Good day, and welcome to Howard Hughes Holdings, Inc. Third Quarter 2023 Earnings Call. [Operator Instructions] Please note that today's event is being recorded. I would now like to turn the conference over to Eric Holcomb, Senior Vice President of Investor Relations. Please go ahead, sir.

Good morning, and welcome to Howard Hughes Holdings Third Quarter 2023 Earnings Call. With me today are David O'Reilly, Chief Executive Officer; Jay Cross, President; Carlos Olea, Chief Financial Officer; and Dave Striph, Head of Operations. Before we begin, I would like to direct you to our website, howardhughes.com where you can download both our third quarter earnings press release and our supplemental package. The earnings release and supplemental package include reconciliations of non-GAAP financial measures that will be discussed today in relation to their most directly comparable GAAP financial measures. Certain statements made today that are not in the present tense or that discuss the company's expectations are forward-looking statements within the meanings of the federal securities laws. Although the company believes that the expectations reflected in such forward-looking statements are based upon reasonable assumptions, we can give no assurance that these expectations will be achieved. Please see the forward-looking statement disclaimer in our third quarter earnings press release and the risk factors in our SEC filings for factors that could cause material differences between forward-looking statements and actual results. We are not under any duty to update forward-looking statements unless required by law. With that, I will now turn the call over to our CEO, David O'Reilly.

Thank you, Eric. Good morning, and welcome to our Third Quarter Earnings Call. I'm going to begin today with a recap of the quarter and cover the segment highlights for our master planned communities in the Seaport. Dave Striph will cover our operating assets, followed by Jay Cross who will update our development projects in Ward Village. And then finally, Carlos Olea will provide an update on our full-year guidance and review our balance sheet. For the third quarter, I'm pleased to report that our company continued to deliver strong financial results in our businesses with resilient underlying demand across our world-class portfolio of assets. Looking quickly around our core segments, we reported strong MPC EBT, which was highlighted by meaningful land sales at a record average price per acre. Our MPC results were complemented by a sharp increase in new homes sold, which is a leading indicator of future land sales, further providing assurance for robust land sales activity in the quarters ahead. Our operating assets continue to deliver incredible results, with year-over-year NOI growth in all 3 core property types, including double-digit increases in multifamily. In Ward Village, our sales team delivered another quarter of exceptional condo sales, selling out A'ali'i and Ulana, and all but one unit at Ko'ula, which was contracted in early October. At quarter end, more than 98% of all condo units in Ward Village were sold or under contract, which is simply an amazing achievement. With these strong results and our favorable outlook for the fourth quarter, we further increased our full-year guidance expectations for MPC EBT and operating asset NOI. We've also expanded our projected condo sales and gross margins to include the sellout of A'ali'i and Ko'ula. At the Seaport, results remain challenging, with third quarter revenues declining $3 million or…

Thank you, David, and good morning. In the third quarter, operating assets continue to experience heightened demand and year-over-year growth across each of our 3 core asset types. In total, we delivered an impressive $63 million of net operating income, which represented a 3% improvement compared to the prior year. Sequentially, NOI declined $5 million, primarily due to onetime lease termination fees during the second quarter at $17.25 Hughes Landing in the Woodlands. This vacated space is already under promising lease negotiations, further exemplifying the strong office demand we are seeing today. We also experienced a normal seasonal decline from the ballpark in Las Vegas, with reduced attendance through the peak summer months. Looking at our property types in more detail, the most significant year-over-year increase was seen in our multifamily portfolio, which delivered record quarterly NOI of nearly $14 million, an incredible 18% improvement. This growth was primarily driven by a 4.5% average in-place rent growth, along with favorable performance from Starling at Bridgeland and Marlow in Columbia, both of which continued lease-up at an outstanding pace. At quarter end, Starling was 93% leased and Marlow was 55% leased, with both properties achieving these results in a year or less. These improvements were partially offset by initial operating losses from Tanager Echo, the latest addition to our multifamily portfolio in Summerlin, which opened in July, and was 13% leased at quarter end. Overall, our stabilized multifamily properties finished the quarter 96% leased, with Downtown Columbia at 97%, Houston at 96%, and Summerlin at 93%. Our office portfolio generated third quarter NOI of $29 million, reflecting a 3% year-over-year improvement. This increase was primarily the result of strong lease-up activity and rent abatement expirations in the Woodlands, partially offset by some tenant turnover in our older assets in Downtown Columbia. In the Woodlands, 9950 Woodloch Forest, our flagship office in this market, has seen tremendous financial improvement with a 31% increase in leased space during the last year. This trophy asset closed the quarter at 91% leased, with the remaining space in negotiation or under expansion options for existing tenants. Overall, with our stabilized office portfolio at 87% leased, we continue to see strong demand for our highly monetized Class A office assets across all markets. In retail, the third quarter NOI was just under $13 million, or a 4% increase compared to the prior year. The improvement was related to increased rental revenue in Houston and Ward Village as lease percentages increased 6% and 2% year-over-year, respectively. Thoughtful improvements in the tenant base in Downtown Summerlin has also contributed to year-over-year growth as increases in retail sales and rental revenue drive the continued success of Summerlin's premier shopping destination. With that, I will now turn the call over to our President, Jay Cross for a review of our Strategic Development segment.

