800 sq ft | 613,807 | Q2 2026 | N/A | ||||||||||||||
| The Ritz-Carlton Residences | Condominium | The Woodlands, TX | 111 units / 5,800 sq ft | 369,465 | 2027 | N/A | ||||||||||||||
| Completed and Sold Out | ||||||||||||||||||||
| ‘A‘ali‘i | Condominium | Honolulu, HI | 750 units / 11,175 sq ft | 390,138 | Completed | N/A | ||||||||||||||
| Ae`o | Condominium | Honolulu, HI | 465 units / 70,800 sq ft | 430,086 | Completed | N/A | ||||||||||||||
| Anaha | Condominium | Honolulu, HI | 317 units / 16,048 sq ft | 403,796 | Completed | N/A | ||||||||||||||
| Ke Kilohana | Condominium | Honolulu, HI | 423 units / 28,386 sq ft | 217,318 | Completed | N/A | ||||||||||||||
| Kō'ula | Condominium | Honolulu, HI | 565 units / 36,995 sq ft | 481,302 | Completed | N/A | ||||||||||||||
| Ulana Ward Village (d) | Condominium | Honolulu, HI | 696 units / 32,100 sq ft | 402,914 | Completed | N/A | ||||||||||||||
| Victoria Place | Condominium | Honolulu, HI | 349 units | 539,017 | Completed | N/A | ||||||||||||||
| Waiea | Condominium | Honolulu, HI | 177 units / 7,716 sq ft | 542,631 | Completed | N/A | ||||||||||||||
(a)For condominium units and multifamily assets, square feet represents ground floor retail space whereas units represents residential units for sale or rent.
(b)As of December 31, 2025, total estimated cost remaining to be spent on these properties was $857.9 million, of which $180.9 million is expected to be funded by HHH with the remaining cost to be funded with existing construction loans and condominium buyer deposits.
(c)The Company acquired this office property in the second quarter of 2025 for $16.3 million, and commenced a redevelopment project in the third quarter of 2025. Total estimated cost for 7 Waterway is inclusive of acquisition, closing, redevelopment, and tenant lease-up costs.
(d)The Company completed construction at Ulana in November 2025. However, landlord work is still ongoing for the retail section of the property as of December 31, 2025. The retail space is expected to be placed in service as leases are executed.
HHH 2025 FORM 10-K | 30
| PROPERTIES | Table of Contents Index to Financial Statements | ||||
The following table summarizes future Strategic Developments projects as of December 31, 2025:
| Location | Size | |||||||
| Future Strategic Developments Rights or Pending Construction | ||||||||
| The Woodlands | ||||||||
| 2000 Woodlands Parkway (a) | The Woodlands, TX | 7,900 sq ft | ||||||
| Ward Village | ||||||||
| ‘Ilima (b) | Honolulu, HI | 148 units / 5,000 sq ft | ||||||
| The Launiu (c) | Honolulu, HI | 485 units / 10,000 sq ft | ||||||
| Melia (b) | Honolulu, HI | 220 units / 6,000 sq ft | ||||||
| Other | ||||||||
| West End Alexandria (d) | Alexandria, VA | 41 acres | ||||||
| Commercial Land | ||||||||
| Columbia | ||||||||
| Columbia Commercial Land (e) | Columbia, MD | 99 acres | ||||||
| Merriweather District (e)(f) | Columbia, MD | 26 acres | ||||||
| Ward Village | ||||||||
| Ward Commercial Land (e) | Honolulu, HI | 6 acres | ||||||
(a)2000 Woodlands Parkway was transferred to Strategic Developments in 2023. The Company expects to execute a new lease in 2026, and transfer the property back to Operating Assets.
(b)We launched pre-sales for these condominiums in June 2025, and as of December 31, 2025 we have entered into contracts for 51% of the total units at ‘Ilima and 65% of the total units at Melia.
(c)As of December 31, 2025, we have entered into contracts for 346 units at The Launiu, representing 71% of total units. Construction is expected to begin in early 2026.
(d)Represents acreage owned through a joint venture.
(e)Represents land acquired or transferred to the Strategic Developments segment for future development, excluding acreage related to assets that are now in service in our Operating Assets segment or related to completed or under construction condominium towers.
(f)Includes acreage from the Lakefront District development that is now considered a part of Merriweather District following rebranding efforts for the area.
HHH 2025 FORM 10-K | 31
| OTHER INFORMATION | Table of Contents Index to Financial Statements | ||||
Item 3. Legal Proceedings
We, as part of our normal business activities, are a party to a number of legal proceedings. Management periodically assesses our liabilities and contingencies in connection with these matters based upon the latest information available. We disclose material pending legal proceedings pursuant to Securities and Exchange Commission rules and other pending matters as we may determine to be appropriate. As of December 31, 2025, management believes that any monetary liability or financial impact of claims or potential claims to which we might be subject after final adjudication of any legal procedures would not be material to our financial position or our results of operations. See Note 12 - Commitments and Contingencies in the Notes to Consolidated Financial Statements under Item 8 of this Annual Report for further discussion.
Item 4. Mine Safety Disclosure
Not applicable.
HHH 2025 FORM 10-K | 32
| OTHER INFORMATION | Table of Contents Index to Financial Statements | ||||
| PART II | ||
Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters, and Issuer Purchases of Equity Securities
| MARKET INFORMATION | ||
Our common stock is traded on the New York Stock Exchange (the NYSE) under the ticker symbol “HHH”. No dividends have been declared or paid in 2025 or 2024. Any future determination related to our dividend policy will be made at the discretion of our board of directors and will depend on a number of factors, including future earnings, capital requirements, restrictions under debt agreements, financial condition, future prospects, and other factors the board of directors may deem relevant.
| NUMBER OF HOLDERS OF RECORD | ||
As of February 12, 2026, there were 974 stockholders of record of our common stock.
| PERFORMANCE GRAPH | ||
The following performance graph compares the yearly dollar change in the cumulative total stockholder return on our common stock with the cumulative total returns of the NYSE Composite Index, MSCI US REIT Index, and the S&P 500 Real Estate Index. The graph tracks the performance of a $100 investment in our common stock and in each of the indexes during the last five fiscal years ended December 31, 2025. The graph was prepared based on the assumption that dividends have been reinvested subsequent to the initial investment. Stockholder returns over the indicated period are based on historical data and should not be considered indicative of future stockholder returns.
HHH 2025 FORM 10-K | 33
| OTHER INFORMATION | Table of Contents Index to Financial Statements | ||||
| EQUITY COMPENSATION PLAN INFORMATION | ||
The following sets forth information with respect to the equity compensation plans available to employees and directors of the Company as of December 31, 2025:
| Plan Category | (a) Number of securities to be issued upon exercise of outstanding options, warrants, and rights | (b) Weighted-average exercise price of outstanding options, warrants, and rights | (c) Number of securities remaining available for future issuance under equity compensation plans (excluding securities reflected in column (a) | ||||||||||||||
| Equity compensation plans approved by security holders | 68,240 | $ | 82.62 | 1,939,450 | |||||||||||||
| Equity compensation plans not approved by security holders | — | — | — | ||||||||||||||
| Total | 68,240 | $ | 82.62 | 1,939,450 | |||||||||||||
The amounts shown in the above table do not include 499,475 outstanding Common Shares (all of which are restricted and subject to vesting requirements) that were granted under the Company’s 2025 Equity Incentive Plan and its predecessor, the 2020 Equity Incentive Plan as further described in Note 13 - Stock-Based Compensation Plans in the Notes to Consolidated Financial Statements under Item 8 of this Annual Report.
| PURCHASES OF EQUITY SECURITIES BY THE ISSUER | ||
The following sets forth information with respect to repurchases made by the Company of its shares of common stock during the fourth quarter of 2025:
| Period | Total number of shares purchased (a) | Average price paid per share | Total number of shares purchased as part of publicly announced plans or programs | Approximate dollar value of shares that may yet be purchased under the plans or programs (b) | |||||||||||||||||||
| October 1 - 31, 2025 | 1,256 | $ | 85.31 | — | $ | 15,009,600 | |||||||||||||||||
| November 1 - 30, 2025 | 1,037 | $ | 89.51 | — | $ | 15,009,600 | |||||||||||||||||
| December 1 - 31, 2025 | 16,828 | $ | 79.78 | — | $ | 15,009,600 | |||||||||||||||||
| Total | 19,121 | $ | 80.67 | — | |||||||||||||||||||
(a)During the fourth quarter of 2025, all 19,121 shares repurchased related to stock received by the Company for the payment of withholding taxes due on employee share issuances under share-based compensation plans. For additional information, see Note 13 - Stock-Based Compensation Plans in the Notes to Consolidated Financial Statements under Item 8 of this Annual Report.
(b)In March 2022, the Board authorized a share repurchase program pursuant to which the Company may, from time to time, purchase up to $250.0 million of its common stock through open-market transactions.
Item 6. [Reserved]
HHH 2025 FORM 10-K | 34
| MANAGEMENT’S DISCUSSION AND ANALYSIS | Table of Contents Index to Financial Statements | ||||
Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations
The following discussion should be read in conjunction with our Consolidated Financial Statements and the related notes filed as a part of this Annual Report on Form 10-K (Annual Report). This discussion contains forward-looking statements that involve risks, uncertainties, assumptions, and other factors, including those described in Part I, Item 1A. Risk Factors and elsewhere in this Annual Report. These factors and others not currently known to us could cause our financial results in 2025 and subsequent fiscal years to differ materially from those expressed in, or implied by, those forward-looking statements. You are cautioned not to place undue reliance on this information which speaks only as of the date of this report. We are not obligated to update this information, whether as a result of new information, future events or otherwise, except as may be required by law.
This section of our Annual Report discusses 2025 and 2024 items and year-to-year comparisons between 2025 and 2024. Discussion of 2023 and year-to-year comparisons between 2024 and 2023 that are not included in this Annual Report can be found in Part II, Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations in the Company’s Annual Report on Form 10-K for the year ended December 31, 2024.
All references to numbered Notes are to specific Notes to our Consolidated Financial Statements included in this Annual Report and which descriptions are incorporated into the applicable response by reference.
| Index | Page | ||||
Overview | 36 | ||||
Results of Operations | 39 | ||||
Operating Assets | 39 | ||||
Master Planned Communities | 41 | ||||
Strategic Developments | 46 | ||||
Corporate Income, Expenses, and Other Items | 49 | ||||
Liquidity and Capital Resources | 51 | ||||
Critical Accounting Policies and Estimates | 55 | ||||
Recently Issued Accounting Pronouncements and Developments | 55 | ||||
HHH 2025 FORM 10-K | 35
MANAGEMENT’S DISCUSSION AND ANALYSIS OVERVIEW | Table of Contents Index to Financial Statements | ||||
| OVERVIEW | ||
General Howard Hughes Holdings Inc. (HHH or the Company) is a holding company that owns a real estate development subsidiary, The Howard Hughes Corporation (HHC). Through HHC, the Company operates a large‑scale, mixed‑use real estate platform focused on the development of master planned communities (MPCs), the investment in strategic real estate development opportunities, and the ownership and operation of income‑producing properties. References to HHH, the Company, we, us, and our refer to Howard Hughes Holdings Inc. and its consolidated subsidiaries, which includes The Howard Hughes Corporation, unless otherwise specifically stated. References to HHC or Howard Hughes Communities refer to The Howard Hughes Corporation and its consolidated subsidiaries unless otherwise specifically stated.
In 2025, the Company began executing a long-term strategy to transition from a pure-play real estate company to a diversified holding company. On May 5, 2025, the Company issued 9,000,000 shares of newly issued common stock to Pershing Square for an aggregate purchase price of $900 million (Pershing Square Issuance). In connection with the investment, the Company and Pershing Square entered into related agreements, including a Services Agreement, Shareholder Agreement, Standstill Agreement, and Registration Rights Agreement. The Company intends to use the proceeds from the transaction to acquire or invest in operating businesses.
As previously disclosed in our Current Report on Form 8‑K filed on December 18, 2025, the Company entered into a definitive agreement to acquire 100% of Vantage Group Holdings Ltd. (Vantage), a privately held specialty insurance and reinsurance company, for cash consideration of approximately $2.1 billion. The transaction remains subject to regulatory approvals and other customary closing conditions, and is expected to close in the second quarter of 2026. To support the funding of the acquisition, the Company also entered into an equity commitment letter with Pershing Square Holdings, Ltd. under which Pershing Square committed to purchase up to $1.0 billion of the Company’s preferred stock, prior to and contingent upon the closing of the Vantage acquisition. Over time, the Company will have the right, but not the obligation, to repurchase the preferred stock during specified periods and upon certain triggering events. The acquisition is expected to be funded through the Company’s cash on hand, and proceeds from the issuance of the preferred stock.
Refer to Item 1. Business for a general description of the assets contained in our three business segments and Item 2. Properties for details regarding the asset type, size, location, and key metrics about our various properties.
We are primarily focused on creating stockholder value by increasing our per-share net asset value. Often, the nature of our business results in short-term volatility in our net income due to the timing of Master Planned Communities (MPC) land sales, recognition of condominium revenue, and operating business pre-opening expenses.
Changes for monetary amounts between periods presented are calculated based on the amounts in thousands of dollars stated in our consolidated financial statements and then rounded to the nearest million. Therefore, certain changes may not recalculate based on the amounts rounded to the nearest million.
2025 Results During 2025, we delivered exceptional results across our core business lines. Operating Assets net operating income (NOI) and MPC earnings before taxes (EBT) both reached record highs, while our condo and strategic development activities extended the runway for future growth.
In our MPCs, we continued to experience heightened demand and home builder interest for new land parcels. As a result, MPC EBT increased 36% year-over-year, driven by a new full-year record number of residential acres sold.
In Operating Assets, we delivered another full-year NOI record, outpacing 2024 results by 7%, excluding dispositions. This growth was led by our office portfolio, which continued to benefit from strong lease-up activity and abatement expirations at various properties in The Woodlands, Merriweather District, and Summerlin. In 2025, the Company executed 484,000 square feet of new or expanded office leases including 334,000 square feet in The Woodlands, 88,000 square feet in Merriweather District, and 62,000 square feet in Summerlin. Our multifamily portfolio also contributed meaningfully to the outperformance due to continued lease-up at our newer properties in Summerlin, Bridgeland, and Merriweather District.
In Strategic Developments, Ward Village had another strong year, closing 690 units at Ulana Ward Village, a workforce tower that generated $369.5 million of condominium revenues at a break even gross margin, which is consistent with our typical target for workforce towers. Pre-sales activity for our under construction condominiums progressed, and these projects were 93% pre-sold at year end and represent more than $1.9 billion of future contracted revenue. Leasing activity at The Launiu remained strong and we launched pre-sales for two new Ward Village condominiums, Melia and ‘Ilima in June 2025, with 66% of the units at these predevelopment towers pre-sold at year end representing $2.0 billion of future contracted revenue. Future contracted revenues will be recognized as projects are completed.
HHH 2025 FORM 10-K | 36
MANAGEMENT’S DISCUSSION AND ANALYSIS OVERVIEW | Table of Contents Index to Financial Statements | ||||
2026 Outlook Proceeding into 2026, we maintain a positive long-term outlook for our businesses and believe we are well positioned to create value across cycles. We remain focused on maintaining liquidity, managing near‑term maturities, and allocating capital to the highest‑return opportunities across our business segments. Development spending will continue on a disciplined basis, and we will evaluate opportunities to recycle capital and enhance balance‑sheet flexibility as market conditions evolve.
Across our master planned communities, we expect demand for new homes, retail, and office space to remain resilient, supported by constrained inventories of existing homes, continued migration to our communities, and the quality and scale of our offerings. MPC EBT is expected to normalize in 2026 following a record year of land sales in 2025 and Operating Assets performance is expected to be stable to modestly positive. We expect condominium activity during the year to be driven primarily by The Park Ward Village, which is substantially pre-sold and positioned to contribute meaningful revenue and gross profit as it is delivered.
Additionally, the Pershing Square investment and the pending agreement to acquire Vantage mark important steps in broadening our strategic reach. We expect to make meaningful progress in 2026 toward building a durable foundation to compound long-term shareholder value across multiple platforms, while maintaining our focus on liquidity, disciplined capital allocation, and balance sheet flexibility. The Company’s expectations will be updated as applicable throughout 2026, and as additional information becomes available regarding the pending Vantage acquisition and its expected contribution to the consolidated business.
Our outlook is subject to risks and uncertainties, including those related to interest rates, capital markets conditions, general economic and housing trends in our key regions, and other factors described in Part I, Item 1A. Risk Factors and elsewhere in this Annual Report.
2025 Highlights | ||
Overall
–Net income from continuing operations decreased to $123.8 million in 2025, compared to net income of $285.2 million in the prior year. The year-over-year decrease was primarily attributed to a change in the product mix of condominium closings as we closed units at a workforce tower in the current year, compared to closing units at a luxury tower in the prior year, and the receipt of insurance proceeds in the prior year following the execution of a settlement agreement related to the construction defect claims at Waiea. These decreases were partially offset by an increase in residential acres sold in Summerlin.
–We continue to maintain a strong liquidity position with $1.5 billion of cash and cash equivalents, $515.0 million of undrawn capacity on our Secured Bridgeland Notes, and $686.6 million of undrawn lender commitment available to be drawn for property development, and limited near-term debt maturities.
Operating Assets
–Operating Assets EBT increased $1.0 million, with a loss of $27.4 million in 2025, compared to a loss of $28.5 million in the prior year.
–Operating Assets NOI was $262.0 million in 2025, a $16.5 million increase compared to $245.5 million in the prior year.
–Office NOI increased $13.6 million, primarily due to strong leasing activity and abatement expirations at various properties in The Woodlands, Merriweather District, and Summerlin, most notably at 9950 Woodloch Forest, 6100 Merriweather, and 1700 Pavilion, partially offset by decreases related to lower occupancy at certain properties in The Woodlands, most notably at 3831 Technology Forest and Two Hughes Landing.
–Multifamily NOI increased $3.9 million primarily due to continued lease-up at Tanager Echo in Summerlin, Wingspan in Bridgeland, and Marlow in Merriweather District.
–In 2025, the Company completed the sale of four land parcels and retail spaces in Ward Village for total proceeds of $18.2 million, and a combined gain on sale of $14.4 million.
MPC
–MPC EBT totaled income of $476.1 million in 2025, a $127.0 million increase compared to income of $349.1 million in the prior year.
–The increase in EBT was primarily due to higher residential land sales at Summerlin and Bridgeland, higher commercial land sales in The Woodlands, and lower equity losses at The Summit.
HHH 2025 FORM 10-K | 37
MANAGEMENT’S DISCUSSION AND ANALYSIS OVERVIEW | Table of Contents Index to Financial Statements | ||||
Strategic Developments
–Strategic Developments EBT totaled a loss of $13.9 million in 2025, a $296.7 million decrease compared to income of $282.8 million in the prior year.
–The decrease in EBT was primarily due to a decrease in condominium sales net cost of sales due to the change in the product mix of condominium closings as we closed units at a workforce tower in the current year, compared to closing units at a luxury tower in the prior year, and a decrease in other income related to accruing a charge for a legal judgment in Columbia in the current year, compared to the receipt of insurance proceeds for the Waiea remediation in the prior year. These decreases were partially offset by an increase in gain on sale of real estate assets due to a land swap in The Woodlands and the sale of a land parcel near Merriweather District in the current year.
–Leasing activity at The Launiu remained strong and we launched pre-sales for two new Ward Village condominiums, Melia and ‘Ilima in June 2025. During 2025, we contracted 283 pre-development units and as of December 31, 2025, 66% of the units at our three pre-development towers are under contract.
–In 2025, we placed three properties in service, including Grogan’s Mill Retail, a retail property in The Woodlands; One Bridgeland Green, an office property in Bridgeland; and 1 Riva Row, a multifamily property in The Woodlands. These properties represent 268 multifamily units and approximately 81,000 square feet of retail and office space.
–In 2025, we began construction on Memorial Hermann Medical Office, an office building in Bridgeland, and the redevelopment of 7 Waterway, an office building in The Woodlands. These properties represent approximately 237,000 square feet of office space.
Corporate
–Net expenses related to Corporate income, expenses, and other items decreased $7.3 million compared to the prior year primarily due to a decrease in income tax expense, partially offset by an increase in general and administrative expenses, primarily related to the Pershing Square advisory fee and a strategic reduction in force in the current year.
Capital and Financing Activities
–In 2025, our financing activity included draws on existing mortgages of $573.5 million, refinancings of $184.2 million, and repayments of $365.7 million. In addition, we repaid $198.0 million on the Secured Bridgeland Notes using the proceeds from the sale of Municipal Utility District (MUD) receivables. For additional information, refer to Note 9 - Mortgages, Notes, and Loans Payable, Net in the Notes to Consolidated Financial Statements under Item 8 of this Annual Report.
–Subsequent to year end, on February 17, 2026, HHC, the Company’s wholly owned subsidiary, issued $500.0 million of 5.875% senior unsecured notes due 2032 and $500.0 million of 6.125% senior unsecured notes due 2034. HHC used the net proceeds to redeem its outstanding $750.0 million 5.375% senior unsecured notes due 2028, including premiums, accrued and unpaid interest and related expenses, and will use the remaining proceeds for general corporate purposes. Refer to Note 9 - Mortgages, Notes, and Loans Payable, Net in the Notes to Consolidated Financial Statements under Item 8 of this Annual Report for additional detail.
HHH 2025 FORM 10-K | 38
MANAGEMENT’S DISCUSSION AND ANALYSIS RESULTS OF OPERATIONS | Table of Contents Index to Financial Statements | ||||
| RESULTS OF OPERATIONS | ||
| Operating Assets | ||
Segment EBT The following table presents segment EBT for Operating Assets for the years ended December 31:
| Operating Assets Segment EBT | ||||||||||||||||||||
| thousands except percentages | 2025 | 2024 | $ Change | % Change | ||||||||||||||||
| Rental revenue | $ | 441,413 | $ | 421,641 | $ | 19,772 | 5 | % | ||||||||||||
| Other land, rental, and property revenues | 24,155 | 22,659 | 1,496 | 7 | % | |||||||||||||||
| Total revenues | 465,568 | 444,300 | 21,268 | 5 | % | |||||||||||||||
| Operating costs | (145,464) | (138,172) | (7,292) | (5) | % | |||||||||||||||
| Rental property real estate taxes | (58,577) | (55,915) | (2,662) | (5) | % | |||||||||||||||
| (Provision for) recovery of doubtful accounts | (232) | (504) | 272 | 54 | % | |||||||||||||||
| Total operating expenses | (204,273) | (194,591) | (9,682) | (5) | % | |||||||||||||||
| Segment operating income (loss) | 261,295 | 249,709 | 11,586 | 5 | % | |||||||||||||||
| Depreciation and amortization | (172,835) | (169,040) | (3,795) | (2) | % | |||||||||||||||
| Interest income (expense), net | (136,637) | (138,207) | 1,570 | 1 | % | |||||||||||||||
| Other income (loss), net | 2,266 | 822 | 1,444 | 176 | % | |||||||||||||||
| Equity in earnings (losses) from unconsolidated ventures | 4,829 | 5,819 | (990) | (17) | % | |||||||||||||||
| Gain (loss) on sale or disposal of real estate and other assets, net | 14,354 | 22,907 | (8,553) | (37) | % | |||||||||||||||
| Gain (loss) on extinguishment of debt | (698) | (465) | (233) | (50) | % | |||||||||||||||
| Segment EBT | $ | (27,426) | $ | (28,455) | $ | 1,029 | 4 | % | ||||||||||||
Operating Assets segment EBT increased $1.0 million compared to the prior year primarily due to the following:
–Rental revenues, net of Operating costs increased $12.5 million primarily due to increased leasing activity across our portfolio.
This increase to EBT was partially offset by the following:
–Gain on sale of real estate decreased $8.6 million primarily due to the sale of four land parcels and retail spaces in Ward Village in 2025, compared to the sale of Lakeland Village Center at Bridgeland, Creekside Park Medical Plaza, and four non-core ground leases in The Woodlands in 2024.
Net Operating Income In addition to the required presentations using accounting principles generally accepted in the United States (GAAP), we use certain non-GAAP performance measures, as we believe these measures improve the understanding of our operational results and make comparisons of operating results among peer companies more meaningful. Management continually evaluates the usefulness, relevance, limitations and calculation of our reported non-GAAP performance measures to determine how best to provide relevant information to the public, and thus such reported measures could change.
We define NOI as operating revenues (rental income, tenant recoveries, and other revenue) less operating expenses (real estate taxes, repairs and maintenance, marketing, and other property expenses). NOI excludes straight-line rents and amortization of tenant incentives, net; interest expense, net; ground rent amortization; demolition costs; other income (loss); depreciation and amortization; development-related marketing costs; gain on sale or disposal of real estate and other assets, net; loss on extinguishment of debt; provision for impairment; and equity in earnings from unconsolidated ventures.
We believe that NOI is a useful supplemental measure of the performance of our Operating Assets segment because it provides a performance measure that reflects the revenues and expenses directly associated with owning and operating real estate properties. We use NOI to evaluate our operating performance on a property-by-property basis because NOI allows us to evaluate the impact that property-specific factors such as rental and occupancy rates, tenant mix, and operating costs have on our operating results, gross margins, and investment returns.
HHH 2025 FORM 10-K | 39
MANAGEMENT’S DISCUSSION AND ANALYSIS RESULTS OF OPERATIONS | Table of Contents Index to Financial Statements | ||||
A reconciliation of Operating Assets segment EBT to Operating Assets NOI is presented in the table below.
| Operating Assets NOI | ||||||||||||||||||||
| thousands except percentages | 2025 | 2024 | $ Change | % Change | ||||||||||||||||
| Operating Assets segment EBT | $ | (27,426) | $ | (28,455) | $ | 1,029 | 4 | % | ||||||||||||
| Add back: | ||||||||||||||||||||
| Depreciation and amortization | 172,835 | 169,040 | 3,795 | 2 | % | |||||||||||||||
| Interest (income) expense, net | 136,637 | 138,207 | (1,570) | (1) | % | |||||||||||||||
| Equity in (earnings) losses from unconsolidated ventures | (4,829) | (5,819) | 990 | 17 | % | |||||||||||||||
| (Gain) loss on sale or disposal of real estate and other assets, net | (14,354) | (22,907) | 8,553 | 37 | % | |||||||||||||||
| (Gain) loss on extinguishment of debt | 698 | 465 | 233 | 50 | % | |||||||||||||||
| Impact of straight-line rent | (1,964) | (4,770) | 2,806 | 59 | % | |||||||||||||||
| Other | 388 | (306) | 694 | NM | ||||||||||||||||
| Operating Assets NOI | $ | 261,985 | $ | 245,455 | $ | 16,530 | 7 | % | ||||||||||||
NM Not meaningful.
The below table presents Operating Assets NOI by property type:
| Operating Assets NOI by Property Type | ||||||||||||||||||||
| thousands except percentages | 2025 | 2024 | $ Change | % Change | ||||||||||||||||
| Office | $ | 138,173 | $ | 124,594 | $ | 13,579 | 11 | % | ||||||||||||
| Retail | 55,132 | 54,163 | 969 | 2 | % | |||||||||||||||
| Multifamily | 62,694 | 58,827 | 3,867 | 7 | % | |||||||||||||||
| Other | 5,986 | 6,153 | (167) | (3) | % | |||||||||||||||
| Dispositions (a) | — | 1,718 | (1,718) | (100) | % | |||||||||||||||
| Operating Assets NOI | $ | 261,985 | $ | 245,455 | $ | 16,530 | 7 | % | ||||||||||||
(a)Properties that were transferred to our Strategic Developments segment for redevelopment and properties that were sold are shown separately for all periods presented.
Operating Assets NOI increased $16.5 million compared to the prior year primarily due to the following:
–Office NOI increased $13.6 million primarily due to strong leasing activity and abatement expirations at various properties in The Woodlands, Merriweather District, and Summerlin, most notably at 9950 Woodloch Forest, 6100 Merriweather, and 1700 Pavilion, partially offset by decreases related to lower occupancy at certain properties in The Woodlands, most notably at 3831 Technology Forest and Two Hughes Landing.
–Multifamily NOI increased $3.9 million primarily due to continued lease-up at Tanager Echo in Summerlin, Wingspan in Bridgeland, and Marlow in Merriweather District.
HHH 2025 FORM 10-K | 40
MANAGEMENT’S DISCUSSION AND ANALYSIS RESULTS OF OPERATIONS | Table of Contents Index to Financial Statements | ||||
| Master Planned Communities | ||
Segment EBT The following table presents segment EBT for MPC for the years ended December 31:
| MPC Segment EBT | ||||||||||||||||||||
| thousands except percentages | 2025 | 2024 | $ Change | % Change | ||||||||||||||||
| Master Planned Communities land sales (a) | $ | 562,586 | $ | 453,195 | $ | 109,391 | 24 | % | ||||||||||||
| Other land, rental, and property revenues | 19,929 | 17,707 | 2,222 | 13 | % | |||||||||||||||
| Builder price participation (b) | 52,341 | 52,023 | 318 | 1 | % | |||||||||||||||
| Total revenues | 634,856 | 522,925 | 111,931 | 21 | % | |||||||||||||||
| Master Planned Communities cost of sales | (188,704) | (169,191) | (19,513) | (12) | % | |||||||||||||||
| Operating costs | (45,298) | (52,736) | 7,438 | 14 | % | |||||||||||||||
| Total operating expenses | (234,002) | (221,927) | (12,075) | (5) | % | |||||||||||||||
| Segment operating income (loss) | 400,854 | 300,998 | 99,856 | 33 | % | |||||||||||||||
| Depreciation and amortization | (408) | (438) | 30 | 7 | % | |||||||||||||||
| Interest income (expense), net | 75,160 | 60,473 | 14,687 | 24 | % | |||||||||||||||
| Other income (loss), net | 120 | — | 120 | NM | ||||||||||||||||
| Equity in earnings (losses) from unconsolidated ventures | (3,374) | (11,899) | 8,525 | 72 | % | |||||||||||||||
| Gain (loss) on sale or disposal of real estate and other assets, net | 3,750 | — | 3,750 | NM | ||||||||||||||||
| Segment EBT | $ | 476,102 | $ | 349,134 | $ | 126,968 | 36 | % | ||||||||||||
(a)MPC land sales include deferred revenue from land sales closed in a previous period that met criteria for recognition in the current period and excludes amounts deferred from current period land sales that do not yet meet the recognition criteria.
(b)Builder price participation revenue is earned when a developer that acquired land from us develops and sells a home to an end user at a price higher than a predetermined breakpoint. The excess over the breakpoint is shared between us and the developer at the time of closing on the sale of the home based on a previously agreed-upon percentage. This revenue fluctuates based upon the number and the prices of homes closed that qualify for builder price participation payments.
NM Not meaningful.
The following table presents MPC segment EBT by MPC for the years ended December 31:
| MPC Segment EBT by MPC | ||||||||||||||||||||
| thousands except percentages | 2025 | 2024 | $ Change | % Change | ||||||||||||||||
| Bridgeland | $ | 100,396 | $ | 77,611 | $ | 22,785 | 29 | % | ||||||||||||
| Summerlin | 361,205 | 260,924 | 100,281 | 38 | % | |||||||||||||||
| Teravalis (a) | (3,163) | 3,596 | (6,759) | (188) | % | |||||||||||||||
| The Woodlands | 7,380 | (8,863) | 16,243 | 183 | % | |||||||||||||||
| The Woodlands Hills | 10,284 | 15,866 | (5,582) | (35) | % | |||||||||||||||
| Segment EBT | $ | 476,102 | $ | 349,134 | $ | 126,968 | 36 | % | ||||||||||||
| Floreo (b) | $ | (3,602) | $ | 9,816 | $ | (13,418) | (137) | % | ||||||||||||
(a)As of December 31, 2025, the Company owned an 88.0% interest in and consolidates Teravalis. For additional detail, refer to Note 1 - Presentation of Financial Statements and Significant Accounting Policies in the Notes to Consolidated Financial Statements under Item 8 of this Annual Report.
(b)These amounts represent 100% of Floreo EBT. As of December 31, 2025, the Company owned a 50% interest in Floreo. Refer to Note 4 - Investments in Unconsolidated Ventures in the Notes to Consolidated Financial Statements under Item 8 of this Annual Report for a description of the joint venture and further discussion.
HHH 2025 FORM 10-K | 41
MANAGEMENT’S DISCUSSION AND ANALYSIS RESULTS OF OPERATIONS | Table of Contents Index to Financial Statements | ||||
MPC segment EBT increased $127.0 million compared to the prior year, primarily due to higher residential land sales at Summerlin and Bridgeland, higher commercial land sales in The Woodlands, and lower equity losses at The Summit.
