Howard Hughes Boasts Solid Q3, Bullish on the Rest of 2024

Howard Hughes Holdings reported better than expected earnings results for the third quarter of 2024 and a significant year-over-year increase in land sales.  

On Tuesday’s earnings call, the company said earnings before taxes from its master-planned communities totaled $145 million, a record for Howard Hughes for the residential developments that are designed almost like small towns. It also saw an increase in land sales across its various markets, with revenues totaling $198 million for the quarter, a 163 percent increase compared to the same three-month period last year.

Howard Hughes’ third-quarter net income from continuing operations came in at $1.95 per share, compared to 64 cents per share in the prior year, topping Zacks’ consensus estimate of 19 cents per share.

“We reported exceptional results across our entire portfolio, further exemplifying the resilience of our unique business model and our continued ability to defy the narrative of the national real estate market,” Howard Hughes CEO David O’Reilly said on the company’s earnings call Tuesday. 

Additionally, total operating assets reached $64.8 million for the quarter, a rise of 8 percent when compared to the third quarter of 2023. Howard Hughes attributes this rise to its office segments, which saw a 9 percent year-over-year increase in net operating income (NOI) of $32 million. 

“During the quarter, we executed 114,000 square feet of new or expanded office leases across all of our markets, making our stabilized office portfolio 88 percent leased at quarter end,” David Striph, president of asset management and operations for Howard Hughes, said on the call. “We expect to further benefit from this leasing momentum in 2025 as office buildouts are completed and free-rent periods burn off.”

The firm’s multifamily portfolio also performed well in the third quarter, Striph said, with NOI of $16 million, a 15 percent year-over-year increase. Howard Hughes attributes this rise to increased rental revenue associated with leasing at some of its newest properties. 

Looking at 2024 as a whole, Howard Hughes expects a “strong and record-setting year,” according to Chief Financial Officer Carlos Olea. 

Howard Hughes Holdings’ stock was trading in the green Tuesday afternoon following the better-than-expected financial results, standing at $80.53 per share.

Amanda Schiavo can be reached at aschiavo@commercialobserver.com.