Thank you, Dave, and good morning, everyone. In the third quarter, we achieved several key milestones, including the substantial completion of one multifamily project, and the start of construction on 2 new developments in our pipeline. We also continue to make good progress on all of our projects under construction. Starting in Houston, we are making exceptional progress with the development of Wingspan, our single-family for rent development located in Bridgeland. This project, which encompasses 263 homes celebrated its grand opening a couple of weeks ago and welcomed its first residents. We anticipate Wingspan will be fully completed in mid-2024. In the Woodlands, we started construction on 1 Riva Row, a 268 unit high-rise multifamily development along the waterway. This much awaited project will set a new standard for luxury in the Howard Hughes portfolio, and contribute meaningful NOI of nearly $10 million per year upon stabilization. We expect to complete this project in mid to late 2025. In Las Vegas, we completed construction and started leasing at Tanager Echo, our newest multifamily offering, with 294 units in the heart of Downtown Summerlin. Right across the street from Tanager Echo, we also recently announced and started construction on a new 67,000 square foot retail development, which will be anchored by a new Whole Foods Market. This new grocery-anchored center will be the first of its kind in Downtown Summerlin, and we expect it will be completed in the third quarter of 2024. A few miles South, we continue to make solid progress on the South Summerlin office, which comprises 2, 3-story office buildings, totaling 147,000 square feet. Topped off and enclosed, we expect this lead silver project will be completed during the first quarter of 2024. Looking quickly at Downtown Columbia. Construction continues on our 86,000 square foot medical office…

Thank you, Jay, and good morning. Let's start by addressing the impairment charge of the Seaport. As we mentioned during this call last quarter, stabilization and profitability were taking longer than expected. Office leasing challenges, the elimination of the 421a tax abatement program, significant weather events and lagging sales triggered a full impairment analysis during this quarter. This cash flow headwinds, when combined with lower restaurant multiples and higher cap rates, resulted in an after-tax impairment charge of $555 million. While we may believe that multiples will increase and cap rates will decrease over time, this analysis must be made at a point in time, using information available at that moment. This does not diminish our view of the Seaport's prospects post-spin, and we will remain focused and dedicated to a successful transition. Let's move on to an update to our full-year guidance. In MPCs, our strong results in the third quarter and our anticipated residential land sales in the fourth quarter are expected to drive significantly higher EBT for the full year. We now expect EBT to be up 10% to 20% year-on-year, which would imply record MPC EBT of $325 million at the midpoint. This compares favorably to our prior guidance of flat to down 10%, and represents an increase at the midpoint of approximately $55 million. Compared to our initial full-year guidance announced at the beginning of the year, MPC EBT is expected to be higher by $125 million at the midpoint. In operating assets, our impressive NOI performance in the third quarter, combined with our strong results throughout the year, is expected to drive enhanced NOI. Excluding the contribution from divested retail assets in 2022, operating assets NOI is now expected to be in a range of up 2% to 4% year-over-year, or approximately $243 million…

Thank you, Carlos. Before we open up for Q&A, just a couple of closing thoughts. First, despite high mortgage rates, the new home market remains strong, and homebuilders continue to seek our land at record prices. As a result, we have further increased MPC EBT guidance to a range that will likely yield record full year results. Our operating assets continue to deliver exceptional performance, which has also resulted in increased 2023 NOI guidance, again, to record levels for the year. Our strong lease up, particularly in office, will help to drive significant NOI growth in the years to come, and move this segment closer to stabilization. And finally, the anticipated spinoff of Seaport Entertainment in 2024 is a significant milestone in the history of Howard Hughes. We believe operating as a pure-play master plan community company will allow us to better focus our attention on our extensive pipeline and attractive growth opportunities within our MPCs. At the same time, Anton and the team at Seaport Entertainment will be better poised to unlock the value of these unique assets and seek complementary growth opportunities in the entertainment space. All right. With that, let's start the Q&A portion of the call. Operator, can you please open the line for our first question?