Summerlin EBT increased $100.3 million compared to the prior year.
–MPC sales, net of MPC cost of sales increased $72.5 million primarily due to the following activity:
–increase in superpad acres sold, with 412.3 acres sold at an average price of $970,000 per acre in 2025, compared to 216.5 acres sold at an average price of $1.3 million per acre in 2024
–decrease due to $6.0 million less revenue recognized out of deferred revenue, net of associated deferred costs in 2025, compared to 2024
–decrease in custom lot acres sold partially offset by an increase in price per acre, with 2.7 acres sold at an average price of $7.5 million per acre in 2025, compared to 3.8 acres sold at an average price of $6.0 million per acre in 2024
–Equity earnings at The Summit increased $15.2 million. This was primarily due to higher losses in 2024 related to changes to the development model.
–Builder price participation increased $4.9 million as homes earned higher participation revenue per home, partially offset by fewer homes closing with sales prices above the predetermined breakpoint necessary for participation revenue in 2025, compared to 2024.
–Increase of $4.0 million primarily due to higher capitalized interest inclusive of derivatives.
–Other land, rental, and property revenues increased $3.5 million primarily due to higher advertising revenue related to superpad acres sold in 2025, compared to 2024.
Bridgeland EBT increased $22.8 million compared to the prior year.
–Increase of $9.4 million primarily due to higher capitalized interest.
–MPC sales, net of MPC cost of sales increased $8.9 million primarily due to the following activity:
–increase in price per acre offset by a slight decrease in residential acres sold, with 177.1 acres sold at an average price of $669,000 per acre in 2025, compared to 178.1 acres sold at an average price of $591,000 per acre in 2024
–decrease due to $3.0 million less revenue recognized out of deferred revenue, net of associated deferred costs in 2025, compared to 2024
–decrease in commercial acres sold, with no acres sold in 2025, compared to 13.5 acres sold at an average price of $369,000 per acre in 2024
–Operating costs decreased $7.6 million due to lower real estate taxes, primarily from the finalization of prior-year accrual estimates.
–Builder price participation decreased $3.1 million as fewer homes were closed with sales prices over the predetermined breakpoint necessary for participation revenue in 2025, compared to 2024.
The Woodlands EBT increased $16.2 million compared to the prior year.
–MPC sales, net of MPC cost of sales increased $13.2 million primarily due to the following activity:
–increase in commercial acres sold, with 30.1 acres sold at an average price of $670,000 per acre in 2025, compared to no acres sold in 2024
–decrease due to $2.1 million less revenue recognized out of deferred revenue, net of associated deferred costs in 2025, compared to 2024
–Gain on sale or disposal of real estate and other assets, net increased $3.7 million due to an eminent domain settlement related to the condemnation of a 9.9-acre parcel of non-saleable land in 2025, with no similar activity in 2024.
Teravalis EBT decreased $6.8 million compared to the prior year.
–Equity earnings at Floreo decreased $6.7 million primarily related to lower land sales in 2025 compared to 2024. Our Floreo joint venture sold a total of 10.6 residential acres at an average price of $793,000 per acre in 2025, compared to 115.4 acres sold at an average price of $777,000 per acre in 2024.
The Woodlands Hills EBT decreased $5.6 million compared to the prior year.
–MPC sales, net of MPC cost of sales decreased $4.7 million primarily due to the following activity:
–decrease in residential acres sold partially offset by an increase in price per acre, with 28.4 acres sold at an average price of $479,000 per acre in 2025, compared to 47.0 acres sold at an average price of $458,000 per acre in 2024
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MPC Equity Investments
The Summit
The Summit, our joint venture with Discovery Land Company, offers a mix of custom lots, single-family homes, and clubhouse suites in our Summerlin MPC. The original 555-acre community (Phase I) is nearing completion and expected to consist of approximately 245 homes and 32 condominiums. In 2022, the Company contributed an additional 54 acres (Phase II) to The Summit adjacent to the existing Summit community to develop approximately 28 custom home sites. We recognized equity losses of $1.6 million and received no cash distributions in 2025, compared to equity losses of $16.8 million and cash distributions of $4.9 million in 2024.
Floreo
Land development is currently underway at Floreo, our joint venture with Trillium Development Holding Company, LLC. In late 2025, the Company welcomed the first residents and celebrated the grand opening of the community.
For additional detail, refer to Note 4 - Investments in Unconsolidated Ventures in the Notes to Consolidated Financial Statements under Item 8 of this Annual Report.
Master Planned Communities Land Sales The following table presents the detail of MPC land sales recognized for the years ended December 31, 2025 and 2024. Total net recognized (deferred) revenue includes revenues recognized in the current period which are related to sales closed in prior periods, offset by revenues deferred on sales closed in the current period.
| thousands | 2025 | 2024 | |||||||||
| Total residential land sales closed | $ | 552,360 | $ | 441,044 | |||||||
| Total commercial land sales closed | 20,168 | 4,984 | |||||||||
| Net recognized (deferred) revenue: | |||||||||||
| Bridgeland | 2,542 | 6,491 | |||||||||
| The Woodlands | (2,137) | 517 | |||||||||
| The Woodlands Hills | 61 | 30 | |||||||||
| Summerlin | (28,346) | (18,140) | |||||||||
| Total net recognized (deferred) revenue | (27,880) | (11,102) | |||||||||
| Special Improvement District revenue | 17,938 | 18,269 | |||||||||
| Master Planned Communities land sales | $ | 562,586 | $ | 453,195 | |||||||
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Residential and Commercial Land Sales Closed The following tables detail our residential and commercial land sales closed for the years ended December 31:
| Summary of MPC Land Sales Closed | |||||||||||||||||||||||||||||||||||
| Land Sales | Acres Sold | Average Price Per Acre | |||||||||||||||||||||||||||||||||
| thousands, except acres sold | 2025 | 2024 | 2025 | 2024 | 2025 | 2024 | |||||||||||||||||||||||||||||
| Residential Land Sales Closed | |||||||||||||||||||||||||||||||||||
| Bridgeland | |||||||||||||||||||||||||||||||||||
| Single family | $ | 118,538 | $ | 105,296 | 177.1 | 178.1 | $ | 669 | $ | 591 | |||||||||||||||||||||||||
| Summerlin | |||||||||||||||||||||||||||||||||||
| Superpad sites | 400,046 | 291,230 | 412.3 | 216.5 | 970 | 1,345 | |||||||||||||||||||||||||||||
| Custom lots | 20,175 | 22,982 | 2.7 | 3.8 | 7,472 | 6,048 | |||||||||||||||||||||||||||||
| The Woodlands Hills | |||||||||||||||||||||||||||||||||||
| Single family | 13,601 | 21,536 | 28.4 | 47.0 | 479 | 458 | |||||||||||||||||||||||||||||
| Total residential land sales closed (a) | $ | 552,360 | $ | 441,044 | 620.5 | 445.4 | $ | 890 | $ | 990 | |||||||||||||||||||||||||
| Commercial Land Sales Closed | |||||||||||||||||||||||||||||||||||
| Bridgeland | $ | — | $ | 4,984 | — | 13.5 | $ | — | $ | 369 | |||||||||||||||||||||||||
| The Woodlands | 20,168 | — | 30.1 | — | 670 | — | |||||||||||||||||||||||||||||
| Total commercial land sales closed (a) | $ | 20,168 | $ | 4,984 | 30.1 | 13.5 | $ | 670 | $ | 369 | |||||||||||||||||||||||||
(a)Excludes revenues recognized in the current period which are related to sales closed in prior periods and includes revenues deferred on sales closed in the current period. Please see the summary of MPC land sales table above which reconciles total residential and commercial land sales closed to MPC land sales revenue recognized for the years ended December 31, 2025 and 2024.
Although our business does not involve the sale or resale of homes, we believe that net new home sales are an important indicator of future demand for our superpad sites and finished lots. Therefore, we use this statistic where relevant in our discussion of MPC operating results herein. Net new home sales reflect home sales made by homebuilders, less cancellations. Cancellations generally occur when a homebuyer signs a contract to purchase a home but later fails to qualify for a home mortgage or is unable to provide an adequate down payment to complete the home sale.
| Net New Home Sales | Median Home Sales Price | ||||||||||||||||||||||
| thousands except percentages | 2025 | 2024 | % Change | 2025 | 2024 | % Change | |||||||||||||||||
| Bridgeland | 812 | 938 | (13.4) | % | $ | 470 | $ | 465 | 1.1 | % | |||||||||||||
| Summerlin | 949 | 1,038 | (8.6) | % | 779 | 692 | 12.6 | % | |||||||||||||||
| The Woodlands (a) | 4 | 9 | (55.6) | % | 2,875 | 2,249 | 27.8 | % | |||||||||||||||
| The Woodlands Hills | 171 | 249 | (31.3) | % | 400 | 419 | (4.5) | % | |||||||||||||||
| Total | 1,936 | 2,234 | (13.3) | % | |||||||||||||||||||
(a) New home sales in The Woodlands are not expected to be significant as residential land development is nearing completion.
MPC Net Contribution MPC Net Contribution is a non-GAAP financial measure derived from EBT, adjusted for certain items as discussed below. Management uses this measure because it captures current period performance through the velocity of sales, as well as current period development expenditures based upon demand at our MPCs, which varies depending upon the stage of the MPC’s development lifecycle, and the overall economic environment. MPC Net Contribution is defined as MPC segment EBT, plus MPC cost of sales, Depreciation and amortization, and net collections from MUD and Special Improvement District (SID) bonds receivables, reduced by MPC development expenditures, land acquisitions, and Equity in earnings from unconsolidated ventures, net of distributions. MPC Net Contribution is not a GAAP-based operational metric and should not be used to measure operating performance of the MPC assets as a substitute for GAAP measures of such performance nor should it be used as a comparison metric with other comparable businesses.
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Below is a reconciliation of segment EBT to MPC Net Contribution for the years ended December 31:
| thousands except percentages | 2025 | 2024 | $ Change | % Change | ||||||||||||||||
| MPC segment EBT | $ | 476,102 | $ | 349,134 | $ | 126,968 | 36 | % | ||||||||||||
| Plus: | ||||||||||||||||||||
| Master Planned Communities cost of sales | 188,704 | 169,191 | 19,513 | 12 | % | |||||||||||||||
| Depreciation and amortization | 408 | 438 | (30) | (7) | % | |||||||||||||||
| MUD and SID bonds collections, net (a) | 37,293 | 107,031 | (69,738) | (65) | % | |||||||||||||||
| Proceeds from sale of MUD receivables | 180,043 | 176,680 | 3,363 | 2 | % | |||||||||||||||
| Distributions from unconsolidated ventures | — | 4,896 | (4,896) | (100) | % | |||||||||||||||
| Less: | ||||||||||||||||||||
| MPC development expenditures | (477,870) | (427,979) | (49,891) | (12) | % | |||||||||||||||
| Equity in (earnings) losses from unconsolidated ventures | 3,374 | 11,899 | (8,525) | (72) | % | |||||||||||||||
| MPC Net Contribution | $ | 408,054 | $ | 391,290 | $ | 16,764 | 4 | % | ||||||||||||
(a)SID collections are shown net of SID transfers to buyers in the respective periods.
MPC Net Contribution increased $16.8 million for the year ended December 31, 2025, primarily due to higher MPC land sales, partially offset by lower MUD and SID bonds collections, net, higher MPC development expenditures, and no distributions from unconsolidated ventures in 2025 compared to 2024.
MPC Land Inventory The following table summarizes MPC land inventory activity:
| thousands | Bridgeland | Summerlin | Teravalis | The Woodlands | The Woodlands Hills | Total MPC | |||||||||||||||||||||||||||||
| Balance December 31, 2023 | $ | 533,031 | $ | 1,079,927 | $ | 544,824 | $ | 172,652 | $ | 115,239 | $ | 2,445,673 | |||||||||||||||||||||||
| Development expenditures (a) | 204,542 | 186,163 | 573 | 5,853 | 30,848 | 427,979 | |||||||||||||||||||||||||||||
| MPC Cost of sales | (47,056) | (113,844) | — | (117) | (8,174) | (169,191) | |||||||||||||||||||||||||||||
| MUD reimbursable costs (b) | (178,701) | — | — | (877) | (20,087) | (199,665) | |||||||||||||||||||||||||||||
| Transfer to Strategic Development and Operating Assets Segments | (1,218) | — | — | 11,399 | — | 10,181 | |||||||||||||||||||||||||||||
| Other | (1,367) | 1,491 | (16) | 583 | (4,006) | (3,315) | |||||||||||||||||||||||||||||
| Balance December 31, 2024 | 509,231 | 1,153,737 | 545,381 | 189,493 | 113,820 | 2,511,662 | |||||||||||||||||||||||||||||
| Development expenditures (a) | 215,001 | 233,631 | 1,867 | 4,053 | 23,318 | 477,870 | |||||||||||||||||||||||||||||
| MPC Cost of sales | (42,459) | (136,797) | — | (4,431) | (5,017) | (188,704) | |||||||||||||||||||||||||||||
| MUD reimbursable costs (b) | (189,603) | — | — | (1,062) | (18,327) | (208,992) | |||||||||||||||||||||||||||||
| Transfer to Strategic Development and Operating Assets Segments | (1,459) | — | — | 121 | — | (1,338) | |||||||||||||||||||||||||||||
| Other | 31,520 | 6,482 | (37) | (859) | 7,473 | 44,579 | |||||||||||||||||||||||||||||
| Balance December 31, 2025 | $ | 522,231 | $ | 1,257,053 | $ | 547,211 | $ | 187,315 | $ | 121,267 | $ | 2,635,077 | |||||||||||||||||||||||
(a)Development expenditures are inclusive of capitalized interest and property taxes.
(b)MUD reimbursable costs represent land development expenditures transferred to MUD Receivables.
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| Strategic Developments | ||
Our Strategic Developments assets generally require substantial future development to maximize their value. Other than our condominium properties, most of the properties and projects in this segment do not generate revenues. Our expenses relating to these assets are primarily related to costs associated with constructing the assets, selling condominiums, carrying costs including, but not limited to, property taxes and insurance and other ongoing costs relating to maintaining the assets in their current condition. If we decide to redevelop or develop a Strategic Developments asset, we expect that with the exception of the residential portion of our condominium projects, upon completion of development, the asset would likely be reclassified to Operating Assets when the asset is placed in service and NOI would become a meaningful measure of its operating performance. All development costs discussed herein are exclusive of land costs.
Segment EBT The following table presents segment EBT for Strategic Developments for the years ended December 31:
| Strategic Developments Segment EBT | ||||||||||||||||||||
| thousands except percentages | 2025 | 2024 | $ Change | % Change | ||||||||||||||||
| Condominium rights and unit sales | $ | 370,156 | $ | 778,616 | $ | (408,460) | (52) | % | ||||||||||||
| Rental revenue | 33 | 459 | (426) | (93) | % | |||||||||||||||
| Other land, rental, and property revenues | 4,174 | 4,321 | (147) | (3) | % | |||||||||||||||
| Total revenues | 374,363 | 783,396 | (409,033) | (52) | % | |||||||||||||||
| Condominium rights and unit cost of sales | (369,408) | (582,574) | 213,166 | 37 | % | |||||||||||||||
| Operating costs | (22,490) | (17,670) | (4,820) | (27) | % | |||||||||||||||
| Real estate taxes | (2,191) | (2,480) | 289 | 12 | % | |||||||||||||||
| Total operating expenses | (394,089) | (602,724) | 208,635 | 35 | % | |||||||||||||||
| Segment operating income (loss) | (19,726) | 180,672 | (200,398) | (111) | % | |||||||||||||||
| Depreciation and amortization | (6,579) | (7,255) | 676 | 9 | % | |||||||||||||||
| Interest income (expense), net | 18,851 | 18,603 | 248 | 1 | % | |||||||||||||||
| Other income (loss), net | (18,487) | 90,534 | (109,021) | (120) | % | |||||||||||||||
| Equity in earnings (losses) from unconsolidated ventures | 317 | 251 | 66 | 26 | % | |||||||||||||||
| Gain (loss) on sale or disposal of real estate and other assets, net | 11,721 | — | 11,721 | NM | ||||||||||||||||
| Segment EBT | $ | (13,903) | $ | 282,805 | $ | (296,708) | (105) | % | ||||||||||||
NM Not meaningful.
Strategic Developments segment EBT decreased $296.7 million compared to the prior year primarily due to the following:
–Condominium sales, net of cost of sales decreased $195.3 million, primarily due to a change in the product mix of condominium closings executed in the current year. Although unit closings were higher with 690 units closed at Ulana Ward Village in the current year, compared to 349 units closed at Victoria Place in the prior year, condominium sales, net of cost of sales decreased as Ulana is a workforce tower and closed at a breakeven gross margin as expected. Ulana is our second workforce tower and fulfills our current reserved housing guaranty in the community. See Note 12 - Commitments and Contingencies in the Notes to Consolidated Financial Statements under Item 8 of this Annual Report for additional information on the reserved housing requirements in Ward Village.
–Other income (loss), net decreased $109.0 million primarily due to the accrual of a $19.8 million charge in the current year for a legal judgment in Columbia, compared to the receipt of $90.0 million of insurance proceeds in the prior year following the execution of a settlement agreement related to the construction defect claims at Waiea. See Note 12 - Commitments and Contingencies in the Notes to Consolidated Financial Statements under Item 8 of this Annual Report for additional information on the legal judgment in Columbia.
These decreases to EBT were partially offset by the following:
–Gain on sale of real estate increased $11.7 million due to the land swap in The Woodlands and the sale of a land parcel near Merriweather District in the current year. See Note 5 - Acquisitions and Dispositions in the Notes to Consolidated Financial Statements under Item 8 of this Annual Report for additional information on these transactions.
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Strategic Developments Projects The following describes the status of our major construction projects as of December 31, 2025. These properties will be transferred to the Operating Assets segment upon completion of construction, unless otherwise noted below.
Bridgeland
Memorial Hermann Medical Office This will be a 50,895-square-foot medical office property. Total development costs are expected to be approximately $23.7 million. We began construction in the third quarter of 2025, and anticipate project completion in the second quarter of 2026. We expect this property to reach projected annual stabilized NOI of $1.9 million by 2029.
The Woodlands
7 Waterway We acquired this 186,369 square-foot office property in the second quarter of 2025 for $16.3 million, and commenced a redevelopment project in the third quarter of 2025. Total redevelopment and tenant lease-up costs are expected to be approximately $22.9 million, bringing total expected cost for this property to $39.2 million. We anticipate project completion in the second quarter of 2026, and expect this property to reach projected annual stabilized NOI of $4.8 million by 2029.
Condominiums Condominium revenue is recognized when construction of the condominium tower is complete and unit sales close, leading to potentially significant variability in revenue recognized between periods.
For all Ward Village condominium units, sales contracts are subject to a 30-day rescission period. The buyers are required to make an initial deposit at signing and an additional deposit 30 days later at which point their total deposit becomes non-refundable. Buyers are then required to make a final deposit within approximately 90 days of our receipt of their second deposit. Buyers are required to deposit the remainder of the sales price on a predetermined pre-closing date. Contracted units disclosed below represent sales that are past the 30-day rescission period.
For The Woodlands condominium units, sales contracts are subject to a 6-day rescission period. The buyers are required to make an initial deposit at signing and a final deposit 60 days later at which point their total deposit becomes non-refundable. Buyers are required to deposit the remainder of the sales price on a predetermined pre-closing date. Contracted units disclosed below represent sales that are past the 6-day rescission period.
Completed Condominiums
Ward Village As of December 31, 2025, our eight completed condominiums, Ae`o, Ke Kilohana, Anaha, Waiea, ‘A‘ali‘i, Kō‘ula, Victoria Place, and Ulana are completely sold. Ulana was completed in the fourth quarter of 2025, and 690 of the 696 units were closed prior to year end. The remaining 6 units are expected to close in early 2026.
Condominiums Under Construction
Ward Village As of December 31, 2025, 96% of the units at our two towers under construction, The Park Ward Village and Kalae, are under contract.
We broke ground on The Park Ward Village in October 2022, and expect to complete construction in the second quarter of 2026. The Park Ward Village will consist of 545 studio, one-, two-, and three-bedroom residences. As of December 31, 2025, we have entered into contracts for 529 units, representing 97% of total units.
We broke ground on Kalae in June 2024, and expect to complete construction in 2028. Kalae will consist of 329 one-, two-, and three-bedroom residences. As of December 31, 2025, we have entered into contracts for 307 units, representing 93% of total units.
The Woodlands We broke ground on The Ritz-Carlton Residences in October 2024, and expect to complete construction in 2027. The Ritz-Carlton Residences will consist of 111 one-, two-, three-, and four-bedroom residences. The development sits on the last available large-scale residential site on Lake Woodlands, spanning roughly eight acres across approximately 1,200 feet of premier lakefront shoreline. As of December 31, 2025, we have entered into contracts for 84 units, representing 76% of total units.
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Predevelopment Condominiums
Ward Village We launched public pre-sales for The Launiu in February 2024. The Launiu will consist of 485 studio, one-, two-, and three-bedroom residences. As of December 31, 2025, we have entered into contracts for 346 units, representing 71% of total units. Construction is expected to commence on The Launiu in early 2026.
We launched public pre-sales for Melia in June 2025. Melia will consist of 220 one-, two-, three-, and four-bedroom residences. As of December 31, 2025, we have entered into contracts for 144 units, representing 65% of total units.
We launched public pre-sales for ‘Ilima in June 2025. ‘Ilima will consist of 148 one-, two-, three-, and four-bedroom residences. As of December 31, 2025, we have entered into contracts for 76 units, representing 51% of total units.
The following provides further detail for all condominium projects as of December 31, 2025:
| Location | Units Closed | Units Under Contract | Total Units | Total % of Units Closed or Under Contract | Completion Date | |||||||||||||||
| Completed | ||||||||||||||||||||
| Waiea | Honolulu, HI | 177 | — | 177 | 100 | % | Q4 2016 | |||||||||||||
| Anaha | Honolulu, HI | 317 | — | 317 | 100 | % | Q4 2017 | |||||||||||||
| Ae`o | Honolulu, HI | 465 | — | 465 | 100 | % | Q4 2018 | |||||||||||||
| Ke Kilohana | Honolulu, HI | 423 | — | 423 | 100 | % | Q2 2019 | |||||||||||||
| ‘A‘ali‘i | Honolulu, HI | 750 | — | 750 | 100 | % | Q4 2021 | |||||||||||||
| Kō'ula | Honolulu, HI | 565 | — | 565 | 100 | % | Q3 2022 | |||||||||||||
| Victoria Place | Honolulu, HI | 349 | — | 349 | 100 | % | Q4 2024 | |||||||||||||
| Ulana Ward Village | Honolulu, HI | 690 | 6 | 696 | 100 | % | Q4 2025 | |||||||||||||
| Under construction | ||||||||||||||||||||
| The Park Ward Village | Honolulu, HI | — | 529 | 545 | 97 | % | Q2 2026 | |||||||||||||
| Kalae | Honolulu, HI | — | 307 | 329 | 93 | % | 2028 | |||||||||||||
| The Ritz-Carlton Residences | The Woodlands, TX | — | 84 | 111 | 76 | % | 2027 | |||||||||||||
| Predevelopment | ||||||||||||||||||||
| The Launiu | Honolulu, HI | — | 346 | 485 | 71 | % | 2028 | |||||||||||||
| Melia | Honolulu, HI | — | 144 | 220 | 65 | % | 2030 | |||||||||||||
| ‘Ilima | Honolulu, HI | — | 76 | 148 | 51 | % | 2030 | |||||||||||||
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Corporate Income, Expenses, and Other Items | ||
The following table contains certain corporate-related and other items not related to segment activities and that are not otherwise included within the segment analyses. Variances related to income and expenses included in NOI or EBT are explained within the previous segment discussions. Significant variances for consolidated items not included in NOI or EBT are described below for the years ended December 31:
| thousands except percentages | 2025 | 2024 | $ Change | % Change | ||||||||||||||||
| General and administrative expenses | $ | (122,240) | $ | (91,752) | $ | (30,488) | (33) | % | ||||||||||||
| Gain (loss) on sale of MUD receivables | (48,197) | (48,651) | 454 | 1 | % | |||||||||||||||
| Corporate interest expense, net | (80,307) | (80,446) | 139 | — | % | |||||||||||||||
| Corporate depreciation and amortization | (3,410) | (3,066) | (344) | (11) | % | |||||||||||||||
| Income tax (expense) benefit | (37,616) | (80,184) | 42,568 | 53 | % | |||||||||||||||
| Other | (19,160) | (14,170) | (4,990) | (35) | % | |||||||||||||||
| Total Corporate income, expenses, and other items | $ | (310,930) | $ | (318,269) | $ | 7,339 | 2 | % | ||||||||||||
Corporate income, expenses, and other items were favorably impacted compared to the prior year by the following:
–Income tax expense decreased $42.6 million primarily due to a decrease in Income before income taxes in 2025 as compared to 2024 as well as the net impact of the 2024 spinoff of Seaport Entertainment Group Inc. which included a net increase in tax expense in 2024 related to the revaluation of deferred tax assets and liabilities, partially offset by a partial release of valuation allowances on the Company’s deferred tax assets. Refer to Note 14 - Income Taxes in the Notes to Consolidated Financial Statements under Item 8 of this Annual Report for additional information.
Corporate income, expenses, and other items were unfavorably impacted compared to the prior year by the following:
–General and administrative expenses increased $30.5 million primarily due to a $17.1 million increase in Pershing Square advisory fees, $14.2 million of expenses related to a strategic reduction in force, and $10.5 million of legal and consulting fees related to the planned acquisition of Vantage. These increases were partially offset by a decrease in compensation and benefits, including those from the strategic reduction in force, as well as other cost reduction initiatives.
–Other expenses increased $5.0 million primarily due to increased marketing costs across our condominium projects.
Pershing Square Advisory Fees Pershing Square will support the Company’s new diversified holding company strategy by providing certain investment and advisory services. The Company will pay Pershing Square a quarterly advisory fee that includes base and variable components. Refer to Note 2 - Pershing Square in the Notes to Consolidated Financial Statements under Item 8 of this Annual Report for additional information on the advisory fee.
The base and variable components of the quarterly advisory fee are detailed below:
| thousands | Year Ended December 31, 2025 | |||||||
| Base fee | $ | 9,849 | ||||||
| Variable fee | 7,284 | |||||||
| Total Pershing Square advisory fee | $ | 17,133 | ||||||
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Income Taxes
| thousands except percentages | 2025 | 2024 | |||||||||
| Income tax expense (benefit) | $ | 37,616 | $ | 80,184 | |||||||
| Income (loss) before income taxes | $ | 161,459 | $ | 365,399 | |||||||
| Effective tax rate | 23.3 | % | 21.9 | % | |||||||
The Company’s effective tax rate is typically impacted by non-deductible executive compensation and other permanent differences as well as state income taxes, which cause the Company’s effective tax rate to deviate from the federal statutory rate.
The Company’s effective tax rate for the year ended December 31, 2025, was 23.3% compared to 21.9% for the year ended December 31, 2024. The increase was primarily due to a partial release of valuation allowances on the Company’s deferred tax assets in 2024.
For additional information on income taxes, see Note 14 - Income Taxes in the Notes to Consolidated Financial Statements under Item 8 of this Annual Report.
HHH 2025 FORM 10-K | 50
MANAGEMENT’S DISCUSSION AND ANALYSIS LIQUIDITY AND CAPITAL RESOURCES | Table of Contents Index to Financial Statements | ||||
| LIQUIDITY AND CAPITAL RESOURCES | ||
We continue to maintain a strong balance sheet and endeavor to ensure we maintain the financial flexibility and liquidity necessary to fund future growth. As of December 31, 2025, we had $1.5 billion of cash and cash equivalents, $515.0 million of undrawn capacity on our Secured Bridgeland Notes, and $686.6 million of undrawn lender commitments available to be drawn for property development, subject to certain restrictions.
Cash Flows | ||
| Year Ended December 31, | |||||||||||
| thousands | 2025 | 2024 | |||||||||
| Cash provided by (used in) operating activities of continuing operations | $ | 462,370 | $ | 447,751 | |||||||
| Cash provided by (used in) investing activities of continuing operations | (219,066) | (430,705) | |||||||||
| Cash provided by (used in) financing activities of continuing operations | 855,351 | (27,754) | |||||||||
| Net cash provided by (used in) discontinued operations | — | (43,846) | |||||||||
Operating Activities Each segment’s relative contribution to our cash flows from operating activities will likely vary significantly from year to year given the changing nature of our development focus. Other than our condominium properties, most of the properties and projects in our Strategic Developments segment do not generate revenues, and the cash flows and earnings may vary. Condominium deposits received from contracted units offset by other various cash uses related to condominium development and sales activities are a substantial portion of our operating activities. Operating cash is utilized to fund ongoing development expenditures in our Strategic Developments and MPC segments.
The cash flows and earnings from the MPC business may fluctuate more than from our operating assets because the MPC business generates revenues from land sales rather than recurring contractual revenues from operating leases. MPC land sales are a substantial portion of our cash flows from operating activities and are partially offset by development costs associated with the land sales business and acquisitions of land that is intended to ultimately be developed and sold.
Net cash provided by operating activities of continuing operations was $462.4 million in 2025, and $447.8 million in 2024. The increase in cash provided by operating activities of $14.6 million was primarily due to an increase in MPC land sales, a decrease in condominium development expenditures, and a net decrease in interest payments, partially offset by a decrease in condominium deposits and cash from closings, the receipt of an insurance reimbursement for the Waiea remediation in the prior year, a decrease in MUD receivable collections, and a decrease in MPC development expenditures.
Investing Activities Net cash used in investing activities of continuing operations was $219.1 million in 2025, and $430.7 million in 2024. The $211.6 million decrease in cash used in investing activities was primarily due to a decrease in cash used related to the net parent investment in discontinued operations and a decrease in cash used for property development, partially offset by a decrease in proceeds from the sale of properties.
Financing Activities Net cash provided by financing activities of continuing operations was $855.4 million in 2025, and net cash used in financing activities was $27.8 million in 2024. The change in financing activities of $883.1 million was primarily due to $862.8 million of net proceeds received in the current year related to the Pershing Square Issuance and a $25.1 million decrease in principal payments on mortgages, notes, and loans payable.
Short- and Long-Term Liquidity | ||
Short-Term Liquidity In the next 12 months, we expect to continue executing our strategy to transition from a pure-play real estate company to a diversified holding company.
From our real estate operations, we expect our primary sources of cash to include cash flow from MPC land sales and condominium closings, cash generated from our operating assets, first mortgage financings secured by our assets, and deposits from condominium sales (which are restricted to funding construction of the related developments). We expect our primary uses of cash to include condominium pre-development and development costs, debt principal payments and debt service costs, MPC land development costs, other strategic developments costs, and general operating costs. We believe that our sources of cash, including existing cash on hand will provide sufficient liquidity to meet our existing obligations and anticipated ordinary course operating expenses for at least the next 12 months.
HHH 2025 FORM 10-K | 51
MANAGEMENT’S DISCUSSION AND ANALYSIS LIQUIDITY AND CAPITAL RESOURCES | Table of Contents Index to Financial Statements | ||||
As previously disclosed, in December 2025, we entered into a purchase agreement to acquire Vantage for $2.1 billion in cash consideration. The transaction remains subject to regulatory approvals and other customary closing conditions, and is expected to close in the second quarter of 2026. To support the funding of the acquisition and to allow for an additional equity contribution to Vantage post acquisition to be used for working capital and general corporate purposes, the Company entered into an equity commitment letter with Pershing Square Holdings, Ltd. under which Pershing Square committed to purchase up to $1.0 billion of the Company’s preferred stock, prior to and contingent upon the closing of the Vantage acquisition. The acquisition is expected to be funded through the Company’s cash on hand, and proceeds from the issuance of the preferred stock. We also expect to incur additional transaction-related expenses prior to the closing and will reimburse all reasonable and documented expenses incurred by Pershing Square in connection with the preferred stock issuance. We believe we have adequate liquidity to meet these acquisition-related obligations; however, the timing of regulatory approvals and closing conditions may affect the timing of cash outflows associated with the transaction.
Long-Term Liquidity The development and redevelopment opportunities in Strategic Developments and Operating Assets are capital intensive and will require significant additional funding, if and when pursued. Any additional funding beyond those sources listed above would be raised with a mix of construction, bridge, and long-term financings, by entering into joint venture arrangements, as well as future equity raises. We cannot provide assurance that financing arrangements for our properties will be on favorable terms or occur at all, which could have a negative impact on our liquidity and capital resources. In addition, we typically must provide completion guarantees to lenders in connection with their financing for our projects.
