DALLAS — The Howard Hughes Corp. (NYSE: HHC), a mixed-use and residential real estate developer and operator with projects across the country, has announced a series of changes for the nine-year-old company. The Dallas-based firm plans to focus on its master-planned communities in Texas, Hawaii, New York, Maryland and Nevada and sell its non-core assets valued at roughly $2 billion over the next 12 to 18 months. HHC expects to net $600 million in cash proceeds from the sales.
The Dallas Morning News reports that HHC will put several high-profile projects up for sale, including the Outlet Collection at Riverwalk in New Orleans, the Bridges of Mint Hill in Charlotte, Elk Grove in Sacramento and 110 North Wacker, a 56-story office tower under construction in Chicago. HHC says the office tower will deliver in October 2020 and is 69 percent preleased.
HHC recently sold Cottonwood Mall in Salt Lake City for $56 million and plans to shop Monarch City, a 261-acre mixed-use project that the Allen City Council approved earlier this summer.
Leadership change, HQ move
Paul Layne, president of HHC’s Central region, is taking over as CEO effective immediately as David Weinreb and Grant Herlitz are stepping down from the company.
“I consider David Weinreb and Grant Herlitz to be the co-founders of The Howard Hughes Corp.,” says Bill Ackman, chairman of the HHC board. “It is a testimony to their superb vision and execution that nine years ago 34 disparate, largely ignored development assets, spun off from a bankrupt shopping mall company, have been transformed into one of the largest and most successful real estate development companies in the United States.”
David O’Reilly, HHC’s chief financial officer, will have an enhanced role at the company. Layne, who has been with the firm since 2012, will replace Weinreb on HHC’s board of directors.
“It has been a privilege to lead this exceptional company since its inception,” said Weinreb. “As the company enters the next stage of its evolution, I wish Paul, David and the board continued success in HHC’s next chapter.”
HHC also plans to move its headquarters from One Galleria Tower in Dallas to The Woodlands, a northern suburb of Houston where the company has invested heavily in recent years with projects including Hughes Landing, a 66-acre mixed-use development with five Class A office buildings, 390 apartments, seven full-service restaurants, a 205-room Embassy Suites by Hilton hotel and outdoor amenities.
HHC expects to recoup approximately $45 million to $50 million per year through the combined changes of moving to its largest regional office in The Woodlands, the consolidation of its Dallas office and changing its corporate structure from a “holding-company-type” management system to a decentralized one.
The company’s stock price dropped precipitously in overnight trading following the announcement, closing at $128.40 per share on Monday, Oct. 21, and opening at $105.17 on Tuesday, Oct. 22. The lower price is still above its closing price of $110.03 per share one year ago.
Founded in 2010 as a spin-off from General Growth Properties (GGP), HHC’s roots reach back to the 1950s when Howard Hughes, a famous business magnate, investor, film producer, aviator and philanthropist, purchased a large tract of land in western Las Vegas that became the Summerlin master-planned community.
Howard Hughes’ holdings became Summa Corp. in 1973 and then The Howard Hughes Corp. in 1994. In 1996, the company merged with Rouse Co., which GGP acquired in 2004.
— John Nelson