[Operator Instructions] Today's first question comes from Anthony Paolone with JPMorgan.

First question relates to the spin, I guess, just multi-parts. Just one, can you tell us if there -- or maybe what the key gaining items we should be watching are to kind of understand timing? And then also just any decisions on whether 250 Water Street goes in or the Aviator stadium goes in or out?

I appreciate the question. It's David. Look, there's a lot of diligence we have left to do, and there's a lot of items we need to complete, including finishing the audited financials that would go into Form 10, legal diligence associated with this, the tax structuring and consents of multiple parties, including lenders at both the stadium and 250 Water. I think that it'd be difficult for me to pontificate at this time as to whether or not those assets are in or out until we work through the conversations and have the discussions on all the requirements we need to get the spin done. As you know, it's a multiple filing process with the SEC. It takes time for them to review and provide comments to respond. Look, in a best case scenario, this is a middle of next year completion, and in all likelihood, it's more towards the back half of next year. There's a lot of diligence and a lot of work that needs to go. And we're at the very early stages right now. So until we're able to lock down that full consent list and the legal structuring, it's going to be tough for me to say exactly which assets are in or out.

Okay. Got it. And then second question relates to the yields on some of the incremental developments in a higher rate environment, 4% on the Whole Foods deal, and 6% on the incremental apartment start. Just wondering, like how you think about where those should be when you're balancing just the return on your capital as well as just the place-making goals for those MPCs more broadly? And I asked, particularly, as you mentioned kicking off sort of the downtown of Bridgeland.

Sure. Jay, I'll let you comment on the individual assets. But in general, Tony, as you know, as master plan developer and as a curator of these communities, the value inherent to us in development is not just the value that's created on that exact block and that exact project. But the value that, that project has on all the surrounding lands around it. The ballpark here in Downtown Summerlin is a perfect example where we delivered that at a good yield, not the best we've ever developed. But what it did in terms of driving sales per foot at the retail center across the street, office leasing and office rents, multifamily leasing, multifamily rents, with that as a catalyst, weighed into the decision. And I think that's absolutely the same case here. Specifically, with Whole Foods in Downtown Summerlin. We have Whole Foods in the Woodlands, in Ward Village and in Columbia in the old headquarters building. And we've seen in all 3 of those instances, how much that operation, that tenant can catalyze an entire urban core. And I don't think that's any different with doing this deal here in Summerlin. Clearly, we would love to see that 4% be much higher. And the yields that we're getting on the in-line retail adjacent to Whole Foods are much higher. The Whole Foods deal itself is less desirable. But the impact that, that Whole Foods deal has on the surrounding land here. And as you know, we have multiple acres that we're continuing to develop here. We think it's pretty substantial and worth leaning into there. Jay?

Yes. Just following up with David's comments, in Summerlin in particular, we have a pretty ambitious multifamily program, I mean, Downtown Summerlin, once Tanager Echo is leased up, we think the presence of Whole Foods is going to accelerate our ability to develop the balance of downtown. And then switching to Riva Row in the Woodlands, as we've noted in the office segment, there's been a flight to quality. Our most successful office building here is 9950, and similarly, we believe that there's going to be a flight to quality of multifamily. And so while we perform market rents based on the success of the [indiscernible] and 2 Lakes Edge, Riva Row is by far the best product we've designed yet in the Woodlands, and we think there's a significant opportunity to outperform. And then with respect to Bridgeland, it's early days yet, but the Chevron announcement has really encouraged us to more seriously start to master plan that urban core. We're starting to look at additional retail and potentially more office, again, to establish Bridgeland as a commercial center, introduce them to a residential center. And so there's more to come on that, but we're excited about the potential of Downtown Bridgeland.

The next question comes from Alexander Goldfarb with Piper Sandler.

First, congrats on the Seaport Entertainment news. That's definitely welcome. David, I know quarterly earnings is a healthy conversation that you and I have always. But as we look at your results, it looks like ex-Seaport, everything else was super strong. And everything was performing the way it should with guidance increases across most of the major business lines. So I just want to make sure that my interpretation of the quarterly earnings is correct that apart from the Seaport, everything else in the company is performing well and continuing to exceed. Is that a fair representation? Or did I miss -- I don't want to misrepresent something in the quarter?