The preferred stock issued by HHH to Pershing Square will become convertible into the common stock of Vantage if not redeemed by the end of the seventh fiscal year post-transaction. HHH will receive a series of call options giving it the right but not the obligation to redeem the preferred stock over the next seven years. The acquisition is expected to have other long‑term implications for the Company’s liquidity profile, although the magnitude and timing of these impacts cannot yet be determined.
Summary of Remaining Development Costs The following table summarizes remaining development costs and related debt for projects held in the Operating Assets and Strategic Developments segments as of December 31, 2025. Total cost remaining to be paid net of debt and buyer deposits consists of $56.0 million related to substantially completed projects, $35.5 million related to projects with estimated completion dates within the next 12 months, and $118.7 million related to projects with estimated completion dates in 2027 and 2028.
Projects that are substantially complete and have been placed into service in the Operating Assets segment and completed condominium projects in the Strategic Developments segment are included in the following table if the project has more than $1.0 million of estimated costs remaining to be incurred. The remaining cost related to substantially completed projects typically represent costs associated with the completion of common areas at our completed condominium towers and budgeted tenant allowances necessary to bring our completed operating assets to stabilized occupancy. The $56.0 million of remaining cost related to substantially complete projects is primarily comprised of $24.6 million for Ulana Ward Village for lease up and tenant buildout of the ground floor retail space and $23.7 million for 1 Riva Row which is being placed in service in phases with only 61% of the property in service as of December 31, 2025.
HHH 2025 FORM 10-K | 52
MANAGEMENT’S DISCUSSION AND ANALYSIS LIQUIDITY AND CAPITAL RESOURCES | Table of Contents Index to Financial Statements | ||||
We expect to be able to meet our cash funding requirements with a combination of existing and anticipated construction loans, condominium buyer deposits, cash flow from our Operating Assets and MPC segments, net proceeds from condominium sales, and our existing cash balances.
| thousands | Estimated Remaining to be Spent | Remaining Buyer Deposits/Holdback to be Drawn | Debt to be Drawn (a) | Costs Remaining to be Paid, Net of Debt and Buyer Deposits/Holdbacks to be Drawn (b) | |||||||||||||||||||
| Operating Assets | |||||||||||||||||||||||
| Columbia | $ | 14,337 | $ | — | $ | 14,460 | $ | (123) | |||||||||||||||
| The Woodlands | 30,565 | — | 4,147 | 26,418 | |||||||||||||||||||
| Bridgeland | 4,921 | — | 1,900 | 3,021 | |||||||||||||||||||
| Summerlin | 14,179 | — | 14,204 | (25) | |||||||||||||||||||
| Total Operating Assets | 64,002 | — | 34,711 | 29,291 | |||||||||||||||||||
| Strategic Developments | |||||||||||||||||||||||
| The Woodlands | 253,327 | — | 149,873 | 103,454 | |||||||||||||||||||
| Bridgeland | 15,798 | — | 15,725 | 73 | |||||||||||||||||||
| Ward Village | 588,755 | 43,752 | 467,601 | 77,402 | |||||||||||||||||||
| Total Strategic Developments | 857,880 | 43,752 | 633,199 | 180,929 | |||||||||||||||||||
| Total | $ | 921,882 | $ | 43,752 | $ | 667,910 | $ | 210,220 | |||||||||||||||
(a)Refer to Note 9 - Mortgages, Notes, and Loans Payable, Net in the Notes to Consolidated Financial Statements under Item 8 of this Annual Report for additional information on debt.
(b)Negative balance relates to costs paid by HHH, but not yet reimbursed by our lenders. We expect to receive funds from our lenders for these costs in the future.
Contractual Cash Obligations and Commitments The following table aggregates our contractual cash obligations and commitments as of December 31, 2025:
| thousands | 2026 | 2027 | 2028 | 2029 | 2030 | Thereafter | Total | ||||||||||||||||
| Mortgages, notes, and loans payable | $ | 663,243 | $ | 507,661 | $ | 923,362 | $ | 1,075,975 | $ | 277,225 | $ | 1,696,748 | $ | 5,144,214 | |||||||||
| Interest payments (a) | 260,531 | 214,724 | 173,511 | 108,835 | 85,862 | 149,256 | 992,719 | ||||||||||||||||
| Ground lease commitments | 300 | 300 | 300 | 300 | 300 | 5,300 | 6,800 | ||||||||||||||||
| Total | $ | 924,074 | $ | 722,685 | $ | 1,097,173 | $ | 1,185,110 | $ | 363,387 | $ | 1,851,304 | $ | 6,143,733 | |||||||||
(a)Interest is based on the borrowings that are presently outstanding and current floating interest rates.
Debt As of December 31, 2025, the Company had $5.1 billion of outstanding debt and $686.6 million of undrawn lender commitment available to be drawn for property development, subject to certain restrictions. Our proportionate share of the debt of our unconsolidated ventures totaled $215.5 million as of December 31, 2025. All of this indebtedness is without recourse to the Company, with the exception of the collateral maintenance obligation for Floreo. See Note 12 - Commitments and Contingencies in the Notes to Consolidated Financial Statements under Item 8 of this Annual Report for additional information related to the Company’s collateral maintenance obligation.
On February 17, 2026, HHC, the Company’s wholly owned subsidiary, issued $500.0 million of 5.875% senior unsecured notes due 2032 and $500.0 million of 6.125% senior unsecured notes due 2034 (collectively the New Notes). The New Notes will pay interest semi-annually, in each case payable on March 1 and September 1 of each year, beginning on September 1, 2026. HHC used the net proceeds to redeem its outstanding $750.0 million 5.375% senior unsecured notes due 2028, including the payment of premiums, accrued and unpaid interest and expenses related to such redemption, and will use the remaining proceeds for general corporate purposes.
Refer to Note 9 - Mortgages, Notes, and Loans Payable, Net in the Notes to Consolidated Financial Statements under Item 8 of this Annual Report for additional detail.
Debt Compliance As of December 31, 2025, the Company was not in compliance with certain property-level debt covenants due to not meeting certain debt service coverage ratios caused by lease expirations, vacancies, rent abatements, and other factors. As a result, the excess net cash flow after debt service from the underlying properties became restricted. While the restricted cash could not be used for general corporate purposes, it could be used to fund operations of the underlying assets, and therefore there was no material impact on the Company’s liquidity or its ability to operate these assets.
HHH 2025 FORM 10-K | 53
MANAGEMENT’S DISCUSSION AND ANALYSIS LIQUIDITY AND CAPITAL RESOURCES | Table of Contents Index to Financial Statements | ||||
Net Debt The following table summarizes our net debt on a segment basis as of December 31, 2025. Net debt is defined as Mortgages, notes, and loans payable, net, including our ownership share of debt of our unconsolidated ventures, reduced by liquidity sources to satisfy such obligations such as our ownership share of Cash and cash equivalents and SID, MUD, and Tax Increment Financing (TIF) receivables. Although net debt is a non-GAAP financial measure, we believe that such information is useful to our investors and other users of our financial statements as net debt and its components are important indicators of our overall liquidity, capital structure, and financial position. However, it should not be used as an alternative to our debt calculated in accordance with GAAP.
| thousands | Operating Assets | Master Planned Communities | Strategic Developments | Segment Totals | Non- Segment Amounts | December 31, 2025 | ||||||||||||||
| Mortgages, notes, and loans payable, net | $ | 2,431,685 | $ | 159,280 | $ | 481,520 | $ | 3,072,485 | $ | 2,037,343 | $ | 5,109,828 | ||||||||
| Mortgages, notes, and loans payable of unconsolidated ventures | 90,533 | 124,938 | — | 215,471 | — | 215,471 | ||||||||||||||
| Less: | ||||||||||||||||||||
| Cash and cash equivalents | (25,941) | (126,774) | (32,060) | (184,775) | (1,283,732) | (1,468,507) | ||||||||||||||
| Cash and cash equivalents of unconsolidated ventures | (4,288) | (12,670) | (3,793) | (20,751) | — | (20,751) | ||||||||||||||
| Special Improvement District receivables | — | (90,417) | — | (90,417) | — | (90,417) | ||||||||||||||
| Municipal Utility District receivables, net | — | (459,729) | — | (459,729) | — | (459,729) | ||||||||||||||
| TIF receivable | — | — | (4,012) | (4,012) | — | (4,012) | ||||||||||||||
| Net Debt | $ | 2,491,989 | $ | (405,372) | $ | 441,655 | $ | 2,528,272 | $ | 753,611 | $ | 3,281,883 | ||||||||
Unconsolidated Ventures We have interests in certain unconsolidated ventures which, as of December 31, 2025, had mortgage financing totaling $434.0 million, with our proportionate share of this debt totaling $215.5 million. All of this indebtedness is without recourse to the Company, with the exception of the collateral maintenance obligation for Floreo. See Note 12 - Commitments and Contingencies in the Notes to Consolidated Financial Statements under Item 8 of this Annual Report for additional information related to the Company’s collateral maintenance obligation. The following table summarizes our share of affiliate debt and cash as of December 31, 2025:
| thousands | Company’s Share of Unconsolidated Ventures’ Debt | Company’s Share of Unconsolidated Ventures’ Cash | |||||||||
| Operating Assets | |||||||||||
| Operating equity investments | $ | 90,533 | $ | 4,288 | |||||||
| Master Planned Communities | |||||||||||
| The Summit | 7,690 | 10,862 | |||||||||
| Floreo | 117,248 | 1,808 | |||||||||
| Strategic Developments | |||||||||||
| West End Alexandria | — | 3,752 | |||||||||
| Other | — | 41 | |||||||||
| Total | $ | 215,471 | $ | 20,751 | |||||||
HHH 2025 FORM 10-K | 54
MANAGEMENT’S DISCUSSION AND ANALYSIS CRITICAL ACCOUNTING POLICIES AND ESTIMATES | Table of Contents Index to Financial Statements | ||||
| CRITICAL ACCOUNTING POLICIES AND ESTIMATES | ||
The preparation of financial statements in accordance with GAAP requires management to make informed judgments, assumptions, and estimates that affect the reported amounts of assets, liabilities, revenues, and expenses. We base our estimates on historical experience and on various other assumptions that we believe to be reasonable under the circumstances. Changes in facts and circumstances or additional information may result in revised estimates, and actual results may differ from these estimates.
Below is a discussion of the accounting policies and estimates that we consider critical to an understanding of our financial condition and operating results that may require complex or significant judgment in their application or require estimates about matters which are inherently uncertain. A discussion of our significant accounting policies, including further discussion of the accounting policies described below, can be found in Note 1 - Presentation of Financial Statements and Significant Accounting Policies in the Notes to Consolidated Financial Statements under Item 8 of this Annual Report.
| Impairments | ||
Methodology We review our long-lived assets for potential impairment indicators whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. Although the carrying amount may exceed the estimated fair value of certain properties, a real estate asset is only considered to be impaired when its carrying amount is not expected to be recovered through estimated future undiscounted cash flows. To the extent an impairment provision is necessary, the excess of the carrying amount of the asset over its estimated fair value is expensed to operations and the carrying amount of the asset is reduced. The adjusted carrying amount, which represents the new cost basis of the asset, is depreciated over the remaining useful life of the asset or, for MPCs, is expensed as a cost of sales when land is sold.
Judgments and uncertainties An impairment loss is recognized if the carrying amount of an asset is not recoverable and exceeds its fair value. The cash flow estimates used both for determining recoverability and estimating fair value are inherently judgmental and reflect current and projected trends in rental, occupancy, pricing, development costs, sales pace, capitalization rates, selling costs, and estimated holding periods for the applicable assets. As such, the evaluation of anticipated cash flows is highly subjective and is based in part on assumptions that could differ materially from actual results in future periods. Unfavorable changes in any of the primary assumptions could result in a reduction of anticipated future cash flows and could indicate property impairment. Uncertainties related to the primary assumptions could affect the timing of an impairment. While we believe our assumptions are reasonable, changes in these assumptions may have a material impact on our financial results.
| Master Planned Communities Cost of Sales | ||
Methodology When residential or commercial land is sold, the cost of sales includes actual costs incurred and estimates of future development costs benefiting the property sold. When land is sold, costs are allocated to each sold superpad or lot based upon the relative sales value. For purposes of allocating development costs, estimates of future revenues and development costs are re-evaluated throughout the year, with adjustments being allocated prospectively to the remaining parcels available for sale. For certain parcels of land, including acquired parcels that the Company does not intend to develop or for which development was complete at the date of acquisition, the specific identification method is used to determine the cost of sales.
Judgments and uncertainties MPC cost of sales estimates are highly judgmental as they are sensitive to cost escalation, sales price escalation, and pace of absorption, which are subject to judgment and affected by expectations about future market or economic conditions. Changes in the assumptions used to estimate future development costs could result in a significant impact on the amounts recorded as cost of sales.
| RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS AND DEVELOPMENTS | ||
Please refer to Note 1 - Presentation of Financial Statements and Significant Accounting Policies in the Notes to Consolidated Financial Statements under Item 8 of this Annual Report for additional information about new accounting pronouncements.
HHH 2025 FORM 10-K | 55
MARKET RISK QUANTITATIVE AND QUALITATIVE DISCLOSURES | Table of Contents Index to Financial Statements | ||||
Item 7A. Quantitative and Qualitative Disclosures about Market Risk
We are subject to interest rate risk with respect to our variable-rate financings as increases in interest rates would cause our payments under such financings to increase. With respect to fixed-rate financings, increases in interest rates could make it more difficult to refinance such debt when it becomes due. As properties are placed into service and become stabilized, we typically refinance the variable-rate debt with long-term fixed-rate debt.
The Company uses derivative instruments to manage its interest rate risk, primarily through the use of interest rate swaps, caps, and collars. The Company had $1.2 billion of variable-rate debt outstanding at December 31, 2025, of which $361.5 million was swapped to a fixed rate through the use of interest rate swaps and $648.1 million had interest rate cap contracts in place. Additionally, the interest rate caps and collars are on construction loans and mortgages with undrawn loan commitment of $29.0 million as of December 31, 2025, which will be covered by the interest rate cap and collar contracts upon drawing. Refer to Note 11 - Derivative Instruments and Hedging Activities in the Notes to Consolidated Financial Statements under Item 8 of this Annual Report for additional detail.
As of December 31, 2025, annual interest costs would increase approximately $2.1 million for every 1.00% increase in floating interest rates. Generally, a significant portion of our interest expense is capitalized due to the level of assets we currently have under development; therefore, the current impact of a change in our interest rate on our Consolidated Statements of Operations and Consolidated Statements of Comprehensive Income would be less than the total change, but we would incur higher cash payments and the development costs of our assets would be higher, resulting in greater depreciation or cost of sales in later years.
The following table summarizes principal cash flows on our debt obligations and related weighted-average interest rates by expected maturity dates as of December 31, 2025:
| Contractual Maturity Date | |||||||||||||||||||||||||||||||||||||||||
| thousands except percentages | 2026 | 2027 | 2028 | 2029 | 2030 | Thereafter | Total | ||||||||||||||||||||||||||||||||||
| Mortgages, notes, and loans payable | $ | 663,243 | $ | 507,661 | $ | 923,362 | $ | 1,075,975 | $ | 277,225 | $ | 1,696,748 | $ | 5,144,214 | |||||||||||||||||||||||||||
| Weighted-average interest rate | 5.29 | % | 5.06 | % | 4.85 | % | 4.65 | % | 4.64 | % | 4.27 | % | |||||||||||||||||||||||||||||
HHH 2025 FORM 10-K | 56
FINANCIAL STATEMENTS INDEX | Table of Contents Index to Financial Statements | ||||
Item 8. Financial Statements and Supplementary Data
| Index to Consolidated Financial Statements and Financial Statement Schedule | Page | ||||
| Consolidated Financial Statements | |||||
Management’s Report on Internal Control over Financial Reporting | 58 | ||||
Report of Independent Registered Public Accounting Firm (PCAOB ID : | 59 | ||||
Consolidated Balance Sheets as of December 31, 2025, and 2024 | 61 | ||||
Consolidated Statements of Operations for the years ended December 31, 2025, 2024, and 2023 | 62 | ||||
Consolidated Statements of Comprehensive Income (Loss) for the years ended December 31, 2025, 2024, and 2023 | 63 | ||||
Consolidated Statements of Equity for the years ended December 31, 2025, 2024, and 2023 | 64 | ||||
Consolidated Statements of Cash Flows for the years ended December 31, 2025, 2024, and 2023 | 65 | ||||
Notes to Consolidated Financial Statements | 67 | ||||
Note 1. Presentation of Financial Statements and Significant Accounting Policies | 67 | ||||
Note 2. Pershing Square | 78 | ||||
Note 3. Discontinued Operations | 79 | ||||
Note 4. Investments in Unconsolidated Ventures | 80 | ||||
Note 5. Acquisitions and Dispositions | 82 | ||||
Note 6. Impairment | 82 | ||||
Note 7. Other Assets and Liabilities | 83 | ||||
Note 8. Intangibles | 84 | ||||
Note 9. Mortgages, Notes, and Loans Payable, Net | 85 | ||||
Note 10. Fair Value | 87 | ||||
Note 11. Derivative Instruments and Hedging Activities | 89 | ||||
Note 12. Commitments and Contingencies | 91 | ||||
Note 13. Stock-Based Compensation Plans | 92 | ||||
Note 14. Income Taxes | 94 | ||||
Note 15. Accumulated Other Comprehensive Income (Loss) | 96 | ||||
Note 16. Earnings Per Share | 97 | ||||
Note 17. Revenues | 97 | ||||
Note 18. Leases | 99 | ||||
Note 19. Segments | 101 | ||||
Note 20. Quarterly Financial Information (Unaudited) | 104 | ||||
Schedule III – Real Estate and Accumulated Depreciation | 105 | ||||
HHH 2025 FORM 10-K | 57
| FINANCIAL STATEMENTS | Table of Contents Index to Financial Statements | ||||
Management’s Report on Internal Control over Financial Reporting
Management of Howard Hughes Holdings Inc. (the Company) is responsible for establishing and maintaining a system of internal control over financial reporting designed to provide reasonable assurance that transactions are executed in accordance with management authorization and that such transactions are properly recorded and reported in the financial statements, and that records are maintained so as to permit preparation of the financial statements in accordance with U.S. generally accepted accounting principles. Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements.
Management has assessed the effectiveness of the Company’s internal control over financial reporting utilizing the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission in Internal Control – Integrated Framework (2013 Framework). Management concluded, based on its assessment, that the Company’s internal control over financial reporting was effective as of December 31, 2025.
KPMG LLP, an independent registered public accounting firm, has audited the Company’s internal control over financial reporting as of December 31, 2025, as stated in their report which is included in this Annual Report on Form 10-K (Annual Report).
HHH 2025 FORM 10-K | 58
| FINANCIAL STATEMENTS | Table of Contents Index to Financial Statements | ||||
Report of Independent Registered Public Accounting Firm
To the Stockholders and the Board of Directors of
Howard Hughes Holdings Inc.:
Opinions on the Consolidated Financial Statements and Internal Control Over Financial Reporting
We have audited the accompanying consolidated balance sheets of Howard Hughes Holdings Inc. (the Company) as of December 31, 2025 and 2024, the related consolidated statements of operations, comprehensive income (loss), equity, and cash flows for each of the years in the three-year period ended December 31, 2025, and the related notes and financial statement schedule III (collectively, the consolidated financial statements). We also have audited the Company’s internal control over financial reporting as of December 31, 2025, based on criteria established in Internal Control – Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission.
In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of the Company as of December 31, 2025 and 2024, and the results of its operations and its cash flows for each of the years in the three-year period ended December 31, 2025, in conformity with U.S. generally accepted accounting principles. Also in our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of December 31, 2025 based on criteria established in Internal Control – Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission.
Basis for Opinions
The Company’s management is responsible for these consolidated financial statements, for maintaining effective internal control over financial reporting, and for its assessment of the effectiveness of internal control over financial reporting, included in the accompanying Management's Report on Internal Control over Financial Reporting. Our responsibility is to express an opinion on the Company’s consolidated financial statements and an opinion on the Company’s internal control over financial reporting based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud, and whether effective internal control over financial reporting was maintained in all material respects.
Our audits of the consolidated financial statements included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements. Our audit of internal control over financial reporting included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. Our audits also included performing such other procedures as we considered necessary in the circumstances. We believe that our audits provide a reasonable basis for our opinions.
Definition and Limitations of Internal Control Over Financial Reporting
A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.
HHH 2025 FORM 10-K | 59
| FINANCIAL STATEMENTS | Table of Contents Index to Financial Statements | ||||
Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.
Critical Audit Matter
The critical audit matter communicated below is a matter arising from the current period audit of the consolidated financial statements that was communicated or required to be communicated to the audit committee and that: (1) relates to accounts or disclosures that are material to the consolidated financial statements and (2) involved our especially challenging, subjective, or complex judgments. The communication of a critical audit matter does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates.
Master Planned Communities (MPC) cost of sales estimates
As discussed in Note 1 to the consolidated financial statements, when developed residential or commercial land is sold, the cost of sales includes actual costs incurred and estimates of future development costs, based on relative sales value, that benefit the property sold. For purposes of allocating development costs, estimates of future revenues and future development costs are re-evaluated throughout the year, with adjustments being allocated prospectively to the remaining parcels available for sale. MPC cost of sales estimates are highly judgmental as they are sensitive to cost escalation and sales price escalation, which are subject to judgment and affected by expectations about future market or economic conditions. The Company recognized MPC cost of sales of $188.7 million for the year ended December 31, 2025.
We identified the evaluation of estimated future development costs and revenues that drive the MPC cost of sales estimates as a critical audit matter. Subjective auditor judgment was required to evaluate the cost escalation and sales price escalation assumptions.
The following are the primary procedures we performed to address this critical audit matter. We evaluated the design and tested the operating effectiveness of certain internal controls related to the process to estimate MPC cost of sales. This included controls related to management’s monitoring and review of the assumptions noted above. We tested the assumptions related to cost escalation and sales price escalation by:
•agreeing the current year estimates for revenues and costs to actual results, where applicable
•comparing the Company’s historical cost escalation and sales price escalation estimates to actual results to assess the Company’s ability to accurately estimate these amounts
•performing site visits for certain MPC developments, as needed and historically when warranted, to compare the overall status of the developments to what is reflected within the MPC cost of sales estimates
•comparing expected price per acre for each property type available for sale to applicable market data
•comparing the cost and sales price escalation rates throughout the duration of the development to available market data.
/s/ KPMG LLP
We have served as the Company’s auditor since 2022.
February 19, 2026
HHH 2025 FORM 10-K | 60
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HOWARD HUGHES HOLDINGS INC.
CONSOLIDATED BALANCE SHEETS
| December 31, | |||||||||||
| thousands except par values and share amounts | 2025 | 2024 | |||||||||
| ASSETS | |||||||||||
| Master Planned Communities assets | $ | $ | |||||||||
| Buildings and equipment | |||||||||||
| Less: accumulated depreciation | ( | ( | |||||||||
| Land | |||||||||||
| Developments | |||||||||||
| Net investment in real estate | |||||||||||
| Investments in unconsolidated ventures | |||||||||||
| Cash and cash equivalents | |||||||||||
| Restricted cash | |||||||||||
| Accounts receivable, net | |||||||||||
| Municipal Utility District (MUD) receivables, net | |||||||||||
| Deferred expenses, net | |||||||||||
| Operating lease right-of-use assets | |||||||||||
| Other assets, net | |||||||||||
| Total assets | $ | $ | |||||||||
| LIABILITIES | |||||||||||
| Mortgages, notes, and loans payable, net | $ | $ | |||||||||
| Operating lease obligations | |||||||||||
| Deferred tax liabilities, net | |||||||||||
| Accounts payable and other liabilities | |||||||||||
| Total liabilities | |||||||||||
| Commitments and Contingencies (see Note 12) | |||||||||||
| EQUITY | |||||||||||
Preferred stock: $ | |||||||||||
Common stock: $ | |||||||||||
| Additional paid-in capital | |||||||||||
| Retained earnings (accumulated deficit) | ( | ( | |||||||||
| Accumulated other comprehensive income (loss) | ( | ||||||||||
Treasury stock, at cost, | ( | ( | |||||||||
| Total stockholders' equity | |||||||||||
| Noncontrolling interests | |||||||||||
| Total equity | |||||||||||
| Total liabilities and equity | $ | $ | |||||||||
See Notes to Consolidated Financial Statements.
HHH 2025 FORM 10-K | 61
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HOWARD HUGHES HOLDINGS INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
| Year Ended December 31, | |||||||||||||||||
| thousands except per share amounts | 2025 | 2024 | 2023 | ||||||||||||||
| REVENUES | |||||||||||||||||
| Condominium rights and unit sales | $ | $ | $ | ||||||||||||||
| Master Planned Communities land sales | |||||||||||||||||
| Rental revenue | |||||||||||||||||
| Other land, rental, and property revenues | |||||||||||||||||
| Builder price participation | |||||||||||||||||
| Total revenues | |||||||||||||||||
| EXPENSES | |||||||||||||||||
| Condominium rights and unit cost of sales | |||||||||||||||||
| Master Planned Communities cost of sales | |||||||||||||||||
| Operating costs | |||||||||||||||||
| Rental property real estate taxes | |||||||||||||||||
| Provision for (recovery of) doubtful accounts | ( | ||||||||||||||||
| General and administrative | |||||||||||||||||
| Depreciation and amortization | |||||||||||||||||
| Other | |||||||||||||||||
| Total expenses | |||||||||||||||||
| OTHER | |||||||||||||||||
| Gain (loss) on sale or disposal of real estate and other assets, net | |||||||||||||||||
| Other income (loss), net | ( | ||||||||||||||||
| Total other | |||||||||||||||||
| Operating income (loss) | |||||||||||||||||
| Interest income | |||||||||||||||||
| Interest expense | ( | ( | ( | ||||||||||||||
| Gain (loss) on extinguishment of debt | ( | ( | ( | ||||||||||||||
| Gain (loss) on sale of MUD receivables | ( | ( | |||||||||||||||
| Equity in earnings (losses) from unconsolidated ventures | ( | ||||||||||||||||
| Income (loss) from continuing operations before income taxes | |||||||||||||||||
| Income tax expense (benefit) | |||||||||||||||||
| Net income (loss) from continuing operations | |||||||||||||||||
| Net income (loss) from discontinued operations, net of tax | ( | ( | |||||||||||||||
| Net income (loss) | ( | ||||||||||||||||
| Net (income) loss attributable to noncontrolling interests | ( | ||||||||||||||||
| Net income (loss) attributable to common stockholders | $ | $ | $ | ( | |||||||||||||
| Basic income (loss) per share — continuing operations | $ | $ | $ | ||||||||||||||
| Basic income (loss) per share — discontinued operations | $ | $ | ( | $ | ( | ||||||||||||
| Basic income (loss) per share attributable to common stockholders | $ | $ | $ | ( | |||||||||||||
| Diluted income (loss) per share — continuing operations | $ | $ | $ | ||||||||||||||
| Diluted income (loss) per share — discontinued operations | $ | $ | ( | $ | ( | ||||||||||||
| Diluted income (loss) per share attributable to common stockholders | $ | $ | $ | ( | |||||||||||||
See Notes to Consolidated Financial Statements.
HHH 2025 FORM 10-K | 62
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HOWARD HUGHES HOLDINGS INC.
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)
| Year Ended December 31, | |||||||||||||||||
| thousands | 2025 | 2024 | 2023 | ||||||||||||||
| Net income (loss) | $ | $ | $ | ( | |||||||||||||
| Other comprehensive income (loss) | |||||||||||||||||
| Interest rate caps and swaps (a) | ( | ( | |||||||||||||||
| Pension adjustment (b) | |||||||||||||||||
| Other comprehensive income (loss) | ( | ( | |||||||||||||||
| Comprehensive income (loss) | ( | ||||||||||||||||
| Comprehensive (income) loss attributable to noncontrolling interests | ( | ||||||||||||||||
| Comprehensive income (loss) attributable to common stockholders | $ | $ | $ | ( | |||||||||||||
(a)Amounts are shown net of deferred tax benefit of $1.2 million for the year ended December 31, 2025, deferred tax expense of $0.1 million for the year ended December 31, 2024, and deferred tax benefit of $2.7 million for the year ended December 31, 2023.
(b)The deferred tax impact was not meaningful for the years ended December 31, 2025, 2024, and 2023.
See Notes to Consolidated Financial Statements.
HHH 2025 FORM 10-K | 63
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HOWARD HUGHES HOLDINGS INC.
CONSOLIDATED STATEMENTS OF EQUITY
| Retained | Accumulated | |||||||||||||||||||||||||||||||
| Additional | Earnings | Other | Total | |||||||||||||||||||||||||||||
| thousands except shares | Common Stock | Paid-In | (Accumulated | Comprehensive | Treasury Stock | Stockholders' | Noncontrolling | Total | ||||||||||||||||||||||||
| Shares | Amount | Capital | Deficit) | Income (Loss) | Shares | Amount | Equity | Interests | Equity | |||||||||||||||||||||||
| Balance, December 31, 2022 | $ | $ | $ | $ | ( | $ | ( | $ | $ | $ | ||||||||||||||||||||||
| Net income (loss) | — | — | — | ( | — | — | — | ( | ( | |||||||||||||||||||||||
Interest rate swaps, net of tax expense (benefit) of $( | — | — | — | — | ( | — | — | ( | — | ( | ||||||||||||||||||||||
Pension adjustment, net of tax expense (benefit) of $ | — | — | — | — | — | — | — | |||||||||||||||||||||||||
| Teravalis noncontrolling interest | — | — | — | — | — | — | — | — | ||||||||||||||||||||||||
| Stock plan activity | — | — | ( | ( | — | |||||||||||||||||||||||||||
| Other | — | — | — | — | — | — | — | — | ( | ( | ||||||||||||||||||||||
| Balance, December 31, 2023 | $ | $ | $ | ( | $ | ( | $ | ( | $ | $ | $ | |||||||||||||||||||||
| Net income (loss) | — | — | — | — | — | — | ( | |||||||||||||||||||||||||
Interest rate swaps, net of tax expense (benefit) of $ | — | — | — | — | — | — | — | |||||||||||||||||||||||||
Pension adjustment, net of tax expense (benefit) of $ | — | — | — | — | — | — | — | |||||||||||||||||||||||||
| Teravalis noncontrolling interest | — | — | — | — | — | — | — | — | ||||||||||||||||||||||||
| Distribution of Seaport Entertainment Group Inc. to stockholders | — | — | ( | — | — | — | — | ( | — | ( | ||||||||||||||||||||||
| Stock plan activity | — | — | ( | ( | — | |||||||||||||||||||||||||||
| Balance, December 31, 2024 | $ | $ | $ | ( | $ | ( | $ | ( | $ | $ | $ | |||||||||||||||||||||
| Net income (loss) | — | — | — | — | — | — | ( | |||||||||||||||||||||||||
Interest rate swaps, net of tax expense (benefit) of $( | — | — | — | — | ( | — | — | ( | — | ( | ||||||||||||||||||||||
Pension adjustment, net of tax expense (benefit) of $ | — | — | — | — | — | — | — | |||||||||||||||||||||||||
| Deconsolidation of Associations of Unit Owners | — | — | — | — | — | — | — | — | ||||||||||||||||||||||||
| Teravalis noncontrolling interest | — | — | — | — | — | — | — | — | ||||||||||||||||||||||||
| Issuance of common shares, net | — | — | — | — | — | |||||||||||||||||||||||||||
| Stock plan activity | — | — | ( | ( | — | |||||||||||||||||||||||||||
| Balance, December 31, 2025 | $ | $ | $ | ( | $ | ( | ( | $ | ( | $ | $ | $ | ||||||||||||||||||||
See Notes to Consolidated Financial Statements.
