Howard Hughes Holdings Inc. (HHH) Business

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.

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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.

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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.

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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).

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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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