HHH 2025 FORM 10-K | 64
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HOWARD HUGHES HOLDINGS INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
| Year Ended December 31, | |||||||||||||||||
| thousands | 2025 | 2024 | 2023 | ||||||||||||||
| CASH FLOWS FROM OPERATING ACTIVITIES | |||||||||||||||||
| Net income (loss) | $ | $ | $ | ( | |||||||||||||
| Net income (loss) from discontinued operations, net of taxes | ( | ( | |||||||||||||||
| Net income (loss) from continuing operations | |||||||||||||||||
| Adjustments to reconcile net income (loss) to cash provided by (used in) operating activities: | |||||||||||||||||
| Depreciation | |||||||||||||||||
| Amortization | |||||||||||||||||
| Amortization of deferred financing costs | |||||||||||||||||
| Amortization of intangibles other than in-place leases | |||||||||||||||||
| Straight-line rent amortization | ( | ( | ( | ||||||||||||||
| Deferred income taxes | ( | ||||||||||||||||
| Restricted stock and stock option amortization | |||||||||||||||||
| Net gain on sale of properties | ( | ( | ( | ||||||||||||||
| Loss on sale of MUD receivables | |||||||||||||||||
| Proceeds from sale of MUD receivables | |||||||||||||||||
| (Gain) loss on extinguishment of debt | |||||||||||||||||
| Equity in (earnings) losses from unconsolidated ventures, net of distributions | ( | ||||||||||||||||
| Provision for (recovery of) doubtful accounts | ( | ||||||||||||||||
| Master Planned Communities development expenditures | ( | ( | ( | ||||||||||||||
| Master Planned Communities cost of sales, net of SID bonds transfers to buyers | |||||||||||||||||
| Condominium development expenditures | ( | ( | ( | ||||||||||||||
| Condominium rights and units cost of sales, net of closing commissions | |||||||||||||||||
| Other | |||||||||||||||||
| Net Changes: | |||||||||||||||||
| Accounts receivable, net | ( | ||||||||||||||||
| Other assets, net | |||||||||||||||||
| Condominium deposits, net | ( | ||||||||||||||||
| Deferred expenses, net | ( | ( | ( | ||||||||||||||
| Accounts payable and other liabilities | |||||||||||||||||
| Cash provided by (used in) operating activities of continuing operations | ( | ||||||||||||||||
| Cash provided by (used in) operating activities of discontinued operations | ( | ( | |||||||||||||||
| Cash provided by (used in) operating activities | ( | ||||||||||||||||
| CASH FLOWS FROM INVESTING ACTIVITIES | |||||||||||||||||
| Property and equipment expenditures | ( | ( | ( | ||||||||||||||
| Operating property improvements | ( | ( | ( | ||||||||||||||
| Property development and redevelopment | ( | ( | ( | ||||||||||||||
| Acquisition of assets | ( | ( | ( | ||||||||||||||
| Proceeds from sales of properties, net | |||||||||||||||||
| Reimbursements under tax increment financings and grants | |||||||||||||||||
| Distributions from unconsolidated ventures | |||||||||||||||||
| Investments in unconsolidated ventures, net | ( | ( | |||||||||||||||
| Other | ( | ||||||||||||||||
| Net parent investment in discontinued operations | ( | ( | |||||||||||||||
| Cash provided by (used in) investing activities of continuing operations | ( | ( | ( | ||||||||||||||
| Cash provided by (used in) investing activities of discontinued operations | |||||||||||||||||
| Cash provided by (used in) investing activities | ( | ( | ( | ||||||||||||||
HHH 2025 FORM 10-K | 65
| FINANCIAL STATEMENTS | Table of Contents Index to Financial Statements | ||||
| Year Ended December 31, | |||||||||||||||||
| thousands | 2025 | 2024 | 2023 | ||||||||||||||
| CASH FLOWS FROM FINANCING ACTIVITIES | |||||||||||||||||
| Proceeds from mortgages, notes, and loans payable | |||||||||||||||||
| Principal payments on mortgages, notes, and loans payable | ( | ( | ( | ||||||||||||||
| Proceeds from issuance of common stock, net | |||||||||||||||||
| Debt extinguishment costs | ( | ||||||||||||||||
| Special Improvement District bond funds released from (held in) escrow | |||||||||||||||||
| Deferred financing costs and bond issuance costs | ( | ( | ( | ||||||||||||||
| Taxes paid on stock options exercised and restricted stock vested | ( | ( | ( | ||||||||||||||
| Stock options exercised | |||||||||||||||||
| Sale of preferred stock in Seaport subsidiary | |||||||||||||||||
| Contributions from Teravalis noncontrolling interest owner | |||||||||||||||||
| Cash provided by (used in) financing activities of continuing operations | ( | ||||||||||||||||
| Cash provided by (used in) financing activities of discontinued operations | ( | ||||||||||||||||
| Cash provided by (used in) financing activities | ( | ||||||||||||||||
| Net change in cash, cash equivalents, and restricted cash | ( | ( | |||||||||||||||
| Cash, cash equivalents, and restricted cash at beginning of period | |||||||||||||||||
| Cash, cash equivalents, and restricted cash at end of period | |||||||||||||||||
| Less: Cash, cash equivalents, and restricted cash of discontinued operations at end of period | |||||||||||||||||
| Cash, cash equivalents, and restricted cash of continuing operations at end of period | $ | $ | $ | ||||||||||||||
| RECONCILIATION OF CASH, CASH EQUIVALENTS AND RESTRICTED CASH | |||||||||||||||||
| Cash and cash equivalents | $ | $ | $ | ||||||||||||||
| Restricted cash | |||||||||||||||||
| Cash, cash equivalents, and restricted cash of continuing operations at end of period | $ | $ | $ | ||||||||||||||
| SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION — CONTINUING OPERATIONS | |||||||||||||||||
| Interest paid, net | $ | $ | $ | ||||||||||||||
| Interest capitalized | |||||||||||||||||
| Income taxes paid (refunded), net | |||||||||||||||||
| Federal | |||||||||||||||||
| Texas | |||||||||||||||||
| Arizona | |||||||||||||||||
| Maryland | |||||||||||||||||
| New York | ( | ||||||||||||||||
| Illinois | |||||||||||||||||
| All other states | |||||||||||||||||
| NON-CASH TRANSACTIONS — CONTINUING OPERATIONS | |||||||||||||||||
| Consideration from sale of properties | $ | $ | $ | ||||||||||||||
| Special Improvement District bonds transfers to buyers | |||||||||||||||||
| Special Improvement District bonds held in third-party escrow | |||||||||||||||||
| Capitalized stock compensation | |||||||||||||||||
| Accrued property improvements, developments, and redevelopments | ( | ( | |||||||||||||||
| Initial recognition of operating lease right-of-use asset | |||||||||||||||||
| Initial recognition of operating lease obligation | |||||||||||||||||
| NON-CASH TRANSACTIONS — DISCONTINUED OPERATIONS | |||||||||||||||||
| Distribution of Seaport Entertainment Group Inc. to stockholders | $ | $ | $ | ||||||||||||||
See Notes to Consolidated Financial Statements.
HHH 2025 FORM 10-K | 66
FINANCIAL STATEMENTS FOOTNOTES | Table of Contents Index to Financial Statements | ||||
| 1. Presentation of Financial Statements and Significant Accounting Policies | ||
General Howard Hughes Holdings Inc. (HHH or the Company) is a holding company that owns a real estate development subsidiary, The Howard Hughes Corporation (HHC). Through HHC, the Company operates a large‑scale, mixed‑use real estate platform focused on the development of master planned communities (MPCs), the investment in strategic real estate development opportunities, and the ownership and operation of income‑producing properties. References to HHH, the Company, we, us, and our refer to Howard Hughes Holdings Inc. and its consolidated subsidiaries, which includes The Howard Hughes Corporation, unless otherwise specifically stated. References to HHC or Howard Hughes Communities refer to The Howard Hughes Corporation and its consolidated subsidiaries unless otherwise specifically stated.
In 2025, the Company began executing a long-term strategy to transition from a pure-play real estate company to a diversified holding company. On May 5, 2025, the Company issued 9,000,000 shares of newly issued common stock to Pershing Square for an aggregate purchase price of $900 million. In connection with the investment, the Company and Pershing Square entered into related agreements, including a Services Agreement, Shareholder Agreement, Standstill Agreement, and Registration Rights Agreement. The Company intends to use the proceeds from the transaction to acquire or invest in operating businesses.
As previously disclosed in our Current Report on Form 8‑K filed on December 18, 2025, the Company entered into a definitive agreement to acquire 100 % of Vantage Group Holdings Ltd. (Vantage), a privately held specialty insurance and reinsurance company, for cash consideration of approximately $2.1 billion. The transaction remains subject to regulatory approvals and other customary closing conditions, and is expected to close in the second quarter of 2026. To support the funding of the acquisition, the Company also entered into an equity commitment letter with Pershing Square Holdings, Ltd. under which Pershing Square committed to purchase up to $1.0 billion of the Company’s preferred stock, prior to and contingent upon the closing of the Vantage acquisition. Over time, the Company will have the right, but not the obligation, to repurchase the preferred stock during specified periods and upon certain triggering events. The acquisition is expected to be funded through the Company’s cash on hand, and proceeds from the issuance of the preferred stock.
See Note 2 - Pershing Square for additional information related to the transactions with Pershing Square in the current period.
Principles of Consolidation and Basis of Presentation The accompanying Consolidated Financial Statements have been prepared in accordance with accounting principles generally accepted in the United States (GAAP). The consolidated financial statements include the accounts of Howard Hughes Holdings Inc. and its subsidiaries after elimination of intercompany balances and transactions. The Company also consolidates certain variable interest entities (VIEs) in accordance with Financial Accounting Standards Board’s Accounting Standards Codification (ASC) 810 Consolidation. The outside equity interests in certain entities controlled by the Company are reflected in the Consolidated Financial Statements as noncontrolling interests.
On July 31, 2024, the spinoff of Seaport Entertainment Group Inc. and its subsidiaries (Seaport Entertainment or SEG) was completed (the Spinoff). As the Spinoff represented a strategic shift in the Company’s operations, the results of SEG are presented as discontinued operations in the Consolidated Statements of Operations and the Consolidated Statements of Cash Flows and, as such, have been excluded from both continuing operations and segment results for all periods presented. The Consolidated Statements of Comprehensive Income (Loss), and Equity are presented on a consolidated basis for both continuing operations and discontinued operations. The disclosures presented in the notes to the Consolidated Financial Statements are presented on a continuing operations basis unless otherwise noted. See Note 3 - Discontinued Operations for additional information.
Management has evaluated for disclosure or recognition all material events occurring subsequent to the date of the Consolidated Financial Statements up to the date and time this Annual Report was filed.
Variable Interest Entities The Company has interests in various legal entities that represent a variable interest entity. A VIE is an entity: (a) that has total equity at risk that is not sufficient to permit the entity to finance its activities without additional subordinated financial support from other entities; (b) where the group of equity holders does not have the power to direct the activities of the entity that most significantly impact the entity’s economic performance, or the obligation to absorb the entity’s expected losses or the right to receive the entity’s expected residual return, or both (i.e., lack the characteristics of a controlling financial interest); or (c) where the voting rights of the equity holders are not proportional to their obligations to absorb the expected losses of the entity, their rights to receive the expected residual returns of the entity, or both, and substantially all of the entity’s activities either involve or are conducted on behalf of an investor that has disproportionately few voting rights.
HHH 2025 FORM 10-K | 67
FINANCIAL STATEMENTS FOOTNOTES | Table of Contents Index to Financial Statements | ||||
The Company determines if a legal entity is a VIE by performing a qualitative analysis that requires certain subjective decisions, taking into consideration the design of the entity, the variability that the entity was designed to create and pass along to its interest holders, the rights of the parties and the purpose of the arrangement. Upon the occurrence of certain reconsideration events, the Company reassesses its initial determination as to whether the entity is a VIE.
The Company also performs a qualitative assessment of each VIE to determine if it is the primary beneficiary. The Company is the primary beneficiary and would consolidate the VIE if it has a controlling financial interest where it has both (a) the power to direct the economically significant activities of the entity and (b) the obligation to absorb losses of, or the right to receive benefits from, the entity that could potentially be significant to the VIE. This assessment requires certain subjective decisions, taking into consideration the contractual agreements that define the ownership structure, the design of the entity, distribution of profits and losses, risks, responsibilities, indebtedness, voting rights and board representation of the respective parties. Management’s assessment of whether the Company is the primary beneficiary of a VIE is continuously performed.
Upon initial consolidation of a VIE, the Company records the assets, liabilities, and noncontrolling interests at fair value and recognizes a gain or loss for the difference between (i) the fair value of the consideration paid, the fair value of noncontrolling interests and the reported amount of any previously held interests and (ii) the net amount of the fair value of the assets and liabilities.
If the Company determines it is no longer the primary beneficiary of a VIE, it will deconsolidate the entity and measure the initial cost basis for any retained interests that are recorded upon the deconsolidation at fair value. The Company will recognize a gain or loss for the difference between the fair value and the previous carrying amount of its investment in the VIE.
Consolidated Variable Interest Entities
Teravalis At December 31, 2025, and 2024, the Company owned an 88.0 12.0
Under the terms of the LLC agreement, cash distributions and the recognition of income-producing activities will be pro rata based on economic ownership interest. As of December 31, 2025, the Company’s Consolidated Balance Sheets included $543.9 million of MPC assets and $65.2 million of Noncontrolling interest related to Teravalis. As of December 31, 2024, the Company’s Consolidated Balance Sheets included $542.1 million of MPC assets and $65.1 million of Noncontrolling interest related to Teravalis.
‘Ilima The Company entered into a joint venture agreement with Discovery Land Company (Discovery) to form Block E Ward Village (‘Ilima) for the purpose of developing, constructing, and operating a residential condominium tower in Ward Village. ‘Ilima was determined to be a VIE, and as the Company has the power to direct the activities that most significantly impact its economic performance, the Company is considered the primary beneficiary and consolidates ‘Ilima. Pre-sales for ‘Ilima commenced in June 2025. The Company currently funds 100 % of the predevelopment activity.
Once pre-sales targets are met and construction financing is obtained, the Company will contribute land and Discovery will contribute to up $5.0 million. All other necessary capital contributions will be funded by the Company. After completion of the condominium tower and closing of condominium sales, cash distributions and the recognition of income-producing activities will be pro rata based on ownership interest. At December 31, 2025, and 2024, the Company owned approximately 100
HHH 2025 FORM 10-K | 68
FINANCIAL STATEMENTS FOOTNOTES | Table of Contents Index to Financial Statements | ||||
The Company’s Consolidated Balance Sheets included the following amounts related to ‘Ilima as of December 31:
| thousands | 2025 | 2024 | |||||||||
| Buildings and equipment | $ | $ | |||||||||
| Less: accumulated depreciation | ( | ( | |||||||||
| Developments | |||||||||||
| Net investment in real estate | |||||||||||
| Cash and cash equivalents | |||||||||||
| Restricted cash | |||||||||||
| Accounts receivable, net | |||||||||||
| Deferred expenses, net | |||||||||||
| Other assets, net | |||||||||||
| Total assets | $ | $ | |||||||||
| Accounts payable and other liabilities | $ | $ | |||||||||
| Total liabilities | $ | $ | |||||||||
Investments in Unconsolidated Ventures The Company’s investments in unconsolidated ventures are accounted for under the equity method to the extent that, based on contractual rights associated with the investments, the Company can exert significant influence over a venture’s operations. Under the equity method, the Company’s investment in the venture is recorded at cost and is subsequently adjusted to recognize the Company’s allocable share of the earnings or losses of the venture. Dividends and distributions received by the Company are recognized as a reduction in the carrying amount of the investment. Generally, joint venture operating agreements provide that assets, liabilities, funding obligations, profits and losses, and cash flows are shared in accordance with ownership percentages. For certain equity method investments, various provisions in the joint venture operating agreements regarding distributions of cash flow based on capital account balances, allocations of profits and losses, and preferred returns may result in the Company’s economic interest differing from its stated ownership or if applicable, the Company’s final profit-sharing interest after receipt of any preferred returns based on the venture’s distribution priorities. For these investments, the Company recognizes income or loss based on the joint venture’s distribution priorities, which could fluctuate over time and may be different from its stated ownership or final profit-sharing percentage.
The Company periodically assesses the appropriateness of the carrying amount of its equity method investments, as events or changes in circumstance may indicate that a decrease in value has occurred which is other‑than‑temporary. In addition to the property‑specific impairment analysis performed on the underlying assets of the investment, the Company also considers the ownership, distribution preferences, limitations and rights to sell and repurchase its ownership interests. If a decrease in value of an investment is deemed to be other‑than‑temporary, the investment is reduced to its estimated fair value, and an impairment-related loss is recognized in the Consolidated Statements of Operations as a component of Equity in earnings (losses) from investments in unconsolidated ventures.
For investments in ventures where the Company has virtually no influence over operations and the investments do not have a readily determinable fair value, the Company has elected the measurement alternative to carry the securities at cost less impairment, if any, plus or minus changes resulting from observable price changes in orderly transactions for the identical or similar investment of the issuer. Equity securities not accounted for under the equity method, or where the measurement alternative has not been elected, are required to be reported at fair value with unrealized gains and losses reported in the Consolidated Statements of Comprehensive Income (Loss) as Net unrealized gains (losses) on instruments measured at fair value through earnings.
Use of Estimates The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions. These estimates and assumptions affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenues and expenses during the reporting periods. The estimates and assumptions include, but are not limited to, capitalization of development costs, provision for income taxes, recoverable amounts of receivables and deferred tax assets, initial valuations of tangible and intangible assets acquired, and the related useful lives of assets upon which depreciation and amortization is based. Estimates and assumptions have also been made with respect to future revenues and costs, and the fair value of warrants, debt, and options granted. MPC cost of sales estimates are highly judgmental as they are sensitive to cost escalation, sales price escalation, and lot absorption, which are subject to judgment and affected by expectations about future market or economic conditions. Additionally, the future cash flow estimates and fair values used for impairment analysis are highly judgmental and reflect current and projected trends in rental, occupancy, pricing, development costs, sales pace, capitalization rates, selling costs, and estimated holding periods for the applicable assets. Both MPC cost of sale estimates and estimates used in impairment analysis are affected by expectations about future market or economic conditions. Actual results could differ from these and other estimates.
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Segments The Company operates in three
Net Investment in Real Estate
Master Planned Community Assets, Buildings and Equipment, and Land Real estate assets are stated at cost less any provisions for impairments and depreciation as applicable. Expenditures for significant improvements to the Company’s assets are capitalized. Tenant improvements relating to the Company’s operating assets are capitalized and depreciated over the shorter of their economic lives or the lease term. Maintenance and repair costs are charged to expense when incurred.
| Asset Type | Years | Balance Sheet Location | |||||||||
| Buildings and improvements | Buildings and Equipment | ||||||||||
| Equipment and fixtures | Buildings and Equipment | ||||||||||
| Computer hardware and vehicles | Buildings and Equipment | ||||||||||
| Tenant improvements | Related lease term | Buildings and Equipment | |||||||||
| Leasing costs | Related lease term | Other assets, net | |||||||||
From time to time, the Company may reassess the development strategies for certain buildings and improvements which results in changes to the Company’s estimate of their remaining useful lives. The Company did not recognize additional depreciation expense of significance for the years ended December 31, 2025, 2024, and 2023.
Developments Development costs, which primarily include direct costs related to placing the asset in service associated with specific development properties, are capitalized as part of the property being developed. Construction and improvement costs incurred in connection with the development of new properties or the redevelopment of existing properties are capitalized before they are placed into service. Such costs include planning, engineering, design, direct material, labor, and subcontract costs. Real estate taxes, utilities, direct legal and professional fees related to the sale of a specific unit, interest, insurance costs, and certain employee costs incurred during construction periods are also capitalized. Capitalization commences when the development activities begin and ceases when a project is completed, put on hold, or at the date that the Company decides not to move forward with a project. Capitalized costs related to a project where HHH has determined not to move forward are expensed if they are not deemed recoverable. Capitalized interest costs are based on qualified expenditures and interest rates in place during the construction period. Demolition costs associated with redevelopments are expensed as incurred unless the demolition was included in the Company’s development plans and imminent as of the acquisition date of an asset.
Once construction of operating properties is complete, the assets are placed into service, and capitalized costs are reclassed to Buildings and equipment and are depreciated in accordance with the Company’s policy. Once construction of condominiums is complete, the assets are reflected as condominium inventory in Other assets, net until the sale of each condominium unit is closed and the related cost is realized in Condominium rights and units cost of sales. In the event that management no longer has the ability or intent to complete a development, the costs previously capitalized are evaluated for impairment.
Developments consist of the following categories as of December 31:
| thousands | 2025 | 2024 | |||||||||
| Development costs | $ | $ | |||||||||
| Land and improvements | |||||||||||
| Total Developments | $ | $ | |||||||||
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Acquisitions of Properties The Company accounts for the acquisition of real estate properties in accordance with ASC 805 Business Combinations. This methodology requires that assets acquired and liabilities assumed be recorded at their fair values on the date of acquisition for business combinations and at relative fair values for asset acquisitions. Acquisition costs related to the acquisition of a business are expensed as incurred. Costs directly related to asset acquisitions are considered additions to the purchase price and increase the cost basis of such assets.
The fair value of tangible assets of an acquired property (which includes land, buildings and improvements) is determined by valuing the property as if it were vacant, and the as-if-vacant value is then allocated to land, buildings and improvements based on management’s determination of the fair value of these assets. The as-if-vacant values are derived from several sources which incorporate significant unobservable inputs that are classified as Level 3 inputs in the fair value hierarchy and primarily include a discounted cash flow analysis using discount and capitalization rates based on recent comparable market transactions, where available.
The fair value of acquired intangible assets consisting of in-place, above-market, and below-market leases is recorded based on a variety of considerations, some of which incorporate significant unobservable inputs that are classified as Level 3 inputs in the fair value hierarchy. In-place lease considerations include, but are not necessarily limited to: (1) the value associated with avoiding the cost of originating the acquired in-place leases (i.e., the market cost to execute a lease, including leasing commissions and tenant improvements); (2) the value associated with lost revenue related to tenant reimbursable operating costs incurred during the assumed lease-up period (i.e., real estate taxes, insurance, and certain other operating expenses); and (3) the value associated with lost rental revenue from existing leases during the assumed lease-up period. Above-market and below-market leases are valued at the present value, using a discount rate that reflects the risks associated with the leases acquired, of the difference between (1) the contractual amounts to be paid pursuant to the in-place lease; and (2) management’s estimate of current market lease rates, measured over the remaining non-cancelable lease term, including any below-market renewal option periods.
Impairment HHH reviews its long-lived assets (including those held by its unconsolidated ventures) for potential impairment indicators whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. An impairment loss is recognized if the carrying amount of an asset is not recoverable and exceeds its fair value. The evaluation of anticipated cash flows is highly subjective and is based in part on assumptions regarding future economic conditions, such as occupancy, rental rates, capital requirements, and sales values that could differ materially from actual results in future periods. If impairment indicators exist and it is expected that undiscounted cash flows generated by the asset are less than its carrying amount, an impairment provision is recorded to write down the carrying amount of the asset to its fair value.
Impairment indicators for HHH’s assets or projects within MPCs are assessed separately and include, but are not limited to, significant decreases in sales pace or average selling prices, significant increases in expected land development and construction costs or cancellation rates, and projected losses on expected future sales. MPC assets have extended life cycles that may last 20 to 40 years, or longer, and have few long‑term contractual cash flows. Further, MPC assets generally have minimal to no residual values because of their liquidating characteristics. MPC development periods often occur through several economic cycles. Subjective factors such as the expected timing of property development and sales, optimal development density, and sales strategy impact the timing and amount of expected future cash flows and fair value.
Impairment indicators for Operating Assets are assessed for each property and include, but are not limited to, significant decreases in net operating income, significant decreases in occupancy, ongoing low occupancy, and significant net operating losses.
Impairment indicators for assets in the Strategic Developments are assessed by project and include, but are not limited to, significant changes in projected completion dates, revenues or cash flows, development costs, market factors, significant decreases in comparable property sale prices, and feasibility.
The cash flow estimates used for determining recoverability and estimating fair value are inherently judgmental and reflect current and projected trends in rental rates, occupancy, pricing, development costs, sales pace, capitalization rates, and estimated holding periods for the applicable assets. Although the estimated fair value of certain assets may be exceeded by the carrying amount, a real estate asset is only considered to be impaired when its carrying amount is not expected to be recovered through estimated future undiscounted cash flows. To the extent an impairment provision is necessary, the excess of the carrying amount of the asset over its estimated fair value is expensed to operations. In addition, the impairment provision is allocated proportionately to adjust the carrying amount of the asset. The adjusted carrying amount, which represents the new cost basis of the asset, is depreciated over the remaining useful life of the asset or, for MPCs, is expensed as a cost of sales when land is sold. Assets that have been impaired will in the future have lower depreciation and cost of sale expenses. The impairment will have no impact on cash flows.
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Cash and Cash Equivalents Cash and cash equivalents consist of highly-liquid investments with maturities at date of purchase of three months or less and include registered money market mutual funds which are invested in United States Treasury bills that are valued at the net asset value of the underlying shares in the funds as of the close of business at the end of each period as well as deposits with major banks throughout the United States. Such deposits are in excess of FDIC limits and are placed with high-quality institutions in order to minimize concentration of counterparty credit risk.
Restricted Cash Restricted cash reflects amounts segregated in escrow accounts in the name of the Company, primarily related to escrowed condominium deposits from buyers and other amounts related to taxes, insurance, and legally restricted security deposits and leasing costs.
Accounts Receivable, net Accounts receivable, net includes straight-line rent receivables, tenant receivables, related-party receivables, and other receivables. On a quarterly basis, management reviews the lease-related receivables, including straight-line rent receivables and tenant receivables, for collectability. This analysis includes a review of past due accounts and considers factors such as the credit quality of tenants, current economic conditions, and changes in customer payment trends. When full collection of a lease-related receivable or future lease payment is deemed to be not probable, a reserve for the receivable balance is charged against rental revenue and future rental revenue is recognized on a cash basis. The Company also records reserves for estimated losses if the estimated loss amount is probable and can be reasonably estimated.
Related-party receivables are primarily due from the Floreo joint venture. This balance includes reimbursable overhead costs incurred by the Company on behalf of Floreo and a $6.0 million guaranty fee associated with the increased borrowing capacity of Floreo’s bond financing in the first quarter of 2025. See Note 4 - Investments in Unconsolidated Ventures for additional information on the Floreo joint venture and Note 12 - Commitments and Contingencies for additional information on the guaranty fee.
Other receivables are primarily related to short-term trade receivables. The Company is exposed to credit losses through the sale of goods and services to customers and assesses its exposure to credit loss related to these receivables on a quarterly basis based on historical collection experience and future expectations by portfolio. The Company records an allowance for credit losses if the estimated loss amount is probable.
The following table represents the components of Accounts Receivable, net of amounts considered uncollectible, in the accompanying Consolidated Balance Sheets as of December 31:
| thousands | 2025 | 2024 | |||||||||
| Straight-line rent receivables | $ | $ | |||||||||
| Tenant receivables | |||||||||||
| Related-party receivables | |||||||||||
| Other receivables | |||||||||||
| Accounts receivable, net (a) | $ | $ | |||||||||
(a)As of December 31, 2025, the total reserve balance for amounts considered uncollectible was $7.2 million, composed of $7.0 million attributable to lease-related receivables and $0.2 million attributable to the allowance for credit losses related to other accounts receivable. As of December 31, 2024, the total reserve balance was $8.2 million, comprised of $8.1 million attributable to lease-related receivables and $0.1 million attributable to the allowance for credit losses related to other accounts receivables.
The following table summarizes the impacts of the collectability reserves in the accompanying Consolidated Statements of Operations for the years ended December 31:
| thousands | |||||||||||||||||
| Statements of Operations Location | 2025 | 2024 | 2023 | ||||||||||||||
| Rental revenue | $ | $ | ( | $ | |||||||||||||
| Provision for (recovery of) doubtful accounts | ( | ||||||||||||||||
| Total (income) expense impact | $ | $ | ( | $ | |||||||||||||
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Municipal Utility District Receivables, net In Houston, Texas, certain development costs are reimbursable through the creation of a Municipal Utility District, also known as Water Control and Improvement Districts, which are separate political subdivisions authorized by Article 16, Section 59 of the Texas Constitution and governed by the Texas Commission on Environmental Quality (TCEQ). MUDs are formed to provide municipal water, wastewater, drainage services, recreational facilities, and roads to those areas where they are currently unavailable through the regular city services. Typically, the developer advances funds for the creation of the facilities, which must be designed, bid, and constructed in accordance with the City of Houston’s and TCEQ requirements.
The MUD Board of Directors authorizes and approves all MUD development contracts, and MUD bond sale proceeds are used to reimburse the developer for its construction costs, including interest. At the date the expenditures occur, the Company determines the costs it believes will be eligible for reimbursement and recognizes that as MUD receivables. These expenditures are subject to review by the MUD engineers for eligibility in accordance with the development contracts as part of the process for reimbursement. MUD receivables are pledged as security to creditors under the debt facilities relating to Bridgeland.
Sale of MUD Receivables In September 2024, the Company entered into a sales transaction of MUD receivables, in which it transferred the reimbursement rights to $186.0 million of existing MUD receivables and $9.3 million of related accrued interest, as well as $40.0 million of anticipated future MUD receivables, for total cash consideration of $176.7 million. Using the relative fair value method, $146.7 million of the cash consideration was allocated to the sale of the existing MUD receivables and $30.0 million was allocated to the sale of the anticipated future MUD receivables. As a result of the sale, the Company derecognized the existing MUD receivables and related accrued interest, resulting in a loss on sale of $51.5 million in the Consolidated Statements of Operations in the third quarter of 2024. Due to an adjustment to the allocation between projects, a slight reduction in the loss was recognized in the fourth quarter of 2024, and the final impact of this sale was a loss of $48.7 million.
In May 2025, the Company entered into a transaction in which it transferred the reimbursement rights to $147.0 million of existing MUD receivables and $14.1 million of related accrued interest, as well as $95.9 million of anticipated future MUD receivables, for total cash consideration of $180.0 million. Using the relative fair value method, $112.8 million of the cash consideration was allocated to the sale of the existing MUD receivables and $67.2 million was allocated to the sale of the anticipated future MUD receivables. As a result of the sale, the Company derecognized the existing MUD receivables and related accrued interest, resulting in a loss on sale of $48.2 million in the Consolidated Statements of Operations.
For both transactions, the Company is required to complete future development activities. As such, liabilities associated with the future development spend were recorded at amortized cost in Accounts payable and other liabilities on the Consolidated Balance Sheets. The associated discounts, which represent the differences between the total future development spend and the allocated cash proceeds, are being amortized into interest expense over the expected development period using the effective interest method. As of December 31, 2025, the total remaining liability was $64.4 million and the total unamortized discount was $12.8 million. Interest expense related to the discount amortization was $21.8 million for the year ended December 31, 2025.
Other Assets, net The major components of Other assets, net include security, escrow, and other deposits; Special Improvement District (SID) receivables; in-place leases; intangibles; Tax increment financing (TIF) receivables; prepaid expenses related to the Company’s properties; condominium inventory; and various other assets.
SID receivables are amounts due from SID bonds related to the Company’s Summerlin MPC. Proceeds from SID bonds are held in escrow by a third-party and are used to reimburse the Company for a portion of the development costs incurred in Summerlin. See Note 9 - Mortgages, Notes, and Loans Payable, Net for additional information on the SID bonds.
The Company’s intangibles include in-place lease assets and above-market lease assets where HHH is the lessor, as well as internally developed software, trademark and trade name intangibles related to MPCs, and goodwill. The Company amortizes finite-lived intangible assets less any residual value, if applicable, on a straight-line basis over the term of the related lease or the estimated useful life of the asset.
TIF receivables are amounts which the Company has submitted for reimbursement from Howard County in Maryland or from the state of Maryland, in conjunction with development costs expended on key roads and infrastructure work within Merriweather District specified per the terms of the county’s TIF legislation, Special Obligation Bonds issued in October 2017, and Grant Disbursement Agreement executed in April 2023.
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Notes receivable, net includes non-derivative financial assets with fixed or determinable payments that are not quoted in an active market. Subsequent to initial recognition, they are recorded at amortized cost less any provision for impairment as required under ASC 326 Financial Instruments - Credit Losses.
Condominium inventory includes available for sale units at HHH’s completed condominium towers and is stated at the lower of cost or fair value less selling costs. Condominium inventory includes land acquisition and development costs, construction costs, and interest and real estate taxes that are capitalized during the development period. HHH evaluates condominium inventory for impairment when potential indicators exist. An impairment loss is recognized if the carrying amount of condominium inventory exceeds the fair value less selling costs, which is based on comparable sales in the normal course of business under existing and anticipated market conditions.
Financial Instruments - Credit Losses The Company is exposed to credit losses through the sale of goods and services to the Company’s customers. Receivables held by the Company primarily relate to short-term trade receivables and financing receivables, which include MUD receivables, SID bonds, TIF receivables, net investments in lease receivables, and notes receivable. The Company assesses its exposure to credit loss based on historical collection experience and future expectations by portfolio segment. Historical collection experience is evaluated on a quarterly basis by the Company.
The amortized cost basis of financing receivables, consisting primarily of MUD and SID receivables, totaled $560.3 million as of December 31, 2025, and $569.1 million as of December 31, 2024. The MUD receivable balance includes accrued interest of $48.2 million at December 31, 2025, and $44.0 million at December 31, 2024. The allowance for credit losses for financing receivables was not material as of December 31, 2025, and 2024, and there was no material activity related to the allowance for credit losses for the years ended December 31, 2025, 2024, and 2023.
Financing receivables are considered to be past due once they are 30 days contractually past due under the terms of the agreement. The Company currently does not have significant financing receivables that are past due or on nonaccrual status. There have been no significant write-offs or recoveries of amounts previously written-off during the current period for financing receivables.
Income Taxes The Company utilizes the asset and liability method of accounting for income taxes. Under this method, deferred tax assets and liabilities are determined based on the difference between the financial statement carrying amounts and tax bases of assets and liabilities using enacted tax rates in effect for years in which the temporary differences are expected to reverse. Deferred income taxes also reflect the impact of operating loss and tax credit carryforwards.
The Company periodically assesses the realizability of its deferred tax assets. If the Company concludes that it is more likely than not that some of the deferred tax assets will not be realized, the tax asset is reduced by a valuation allowance. The Company considers many factors when assessing the likelihood of future realization of deferred tax assets, including expectations of future taxable income, carryforward periods available to the Company for tax reporting purposes, various income tax strategies, and other relevant factors. In addition, interest and penalties related to uncertain tax positions, if necessary, are recognized in income tax expense.
Marketing and Advertising Each of the Company’s segments incur various marketing and advertising costs as part of their development, branding, leasing, or sales initiatives. These costs include special events, broadcasts, direct mail and online digital and social media programs, and they are expensed as incurred.
Fair Value of Financial Instruments The carrying values of cash and cash equivalents, escrows, receivables, accounts payable, accrued expenses, and other assets and liabilities are reasonable estimates of their fair values because of the short maturities of these instruments.
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Derivative Instruments and Hedging Activities Derivative instruments and hedging activities require management to make judgments on the nature of its derivatives and their effectiveness as hedges. These judgments determine if the changes in fair value of the derivative instruments are reported as a component of Net Income in the Consolidated Statements of Operations or as a component of Comprehensive Income in the Equity on the Consolidated Balance Sheets. While management believes its judgments are reasonable, a change in a derivative’s effectiveness as a hedge could materially affect expenses, net income, and equity. The Company accounts for the changes in the fair value of an effective hedge in other comprehensive income (loss) and subsequently reclassifies the balance from other comprehensive income (loss) to earnings over the term that the hedged transaction affects earnings. The Company accounts for the changes in the fair value of an ineffective hedge directly in earnings.
Stock-Based Compensation The Company maintains various equity incentive plans, with outstanding stock-based compensation awards (Awards) which include stock options and restricted stock awards (RSAs). In 2023, pursuant to the holding company reorganization discussed above, each outstanding share of HHC’s common stock was automatically converted into one share of HHH common stock. HHH assumed all obligations under the equity incentive plans. All stock options and restricted stock outstanding will be settled in HHH stock.
In 2024, at the time of the Spinoff, all of these Awards were modified to adjust the number of HHH shares by certain ratios and/or allocation factors. The stock options were modified into HHH stock options and SEG stock options based on the applicable ratios and/or allocation factors. In addition, the growth targets for the RSAs based on Net Asset Value and related performance conditions were revised to carve out the impact of the Spinoff. Also, the market conditions related to Total Shareholder Return (TSR) targets were evaluated as of the Spinoff date for the TSR-based RSAs and then modified to time-based, service conditions only. See Note 13 - Stock-Based Compensation Plans for additional information.
The Company applies the provisions of ASC 718 Stock Compensation which requires all share‑based payments to be recognized in the Consolidated Statements of Operations based on their fair values. The fair value of stock option awards is determined using the Black-Scholes option-pricing model. Restricted stock awards are valued using the market price of the Company’s common stock on the grant date. For restricted stock awards with market conditions or performance conditions, the award is valued using a Monte Carlo simulation. The Company records compensation cost for stock-based compensation awards over the requisite service period. If the requisite service period is satisfied, compensation cost is not adjusted unless the award contains a performance condition. If an award contains a performance condition, expense is recognized only for those shares that ultimately vest using the per-share fair value measured at the grant date. The Company recognizes forfeitures as they occur.
Revenue Recognition and Related Matters
Condominium Rights and Unit Sales Revenue from the sale of an individual unit in a condominium project is recognized at a point in time (i.e., the closing) when HHH satisfies the single performance obligation to construct a condominium project and transfers control of a completed unit to a buyer. The transaction price, which is the amount of consideration the Company receives upon delivery of the completed condominium unit to the buyer, is allocated to this single obligation and is received at closing less any amounts previously paid on deposit.
The Company receives cash payments in the form of escrowed condominium deposits from customers who have contracted to purchase a condominium unit based on billing schedules established in HHH’s condominium purchase agreement contracts. The amounts are recorded in Restricted cash until released from escrow in accordance with the escrow agreement and on approval of HHH’s lender to fund construction costs of a project. A corresponding condominium contract deposit liability is established at the date of receipt, representing a portion of HHH’s unsatisfied performance obligation at each reporting date.
These deposits, along with the balance of the contract value, are recognized at closing upon satisfaction of HHH’s performance obligation and transfer of title to the buyer. Real estate project costs directly associated with a condominium project, which are HHH’s costs to fulfill contracts with condominium buyers, are capitalized while all other costs are expensed as incurred. Total estimated project costs include direct costs such as the carrying value of the land, site planning, architectural, construction, and financing costs, as well as indirect cost allocations. The allocations include costs which clearly relate to the specific project, including certain infrastructure and amenity costs which benefit the project as well as others, and are based upon the relative sales value of the units. Furthermore, incremental costs incurred to obtain a contract to sell condominium units are evaluated for capitalization in accordance with ASC 340-40 Components, Costs & Considerations, with incremental costs to fulfill a contract only being capitalized if the costs relate directly to a specifically identified contract, enhance resources to satisfy performance obligations in the future, and are expected to be recovered.
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Master Planned Communities Land Sales Revenues from land sales are recognized at a point in time when the land sale closing process is complete. The transaction price generally has both fixed and variable components, with the fixed price stipulated in the contract and representative of a single performance obligation. See Builder Price Participation (BPP) below for a discussion of the variable component. The fixed transaction price, which is the amount of consideration received in full upon transfer of the land title to the buyer, is allocated to this single obligation and is received at closing of the land sale less any amounts previously paid on deposit.
The Company receives cash payments in the form of land purchase deposits from homebuilders or other commercial buyers who have contracted to purchase land within the Company’s MPCs, and HHH holds any escrowed deposits in Restricted cash or Cash and cash equivalents based on the terms of the contract. In situations where the Company has completed the closing of a developed land parcel or superpad and consideration is paid in full, but a portion of HHH’s performance obligation relating to the enhancement of the land is still unsatisfied, revenue related to HHH’s obligation is recognized over time. The Company recognizes only the portion of the improved land sale where the improvements are fully satisfied based on a cost input method. The aggregate amount of the transaction price allocated to the unsatisfied obligation is recorded as deferred land sales and is presented in Accounts payable and other liabilities. The Company measures HHH’s unsatisfied obligation based on the costs remaining relative to the total cost at the date of closing.
When residential or commercial land is sold, the cost of sales includes actual costs incurred and estimates of future development costs benefiting the property sold. In accordance with ASC 970-360-30-1 Real Estate Project Costs, when land is sold, costs are allocated to each sold superpad or lot based upon the relative sales value. For purposes of allocating development costs, estimates of future revenues and development costs are re-evaluated throughout the year, with adjustments being allocated prospectively to the remaining parcels available for sale. For certain parcels of land, including acquired parcels that the Company does not intend to develop or for which development was complete at the date of acquisition, the specific identification method is used to determine the cost of sales.
Builder Price Participation BPP is the variable component of the transaction price for certain Master Planned Communities land sales. BPP is earned when a developer that acquired land from HHH develops and sells a home to an end user at a price higher than a predetermined breakpoint. The excess over the breakpoint is shared between HHH and the developer at the time of closing on the sale of the home based on a previously agreed-upon percentage. Generally, BPP is constrained, and accordingly, the Company does not recognize an estimate of variable consideration. The Company’s conclusion is based on the following factors:
–BPP is highly susceptible to factors outside HHH’s influence such as unemployment and interest rates
–the time between the sale of land to a homebuilder and closing on a completed home can take up to three years
–there is significant variability in home pricing from period to period
The Company evaluates contracts with homebuilders with respect to BPP at each reporting period to determine whether a change in facts and circumstances has eliminated the constraint and will record an estimate of BPP revenue, if applicable.
For Condominium rights and unit sales, Master planned communities land sales, and Builder price participation the Company elected the practical expedient to not adjust promised amount of consideration for the effects of a significant financing component when the expected period between transfer of the promised asset and payment is one year or less.
Rental Revenues Revenue associated with the Company’s operating assets includes minimum rent, percentage rent in lieu of fixed minimum rent, tenant recoveries, and overage rent.
Minimum rent revenues are recognized on a straight‑line basis over the terms of the related leases when collectability is reasonably assured and the tenant has taken possession of, or controls, the physical use of the leased asset. Percentage rent in lieu of fixed minimum rent is recognized as sales are reported from tenants. Minimum rent revenues also include amortization related to above-market and below‑market tenant leases on acquired properties.
Recoveries from tenants are stipulated in the leases, are generally computed based upon a formula related to real estate taxes, insurance, and other real estate operating expenses, and are generally recognized as revenues in the period the related costs are incurred.
If the lease provides for tenant improvements, the Company determines whether the tenant improvements are owned by the tenant or by HHH. When HHH is the owner of the tenant improvements, rental revenue begins when the improvements are substantially complete. When the tenant is the owner of the tenant improvements, any tenant allowance funded by the Company is treated as a lease incentive and amortized as an adjustment to rental revenue over the lease term.
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Other Land, Rental, and Property Revenues Other land revenues recognized over time include ground maintenance revenue, and homeowner association management fee revenue. These revenues are recognized over time, as time elapses. The amount of consideration and the duration are fixed, as stipulated in the related agreements, and represent a single performance obligation.
Other land revenues also include transfer and advertising fees on the secondary sales of homes in MPCs, forfeitures of earnest money deposits by buyers of HHH’s condominium units, lease termination fees, and other miscellaneous items. These items are recognized at a point in time when the real estate closing process is complete or HHH has a legal right to the respective fee or deposit.
Other rental revenues also includes overage rent which is recognized on an accrual basis once tenant sales exceed contractual thresholds contained in the lease and is calculated by multiplying the tenant sales in excess of the minimum amount by a percentage defined in the lease.
Noncontrolling Interests As of December 31, 2025, and December 31, 2024, noncontrolling interests related to the 12
Recently Issued Accounting Standards The following is a summary of recently issued and other notable accounting pronouncements which relate to the Company’s business.
Accounting Standards Update 2024-03, Disaggregation of Income Statement Expenses This update requires the disclosure of additional disaggregated information in the notes to financial statements for certain categories of costs and expenses that are included on the face of the statement of operations. The new disclosure requirements are effective for annual periods beginning after December 15, 2026, and for interim periods beginning after December 15, 2027, with early adoption permitted. The Company is currently evaluating the impact this standard will have on its financial statement presentation and disclosures.
HHH 2025 FORM 10-K | 77
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2. Pershing Square | ||
Common Share Issuance to Pershing Square On May 5, 2025, the Company entered into a Share Purchase Agreement (Purchase Agreement), by and between the Company and Pershing Square Holdco, L.P. (PS Holdco), pursuant to which the Company sold to PS Holdco 9,000,000 newly issued shares of the Company’s common stock at a purchase price of $100 per share, for an aggregate purchase price of $900 million (the Pershing Square Issuance). In connection with the Purchase Agreement, the Company also entered into several other agreements, dated May 5, 2025, with PS Holdco and Pershing Square Capital Management, L.P. (together, Pershing Square), including a Services Agreement, a Shareholder Agreement, a Standstill Agreement, and a Registration Rights Agreement.
As of December 31, 2025, Pershing Square beneficially owned approximately 46.9 % of the Company’s outstanding shares of common stock. The Company expects to use the proceeds from the transaction to acquire or make investments in operating companies as part of the Company’s new strategy of becoming a diversified holding company.
Transaction Costs The Company incurred $38.3 million in costs directly attributable to the Pershing Square Issuance. As required by the Purchase Agreement, these transaction costs included the reimbursement of $25.0 million of reasonable and documented expenses incurred by Pershing Square in connection with the negotiation and execution of the transaction. These reimbursement costs were treated as a reduction of the proceeds and recorded directly in Additional paid-in capital on the Consolidated Balance Sheets. The remaining $13.3 million of costs were incurred directly by the Company and included $12.2 million of costs attributable to the sale of common stock recognized in Additional paid-in capital and $1.1 million of costs which were expensed as incurred as General and administrative expenses in the Consolidated Statements of Operations.
Services Agreement Pursuant to the terms of the Services Agreement, Pershing Square will support the Company’s new diversified holding company strategy by providing services to the Company, such as (i) investment advisory services, (ii) making recommendations with respect to hedging, balance sheet optimization and capital allocation, (iii) executing transactions, (iv) assisting the Company with business and corporate development functions, (v) making voting recommendations for the Company’s investments, (vi) assisting with and advising on fundraising, (vii) monitoring operations of the Company and its investments, subject to the day-to-day authority and responsibility of management of the Company, (viii) providing recommendations for persons to serve as designees or deputies of the Chief Investment Officer, (ix) engaging and supervising third-party service providers, (x) making dividend payment recommendations, and (xi) providing other services as may be agreed upon. The Services Agreement will have an initial ten-year term and will have successive renewal terms of ten years .
The Company will pay Pershing Square a quarterly base advisory fee of $3.75 million and a quarterly variable advisory fee equal to 0.375 % of the excess value of the quarter-end stock price of the Company’s common stock minus the reference price of $66.15 , multiplied by the existing share count as of the transaction date, which will not increase with the issuance of new shares of common stock. The base fee and the reference share price are subject to annual adjustment based on the Core Personal Consumption Expenditures (PCE) Price Index. The total advisory fee recognized in General and administrative expenses in the Consolidated Statements of Operations was $17.1 million for the year ended December 31, 2025. As of December 31, 2025, the Consolidated Balance Sheets reflect accounts payable of $3.3 million due to Pershing Square with respect to the advisory fees.
HHH 2025 FORM 10-K | 78
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3. Discontinued Operations | ||
On July 31, 2024, the Spinoff of SEG was completed. The Spinoff included all assets previously included in the Company’s Seaport segment and the Las Vegas Aviators and the Las Vegas Ballpark, which were previously included in the Operating Assets segment. As the Spinoff represents a strategic shift in the Company’s operations, the results of SEG are included as discontinued operations for all periods presented.
The following table presents key components of Net income (loss) from discontinued operations, net of income taxes, for the years ended December 31:
| thousands | 2024 | 2023 | ||||||||||||
| Total revenues | $ | $ | ||||||||||||
| Total operating expenses | ||||||||||||||
| General and administrative (a) | ||||||||||||||
| Depreciation and amortization | ||||||||||||||
| Other | ||||||||||||||
| Provision for impairment | ( | |||||||||||||
| Other income (loss), net | ( | ( | ||||||||||||
| Interest income (expense), net | ( | |||||||||||||
| Gain (loss) on extinguishment of debt | ( | ( | ||||||||||||
| Equity in earnings (losses) from unconsolidated ventures | ( | ( | ||||||||||||
| Net income (loss) from discontinued operations before income taxes | ( | ( | ||||||||||||
| Income tax expense (benefit) | ( | ( | ||||||||||||
| Net income (loss) from discontinued operations, net of taxes | $ | ( | $ | ( | ||||||||||
(a)General and administrative expenses relate to costs incurred to complete the spinoff of Seaport Entertainment.
Continuing Involvement with SEG In connection with the Spinoff, HHH entered into several agreements with Seaport Entertainment that governed the execution of the transaction and the relationship of the parties following the Spinoff including a Separation and Distribution Agreement, Transition Services Agreement, Tax Matters Agreement, Employee Matters Agreement, Guaranty Agreement, and various other agreements. All agreements expired on August 1, 2025, and as such, HHH has no continuing obligations to or from SEG under these agreements.
Seaport Entertainment Guaranty Following the execution of the Spinoff, HHH provided a full backstop guaranty for SEG’s outstanding mortgage related to its 250 Water Street property (SEG Term Loan). On February 6, 2026, SEG announced that it had closed the sale of its 250 Water Street property. As part of the transaction, SEG repaid the SEG Term Loan in full and HHH was released from the related backstop guaranty. See Note 12 - Commitments and Contingencies for additional information.
HHH 2025 FORM 10-K | 79
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4. Investments in Unconsolidated Ventures | ||
In the normal course of business, the Company enters into partnerships and ventures with an emphasis on investments associated with the development and operation of real estate assets. As of December 31, 2025, the Company does not consolidate the investments below as it does not have a controlling financial interest in these ventures. As such, the Company primarily reports its interests in accordance with the equity method. As of December 31, 2025, these ventures had debt totaling $434.0 million, with the Company’s proportionate share of this debt totaling $215.5 million. All of this indebtedness is without recourse to the Company, with the exception of the collateral maintenance obligation for Floreo. See Note 12 - Commitments and Contingencies for additional information related to the Company’s collateral maintenance obligation.
Investments in unconsolidated ventures consist of the following:
| Ownership Interest (a) | Carrying Value | Share of Earnings/Dividends | ||||||||||||||||||||||||||||||||||||
| December 31, | December 31, | December 31, | December 31, | Year Ended December 31, | ||||||||||||||||||||||||||||||||||
| thousands except percentages | 2025 | 2024 | 2025 | 2024 | 2025 | 2024 | 2023 | |||||||||||||||||||||||||||||||
| Equity Method Investments | ||||||||||||||||||||||||||||||||||||||
| Operating Assets | ||||||||||||||||||||||||||||||||||||||
| Operating equity investments (b) | Various | Various | $ | $ | $ | ( | $ | $ | ( | |||||||||||||||||||||||||||||
| Master Planned Communities | ||||||||||||||||||||||||||||||||||||||
| The Summit (c) | ( | ( | ||||||||||||||||||||||||||||||||||||
| Floreo (d) | ( | ( | ||||||||||||||||||||||||||||||||||||
| Strategic Developments | ||||||||||||||||||||||||||||||||||||||
| West End Alexandria (c) | ||||||||||||||||||||||||||||||||||||||
| Other | ( | |||||||||||||||||||||||||||||||||||||
| ( | ( | |||||||||||||||||||||||||||||||||||||
| Other investments (e) | ||||||||||||||||||||||||||||||||||||||
Investments in unconsolidated ventures | $ | $ | $ | $ | ( | $ | ||||||||||||||||||||||||||||||||
(a)Ownership interests presented reflect the Company’s stated ownership interest or if applicable, the Company’s final profit-sharing interest after receipt of any preferred returns based on the venture’s distribution priorities.
(b)Two of the operating equity investments were in a combined deficit position of $23.8 million at December 31, 2025, and $18.0 million at December 31, 2024, and presented in Accounts payable and other liabilities on the Consolidated Balance Sheets.
(c)For these equity method investments, various provisions in the venture operating agreements regarding distributions of cash flow based on capital account balances, allocations of profits and losses, and preferred returns may result in the Company’s economic interest differing from its stated interest or final profit-sharing interest. For these investments, the Company recognizes income or loss based on the venture’s distribution priorities, which could fluctuate over time and may be different from its stated ownership or final profit-sharing interest.
(d)Classified as a VIE; however, the Company is not the primary beneficiary and accounts for its investment in accordance with the equity method. Refer to discussion below for additional information.
The Summit In 2015, the Company formed DLV/HHPI Summerlin, LLC (The Summit) with Discovery Land Company (Discovery) to develop a custom home community in Summerlin. The Company contributed land for Phase I in 2015 and initially received distributions and recognized its share of income or loss based on the joint venture’s distribution priorities. The Company has now received all of its preferred return distributions, and recognizes its share of income or loss for Phase I based on its final profit-sharing interest.
In July 2022, the Company contributed an additional 54 acres to The Summit (Phase II land). The Phase II land is adjacent to the existing Summit development and includes approximately 28 custom home sites. The first lot sales closed in the first quarter of 2023. The Company will receive distributions and recognize its share of income or loss for Phase II based on the joint venture’s distribution priorities in the amended Summit LLC agreement, which could fluctuate over time. Upon receipt of preferred returns to HHH, distributions and recognition of income or loss will be allocated to the company based on its final profit-sharing interest.
Floreo In the fourth quarter of 2021, simultaneous with the Teravalis land acquisition, the Company closed on the acquisition of a 50 % interest in Trillium Development Holding Company, LLC (Floreo) and entered into an LLC Agreement with JDM Partners and El Dorado Holdings to develop the first village within the new Teravalis MPC on 3,029 acres of land in the greater Phoenix, Arizona area. The first land sales closed in the first quarter of 2024.
HHH 2025 FORM 10-K | 80
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In October 2022, Floreo closed on a $165.0 million bond financing. In February 2025, the borrowing capacity on the bond increased to $365.0 million. Outstanding borrowings as of December 31, 2025, were $242.0 million. The Company provided a guaranty on this financing in the form of a collateral maintenance obligation and received an initial guaranty fee of $5.0 million and will receive an additional guaranty fee of $6.0 million associated with the increased borrowing capacity. The financing and related guaranty provided by the Company triggered a reconsideration event, and as of December 31, 2022, Floreo was classified as a VIE. Due to rights held by other members, the Company does not have a controlling financial interest in Floreo and is not the primary beneficiary. As of December 31, 2025, the Company’s maximum exposure to loss as a result of this investment is limited to the $59.0 million aggregate carrying value as the Company has not made any other firm commitments to fund amounts on behalf of this VIE, and cash collateral that the Company may be obligated to post related to its collateral maintenance obligation. See Note 12 - Commitments and Contingencies for additional information related to the Company’s collateral maintenance obligation.
West End Alexandria In the fourth quarter of 2021, the Company entered into an Asset Contribution Agreement with Landmark Land Holdings, LLC (West End Alexandria) to redevelop a site previously known as Landmark Mall. Other equity owners include Foulger-Pratt Development, LLC (Foulger-Pratt) and Seritage SRC Finance (Seritage). In exchange for equity interests in West End Alexandria, the Company conveyed its Landmark Mall property, Seritage conveyed additional land, and Foulger-Pratt contributed cash consideration.
Development plans for the 41 -acre property include approximately four million square feet of residential, retail, commercial, and entertainment offerings integrated into a cohesive neighborhood with a central plaza and a network of parks and public transportation. Foulger-Pratt manages construction of the development. Demolition was completed in 2023, with completion of infrastructure work expected in 2026.
The Company does not have the ability to control the activities that most impact the economic performance of the venture as Foulger-Pratt is the managing member and manages all development activities. As such, the Company accounts for its ownership interest in accordance with the equity method.
Summarized Financial Information The following tables provide combined summarized financial statement information for the Company’s unconsolidated ventures. Financial statement information is included for each investment for all periods in which the Company’s ownership interest was accounted for as an equity method investment.
| thousands | December 31, 2025 | December 31, 2024 | ||||||||||||
| Consolidated Balance Sheets | ||||||||||||||
| Total Assets | $ | $ | ||||||||||||
| Total Liabilities | ||||||||||||||
| Total Equity | ||||||||||||||
| Year Ended December 31, | ||||||||||||||||||||
| thousands | 2025 | 2024 | 2023 | |||||||||||||||||
| Consolidated Statements of Operations | ||||||||||||||||||||
| Revenues | $ | $ | $ | |||||||||||||||||
| Operating Income | ||||||||||||||||||||
| Net income (loss) | ||||||||||||||||||||
HHH 2025 FORM 10-K | 81
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5. Acquisitions and Dispositions | ||
Acquisitions
Strategic Developments In May 2025, the Company acquired the 7 Waterway office property and the adjacent parking garage for $16.3 million in an asset acquisition. The approximately 186,369 square-foot office property is located in The Woodlands.
Operating Assets In June 2024, the Company acquired the 6 Waterway (formerly Waterway Plaza II) office property and the adjacent parking garage for $19.2 million in an asset acquisition. The approximately 141,763 -square-foot office property is located in The Woodlands.
Dispositions Gains and losses on asset dispositions are recorded to Gain (loss) on sale or disposal of real estate and other assets, net in the Consolidated Statements of Operations, unless otherwise noted.
Strategic Developments The Grogan’s Mill Library and Community Center was developed in connection with a land swap agreement entered into with Montgomery County, Texas. In July 2025, upon completion of construction, the Company transferred the Grogan's Mill Library and Community Center to Montgomery County in exchange for a land parcel on the Waterway in The Woodlands (Town Green), resulting in a gain of $10.1 million. Town Green was measured at fair value and is held in the strategic segment for future development. See Note 10 - Fair Value for additional information.
Operating Assets In September 2025, the Company completed the sale of two land parcels, which included a 6,890 square foot retail space, in Ward Village for total proceeds of $6.0 million, resulting in a gain of $4.4 million.
In January 2025, the Company completed the sale of two land parcels, which included a 13,870 square foot retail space, in Ward Village for total consideration of $12.2 million, resulting in a gain of $10.0 million.
During 2024, the Company completed the sale of four non-core ground leases in The Woodlands, for total proceeds of $9.6 million, resulting in a gain of $6.7 million.
In December 2024, the Company completed the sale of Lakeland Village Center at Bridgeland, a 67,947 -square-foot retail property in Bridgeland, for $28.0 million, resulting in a gain of $11.4 million.
In February 2024, the Company completed the sale of Creekside Park Medical Plaza, a 32,689 -square-foot medical office building in The Woodlands, for $14.0 million, resulting in a gain of $4.8 million.
In December 2023, the Company completed the sale of Memorial Hermann Medical Office, a 20,000 -square-foot medical office building in The Woodlands, for $9.6 million, resulting in a gain of $3.2 million.
In July 2023, the Company completed the sale of two self-storage facilities with a total of 1,370 storage units in The Woodlands, for $30.5 million, resulting in a gain of $16.1 million.
In March 2023, the Company completed the sale of two land parcels in Honolulu, including an 11,929 -square-foot building at the Ward Village Retail property, for total consideration of $6.3 million, resulting in a gain of $4.7 million.
6. Impairment | ||
The Company reviews its long-lived assets for potential impairment indicators when events or changes in circumstances indicate that the carrying amount may not be recoverable. Impairment or disposal of long‑lived assets in accordance with ASC 360 Property, Plant, and Equipment, requires that if impairment indicators exist and expected undiscounted cash flows generated by the asset over an anticipated holding period are less than its carrying amount, an impairment provision should be recorded to write down the carrying amount of the asset to its fair value. The impairment analysis does not consider the timing of future cash flows and whether the asset is expected to earn an above- or below-market rate of return. No impairment charges were recorded in continuing operations during the three years ended December 31, 2025, 2024, and 2023.
HHH 2025 FORM 10-K | 82
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The Company periodically evaluates strategic alternatives with respect to each property and may revise the strategy from time to time, including the intent to hold the asset on a long-term basis or the timing of potential asset dispositions. For example, the Company may decide to sell property that is held for use, and the sale price may be less than the carrying amount. As a result, changes in strategy could result in impairment charges in future periods.
The Company evaluates each investment in an unconsolidated venture discussed in Note 4 - Investments in Unconsolidated Ventures periodically for recoverability and valuation declines that are other-than-temporary. If the decrease in value of an investment is deemed to be other-than-temporary, the investment is reduced to its estimated fair value. No impairment charges were recorded in continuing operations during the three years ended December 31, 2025, 2024, and 2023.
In 2023, the Company recorded a $709.5 million impairment charge related to the Seaport segment, which is now reported in discontinued operations following the Spinoff.
7. Other Assets and Liabilities | ||
Other Assets, Net The following table summarizes the significant components of Other assets, net as of December 31:
| thousands | 2025 | 2024 | |||||||||
| Special Improvement District receivable, net | $ | $ | |||||||||
| Security, escrow, and other deposits | |||||||||||
| In-place leases, net | |||||||||||
| Prepaid expenses | |||||||||||
| Tenant incentives and other receivables, net | |||||||||||
| Other | |||||||||||
| Intangibles, net | |||||||||||
| TIF receivable, net | |||||||||||
| Condominium inventory | |||||||||||
| Interest rate derivative assets | |||||||||||
| Notes receivable, net | |||||||||||
| Net investment in lease receivable | |||||||||||
| Other assets, net | $ | $ | |||||||||
Accounts Payable and Other Liabilities The following table summarizes the significant components of Accounts payable and other liabilities as of December 31:
| thousands | 2025 | 2024 | |||||||||
| Condominium deposit liabilities | $ | $ | |||||||||
| Construction payables | |||||||||||
| Deferred income | |||||||||||
| Accounts payable and accrued expenses | |||||||||||
| MUD sale liability | |||||||||||
| Tenant and other deposits | |||||||||||
| Accrued interest | |||||||||||
| Accrued real estate taxes | |||||||||||
| Accrued payroll and other employee liabilities | |||||||||||
| Other | |||||||||||
| Interest rate derivative liabilities | |||||||||||
| Accounts payable and other liabilities | $ | $ | |||||||||
HHH 2025 FORM 10-K | 83
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8. Intangibles | ||
The following table summarizes the Company’s intangible assets and liabilities:
| As of December 31, 2025 | As of December 31, 2024 | ||||||||||||||||||||||||||||||||||
| Gross Asset (Liability) | Accumulated (Amortization)/ Accretion | Net Carrying Amount | Gross Asset (Liability) | Accumulated (Amortization)/ Accretion | Net Carrying Amount | ||||||||||||||||||||||||||||||
| thousands | |||||||||||||||||||||||||||||||||||
| Intangible Assets: | |||||||||||||||||||||||||||||||||||
| Other intangibles | $ | $ | ( | $ | $ | $ | ( | $ | |||||||||||||||||||||||||||
| Goodwill | — | — | |||||||||||||||||||||||||||||||||
| Indefinite lived intangibles | — | — | |||||||||||||||||||||||||||||||||
| Tenant leases: | |||||||||||||||||||||||||||||||||||
| In-place value | ( | ( | |||||||||||||||||||||||||||||||||
| Above-market | ( | ( | |||||||||||||||||||||||||||||||||
| Below-market | ( | ||||||||||||||||||||||||||||||||||
| Total indefinite lived intangibles | $ | $ | |||||||||||||||||||||||||||||||||
| Total amortizing intangibles | $ | $ | |||||||||||||||||||||||||||||||||
Other intangibles includes trademark and trade name intangibles related to MPCs as well as internally developed software. These intangibles are included in Other assets, net and are amortized on a straight-line basis over the estimated useful life of the asset. The tenant in-place, above-market, and below-market lease intangible assets resulted from real estate acquisitions. The in‑place value and above-market value of tenant leases are included in Other assets, net and are amortized over periods that approximate the related lease terms. The below‑market tenant leases are included in Accounts payable and other liabilities and are amortized over the remaining non-cancelable terms of the respective leases. See Note 7 - Other Assets and Liabilities for additional information regarding Other assets, net and Accounts payable and other liabilities.
Net amortization and accretion expense for these intangible assets and liabilities was $5.2 million in 2025, $4.6 million in 2024, and $4.3 million in 2023.
Future net amortization and accretion expense is estimated for each of the five succeeding years as shown below:
| thousands | 2026 | 2027 | 2028 | 2029 | 2030 | ||||||||||||||||||||||||
| Net amortization and accretion expense | $ | $ | $ | $ | $ | ||||||||||||||||||||||||
HHH 2025 FORM 10-K | 84
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9. Mortgages, Notes, and Loans Payable, Net | ||
Mortgages, Notes, and Loans Payable All mortgages, notes, and loans payable of HHH are held by HHC and its subsidiaries.
| December 31, | ||||||||
| thousands | 2025 | 2024 | ||||||
| Fixed-rate debt | ||||||||
| Senior unsecured notes | $ | $ | ||||||
| Secured mortgages payable | ||||||||
| Special Improvement District bonds | ||||||||
| Variable-rate debt (a) | ||||||||
| Secured Bridgeland Notes | ||||||||
| Secured mortgages payable | ||||||||
| Unamortized deferred financing costs (b) | ( | ( | ||||||
| Mortgages, notes, and loans payable, net | $ | $ | ||||||
(a)The Company has entered into derivative instruments to manage the variable interest rate exposure. See Note 11 - Derivative Instruments and Hedging Activities for additional information.
(b)Deferred financing costs are amortized to interest expense over the initial contractual term of the respective financing agreements using the effective interest method (or other methods which approximate the effective interest method).
As of December 31, 2025, land, buildings and equipment, developments, and other collateral with a net book value of $4.8 billion have been pledged as collateral for the Company’s debt obligations. Senior unsecured notes totaling $2.1 billion and $52.1 million of secured mortgages payable are recourse to the Company.
Senior Unsecured Notes During 2020 and 2021, the Company issued $2.1 The following table summarizes the Company’s senior unsecured notes by issuance date:
| $ in thousands | Principal | Maturity Date | Interest Rate | |||||||||||||||||
| August 2020 | $ | August 2028 | ||||||||||||||||||
| February 2021 | February 2029 | |||||||||||||||||||
| February 2021 | February 2031 | |||||||||||||||||||
| Senior unsecured notes | $ | |||||||||||||||||||
On February 17, 2026, HHC, the Company’s wholly owned subsidiary, issued $500.0 million of 5.875 % senior unsecured notes due 2032 and $500.0 million of 6.125 % senior unsecured notes due 2034 (collectively the New Notes). The New Notes will pay interest semi-annually, in each case payable on March 1 and September 1 of each year, beginning on September 1, 2026. HHC used the net proceeds to redeem its outstanding $750.0 million 5.375 % senior unsecured notes due 2028, including the payment of premiums, accrued and unpaid interest and expenses related to such redemption, and will use the remaining proceeds for general corporate purposes.
The New Notes were offered in a private placement, solely to persons reasonably believed to be qualified institutional buyers. The New Notes have not been, and will not be, registered under the Securities Act or the securities laws of any other jurisdiction and may not be offered or sold in the United States absent registration or an applicable exemption from the registration requirements.
Secured Mortgages Payable The Company’s outstanding mortgages are collateralized by certain of the Company’s real estate assets. Certain of the Company’s loans contain provisions that 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. Construction loans related to the Company’s development properties are generally variable-rate, interest-only, and have maturities of five years or less. Debt obligations related to the Company’s operating properties generally require monthly installments of principal and interest.
HHH 2025 FORM 10-K | 85
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The following table summarizes the Company’s secured mortgages payable:
| December 31, 2025 | December 31, 2024 | ||||||||||||||||||||||||||||
| $ in thousands | Principal | Range of Interest Rates | Weighted-average Interest Rate | Weighted-average Years to Maturity | Principal | Range of Interest Rates | Weighted-average Interest Rate | Weighted-average Years to Maturity | |||||||||||||||||||||
| Fixed rate (a) | $ | % | $ | % | |||||||||||||||||||||||||
| Variable rate (b) | % | % | |||||||||||||||||||||||||||
| Secured mortgages payable | $ | % | $ | % | |||||||||||||||||||||||||
(a)Interest rates presented are based upon the coupon rates of the Company’s fixed-rate debt obligations.
(b)Interest rates presented are based on the applicable reference interest rates as of December 31, 2025 and 2024, excluding the effects of interest rate derivatives.
The Company has entered into derivative instruments to manage its variable interest rate exposure. The weighted-average interest rate of the Company’s variable-rate mortgages payable, inclusive of interest rate derivatives, was 7.15 % as of December 31, 2025, and 7.02 % as of December 31, 2024. See Note 11 - Derivative Instruments and Hedging Activities for additional information.
The Company’s secured mortgages mature over various terms through September 2052. On certain of its debt obligations, the Company has the option to exercise extension options, subject to certain terms, which 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 identified covenants, the Company may be required to pay down a portion of the loan to exercise the extension option.
During 2025, the Company’s mortgage activity included draws on existing mortgages of $573.5 million, refinancings of $184.2 million, and repayments of $365.7 million. As of December 31, 2025, the Company’s secured mortgage loans had $686.6 million of undrawn lender commitment available to be drawn for property development, subject to certain restrictions.
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. These bonds bear interest at fixed rates ranging from 4.13 % to 6.50 % with maturities ranging from 2030 to 2055 as of December 31, 2025, and fixed rates ranging from 4.13 % to 6.05 % with maturities ranging from 2025 to 2054 as of December 31, 2024. For the year ended December 31, 2025, $16.4 million in SID bonds were issued and obligations of $17.7 million were assumed by buyers.
Secured Bridgeland Notes The Company’s $600.0 million secured notes mature in 2029 and are secured by MUD receivables and land in Bridgeland. The loan requires a 10 % fully refundable deposit on the outstanding balance and has an interest rate of 6.06 %. In the second quarter of 2025, $198.0 million was repaid using the proceeds from the sale of MUD receivables, bringing outstanding borrowings to $85.0 million as of December 31, 2025.
Debt Compliance On certain of its debt obligations, the Company has the option to exercise extension options, subject to certain terms, which 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 identified covenants, the Company may be required to pay down a portion of the loan to exercise the extension option.
As of December 31, 2025, the Company was not in compliance with certain property-level debt covenants due to not meeting certain debt service coverage ratios caused by lease expirations, vacancies, rent abatements, and other factors. As a result, the excess net cash flow after debt service from the underlying properties became restricted. While the restricted cash could not be used for general corporate purposes, it could be used to fund operations of the underlying assets, and therefore there was no material impact on the Company’s liquidity or its ability to operate these assets.
HHH 2025 FORM 10-K | 86
FINANCIAL STATEMENTS FOOTNOTES | Table of Contents Index to Financial Statements | ||||
Scheduled Maturities The following table summarizes the contractual obligations relating to the Company’s mortgages, notes, and loans payable as of December 31, 2025:
| thousands | Mortgages, notes, and loans payable principal payments | |||||||
| 2026 | $ | |||||||
| 2027 | ||||||||
| 2028 (a) | ||||||||
| 2029 | ||||||||
| 2030 | ||||||||
| Thereafter (a) | ||||||||
| Total principal payments | ||||||||
| Unamortized deferred financing costs | ( | |||||||
| Mortgages, notes, and loans payable | $ | |||||||
10. Fair Value | ||
ASC 820, Fair Value Measurement (ASC 820), emphasizes that fair value is a market-based measurement that should be determined using assumptions market participants would use in pricing an asset or liability. The standard establishes a hierarchical disclosure framework that prioritizes and ranks the level of market price observability used in measuring assets or liabilities at fair value. Market price observability is impacted by a number of factors, including the type of investment and the characteristics specific to the asset or liability. Assets or liabilities with readily available active quoted prices, or for which fair value can be measured from actively quoted prices, generally will have a higher degree of market price observability and a lesser degree of judgment used in measuring fair value.
The following table presents the fair value measurement hierarchy levels required under ASC 820 for the Company’s assets and liabilities that are measured at fair value on a recurring basis.
| December 31, 2025 | December 31, 2024 | ||||||||||||||||||||||||||||||||||||||||||||||
| Fair Value Measurements Using | Fair Value Measurements Using | ||||||||||||||||||||||||||||||||||||||||||||||
| thousands | Total | Quoted Prices in Active Markets for Identical Assets (Level 1) | Significant Other Observable Inputs (Level 2) | Significant Unobservable Inputs (Level 3) | Total | Quoted Prices in Active Markets for Identical Assets (Level 1) | Significant Other Observable Inputs (Level 2) | Significant Unobservable Inputs (Level 3) | |||||||||||||||||||||||||||||||||||||||
| Interest rate derivative assets | $ | $ | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||||||||||||
| Interest rate derivative liabilities | |||||||||||||||||||||||||||||||||||||||||||||||
The fair values of interest rate derivatives are determined using the market standard methodology of netting the discounted future fixed cash payments and the discounted expected variable cash receipts. The variable cash receipts are based on an expectation of future interest rates derived from observable market interest rate curves.
HHH 2025 FORM 10-K | 87
FINANCIAL STATEMENTS FOOTNOTES | Table of Contents Index to Financial Statements | ||||
The estimated fair values of the Company’s financial instruments that are not measured at fair value on a recurring basis are as follows:
| December 31, 2025 | December 31, 2024 | ||||||||||||||||||||||||||||
| thousands | Fair Value Hierarchy | Carrying Amount | Estimated Fair Value | Carrying Amount | Estimated Fair Value | ||||||||||||||||||||||||
| Assets: | |||||||||||||||||||||||||||||
| Cash, cash equivalents, and restricted cash | Level 1 | $ | $ | $ | $ | ||||||||||||||||||||||||
| Accounts receivable, net (a) | Level 3 | ||||||||||||||||||||||||||||
| Notes receivable, net (b) | Level 3 | ||||||||||||||||||||||||||||
| Liabilities: | |||||||||||||||||||||||||||||
| Fixed-rate debt (c) | Level 2 | ||||||||||||||||||||||||||||
| Variable-rate debt (c) | Level 2 | ||||||||||||||||||||||||||||
(a)Accounts receivable, net is shown net of an allowance of $7.2 million at December 31, 2025, and $8.2 million at December 31, 2024. Refer to Note 1 - Presentation of Financial Statements and Significant Accounting Policies for additional information on the allowance.
(b)Notes receivable, net is shown net of an immaterial allowance at December 31, 2025, and December 31, 2024.
(c)Excludes related unamortized financing costs.
The carrying amounts of Cash and restricted cash, Accounts receivable, net, and Notes receivable, net approximate fair value because of the short‑term maturity of these instruments.
The fair value of the Company’s senior unsecured notes, included in fixed-rate debt in the table above, is based upon the trade price closest to the end of the period presented. The fair value of other fixed-rate debt in the table above was estimated based on a discounted future cash payment model, which includes risk premiums and risk-free rates derived from the Secured Overnight Financing Rate (SOFR) or U.S. Treasury obligation interest rates as of December 31, 2025. Refer to Note 9 - Mortgages, Notes, and Loans Payable, Net for additional information. The discount rates reflect the Company’s judgment as to what the approximate current lending rates for loans or groups of loans with similar maturities and credit quality would be if credit markets were operating efficiently and assuming that the debt is outstanding through maturity.
The carrying amounts for the Company’s variable-rate debt approximate fair value given that the interest rates are variable and adjust with current market rates for instruments with similar risks and maturities.
The below table includes a non-financial asset received as consideration in a land swap transaction and measured at fair value on a non-recurring basis:
| Fair Value Measurements Using | ||||||||||||||||||||||||||
| thousands | Segment | Total Fair Value Measurement | Quoted Prices in Active Markets for Identical Assets (Level 1) | Significant Other Observable Inputs (Level 2) | Significant Unobservable Inputs (Level 3) | |||||||||||||||||||||
| Town Green (a) | Strategic Developments | $ | $ | $ | $ | |||||||||||||||||||||
(a)The fair value was determined based on an independent property appraisal using market‑participant assumptions as of June 2025. Refer to Note 5 - Acquisitions and Dispositions for additional information.
HHH 2025 FORM 10-K | 88
FINANCIAL STATEMENTS FOOTNOTES | Table of Contents Index to Financial Statements | ||||
11. Derivative Instruments and Hedging Activities | ||
The Company is exposed to interest rate risk related to its variable interest rate debt, and it manages this risk by utilizing interest rate derivatives. The Company uses interest rate swaps, collars, and caps to add stability to interest costs by reducing the Company’s exposure to interest rate movements. Interest rate swaps designated as cash flow hedges involve the receipt of variable amounts from a counterparty in exchange for the Company’s fixed‑rate payments over the life of the agreements without exchange of the underlying notional amount. Interest rate collars designated as cash flow hedges involve the receipt of variable amounts from a counterparty if interest rates rise above an established ceiling rate and payment of variable amounts to a counterparty if interest rates fall below an established floor rate, in exchange for an upfront premium. No payments or receipts are exchanged on interest rate collar contracts unless interest rates rise above or fall below the established ceiling and floor rates. Interest rate caps designated as cash flow hedges involve the receipt of variable amounts from a counterparty if interest rates rise above the strike rate on the contract in exchange for an upfront premium. Certain of the Company’s interest rate caps are not currently designated as hedges, and therefore, any gains or losses are recognized in current-period earnings within Interest expense in the Consolidated Statements of Operations. These derivatives are recorded on a gross basis at fair value on the Consolidated Balance Sheet.
Assessments of hedge effectiveness are performed quarterly using regression analysis. The change in the fair value of derivatives designated and qualifying as cash flow hedges is recorded in Accumulated other comprehensive income (loss) (AOCI) and is subsequently reclassified into earnings in the period that the hedged forecasted transaction affects earnings within the same income statement line item being hedged. Derivatives accounted for as cash flow hedges are classified in the same category in the Consolidated Statements of Cash Flows as the items being hedged. Gains and losses from derivative financial instruments are reported in Cash provided by (used in) operating activities within the Consolidated Statements of Cash Flows.
The Company is exposed to credit risk in the event of non-performance by its derivative counterparties. To mitigate its credit risk, the Company reviews the creditworthiness of counterparties and enters into agreements with those that are considered credit-worthy, such as large financial institutions with favorable credit ratings. There were no derivative counterparty defaults as of December 31, 2025 or 2024.
If the derivative contracts are terminated prior to their maturity, the amounts previously recorded in AOCI are recognized in earnings over the period that the hedged transaction impacts earnings. During the year ended December 31, 2025, the Company recorded an immaterial reduction in Interest expense related to the amortization of terminated swaps.
Amounts reported in AOCI related to derivatives will be reclassified to Interest expense as interest payments are made on the Company’s variable‑rate debt. Over the next 12 months, HHH estimates that $1.2 million of net gain will be reclassified to Interest expense including amounts related to the amortization of terminated swaps.
HHH 2025 FORM 10-K | 89
FINANCIAL STATEMENTS FOOTNOTES | Table of Contents Index to Financial Statements | ||||
The following table summarizes certain terms of the Company’s derivative contracts. The Company reports derivative assets in Other assets, net and derivative liabilities in Accounts payable and other liabilities.
| Fair Value Asset (Liability) | |||||||||||||||||||||||||||||
| Notional | Fixed Interest | Effective | Maturity | December 31, | December 31, | ||||||||||||||||||||||||
| thousands | Amount | Rate (a) | Date | Date | 2025 | 2024 | |||||||||||||||||||||||
| Derivative instruments not designated as hedging instruments: (b) | |||||||||||||||||||||||||||||
| Interest rate collar | 6/1/2023 | 6/1/2025 | $ | $ | |||||||||||||||||||||||||
| Interest rate collar | 6/1/2023 | 6/1/2025 | |||||||||||||||||||||||||||
| Interest rate cap | 10/12/2021 | 9/29/2025 | |||||||||||||||||||||||||||
| Interest rate cap | 10/12/2021 | 9/29/2025 | |||||||||||||||||||||||||||
| Interest rate cap | 6/17/2025 | 7/1/2026 | |||||||||||||||||||||||||||
| Interest rate cap | 6/20/2024 | 7/15/2026 | |||||||||||||||||||||||||||
| Interest rate cap | 6/20/2024 | 7/15/2026 | |||||||||||||||||||||||||||
| Interest rate cap | 12/2/2024 | 12/15/2026 | |||||||||||||||||||||||||||
| Derivative instruments designated as hedging instruments: | |||||||||||||||||||||||||||||
| Interest rate cap | 11/7/2024 | 11/7/2025 | |||||||||||||||||||||||||||
| Interest rate cap | 12/22/2022 | 12/21/2025 | |||||||||||||||||||||||||||
| Interest rate swap | 5/1/2025 | 4/15/2026 | ( | ||||||||||||||||||||||||||
| Interest rate swap | 7/10/2025 | 8/1/2026 | ( | ||||||||||||||||||||||||||
| Interest rate swap | 1/3/2023 | 1/1/2027 | ( | ||||||||||||||||||||||||||
| Interest rate swap | 3/1/2022 | 2/18/2027 | |||||||||||||||||||||||||||
| Interest rate cap | 11/7/2025 | 1/8/2027 | |||||||||||||||||||||||||||
| Interest rate cap | 12/21/2025 | 12/21/2028 | |||||||||||||||||||||||||||
| Interest rate swap | 11/1/2019 | 1/1/2032 | |||||||||||||||||||||||||||
| Total fair value derivative assets | $ | $ | |||||||||||||||||||||||||||
| Total fair value derivative liabilities | ( | ||||||||||||||||||||||||||||
| Total fair value derivatives asset (liability), net | $ | $ | |||||||||||||||||||||||||||
(a)These rates represent the swap rate and cap strike rate on HHH’s interest rate swaps, caps, and collars.
(b)Interest income related to these contracts was $0.4 million in 2025 and $1.4 million in 2024.
The tables below present the effect of the Company’s derivative financial instruments in the Consolidated Statements of Operations for the years ended December 31:
| Derivatives in Cash Flow Hedging Relationships | Amount of Gain (Loss) Recognized in AOCI on Derivatives | ||||||||||||||||
| thousands | 2025 | 2024 | 2023 | ||||||||||||||
| Interest rate derivatives | $ | ( | $ | $ | |||||||||||||
| Location of Gain (Loss) Reclassified from AOCI into Statements of Operations | Amount of Gain (Loss) Reclassified from AOCI into Statements of Operations | ||||||||||||||||
| thousands | 2025 | 2024 | 2023 | ||||||||||||||
| Interest expense | $ | $ | $ | ||||||||||||||
HHH 2025 FORM 10-K | 90
FINANCIAL STATEMENTS FOOTNOTES | Table of Contents Index to Financial Statements | ||||
12. Commitments and Contingencies | ||
Litigation In the normal course of business, from time to time, the Company is involved in legal proceedings relating to the ownership and operations of its properties. In management’s opinion, the liabilities, if any, that may ultimately result from normal course of business legal actions are not expected to have a material effect on the Company’s consolidated financial position, results of operations, or liquidity.
Columbia The Company is currently developing certain property it owns in Merriweather District (formerly Downtown Columbia), which is subject to certain recorded documents, covenants, and restrictions (the Covenants). Under the Covenants, HHH is the master developer of Merriweather District. In 2017, IMH Columbia, LLC (IMH) purchased the site of a former Sheraton Hotel (the Hotel Lot) subject to the Covenants. IMH has made demands that HHH accede to IMH’s development plans for the Hotel Lot and HHH has exercised its right under the Covenants to object to IMH’s plans for the Hotel Lot. IMH filed a complaint seeking (1) a declaration that HHH gave its consent, under the Covenants, to IMH’s proposed changes in use and onsite parking, or that the limitations under the Covenants are obsolete and unenforceable, (2) damages reimbursing the costs and expenses IMH claims to have incurred in reliance on HHH's alleged consent to IMH’s proposed development, (3) damages related to the expectation of lost profits, which IMH alleged were caused by HHH breaching the Covenants by prohibiting IMH from proceeding with its proposed development, and (4) declarations finding that HHH breached the shared parking related Covenants relating to HHH’s own property. The jury trial concluded in April 2024, and the jury found partially in favor of IMH and awarded damages of $17.0 million, which will accrue post-judgment interest of 10 % annually from the date of the final judgment. The Company appealed the judgment, and the Court of Appeals heard oral arguments in September 2025. In December 2025, the Appellate Court of Maryland affirmed the judgment in full and the Company does not intend to file a motion for reconsideration or appeal the decision. As such, the Company accrued a liability of $19.8 million at December 31, 2025, inclusive of $17.0 million for the initial judgment and $2.8 million of related interest, and recognized the amount in Other income (loss), net in the accompanying Consolidated Statements of Operations for year ended December 31, 2025.
Timarron Park On June 14, 2018, the Company was served with a petition involving approximately 500 individuals or entities who claim that their properties, located in the Timarron Park neighborhood of The Woodlands, were damaged by flood waters that resulted from the unprecedented rainfall that occurred throughout Harris County and surrounding areas during Hurricane Harvey in August 2017. The complaint was filed in State Court in Harris County of the State of Texas. In general, the plaintiffs allege negligence in the development of Timarron Park and violations of Texas’ Deceptive Trade Practices Act and name as defendants The Howard Hughes Corporation, The Woodlands Land Development Company, and two unaffiliated parties involved in the planning and engineering of Timarron Park. The plaintiffs are seeking restitution for damages to their properties and diminution of their property values. On August 9, 2022, the Court granted the Company’s summary judgment motions and dismissed the plaintiffs’ claims. The plaintiffs filed a motion for a new trial, which was denied. Plaintiffs appealed. In November 2024, a three-judge panel of the Court of Appeals affirmed the trial court’s judgment in the Company’s favor. Plaintiffs sought rehearing. In December 2025, the Court of Appeals again affirmed the trial court’s judgment in the Company’s favor in a subsequent opinion issued following rehearing. The plaintiffs have obtained an extension of time to seek further rehearing or rehearing en banc and may also seek discretionary review by the Texas Supreme Court. Any such review is discretionary. The Company will continue to defend the matter as it believes that these claims are without merit and that it has substantial legal and factual defenses to the claims and allegations contained in the complaint. Based upon the present status of this matter, the Company does not believe it is probable that a loss will be incurred. Accordingly, the Company has not recorded a charge as a result of this action.
Kō'ula In January 2025, the Association of Unit Owners of Kō'ula filed two complaints against the Company and the general contractor, with one complaint alleging multiple code violations and construction defects (Defect Action) and the other claiming that the Company understated operating costs and disproportionately allocated common expenses to the detriment of unit owners (Budget Action). The Company’s insurance carrier has agreed to defend the Defect Action, while coverage for the Budget Action was denied. The Company filed a motion to consolidate both complaints, which was granted in June 2025, and the court’s order regarding the same was entered in September 2025. The Company filed motions to dismiss both actions in October 2025. The Court heard both motions in December 2025, and the Company is awaiting a ruling. The trial is presently scheduled for January 2027. The Company has not accrued any amount related to this claim as the damage is undetermined.
Letters of Credit and Surety Bonds As of December 31, 2025, the Company had outstanding letters of credit totaling $5.2 million and surety bonds totaling $383.1 million. As of December 31, 2024, the Company had outstanding letters of credit totaling $3.9 million and surety bonds totaling $353.8 million. These letters of credit and surety bonds were issued primarily in connection with insurance requirements, special real estate assessments, and construction obligations.
HHH 2025 FORM 10-K | 91
FINANCIAL STATEMENTS FOOTNOTES | Table of Contents Index to Financial Statements | ||||
Operating Leases The Company leases land or buildings at certain properties from third parties, which are recorded in Operating lease right-of-use assets and Operating lease obligations on the Consolidated Balance Sheets. See Note 18 - Leases for further discussion.
Guaranty Agreements The Company evaluates the likelihood of future performance under the below guarantees and, as of December 31, 2025 and 2024, there were no events requiring financial performance under the following guarantees.
Seaport Entertainment Guaranty Following the execution of the Spinoff, HHH provided a full backstop guaranty for SEG’s outstanding $61.3 million mortgage related to its 250 Water Street property (SEG Term Loan). As consideration for providing such guaranty, SEG paid the Company an annualized guaranty fee equal to 2.0 % of the total outstanding principal, paid monthly. The Company’s maximum exposure under this guaranty was equal to the outstanding principal and interest balance at the end of each period. On February 6, 2026, SEG announced that it had closed the sale of its 250 Water Street property. As part of the transaction, SEG repaid the SEG Term Loan in full and the Company was released from the related backstop guaranty.
Floreo Guaranty In October 2022, Floreo, the Company’s 50 %-owned joint venture in Teravalis, closed on a $165 million bond financing with a maturity date of October 1, 2027. In February 2025, the borrowing capacity on the bond was increased to $365.0 million and the maturity was extended to December 1, 2029. Outstanding borrowings as of December 31, 2025, were $242.0 million. A wholly owned subsidiary of the Company (HHC Subsidiary) provided a guaranty for the bond in the form of a collateral maintenance commitment under which it will post refundable cash collateral if the LTV ratio exceeds 50 %. A separate wholly owned subsidiary of the Company also provided a backstop guaranty requiring the payment of cash collateral in the event HHC Subsidiary fails to make necessary payments when due. In February 2025, in connection with the increase of the borrowing capacity, the potential cash collateral commitment associated with this guaranty increased from $50.0 million to $100.0 million. The cash collateral becomes nonrefundable if Floreo defaults on the bond obligation.
The Company received a fee of $5.0 million in exchange for providing the initial guaranty and recognized an additional guaranty fee of $6.0 million associated with the increased borrowing capacity. This deferred income was recorded in Accounts payable and other liabilities on the Consolidated Balance Sheets as of December 31, 2025 and 2024, and will be recognized in Other income (loss), net in a manner that corresponds to the bond repayment by Floreo. The Company’s maximum exposure under this guaranty is equal to the cash collateral that the Company may be obligated to post. As of December 31, 2025, the Company has not posted any cash collateral. Given the existence of other collateral including the undeveloped land owned by Floreo, the entity’s extensive and discretionary development plan, and its eligibility for reimbursement of a significant part of the development costs from the Community Facility District in Arizona, the Company does not expect to have to post collateral.
Merriweather District (formerly Downtown Columbia) To the extent that increases in taxes do not cover debt service payments on the Redevelopment District TIF bonds issued by Howard County, Maryland, the Company’s wholly owned subsidiary is obligated to pay special taxes. Management has concluded that, as of December 31, 2025, any obligations to pay special taxes are not probable.
Ward Village As part of the Company’s development permits with the Hawai‘i Community Development Authority for the condominium towers at Ward Village, the Company entered into a guaranty whereby it is required to reserve 20 % of the residential units for local residents who meet certain maximum income and net worth requirements. This guaranty, which is triggered once the necessary permits are granted and construction commences, was satisfied for Waiea, Anaha, and Ae`o, with the opening of Ke Kilohana, which is a workforce tower fully earmarked to fulfill this obligation for the first four towers. The reserved units for ‘A‘ali‘i tower are included in the ‘A‘ali‘i tower. Units for Kō'ula, Victoria Place, The Park Ward Village, and Kalae were satisfied with the construction of Ulana Ward Village, which is a second workforce tower fully earmarked to fulfill the remaining reserved housing guaranty in the community. Construction on Ulana Ward Village began in early 2023, and was completed in November 2025.
13. Stock-Based Compensation Plans | ||
In September 2025, the Company’s stockholders approved the Howard Hughes Holdings Inc. 2025 Equity Incentive Plan (the 2025 Equity Plan). Pursuant to the 2025 Equity Plan, 2,000,000 shares of the Company’s common stock were reserved for issuance. The 2025 Equity Plan provides for grants of stock options, stock appreciation rights, restricted stock, restricted stock units, and other stock-based awards. Employees, directors, and consultants of the Company are eligible for Awards. The 2025 Equity Incentive Plan is administered by the Compensation Committee of the Board of Directors (Compensation Committee).
HHH 2025 FORM 10-K | 92
FINANCIAL STATEMENTS FOOTNOTES | Table of Contents Index to Financial Statements | ||||
Prior to the adoption of the 2025 Equity Plan, equity awards were issued under The Howard Hughes Corporation 2020 Equity Incentive Plan (the 2020 Equity Plan) and The Howard Hughes Corporation Amended and Restated 2010 Equity Incentive Plan (the 2010 Equity Plan). The adoption of the 2025 Equity Plan did not impact the administration of Awards issued under previous plans but following adoption of the 2025 Equity Plan, equity awards will no longer be granted under previous plans.
As of December 31, 2025, there were a maximum of 1,939,450 HHH shares available for future grants under the 2025 Equity Plan.
The following summarizes stock-based compensation expense, net of amounts capitalized to development projects, for the years ended December 31:
| thousands | 2025 | 2024 | 2023 | ||||||||||||||
| Stock Options (a) | $ | $ | $ | ||||||||||||||
| Restricted Stock (b) | |||||||||||||||||
| Pre-tax stock-based compensation expense | $ | $ | $ | ||||||||||||||
| Income tax benefit | $ | $ | $ | ||||||||||||||
(a)Amounts shown are net of immaterial amounts capitalized to development projects.
(b)Amounts shown are net of $3.2 million capitalized to development projects in 2025, $3.9 million capitalized to development projects in 2024, and $4.6 million capitalized to development projects in 2023.
Stock Options There were no grants of stock options in 2025. The following table summarizes stock option activity:
| Stock Options | Weighted-average Exercise Price | Weighted-average Remaining Contractual Term (years) | Aggregate Intrinsic Value | ||||||||||||||
Stock options outstanding at December 31, 2024 | $ | ||||||||||||||||
| Exercised (a) | ( | ||||||||||||||||
| Expired | ( | ||||||||||||||||
Stock options outstanding at December 31, 2025 | $ | $ | |||||||||||||||
Stock options vested and expected to vest at December 31, 2025 | $ | $ | |||||||||||||||
Stock options exercisable at December 31, 2025 | $ | $ | |||||||||||||||
The fair value of stock option awards is determined using the Black-Scholes option-pricing model with the following assumptions:
–Expected life—Based on the average of the time to vesting and full term of an option
–Risk-free interest rates—Based on the U.S. Treasury rate over the expected life of an option
–Expected volatility—Based on the average of implied and historical volatilities as of each of the grant dates
The fair value on the grant date and the significant assumptions used in the Black‑Scholes option‑pricing model are as follows:
| 2025 | 2024 | 2023 | |||||||||||||||
| Weighted-average grant date fair value | N/A | $ | N/A | ||||||||||||||
| Assumptions | |||||||||||||||||
| Expected life of options (in years) | N/A | N/A | |||||||||||||||
| Risk-free interest rate | N/A | N/A | |||||||||||||||
| Expected volatility | N/A | N/A | |||||||||||||||
| Expected annual dividend per share | N/A | ||||||||||||||||
Generally, options granted vest over requisite service periods, expire ten years after the grant date and generally do not become exercisable until their restrictions on exercise lapse after the five-year anniversary of the grant date.
The balance of unamortized stock option expense as of December 31, 2025, was $0.1 million, which is expected to be recognized over a weighted‑average period of 1.3 years.
HHH 2025 FORM 10-K | 93
FINANCIAL STATEMENTS FOOTNOTES | Table of Contents Index to Financial Statements | ||||
Restricted Stock Restricted stock awards may not be sold or otherwise transferred until restrictions have lapsed as established by the Compensation Committee. In addition to the granting of restricted stock to employees, the Company awards restricted stock to non‑employee directors as part of their annual retainer. The employee awards generally vest over a range of to five years , and non‑employee director awards generally vest in approximately one year .
The following table summarizes restricted stock activity:
| Restricted Stock | Weighted-average Grant Date Fair Value | ||||||||||
| Restricted stock outstanding at December 31, 2024 | $ | ||||||||||
| Granted | |||||||||||
| Vested | ( | ||||||||||
| Forfeited | ( | ||||||||||
| Restricted stock outstanding at December 31, 2025 | $ | ||||||||||
The grant date fair value of restricted stock is based on the closing price of common stock at grant date. For restricted stock awards that vest based on stockholder returns, the grant date fair value is calculated using a Monte-Carlo approach which simulates the Company’s stock price on the corresponding vesting dates and is reflected at the target level of performance. For restricted stock awards that vest based on net asset value per share, the grant date fair value is calculated using a Monte-Carlo approach which simulates the Company’s net asset value on the vesting date and is reflected at the target level of performance.
The weighted-average grant-date fair value per share of restricted stock granted was $66.16 during 2024 and $83.85 during 2023. The fair value of restricted stock that vested was $12.9 million during 2025, $10.3 million during 2024, and $9.6 million during 2023, based on the HHH market price at the vesting date.
The balance of unamortized restricted stock expense as of December 31, 2025, was $20.9 million, which is expected to be recognized over a weighted‑average period of 2.1 years.
14. Income Taxes | ||
Deferred income taxes are accounted for using the asset and liability method. Deferred tax assets and liabilities are recognized for the expected future tax consequences of events that have been included in the financial statements or tax returns. Under this method, deferred tax assets and liabilities are determined based on the differences between the financial reporting and tax basis of assets and liabilities using enacted tax rates currently in effect. Deferred income taxes also reflect the impact of operating loss and tax credit carryforwards.
The following summarizes income tax expense (benefit) for the years ended December 31:
| thousands | 2025 | 2024 | 2023 | ||||||||||||||
| Current | |||||||||||||||||
| Federal | $ | $ | $ | ||||||||||||||
| State | |||||||||||||||||
| Total current | |||||||||||||||||
| Deferred | |||||||||||||||||
| Federal | ( | ||||||||||||||||
| State | ( | ( | ( | ||||||||||||||
| Total deferred | ( | ||||||||||||||||
| Total | $ | $ | $ | ||||||||||||||
HHH 2025 FORM 10-K | 94
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Reconciliation of the Income tax expense (benefit) if computed at the U.S. federal statutory income tax rate to the Company’s reported Income tax expense (benefit) for the years ended December 31 is as follows:
| thousands except percentages | 2025 | 2024 | 2023 | |||||||||||||||||||||||
| Tax computed at the U.S. federal statutory rate | $ | % | $ | % | $ | % | ||||||||||||||||||||
| Increase (decrease) in valuation allowance, net | % | ( | ( | % | % | |||||||||||||||||||||
| State and local income tax expense (benefit), net of federal income tax (a) | % | % | ( | ( | % | |||||||||||||||||||||
| Tax expense on compensation disallowance | % | % | % | |||||||||||||||||||||||
| Other, net | ( | ( | % | % | % | |||||||||||||||||||||
| Income tax expense (benefit) | $ | % | $ | % | $ | % | ||||||||||||||||||||
(a)Tax in Maryland, Hawai‘i, Virginia, Texas, New York, and New York City comprise more than 50% of the tax effect in this category.
As of December 31, 2025, the amounts and expiration dates of operating loss carryforwards for tax purposes are as follows:
| thousands | Amount | Expiration Date | |||||||||
| Net operating loss carryforwards - Federal | $ | n/a | |||||||||
| Net operating loss carryforwards - State | 2025-2044 | ||||||||||
| Net operating loss carryforwards - State | n/a | ||||||||||
| Charitable contribution carryforwards - Federal | 2030 | ||||||||||
| General business tax credit carryforwards | 2044 | ||||||||||
The following summarizes tax effects of temporary differences and carryforwards included in the net deferred tax liabilities as of December 31:
| thousands | 2025 | 2024 | |||||||||
| Deferred tax assets: | |||||||||||
| Accrued expenses | $ | $ | |||||||||
| Investments in unconsolidated ventures | |||||||||||
| Other | |||||||||||
| Accounts receivable | |||||||||||
| Operating loss and tax carryforwards | |||||||||||
| Total deferred tax assets | |||||||||||
| Valuation allowance | ( | ( | |||||||||
| Total net deferred tax assets | $ | $ | |||||||||
| Deferred tax liabilities: | |||||||||||
| Master Planned Communities properties | $ | ( | $ | ( | |||||||
| Operating and development properties and fixed assets | ( | ( | |||||||||
| Deferred income | ( | ( | |||||||||
| Prepaid expenses | ( | ( | |||||||||
| Investments in unconsolidated ventures | ( | ||||||||||
| Total deferred tax liabilities | ( | ( | |||||||||
| Total net deferred tax liabilities | $ | ( | $ | ( | |||||||
The deferred tax liability associated with the Company’s MPCs is largely attributable to the difference between the basis and value determined as of the date of the acquisition by its predecessors adjusted for sales that have occurred since that time. The recognition of these deferred tax liabilities is dependent upon the timing and sales price of future land sales and the method of accounting used for income tax purposes. The deferred tax liability related to deferred income represents the difference between the income tax method of accounting and the financial statement method of accounting for prior sales of land in the Company’s MPCs.
HHH 2025 FORM 10-K | 95
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Generally, the Company is currently open to audit under the statute of limitations by the Internal Revenue Service as well as state taxing authorities for the years ended December 31, 2022 through 2024. In the Company’s opinion, it has made adequate tax provisions for years subject to examination. However, the final determination of tax examinations and any related litigation could be different from what was reported on the returns.
The Company applies the generally accepted accounting principle related to accounting for uncertainty in income taxes, which prescribes a recognition threshold that a tax position is required to meet before recognition in the financial statements and provides guidance on derecognition, measurement, classification, interest and penalties, accounting in interim periods, disclosure, and transition issues.
The Company recognizes and reports interest and penalties related to unrecognized tax benefits, if applicable, within the provision for income tax expense. The Company had no no
15. Accumulated Other Comprehensive Income (Loss) | ||
The following tables summarize changes in AOCI, all of which are presented net of tax:
| thousands | |||||
| Balance at December 31, 2022 | $ | ||||
| Derivative instruments: | |||||
| Other comprehensive income (loss) before reclassifications | |||||
| (Gain) loss reclassified to net income | ( | ||||
| Pension adjustment | |||||
| Net current-period other comprehensive income (loss) | ( | ||||
| Balance at December 31, 2023 | $ | ||||
| Derivative instruments: | |||||
| Other comprehensive income (loss) before reclassifications | |||||
| (Gain) loss reclassified to net income | ( | ||||
| Pension adjustment | |||||
| Net current-period other comprehensive income (loss) | |||||
| Balance at December 31, 2024 | $ | ||||
| Derivative instruments: | |||||
| Other comprehensive income (loss) before reclassifications | ( | ||||
| (Gain) loss reclassified to net income | ( | ||||
| Pension adjustment | |||||
| Net current-period other comprehensive income (loss) | ( | ||||
| Balance at December 31, 2025 | $ | ( | |||
The following table summarizes the amounts reclassified out of AOCI for the years ended December 31:
Accumulated Other Comprehensive Income (Loss) Components thousands | Affected line items in the Statements of Operations | |||||||||||||
| 2025 | 2024 | |||||||||||||
| (Gains) losses on cash flow hedges | $ | ( | $ | ( | Interest expense | |||||||||
| Income taxes on (gains) losses on cash flow hedges | Income tax expense (benefit) | |||||||||||||
| Total reclassifications of (income) loss for the period | $ | ( | $ | ( | ||||||||||
HHH 2025 FORM 10-K | 96
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16. Earnings Per Share | ||
Basic earnings (loss) per share (EPS) is computed by dividing net income (loss) available to common stockholders by the weighted‑average number of common shares outstanding. Diluted EPS is computed after adjusting the numerator and denominator of the basic EPS computation for the effects of all potentially dilutive common shares. The dilutive effect of options and non-vested stock issued under stock‑based compensation plans is computed using the treasury stock method.
Information related to the Company’s EPS calculations is summarized for the years ended December 31 as follows:
| thousands except per share amounts | 2025 | 2024 | 2023 | ||||||||||||||
| Net income (loss) | |||||||||||||||||
| Net income (loss) from continuing operations | $ | $ | $ | ||||||||||||||
| Net (income) loss attributable to noncontrolling interests | ( | ||||||||||||||||
| Net income (loss) from continuing operations attributable to common stockholders | |||||||||||||||||
| Net income (loss) from discontinued operations | ( | ( | |||||||||||||||
| Net income (loss) attributable to common stockholders | $ | $ | $ | ( | |||||||||||||
| Shares | |||||||||||||||||
| Weighted-average common shares outstanding — basic | |||||||||||||||||
| Restricted stock and stock options | |||||||||||||||||
| Weighted-average common shares outstanding — diluted | |||||||||||||||||
| Net income (loss) per common share | |||||||||||||||||
| Basic income (loss) per share — continuing operations | $ | $ | $ | ||||||||||||||
| Basic income (loss) per share — discontinued operations | $ | $ | ( | $ | ( | ||||||||||||
| Basic income (loss) per share — attributable to common stockholders | $ | $ | $ | ( | |||||||||||||
| Diluted income (loss) per share — continuing operations | $ | $ | $ | ||||||||||||||
| Diluted income (loss) per share — discontinued operations | $ | $ | ( | $ | ( | ||||||||||||
| Diluted income (loss) per share — attributable to common stockholders | $ | $ | $ | ( | |||||||||||||
| Anti-dilutive shares excluded from diluted EPS | |||||||||||||||||
| Restricted stock and stock options | |||||||||||||||||
Common Stock Repurchases In March 2022, the Board authorized a share repurchase program, pursuant to which the Company may, from time to time, purchase up to $250.0 million of its common stock through open-market transactions. The date and time of such repurchases will depend upon market conditions, and the program may be suspended or discontinued at any time. During 2022, the Company repurchased approximately $235.0 million of its common stock.
17. Revenues | ||
Revenues from contracts with customers (excluding lease-related revenues) are recognized when control of the promised goods or services is transferred to the Company’s customers in an amount that reflects the consideration the Company expects to be entitled to in exchange for those goods or services. Revenue and cost of sales for condominium units sold are not recognized until the construction is complete, the sale closes, and the title to the property has transferred to the buyer (point in time). Additionally, certain real estate selling costs, such as the costs related to the Company’s condominium model units, are either expensed immediately or capitalized as property and equipment and depreciated over their estimated useful life.
HHH 2025 FORM 10-K | 97
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The following presents the Company’s revenues disaggregated by revenue source for the years ended December 31:
| thousands | 2025 | 2024 | 2023 | ||||||||||||||
| Revenues from contracts with customers | |||||||||||||||||
| Recognized at a point in time: | |||||||||||||||||
| Condominium rights and unit sales | $ | $ | $ | ||||||||||||||
| Master Planned Communities land sales | |||||||||||||||||
| Builder price participation | |||||||||||||||||
| Total | |||||||||||||||||
| Recognized at a point in time or over time: | |||||||||||||||||
| Other land, rental, and property revenues | |||||||||||||||||
| Rental and lease-related revenues | |||||||||||||||||
| Rental revenue | |||||||||||||||||
| Total revenues | $ | $ | $ | ||||||||||||||
Contract Assets and Liabilities Contract assets are the Company’s right to consideration in exchange for goods or services that have been transferred to a customer, excluding any amounts presented as a receivable. Contract liabilities are the Company’s obligation to transfer goods or services to a customer for which the Company has received consideration.
There were no contract assets for the periods presented. The contract liabilities primarily relate to escrowed condominium deposits, MPC land sales deposits, and deferred MPC land sales related to unsatisfied land improvements. The beginning and ending balances of contract liabilities and significant activity during the periods presented are as follows:
| thousands | Contract Liabilities | ||||
Balance at December 31, 2023 | $ | ||||
| Consideration earned during the period | ( | ||||
| Consideration received during the period | |||||
Balance at December 31, 2024 | $ | ||||
| Consideration earned during the period | ( | ||||
| Consideration received during the period | |||||
Balance at December 31, 2025 | $ | ||||
Remaining Unsatisfied Performance Obligations The Company’s remaining unsatisfied performance obligations represent a measure of the total dollar value of work to be performed on contracts executed and in progress. These performance obligations primarily relate to the completion of condominium construction and transfer of control to a buyer, as well as the completion of contracted MPC land sales and related land improvements. These obligations are associated with contracts that generally are non-cancelable by the customer after 30 days for all Ward Village condominiums and after 6 days for The Ritz-Carlton Residences; however, purchasers of condominium units have the right to cancel the contract should the Company elect not to construct the condominium unit within a certain period of time or materially change the design of the condominium unit. The aggregate amount of the transaction price allocated to the Company’s remaining unsatisfied performance obligations as of December 31, 2025, was $4.4 billion. The Company expects to recognize this amount as revenue over the following periods:
| thousands | Less than 1 year | 1-2 years | 3 years and thereafter | |||||||||||||||||
| Total remaining unsatisfied performance obligations | $ | $ | $ | |||||||||||||||||
The Company’s remaining performance obligations are adjusted to reflect any known project cancellations, revisions to project scope and cost, and deferrals, as appropriate. These amounts exclude estimated amounts of variable consideration which are constrained, such as builder price participation.
HHH 2025 FORM 10-K | 98
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18. Leases | ||
The Company has lease agreements with lease and non-lease components and has elected to aggregate these components into a single component for all classes of underlying assets. Certain of the Company’s lease agreements include non-lease components such as fixed common area maintenance charges.
Lessee Arrangements The Company determines whether an arrangement is a lease at inception. Operating leases are included in Operating lease right-of-use assets and Operating lease obligations on the Consolidated Balance Sheets. Right-of-use assets represent the Company’s right to use an underlying asset for the lease term and lease liabilities represent the Company’s obligation to make lease payments arising from the lease. Operating lease right-of-use assets and liabilities are recognized at commencement date based on the present value of future minimum lease payments over the lease term. As most of the Company’s leases do not provide an implicit rate, the Company uses an estimate of the incremental borrowing rate based on the information available at the lease commencement date in determining the present value of future lease payments. The Operating lease right-of-use asset also includes any lease payments made, less any lease incentives and initial direct costs incurred. The Company does not have any finance leases.
The Company’s lessee agreements consist of operating leases primarily for ground leases and other real estate. The Company’s leases have remaining lease terms of approximately 1 year to approximately 24 years, excluding extension options. The Company considers its strategic plan and the life of associated agreements in determining when options to extend or terminate lease terms are reasonably certain of being exercised. Leases with an initial term of 12 months or less are not recorded on the Consolidated Balance Sheets; the Company recognizes lease expense for these leases on a straight-line basis over the lease term. Certain of the Company’s lease agreements include variable lease payments based on a percentage of income generated through subleases, changes in price indices and market rates, and other costs arising from operating, maintenance, and taxes. The Company’s lease agreements do not contain residual value guarantees or restrictive covenants. The Company leases certain buildings constructed on its ground leases to third parties.
The Company’s leased assets and liabilities are as follows:
| thousands | 2025 | 2024 | |||||||||
| Operating lease right-of-use assets | $ | $ | |||||||||
| Operating lease obligations | |||||||||||
Future minimum lease payments as of December 31, 2025, are as follows:
| thousands | Operating Leases | ||||
| 2026 | $ | ||||
| 2027 | |||||
| 2028 | |||||
| 2029 | |||||
| 2030 | |||||
| Thereafter | |||||
| Total lease payments | |||||
| Less: imputed interest | ( | ||||
| Present value of lease liabilities | $ | ||||
Other information related to the Company’s lessee agreements is as follows:
| Supplemental Consolidated Statements of Cash Flows Information | Year ended December 31, | ||||||||||
| thousands | 2025 | 2024 | |||||||||
| Cash paid for amounts included in the measurement of lease liabilities: | |||||||||||
| Operating cash flows on operating leases | $ | $ | |||||||||
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| Other Information | 2025 | 2024 | |||||||||
| Weighted-average remaining lease term (years) | |||||||||||
| Operating leases | |||||||||||
| Weighted-average discount rate | |||||||||||
| Operating leases | % | % | |||||||||
Lessor Arrangements The Company receives rental income from the leasing of retail, office, multifamily, and other space under operating leases, as well as certain variable tenant recoveries. Operating leases for retail, office, and other properties are with a variety of tenants and have a remaining average term of approximately five years . Lease terms generally vary among tenants and may include early termination options, extension options, and fixed rental rate increases or rental rate increases based on an index. Multifamily leases generally have a term of 12 months or less. Minimum rent revenues related to operating leases are as follows:
| Year ended December 31, | |||||||||||
| thousands | 2025 | 2024 | |||||||||
| Total minimum rent payments | $ | $ | |||||||||
Total future minimum rents associated with operating leases are as follows:
| thousands | Total Minimum Rent | ||||
| 2026 | $ | ||||
| 2027 | |||||
| 2028 | |||||
| 2029 | |||||
| 2030 | |||||
| Thereafter | |||||
| Total | $ | ||||
Minimum rent revenues are recognized on a straight‑line basis over the terms of the related leases when collectability is reasonably assured and the tenant has taken possession of, or controls, the physical use of the leased asset. Percentage rent in lieu of fixed minimum rent is recognized as sales are reported from tenants. Minimum rent revenues reported in the Consolidated Statements of Operations also include amortization related to above-market and below‑market tenant leases on acquired properties.
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19. Segments | ||
The Company has three
Activity within each of the Company’s reportable segments is as follows:
–Operating Assets – consists of developed or acquired retail, office, and multifamily properties along with other real estate investments. These properties are currently generating rental revenues and may be redeveloped, repositioned, or sold to improve segment performance or to recycle capital.
–MPC – consists of the development and sale of land in large‑scale, long‑term community development projects in and around Las Vegas, Nevada; Houston, Texas; and Phoenix, Arizona. Revenues are primarily generated through the sale of residential and commercial land to homebuilders and developers.
–Strategic Developments – consists of residential condominium and commercial property projects currently under development and all other properties held for development which have no substantial operations. Revenues are primarily generated from the sale of condominium units.
The Chief Operating Decision Maker (CODM), which is the Company’s Chief Executive Officer, may use different operating measures to assess operating results and allocate resources among the three
HHH 2025 FORM 10-K | 101
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Segment EBT is as follows for the years ended December 31:
| thousands | Operating Assets Segment | MPC Segment | Strategic Developments Segment | ||||||||
| Year Ended December 31, 2025 | |||||||||||
| Total revenues | $ | $ | $ | ||||||||
| Condominium rights and unit cost of sales | ( | ||||||||||
| Master Planned Communities cost of sales | ( | ||||||||||
| Operating costs | ( | ( | ( | ||||||||
| Rental property real estate taxes | ( | ( | |||||||||
| (Provision for) recovery of doubtful accounts | ( | ||||||||||
| Segment operating income (loss) | ( | ||||||||||
| Depreciation and amortization | ( | ( | ( | ||||||||
| Interest income (expense), net | ( | ||||||||||
| Other income (loss), net | ( | ||||||||||
| Equity in earnings (losses) from unconsolidated ventures | ( | ||||||||||
| Gain (loss) on sale or disposal of real estate and other assets, net | |||||||||||
| Gain (loss) on extinguishment of debt | ( | ||||||||||
| Segment EBT | $ | ( | $ | $ | ( | ||||||
| Year Ended December 31, 2024 | |||||||||||
| Total revenues | $ | $ | $ | ||||||||
| Condominium rights and unit cost of sales | ( | ||||||||||
| Master Planned Communities cost of sales | ( | ||||||||||
| Operating costs | ( | ( | ( | ||||||||
| Rental property real estate taxes | ( | ( | |||||||||
| (Provision for) recovery of doubtful accounts | ( | ||||||||||
| Segment operating income (loss) | |||||||||||
| Depreciation and amortization | ( | ( | ( | ||||||||
| Interest income (expense), net | ( | ||||||||||
| Other income (loss), net | |||||||||||
| Equity in earnings (losses) from unconsolidated ventures | ( | ||||||||||
| Gain (loss) on sale or disposal of real estate and other assets, net | |||||||||||
| Gain (loss) on extinguishment of debt | ( | ||||||||||
| Segment EBT | $ | ( | $ | $ | |||||||
| Year Ended December 31, 2023 | |||||||||||
| Total revenues | $ | $ | $ | ||||||||
| Condominium rights and unit cost of sales | ( | ||||||||||
| Master Planned Communities cost of sales | ( | ||||||||||
| Operating costs | ( | ( | ( | ||||||||
| Rental property real estate taxes | ( | ( | |||||||||
| (Provision for) recovery of doubtful accounts | |||||||||||
| Segment operating income (loss) | ( | ||||||||||
| Depreciation and amortization | ( | ( | ( | ||||||||
| Interest income (expense), net | ( | ||||||||||
| Other income (loss), net | ( | ||||||||||
| Equity in earnings (losses) from unconsolidated ventures | |||||||||||
| Gain (loss) on sale or disposal of real estate and other assets, net | |||||||||||
| Gain (loss) on extinguishment of debt | ( | ||||||||||
| Segment EBT | $ | ( | $ | $ | ( | ||||||
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The following represents the reconciliation of segment EBT to Net income (loss) from continuing operations before income taxes in the Consolidated Statements of Operations for the years ended December 31:
| thousands | 2025 | 2024 | 2023 | ||||||||||||||
| Operating Assets EBT | $ | ( | $ | ( | $ | ( | |||||||||||
| MPC EBT | |||||||||||||||||
| Strategic Developments EBT | ( | ( | |||||||||||||||
| General and administrative expenses | ( | ( | ( | ||||||||||||||
| Gain (loss) on sale of MUD receivables | ( | ( | |||||||||||||||
| Corporate interest expense, net | ( | ( | ( | ||||||||||||||
| Corporate income, expenses, and other items | ( | ( | ( | ||||||||||||||
| Net income (loss) from continuing operations before income taxes | $ | $ | $ | ||||||||||||||
The following represents the reconciliation of segment revenue to Total revenues in the Consolidated Statements of Operations for the years ended December 31:
| thousands | 2025 | 2024 | 2023 | ||||||||||||||
| Operating Assets revenue | $ | $ | $ | ||||||||||||||
| MPC revenue | |||||||||||||||||
| Strategic Developments revenue | |||||||||||||||||
| Corporate income | |||||||||||||||||
| Total revenues | $ | $ | $ | ||||||||||||||
The following represents asset information by segment and the reconciliation of total segment assets to Total assets on the Consolidated Balance Sheets as of December 31:
| thousands | 2025 | 2024 | |||||||||
| Operating Assets | $ | $ | |||||||||
| Master Planned Communities | |||||||||||
| Strategic Developments | |||||||||||
| Corporate | |||||||||||
| Total assets | $ | $ | |||||||||
The following represents capital expenditures by segment for the years ended December 31:
| thousands | 2025 | 2024 | |||||||||
| Operating Assets | $ | $ | |||||||||
| Master Planned Communities | |||||||||||
| Strategic Developments | |||||||||||
HHH 2025 FORM 10-K | 103
FINANCIAL STATEMENTS FOOTNOTES | Table of Contents Index to Financial Statements | ||||
20. Quarterly Financial Information (Unaudited) | ||
The Company completed the Spinoff of SEG in the third quarter of 2024. As the Spinoff represented a strategic shift in the Company’s operations, the results of SEG are presented as discontinued operations, which resulted in retrospective changes to the Company’s Consolidated Statements of Operations. See Note 3 - Discontinued Operations for additional information.
The following table provides summarized quarterly financial data for 2024. All per share amounts presented below are calculated based on whole dollars and number of shares, and therefore the sum of continuing and discontinued operations per share amounts may not recalculate to the total per share amounts.
| thousands except per share amounts | First Quarter | Second Quarter | Third Quarter | Fourth Quarter | |||||||||||||||||||
| 2024 | |||||||||||||||||||||||
| Total revenues | $ | $ | $ | $ | |||||||||||||||||||
| Operating income (loss) | |||||||||||||||||||||||
| Net income (loss) from continuing operations | ( | ||||||||||||||||||||||
| Net income (loss) from discontinued operations, net of tax | ( | ( | ( | ( | |||||||||||||||||||
| Net income (loss) | ( | ||||||||||||||||||||||
| Net (income) loss attributable to noncontrolling interests | ( | ||||||||||||||||||||||
| Net income (loss) attributable to common stockholders | ( | ||||||||||||||||||||||
| Basic income (loss) per share — continuing operations | $ | ( | $ | $ | $ | ||||||||||||||||||
| Basic income (loss) per share — discontinued operations | $ | ( | $ | ( | $ | ( | $ | ( | |||||||||||||||
| Basic income (loss) per share attributable to common stockholders | $ | ( | $ | $ | $ | ||||||||||||||||||
| Diluted income (loss) per share — continuing operations | $ | ( | $ | $ | $ | ||||||||||||||||||
| Diluted income (loss) per share — discontinued operations | $ | ( | $ | ( | $ | ( | $ | ( | |||||||||||||||
| Diluted income (loss) per share attributable to common stockholders | $ | ( | $ | $ | $ | ||||||||||||||||||
HHH 2025 FORM 10-K | 104
| FINANCIAL STATEMENT SCHEDULE | Table of Contents Index to Financial Statements | ||||
SCHEDULE III – REAL ESTATE AND ACCUMULATED DEPRECIATION
DECEMBER 31, 2025
| Initial Cost (b) | Costs Capitalized Subsequent to Acquisition (c) | Gross Amounts at Which Carried at Close of Period (d) | ||||||||||||||||||||||||||||||||||||||||||||||||
Name of Center thousands | Location | Center Type | Encumbrances (a) | Land | Buildings and Improvements | Land (e) | Buildings and Improvements (e) | Land | Buildings and Improvements | Total | Accumulated Depreciation (f) | Date of Construction | Date Acquired / Completed | |||||||||||||||||||||||||||||||||||||
| Bridgeland | ||||||||||||||||||||||||||||||||||||||||||||||||||
| Bridgeland | Cypress, TX | MPC | $ | $ | $ | $ | $ | $ | $ | $ | $ | ( | 2004 | |||||||||||||||||||||||||||||||||||||
| Bridgeland Predevelopment | Cypress, TX | Development | ||||||||||||||||||||||||||||||||||||||||||||||||
| Houston Ground Leases - Bridgeland | Cypress, TX | Other | Various | |||||||||||||||||||||||||||||||||||||||||||||||
| Lakeside Row | Cypress, TX | Multifamily | ( | 2018 | 2019 | |||||||||||||||||||||||||||||||||||||||||||||
| Memorial Hermann Medical Office | Cypress, TX | Development | 2025 | |||||||||||||||||||||||||||||||||||||||||||||||
| One Bridgeland Green | Cypress, TX | Office | ( | 2024 | 2025 | |||||||||||||||||||||||||||||||||||||||||||||
| Starling at Bridgeland | Cypress, TX | Multifamily | ( | 2021 | 2022 | |||||||||||||||||||||||||||||||||||||||||||||
| Village Green at Bridgeland Central | Cypress, TX | Retail | ( | 2024 | 2024 | |||||||||||||||||||||||||||||||||||||||||||||
| Wingspan | Cypress, TX | Multifamily | ( | 2022 | 2023 | |||||||||||||||||||||||||||||||||||||||||||||
| Columbia | ||||||||||||||||||||||||||||||||||||||||||||||||||
| Color Burst Park Retail | Columbia, MD | Retail | ( | 2019 | 2020 | |||||||||||||||||||||||||||||||||||||||||||||
| Columbia Ground Leases | Columbia, MD | Other | ( | 2024 | ||||||||||||||||||||||||||||||||||||||||||||||
| Columbia Office Properties | Columbia, MD | Office | ( | ( | 2004 / 2007 | |||||||||||||||||||||||||||||||||||||||||||||
| Columbia Parking Garages | Columbia, MD | Other | ( | ( | Various | Various | ||||||||||||||||||||||||||||||||||||||||||||
| Columbia Predevelopment | Columbia, MD | Development | ||||||||||||||||||||||||||||||||||||||||||||||||
| Juniper | Columbia, MD | Multifamily | ( | 2018 | 2020 | |||||||||||||||||||||||||||||||||||||||||||||
| 10285 Lakefront Medical Office | Columbia, MD | Office | ( | 2022 | 2024 | |||||||||||||||||||||||||||||||||||||||||||||
| One Mall North | Columbia, MD | Office | ( | 2016 | ||||||||||||||||||||||||||||||||||||||||||||||
| Marlow | Columbia, MD | Multifamily | ( | 2021 | 2022 | |||||||||||||||||||||||||||||||||||||||||||||
| 6100 Merriweather | Columbia, MD | Office | ( | 2018 | 2019 | |||||||||||||||||||||||||||||||||||||||||||||
| One Merriweather | Columbia, MD | Office | ( | 2015 | 2017 | |||||||||||||||||||||||||||||||||||||||||||||
| Two Merriweather | Columbia, MD | Office | ( | 2016 | 2017 | |||||||||||||||||||||||||||||||||||||||||||||
| Merriweather District (g) | Columbia, MD | Development | ( | ( | Various | |||||||||||||||||||||||||||||||||||||||||||||
| Merriweather Row | Columbia, MD | Office | ( | 2012/2014 | ||||||||||||||||||||||||||||||||||||||||||||||
| Rouse Building | Columbia, MD | Retail | ( | 2013 | 2014 | |||||||||||||||||||||||||||||||||||||||||||||
| Summerlin | ||||||||||||||||||||||||||||||||||||||||||||||||||
| Aristocrat | Las Vegas, NV | Office | ( | 2017 | 2018 | |||||||||||||||||||||||||||||||||||||||||||||
| Constellation | Las Vegas, NV | Multifamily | ( | 2017 | ||||||||||||||||||||||||||||||||||||||||||||||
| Downtown Summerlin (h)(i) | Las Vegas, NV | Retail/Office | ( | 2013 | 2014 / 2015 | |||||||||||||||||||||||||||||||||||||||||||||
| Hockey Ground Lease (h) | Las Vegas, NV | Other | ( | 2017 | ||||||||||||||||||||||||||||||||||||||||||||||
| Meridian | Las Vegas, NV | Office | ( | 2022 | 2024 | |||||||||||||||||||||||||||||||||||||||||||||
| 1700 Pavilion (h) | Las Vegas, NV | Office | ( | 2021 | 2022 | |||||||||||||||||||||||||||||||||||||||||||||
| Two Summerlin (h) | Las Vegas, NV | Office | ( | 2017 | 2018 | |||||||||||||||||||||||||||||||||||||||||||||
| Summerlin (h) | Las Vegas, NV | MPC | ( | 2004 | ||||||||||||||||||||||||||||||||||||||||||||||
| Summerlin Grocery Anchored Center (h) | Las Vegas, NV | Retail | ( | 2023 | 2024 | |||||||||||||||||||||||||||||||||||||||||||||
| Summerlin Predevelopment | Las Vegas, NV | Development | ||||||||||||||||||||||||||||||||||||||||||||||||
| Tanager (h) | Las Vegas, NV | Multifamily | ( | 2017 | 2019 | |||||||||||||||||||||||||||||||||||||||||||||
| Tanager Echo (h) | Las Vegas, NV | Multifamily | ( | 2021 | 2023 | |||||||||||||||||||||||||||||||||||||||||||||
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| Initial Cost (b) | Costs Capitalized Subsequent to Acquisition (c) | Gross Amounts at Which Carried at Close of Period (d) | ||||||||||||||||||||||||||||||||||||||||||||||||
Name of Center thousands | Location | Center Type | Encumbrances (a) | Land | Buildings and Improvements | Land (e) | Buildings and Improvements (e) | Land | Buildings and Improvements | Total | Accumulated Depreciation (f) | Date of Construction | Date Acquired / Completed | |||||||||||||||||||||||||||||||||||||
| Teravalis | ||||||||||||||||||||||||||||||||||||||||||||||||||
| Teravalis | Phoenix, AZ | MPC | ( | 2021 | ||||||||||||||||||||||||||||||||||||||||||||||
| The Woodlands | ||||||||||||||||||||||||||||||||||||||||||||||||||
| Creekside Park | The Woodlands, TX | Multifamily | ( | 2017 | 2018 | |||||||||||||||||||||||||||||||||||||||||||||
| Creekside Park The Grove | The Woodlands, TX | Multifamily | ( | 2019 | 2021 | |||||||||||||||||||||||||||||||||||||||||||||
| Creekside Park West | The Woodlands, TX | Retail | ( | ( | 2018 | 2019 | ||||||||||||||||||||||||||||||||||||||||||||
| Grogan's Mill Retail | The Woodlands, TX | Retail | ( | 2024 | 2025 | |||||||||||||||||||||||||||||||||||||||||||||
| Houston Ground Leases - The Woodlands | The Woodlands, TX | Other | ( | Various | ||||||||||||||||||||||||||||||||||||||||||||||
| One Hughes Landing | The Woodlands, TX | Office | ( | 2012 | 2013 | |||||||||||||||||||||||||||||||||||||||||||||
| Two Hughes Landing | The Woodlands, TX | Office | ( | ( | 2013 | 2014 | ||||||||||||||||||||||||||||||||||||||||||||
| Three Hughes Landing | The Woodlands, TX | Office | ( | 2014 | 2016 | |||||||||||||||||||||||||||||||||||||||||||||
| 1725 Hughes Landing Boulevard | The Woodlands, TX | Office | ( | 2013 | 2015 | |||||||||||||||||||||||||||||||||||||||||||||
| 1735 Hughes Landing Boulevard | The Woodlands, TX | Office | ( | ( | 2013 | 2015 | ||||||||||||||||||||||||||||||||||||||||||||
| Hughes Landing Daycare | The Woodlands, TX | Other | 2018 | 2019 | ||||||||||||||||||||||||||||||||||||||||||||||
| Hughes Landing Retail | The Woodlands, TX | Retail | ( | 2013 | 2015 | |||||||||||||||||||||||||||||||||||||||||||||
| 1701 Lake Robbins | The Woodlands, TX | Retail | ( | 2014 | ||||||||||||||||||||||||||||||||||||||||||||||
| 2201 Lake Woodlands Drive | The Woodlands, TX | Office | ( | 2011 | ||||||||||||||||||||||||||||||||||||||||||||||
| Lakefront North | The Woodlands, TX | Office | ( | 2018 | ||||||||||||||||||||||||||||||||||||||||||||||
| One Lakes Edge | The Woodlands, TX | Multifamily | ( | 2013 | 2015 | |||||||||||||||||||||||||||||||||||||||||||||
| Two Lakes Edge | The Woodlands, TX | Multifamily | ( | 2018 | 2020 | |||||||||||||||||||||||||||||||||||||||||||||
| Millennium Six Pines | The Woodlands, TX | Multifamily | ( | 2016 | ||||||||||||||||||||||||||||||||||||||||||||||
| Millennium Waterway | The Woodlands, TX | Multifamily | ( | 2012 | ||||||||||||||||||||||||||||||||||||||||||||||
| 8770 New Trails | The Woodlands, TX | Office | ( | 2019 | 2020 | |||||||||||||||||||||||||||||||||||||||||||||
| 9303 New Trails | The Woodlands, TX | Office | ( | 2011 | ||||||||||||||||||||||||||||||||||||||||||||||
| 1 Riva Row | The Woodlands, TX | Multifamily | ( | 2023 | 2025 | |||||||||||||||||||||||||||||||||||||||||||||
| 3831 Technology Forest Drive | The Woodlands, TX | Office | ( | 2014 | 2014 | |||||||||||||||||||||||||||||||||||||||||||||
| The Lane at Waterway | The Woodlands, TX | Multifamily | ( | 2019 | 2020 | |||||||||||||||||||||||||||||||||||||||||||||
| The Ritz-Carlton Residences | The Woodlands, TX | Development | ( | 2024 | ||||||||||||||||||||||||||||||||||||||||||||||
| The Woodlands | The Woodlands, TX | MPC | ( | ( | ( | 2011 | ||||||||||||||||||||||||||||||||||||||||||||
| The Woodlands Parking Garages | The Woodlands, TX | Other | ( | Various | ||||||||||||||||||||||||||||||||||||||||||||||
| The Woodlands Predevelopment | The Woodlands, TX | Development | ( | |||||||||||||||||||||||||||||||||||||||||||||||
| The Woodlands Towers at the Waterway (j) | The Woodlands, TX | Office | ( | 2019 | ||||||||||||||||||||||||||||||||||||||||||||||
| The Woodlands Warehouse | The Woodlands, TX | Other | ( | 2019 | ||||||||||||||||||||||||||||||||||||||||||||||
| 3 Waterway Square | The Woodlands, TX | Office | ( | 2012 | 2013 | |||||||||||||||||||||||||||||||||||||||||||||
| 4 Waterway Square | The Woodlands, TX | Office | ( | 2011 | ||||||||||||||||||||||||||||||||||||||||||||||
| 6 Waterway (k) | The Woodlands, TX | Office | ( | 2024 | ||||||||||||||||||||||||||||||||||||||||||||||
| 7 Waterway | The Woodlands, TX | Development | 2025 | |||||||||||||||||||||||||||||||||||||||||||||||
| 20/25 Waterway Avenue | The Woodlands, TX | Retail | ( | 2011 | ||||||||||||||||||||||||||||||||||||||||||||||
| Waterway Square Retail | The Woodlands, TX | Retail | ( | 2011 | ||||||||||||||||||||||||||||||||||||||||||||||
| 1400 Woodloch Forest | The Woodlands, TX | Office | ( | 2011 | ||||||||||||||||||||||||||||||||||||||||||||||
| The Woodlands Hills | ||||||||||||||||||||||||||||||||||||||||||||||||||
| The Woodlands Hills | Conroe, TX | MPC | ( | 2014 | ||||||||||||||||||||||||||||||||||||||||||||||
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| Initial Cost (b) | Costs Capitalized Subsequent to Acquisition (c) | Gross Amounts at Which Carried at Close of Period (d) | ||||||||||||||||||||||||||||||||||||||||||||||||
Name of Center thousands | Location | Center Type | Encumbrances (a) | Land | Buildings and Improvements | Land (e) | Buildings and Improvements (e) | Land | Buildings and Improvements | Total | Accumulated Depreciation (f) | Date of Construction | Date Acquired / Completed | |||||||||||||||||||||||||||||||||||||
| Ward Village | ||||||||||||||||||||||||||||||||||||||||||||||||||
| ‘A‘ali‘i | Honolulu, HI | Condominium | ( | 2018 | 2021 | |||||||||||||||||||||||||||||||||||||||||||||
| Ae`o | Honolulu, HI | Condominium | ( | 2016 | 2018 | |||||||||||||||||||||||||||||||||||||||||||||
| Anaha | Honolulu, HI | Condominium | ( | 2014 | 2017 | |||||||||||||||||||||||||||||||||||||||||||||
| Kalae | Honolulu, HI | Development | 2024 | |||||||||||||||||||||||||||||||||||||||||||||||
| Ke Kilohana | Honolulu, HI | Condominium | ( | 2016 | 2019 | |||||||||||||||||||||||||||||||||||||||||||||
| Kewalo Basin Harbor | Honolulu, HI | Other | ( | ( | 2017 | 2019 | ||||||||||||||||||||||||||||||||||||||||||||
| Kō‘ula | Honolulu, HI | Condominium | ( | 2019 | 2022 | |||||||||||||||||||||||||||||||||||||||||||||
| The Park Ward Village | Honolulu, HI | Development | 2022 | |||||||||||||||||||||||||||||||||||||||||||||||
| Ulana Ward Village | Honolulu, HI | Condominium | ( | 2023 | 2025 | |||||||||||||||||||||||||||||||||||||||||||||
| Victoria Place | Honolulu, HI | Condominium | ( | 2021 | 2024 | |||||||||||||||||||||||||||||||||||||||||||||
| Waiea | Honolulu, HI | Condominium | ( | 2014 | 2016 | |||||||||||||||||||||||||||||||||||||||||||||
| Ward Predevelopment | Honolulu, HI | Development | ( | |||||||||||||||||||||||||||||||||||||||||||||||
| Ward Village Parking Garages | Honolulu, HI | Other | ( | 2011 / 2016 | 2013 / 2018 | |||||||||||||||||||||||||||||||||||||||||||||
| Ward Village Retail | Honolulu, HI | Retail | ( | ( | Various | Various | ||||||||||||||||||||||||||||||||||||||||||||
| Total excluding Corporate and Deferred financing costs | ( | |||||||||||||||||||||||||||||||||||||||||||||||||
| Corporate | Various | ( | ( | |||||||||||||||||||||||||||||||||||||||||||||||
| Deferred financing costs | N/A | ( | ||||||||||||||||||||||||||||||||||||||||||||||||
| Total | $ | $ | $ | $ | $ | $ | $ | $ | $ | ( | ||||||||||||||||||||||||||||||||||||||||
(a)Refer to Note 9 - Mortgages, Notes, and Loans Payable, Net for additional information.
(b)The initial cost for developed projects includes costs incurred through the end of the first complete calendar year after the asset is placed in service; for projects undergoing development or redevelopment, it includes all costs incurred up to the end of the reporting period; for acquired properties not in need of redevelopment, it represents the acquisition cost.
(c)For retail and other properties, costs capitalized subsequent to acquisitions is net of cost of disposals or other property write‑downs. For MPCs, costs capitalized subsequent to acquisitions are net of the cost of land sales.
(d)The aggregate cost of land, buildings, and improvements for federal income tax purposes is approximately $6.2 billion.
(e)Reductions in Land reflect transfers to Buildings and Improvements for projects which the Company is internally developing.
(f)Depreciation is based upon the useful lives in Note 1 - Presentation of Financial Statements and Significant Accounting Policies.
(g)Includes amounts from the Lakefront District development that is now considered a part of Merriweather District following rebranding efforts for the area.
(h)Encumbrances balance either represents or is inclusive of SIDs.
(i)Downtown Summerlin includes the One Summerlin office property, which was placed in service in 2015.
(j)The Woodlands Towers at the Waterway includes 1201 Lake Robbins and 9950 Woodloch Forest.
(k)In 2025, the Company rebranded 6 Waterway (formerly Waterway Plaza II).
| Reconciliation of Real Estate | ||||||||||||||||||||
| thousands | 2025 | 2024 | 2023 | |||||||||||||||||
| Balance at January 1 | $ | $ | $ | |||||||||||||||||
| Additions | ||||||||||||||||||||
| Dispositions, write-offs, and land and condominium costs of sales | ( | ( | ( | |||||||||||||||||
| Balance at December 31 | $ | $ | $ | |||||||||||||||||
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| Reconciliation of Accumulated Depreciation | ||||||||||||||||||||
| thousands | 2025 | 2024 | 2023 | |||||||||||||||||
| Balance at January 1 | $ | $ | $ | |||||||||||||||||
| Depreciation Expense | ||||||||||||||||||||
| Dispositions and write-offs | ( | ( | ( | |||||||||||||||||
| Balance at December 31 | $ | $ | $ | |||||||||||||||||
HHH 2025 FORM 10-K | 108
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Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure
None.
Item 9A. Controls and Procedures
| DISCLOSURE CONTROLS AND PROCEDURES | ||
We maintain disclosure controls and procedures (as defined in Rule 13a-15(e) under the Exchange Act of 1934) that are designed to provide reasonable assurance that information required to be disclosed in our reports to the Securities and Exchange Commission (SEC) is recorded, processed, summarized, and reported within the time periods specified in the SEC’s rules and forms, and that such information is accumulated and communicated to our management, including our principal executive officer, principal financial officer, and principal accounting officer, as appropriate, to allow timely decisions regarding required disclosure.
As required by SEC rules, we carried out an evaluation, under the supervision and with the participation of our management, including our principal executive officer, principal financial officer, and principal accounting officer, of the effectiveness of the design and operation of our disclosure controls and procedures as of December 31, 2025, the end of the period covered by this report. Based on the foregoing, our principal executive officer, principal financial officer, and principal accounting officer concluded that our disclosure controls and procedures were effective as of December 31, 2025.
| INTERNAL CONTROLS OVER FINANCIAL REPORTING | ||
There were no changes to our internal control over financial reporting that occurred during the period covered by this report that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
| MANAGEMENT’S REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING | ||
Management’s annual report on internal control over financial reporting is provided in Item 8. Financial Statements and Supplementary Data in this Annual Report on Form 10-K. The attestation report of the Company’s independent registered public accounting firm, KPMG LLP, regarding the Company’s internal control over financial reporting is also provided in Item 8. Financial Statements and Supplementary Data in this Annual Report on Form 10-K.
Item 9B. Other Information
There were no directors or officers that had adopted terminated
Item 9C. Disclosure Regarding Foreign Jurisdictions that Prevent Inspections
Not applicable.
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| PART III | ||
Item 10. Directors, Executive Officers, and Corporate Governance
The information required by Item 10 is incorporated by reference to the relevant information included in our proxy statement for our 2026 Annual Meeting of Stockholders.
Item 11. Executive Compensation
The information required by Item 11 is incorporated by reference to the relevant information included in our proxy statement for our 2026 Annual Meeting of Stockholders.
Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters
The information required by Item 12 is incorporated by reference to the relevant information included in our proxy statement for our 2026 Annual Meeting of Stockholders.
Item 13. Certain Relationships and Related Transactions, and Director Independence
The information required by Item 13 is incorporated by reference to the relevant information included in our proxy statement for our 2026 Annual Meeting of Stockholders.
Item 14. Principal Accountant Fees and Services
The information required by Item 14 is incorporated by reference to the relevant information included in our proxy statement for our 2026 Annual Meeting of Stockholders.
HHH 2025 FORM 10-K | 110
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| PART IV | ||
Item 15. Exhibits and Financial Statement Schedule
(a)Financial Statements and Financial Statement Schedule.
The Consolidated Financial Statements and Schedule listed in the Index to this Annual Report on page 57 are filed as part of this Annual Report. No additional financial statement schedules are presented as the required information is not applicable, not present in amounts sufficient to require submission of the schedule, or because the information required is enclosed in the Consolidated Financial Statements and notes thereto.
(b)Exhibits.
| Exhibit No. | Description of Exhibit | ||||
| 2.1 | Agreement and Plan of Merger, dated as of August 11, 2023, by and among The Howard Hughes Corporation, Howard Hughes Holdings Inc. and HHC Merger Sub Co. (incorporated by reference to Exhibit 2.1 to the Company’s Current Report on Form 8-K12B, filed August 11, 2023) | ||||
| 2.2 | Separation Agreement, dated July 31, 2024, between Howard Hughes Holdings Inc. and Seaport Entertainment Group Inc. (incorporated by reference to Exhibit 2.1 to the Company’s Current Report on Form 8-K, filed August 1, 2024) | ||||
| 3.1 | Amended and Restated Certificate of Incorporation of Howard Hughes Holdings Inc., dated August 11, 2023 (incorporated by reference to Exhibit 3.1 to the Company’s Quarterly Report on Form 10-Q, filed November 6, 2023) | ||||
| 3.2 | Amended and Restated Bylaws of Howard Hughes Holdings Inc., dated August 11, 2023 (incorporated by reference to Exhibit 3.2 to the Company’s Current Report on Form 8-K12B, filed August 11, 2023) | ||||
| 3.3 | Certificate of Designations of Series A Junior Participating Preferred Stock, filed with the Secretary of State of Delaware on February 29, 2012 (incorporated by reference to Exhibit 3.1 to The Howard Hughes Corporation’s Current Report on Form 8-K, filed February 29, 2012) | ||||
| 4.1 | Indenture, dated as of March 16, 2017 by and between The Howard Hughes Corporation and Wells Fargo Bank, National Association, as trustee (incorporated by reference to Exhibit 4.1 to The Howard Hughes Corporation’s Current Report on Form 8-K, filed March 21, 2017) | ||||
| 4.1.1 | Second Supplemental Indenture, dated as of August 18, 2020, to the indenture dated as of March 16, 2017 and first supplemented as of June 15, 2017, by and among HHC Warehouse Holdings Company, LLC, HH Warehouse Land Holdings, LLC, The Howard Hughes Corporation and Wells Fargo Bank, National Association, as the trustee (incorporated by reference to Exhibit 4.2 to The Howard Hughes Corporation’s Current Report on Form 8-K, filed August 21, 2020) | ||||
| 4.1.2 | Third Supplemental Indenture, dated as of October 2, 2020, to the indenture dated as of March 16, 2017, as first supplemented on June 15, 2017 and as further supplemented on August 18, 2020, among The Howard Hughes Corporation, HH Woodlands Tower Holdings, LLC, API/ HHC Lake Robbins Holding Company, LLC and Wells Fargo Bank, National Association, as trustee (incorporated by reference to Exhibit 4.2 to The Howard Hughes Corporation’s Current Report on Form 8-K, filed October 7, 2020) | ||||
| 4.1.3 | Fourth Supplemental Indenture, dated as of February 2, 2021, to the indenture dated as of March 16, 2017, by and among The Howard Hughes Corporation, HHC Warehouse Holdings Company, LLC, HH Warehouse Land Holdings, LLC, HH Woodlands Tower Holdings, LLC, API/HHC Lake Robbins Holding Company, LLC, and Wells Fargo Bank, National Association, as the trustee (incorporated by reference to Exhibit 4.3 to The Howard Hughes Corporation’s Current Report on Form 8-K, filed February 4, 2021) | ||||
| 4.2 | Indenture, dated as of August 18, 2020, by and among The Howard Hughes Corporation, HHC Warehouse Holdings Company, LLC, HH Warehouse Land Holdings, LLC and Wells Fargo Bank, National Association, as trustee (incorporated by reference to Exhibit 4.1 to The Howard Hughes Corporation’s Current Report on Form 8-K, filed August 21, 2020) | ||||
| 4.2.1 | First Supplemental Indenture, dated as of October 2, 2020, to the indenture dated as of August 18, 2020, among The Howard Hughes Corporation, HH Woodlands Tower Holdings, LLC, API/ HHC Lake Robbins Holding Company, LLC and Wells Fargo Bank, National Association, as trustee (incorporated by reference to Exhibit 4.1 to The Howard Hughes Corporation’s Current Report on Form 8-K, filed October 7, 2020) | ||||
| 4.3 | Indenture, dated as of February 2, 2021, by and among The Howard Hughes Corporation, HHC Warehouse Holding Company, LLC, HH Warehouse Land Holdings, LLC, HH Woodlands Tower Holdings, LLC, API/HHC Lake Robbins Holding Company, LLC, and Wells Fargo Bank, National Association, as trustee (incorporated by reference to Exhibit 4.1 to The Howard Hughes Corporation’s Current Report on Form 8-K, filed February 4, 2021) | ||||
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| 4.4 | Indenture, dated as of February 2, 2021, by and among The Howard Hughes Corporation, HHC Warehouse Holding Company, LLC, HH Warehouse Land Holdings, LLC, HH Woodlands Tower Holdings, LLC, API/HHC Lake Robbins Holding Company, LLC, and Wells Fargo Bank, National Association, as trustee (incorporated by reference to Exhibit 4.2 to The Howard Hughes Corporation’s Current Report on Form 8-K, filed February 4, 2021) | ||||
| 4.5 | Description of Securities of the Registrant (incorporated by reference to Exhibit 4.13 to the Company’s Annual Report on Form 10-K, filed February 27, 2024) | ||||
| 10.1 | Form of indemnification agreement for directors and certain executive officers of The Howard Hughes Corporation (incorporated by reference to Exhibit 10.7 to The Howard Hughes Corporation’s Current Report on Form 8-K, filed November 12, 2010) | ||||
| 10.2 | Registration Rights Agreement, dated November 9, 2010, between The Howard Hughes Corporation and Pershing Square Capital Management, L.P., Blackstone Real Estate Partners VI L.P., Blackstone Real Estate Partners (AIV) VI L.P., Blackstone Real Estate Partners VI.F L.P., Blackstone Real Estate Partners VI.TE.1 L.P., Blackstone Real Estate Partners VI.TE.2 L.P., Blackstone Real Estate Holdings VI L.P., and Blackstone GGP Principal Transaction Partners L.P. (incorporated by reference to Exhibit 99.4 to The Howard Hughes Corporation’s Current Report on Form 8-K, filed November 12, 2010) | ||||
| 10.3* | Form of The Howard Hughes Corporation Deferred Compensation Plan (incorporated by reference to Exhibit 99.1 to The Howard Hughes Corporation’s Current Report on Form 8-K, filed September 17, 2014) | ||||
| 10.4* | The Howard Hughes Corporation Management Co., LLC Separation Benefit Plan (incorporated by reference to Exhibit 10.1 to The Howard Hughes Corporation’s Current Report on Form 8-K, filed August 16, 2017) | ||||
| 10.5 | Share Purchase Agreement, dated March 27, 2020, by and among The Howard Hughes Corporation and Pershing Square Capital Management, L.P. (incorporated by reference to Exhibit 10.1 to The Howard Hughes Corporation’s Current Report on Form 8-K, filed March 31, 2020) | ||||
| 10.6* | The Howard Hughes Corporation 2020 Equity Incentive Plan (incorporated by reference to Exhibit 10.1 to The Howard Hughes Corporation’s Current Report on Form 8-K, filed May 20, 2020) | ||||
| 10.7* | Amendment No. 1 to Restricted Stock Agreements dated November 4, 2020 between The Howard Hughes Corporation and David O’Reilly (incorporated by reference to Exhibit 10.3 to The Howard Hughes Corporation’s Quarterly Report on Form 10-Q, filed November 5, 2020) | ||||
| 10.8* | Second Amended and Restated Employment Agreement, dated December 1, 2020, between The Howard Hughes Corporation and David O’Reilly (incorporated by reference to Exhibit 10.1 to The Howard Hughes Corporation’s Current Report on Form 8-K, filed December 2, 2020) | ||||
| 10.9* | Employment Agreement, dated December 1, 2020, between The Howard Hughes Corporation and L. Jay Cross (incorporated by reference to Exhibit 10.2 to The Howard Hughes Corporation’s Current Report on Form 8-K, filed December 2, 2020) | ||||
| 10.10* | Employment Agreement, dated January 12, 2022, between the Howard Hughes Corporation and Carlos Olea (incorporated by reference to Exhibit 10.1 to The Howard Hughes Corporation’s Current Report on Form 8-K, filed January 12, 2022) | ||||
| 10.11* | Form of Time-Based Restricted Stock Award (Executives with Employment Agreements) under The Howard Hughes Corporation 2020 Equity Incentive Plan (incorporated by reference to Exhibit 10.1 to The Howard Hughes Corporation’s Quarterly Report on Form 10-Q, filed May 10, 2021) | ||||
| 10.12* | Form of Time-Based Restricted Stock Award (Executive Officers without Employment Agreements) under The Howard Hughes Corporation 2020 Equity Incentive Plan (incorporated by reference to Exhibit 10.2 to The Howard Hughes Corporation’s Quarterly Report on Form 10-Q, filed May 10, 2021) | ||||
| 10.13* | Form of Performance-Based Restricted Stock Award (Executive Officers with Employment Agreements) under The Howard Hughes Corporation 2020 Equity Incentive Plan (incorporated by reference to Exhibit 10.3 to The Howard Hughes Corporation’s Quarterly Report on Form 10-Q, filed May 10, 2021) | ||||
| 10.14* | Form of Performance-Based Restricted Stock Award (Executive Officers without Employment Agreements) under The Howard Hughes Corporation 2020 Equity Incentive Plan (incorporated by reference to Exhibit 10.4 to The Howard Hughes Corporation’s Quarterly Report on Form 10-Q, filed May 10, 2021) | ||||
| 10.15* | Form of Restricted Stock Agreement for Nonemployee Directors under The Howard Hughes Corporation 2020 Equity Incentive Plan (incorporated by reference to Exhibit 10.2 to The Howard Hughes Corporation’s Quarterly Report on Form 10-Q, filed August 4, 2021) | ||||
| 10.16* | Assignment and Assumption Agreement by and between The Howard Hughes Corporation and Howard Hughes Holdings Inc., dated as of August 11, 2023 (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K12B, filed August 11, 2023) | ||||
HHH 2025 FORM 10-K | 112
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| 10.17 | Transition Services Agreement, dated July 31, 2024, between Howard Hughes Holdings Inc. and Seaport Entertainment Group Inc. (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K, filed August 1, 2024) | ||||
| 10.18 | Tax Matters Agreement, dated July 31, 2024, between Howard Hughes Holdings Inc. and Seaport Entertainment Group Inc. (incorporated by reference to Exhibit 10.2 to the Company’s Current Report on Form 8-K, filed August 1, 2024) | ||||
| 10.19 | Employee Matters Agreement, dated July 31, 2024, between Howard Hughes Holdings Inc. and Seaport Entertainment Group Inc. (incorporated by reference to Exhibit 10.3 to the Company’s Current Report on Form 8-K, filed August 1, 2024) | ||||
| 10.20* | Amendment No. 1 to Second Amended and Restated Employment Agreement, effective as of January 1, 2024, between Howard Hughes Holdings Inc. and David O’Reilly (incorporated by reference to Exhibit 10.20 to the Company’s Annual Report on Form 10-K, filed February 26, 2025) | ||||
| 10.21* | Amendment No. 1 to Employment Agreement, effective as of January 1, 2024, between Howard Hughes Holdings Inc. and L. Jay Cross (incorporated by reference to Exhibit 10.21 to the Company’s Annual Report on Form 10-K, filed February 26, 2025) | ||||
| 10.22* | Amendment No. 1 to Employment Agreement, effective as of January 1, 2024, between Howard Hughes Holdings Inc. and Carlos Olea (incorporated by reference to Exhibit 10.22 to the Company’s Annual Report on Form 10-K, filed February 26, 2025) | ||||
| 10.23* | Employment Agreement between Howard Hughes Holdings Inc. and Joseph Valane dated December 29, 2023 (incorporated by reference to Exhibit 10.23 to the Company’s Annual Report on Form 10-K, filed February 26, 2025) | ||||
| 10.24* | Amendment No. 2 to Second Amended and Restated Employment Agreement, effective as of April 1, 2025, between Howard Hughes Holdings Inc. and David O’Reilly (incorporated by reference to Exhibit 99.1 to the Company’s Current Report on Form 8-K, filed April 4, 2025) | ||||
| 10.25* | Amendment No. 2 to Employment Agreement, effective as of April 1, 2025, between Howard Hughes Holdings Inc. and Carlos A. Olea (incorporated by reference to Exhibit 99.2 to the Company’s Current Report on Form 8-K, filed April 4, 2025) | ||||
| 10.26* | Amendment No. 1 to Employment Agreement, effective as of April 1, 2025, between Howard Hughes Holdings Inc. and Joseph Valane (incorporated by reference to Exhibit 99.3 to the Company’s Current Report on Form 8-K, filed April 4, 2025) | ||||
| 10.27 | Share Purchase Agreement, dated May 5, 2025, by and between the Company and Pershing Square Holdco, L.P. (incorporated by reference to Exhibit 10.1 to the Howard Hughes Holdings Inc. Current Report on Form 8-K, filed May 6, 2025) | ||||
| 10.28 | Services Agreement, dated May 5, 2025, by and between the Company and Pershing Square Capital Management, L.P. (incorporated by reference to Exhibit 10.2 to the Howard Hughes Holdings Inc. Current Report on Form 8-K, filed May 6, 2025) | ||||
| 10.29 | Shareholder Agreement, dated May 5, 2025, by and between the Company, Pershing Square Holdco, L.P., and Pershing Square Capital Management, L.P. (incorporated by reference to Exhibit 10.3 to the Howard Hughes Holdings Inc. Current Report on Form 8-K, filed May 6, 2025) | ||||
| 10.30 | Standstill Agreement, dated May 5, 2025, by and between the Company and Pershing Square Holdco, L.P. (incorporated by reference to Exhibit 10.4 to The Howard Hughes Holdings Inc. Current Report on Form 8-K, filed May 6, 2025) | ||||
| 10.31 | Registration Rights Agreement, dated May 5, 2025, by and between the Company, Pershing Square Holdco, L.P. and Pershing Square Capital Management, L.P. on behalf of certain of its affiliates (incorporated by reference to Exhibit 10.5 to the Howard Hughes Holdings Inc. Current Report on Form 8-K, filed May 6, 2025) | ||||
| 10.32 | Separation and Release Agreement, dated June 8, 2025, between Howard Hughes Holdings Inc. and L. Jay Cross (incorporated by reference to Exhibit 99.1 to the Howard Hughes Holdings Inc. Current Report on Form 8-K, filed June 10, 2025) | ||||
| 10.33* | 2025 Equity Incentive Plan (incorporated by reference to Exhibit 10.1 to the Howard Hughes Holdings Inc. Current Report on Form 8-K filed October 7, 2025) | ||||
| 10.34 | Purchase and Sale Agreement, dated December 17, 2025 (incorporated by reference to Exhibit 10.1 to the Howard Hughes Holdings Inc. Current Report on Form 8-K filed December 18, 2025) | ||||
| 10.35 | Equity Commitment Letter (incorporated by reference to Exhibit 10.2 to the Howard Hughes Holdings Inc. Current Report on Form 8-K filed December 18, 2025) | ||||
| 19.1+ | |||||
HHH 2025 FORM 10-K | 113
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| 21.1+ | List of Subsidiaries | ||||
| 23.1+ | Consent of KPMG LLP | ||||
| 24.1+ | Power of Attorney | ||||
| 31.1+ | Certification of Chief Executive Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 | ||||
| 31.2+ | Certification of Chief Financial Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 | ||||
| 32.1++ | Certification of Chief Executive Officer and Chief Financial Officer Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 | ||||
| 97.1 | Executive Compensation Recoupment Policy (incorporated by reference to Exhibit 97.1 to the Company’s Annual Report on Form 10-K, filed February 27, 2024) | ||||
| 101.INS | Inline XBRL Instance Document - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document | ||||
| 101.SCH+ | Inline XBRL Taxonomy Extension Schema Document | ||||
| 101.CAL+ | Inline XBRL Taxonomy Extension Calculation Linkbase Document | ||||
| 101.LAB+ | Inline XBRL Taxonomy Extension Label Linkbase Document | ||||
| 101.PRE+ | Inline XBRL Taxonomy Extension Presentation Linkbase Document | ||||
| 101.DEF+ | Inline XBRL Taxonomy Extension Definition Linkbase Document | ||||
| 104 | Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101) | ||||
* Management contract, compensatory plan, or arrangement
+ Filed herewith
++ Furnished herewith
Attached as Exhibit 101 to this report are the following documents formatted in iXBRL (Inline Extensible Business Reporting Language): (i) the Consolidated Statements of Operations for the years ended December 31, 2025, 2024, and 2023, (ii) Consolidated Statements of Comprehensive Income (Loss) for the years ended December 31, 2025, 2024, and 2023, (iii) the Consolidated Balance Sheets as of December 31, 2025 and 2024, (iv) Consolidated Statements of Equity for the years ended December 31, 2025, 2024, and 2023, (v) the Consolidated Statements of Cash Flows for the years ended December 31, 2025, 2024, and 2023, and (vi) the Notes to Consolidated Financial Statements.
Item 16. Form 10-K Summary
Not applicable.
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| SIGNATURES | ||
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
Howard Hughes Holdings Inc.
| /s/ Carlos A. Olea | ||||||||
| Carlos A. Olea | ||||||||
| Chief Financial Officer | February 19, 2026 | |||||||
Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.
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| Signature | Title | Date | ||||||||||||
| * | Executive Chairman of the Board and Director | February 19, 2026 | ||||||||||||
| William Ackman | ||||||||||||||
| /s/ David R. O’Reilly | Chief Executive Officer and Director | February 19, 2026 | ||||||||||||
| David R. O’Reilly | (Principal Executive Officer) | |||||||||||||
| /s/ Carlos A. Olea | Chief Financial Officer | February 19, 2026 | ||||||||||||
| Carlos A. Olea | (Principal Financial Officer) | |||||||||||||
| /s/ Elena Verbinskaya | Chief Accounting Officer | February 19, 2026 | ||||||||||||
| Elena Verbinskaya | (Principal Accounting Officer) | |||||||||||||
| * | Director | February 19, 2026 | ||||||||||||
| David Eun | ||||||||||||||
| * | Director | February 19, 2026 | ||||||||||||
| Ben Hakim | ||||||||||||||
| * | Director | February 19, 2026 | ||||||||||||
| Ryan Israel | ||||||||||||||
| * | Director | February 19, 2026 | ||||||||||||
| Thom Lachman | ||||||||||||||
| * | Director | February 19, 2026 | ||||||||||||
| Susan Panuccio | ||||||||||||||
| * | Director | February 19, 2026 | ||||||||||||
| R. Scot Sellers | ||||||||||||||
| * | Director | February 19, 2026 | ||||||||||||
| Mary Ann Tighe | ||||||||||||||
| * | Director | February 19, 2026 | ||||||||||||
| Jean-Baptiste Wautier | ||||||||||||||
| * | Director | February 19, 2026 | ||||||||||||
| Anthony Williams | ||||||||||||||
| */s/ David R. O’Reilly | ||||||||||||||
| David R. O’Reilly | ||||||||||||||
| Attorney-in-fact | ||||||||||||||
HHH 2025 FORM 10-K | 116
FAQ
What is Howard Hughes Holdings (HHH) changing in its business strategy?
Howard Hughes Holdings is shifting from a pure-play real estate company to a diversified holding company. It plans to own controlling stakes in operating businesses, while continuing to develop master planned communities and income-producing properties, using real estate cash flows to support both development and acquisitions.
What major transactions did Howard Hughes (HHH) complete or announce in 2025?
In 2025, Howard Hughes sold 9,000,000 new common shares to Pershing Square for $900 million . It also agreed to acquire 100% of Vantage Group Holdings Ltd., a specialty insurance and reinsurance company, for approximately $2.1 billion in cash, subject to regulatory approvals and customary closing conditions.
How financially leveraged is Howard Hughes Holdings (HHH) according to the 2025 10-K?
As of December 31, 2025, Howard Hughes reported total consolidated debt of about $5.1 billion , equal to roughly 48% of the book value of total assets. Net debt, including its share of unconsolidated venture debt and cash adjustments, was approximately 39% of total enterprise value.
What are Howard Hughes Holdings’ (HHH) main business segments?
Howard Hughes operates through three segments: Operating Assets, Master Planned Communities, and Strategic Developments. Operating Assets generate recurring rental income, MPCs focus on large-scale land development and sales, and Strategic Developments handle new projects, including condominium towers that later transition into income-producing operating properties.
What key risks does Howard Hughes Holdings (HHH) highlight in its 2025 10-K?
The company cites exposure to real estate cycles, housing demand, interest rates, and construction costs. It also flags geographic concentration, climate and extreme weather, cybersecurity threats, regulatory and entitlement challenges, high indebtedness, joint-venture risks, and execution risks around its Pershing Square partnership, Vantage acquisition, and new holding-company strategy.
How large is Howard Hughes Holdings’ (HHH) master planned community land bank?
Howard Hughes reports one of the nation’s largest MPC portfolios, spanning about 101,000 gross acres across five states. As of December 31, 2025, its MPCs, including the Floreo joint venture, contained roughly 34,000 acres available for sale or development across residential and commercial uses in multiple high-demand U.S. markets.
What is Pershing Square’s role and ownership stake in Howard Hughes Holdings (HHH)?
Pershing Square beneficially owns about 46.7% of Howard Hughes’ outstanding common stock as of February 12, 2026. It receives advisory fees under a long-term services agreement and has board nomination rights, giving it significant influence over strategy, capital allocation, management decisions, and other key corporate policies.
Howard Hughes Holdings Inc.
NYSE:HHH
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Real Estate - Development
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