Alex, I think that was well said. We increased our guidance in our MPC segment to a record number for the company, despite this higher interest rate environment. Our current run rate NOI is the highest in the history of the company. And as you know, over the past several years, we've sold our hotels, we've sold our noncore retail, we sold self-storage. We chipped away at that NOI, and despite selling assets that were noncore, our core office, retail and multifamily have demonstrated great resilience in a more challenging market due to the desirability of our communities, delivering incredible results in our operating asset portfolio. And then we had a modest price reduction that we talked about last quarter in Hawaii, and it was exactly what was needed because we sold out both Ko'ula and A'ali'i at better numbers than we had anticipated even last quarter. And the momentum continues there with presales at Kalae continuing to go higher every month. So I think your comments are spot on, that every piston in this company is firing as the best it ever has, with the exception of the Seaport, which has faced some unfortunate headwinds, some of which are beyond our control and mother nature being the biggest culprit in the month of September.

Okay. And then the next question, David, is until Seaport Entertainment spills -- spins off, is there other noise that we will see in the quarterly results? Or is all of that sort of taken care of in this quarter?

I think if your question is asking about kind of the onetime items or a recurrence of the type of announcements like we saw this quarter with the impairment, I don't anticipate any. I'll never say never because things change overnight, and pretty dramatically in some instances. But we don't see any kind of one-timers or major items out there that we would want to highlight or guide to today.

Okay. And then is there an update that you can provide on Nevada? I don't know if there's anything on the ballot for election today or if there's anything legislatures contemplating with regards to the studio tax credits, but maybe an update there?

Yes. We're continuing to advance the ball down the field. And the team here in Summerlin, we're taking our earnings call today from the Summerlin office, has done an incredible job partnering with the governor, with the Senate, with the assembly, and helping to craft the bill that we think will meet the needs of all the folks involved, including our local residents and all the residents of Southern Nevada who want to see a stronger, more diversified economy and the influence of diversification factor with the film studio business. We're still continuing to work closely with Sony, but we don't have a date yet for a special session on legislature where we would try to get this bill brought. Positive momentum, but no clear definite date on when we can get going.

Okay. And just final question is, the home sales are certainly strong. Obviously, the land sales as well. What you're seeing with the homebuilders and the home sales to new residents, are those being achieved through homebuilder incentives that helps buyers overcome the current interest rate environment? Or is this really true -- not true demand, but is it really just the buyers just looking through 7% plus mortgages, and just biting the bullet and buying. I'm trying to understand how much of the home sales are helped by builder incentives versus just the natural demand is overcoming the interest rate environment?

The answer to that, Alex, is yes, because we're seeing all of the above. In Summerlin here, where we have mostly national homebuilders, many of which have their own mortgage companies, we've seen them lean in with short-term and even long-term rate buy-downs, typically around 100, 150 basis points. In Bridgeland, where we've had incredible home sales, we're dealing with large regional private builders, most of which don't have their own mortgage company, and have only in limited instances provided incentives with rate buydowns. So I think we've seen both. All buyers come to the table with different needs. Some are short-term rates that buy down, somewhat long term, some don't want any. And I think the homebuilders are being thoughtful and creative how they address the needs of individual buyers and driving home sales. And the results of the public homebuilders have been nothing short of, I think, exceptional. We've seen quarter after quarter and in some instances, 8 to 10 quarters in a row, with margins over 25%. And I think that means that there's still leverage in the hands of the homebuilder, not the home buyer because the limited supply of resale inventory is pushing everyone in new construction.

The next question is from Peter Abramowitz with Jefferies.

Just wondering if you could talk about the 2 new projects you broke ground on in the operating assets segment this quarter. I guess, what made them particularly attractive, looking at the returns relative to your cost of capital? And I guess, how does that stack up in terms of the opportunity set that's out there today for development?

Yes. Peter, I think we -- Jay and I have kind of both discussed it a little bit, a couple of questions ago, the individual projects with Whole Foods and Riva Row. I'll try and summarize it pretty quickly, so I'm not redundant. We've always built Whole Foods in our communities as we think they're catalysts to changing and transforming the landscape. And as Jay mentioned, we have a large-scale master plan here in Downtown Summerlin with a tremendous amount of multifamily assets in our pipeline. And having a Whole Foods can catalyze those with higher rents and get that development pipeline moving faster. And then at Riva Row, in the Woodlands, this is going to be pushing the high bar and luxury for multifamily, what we've seen in the Woodlands and perhaps in all of Houston. And we think that we've been very conservative on how we've underwritten that asset. We think it's also an asset that's going to impact its surrounding land and surrounding community on the waterway. And will have an overall positive impact to give value creation for our company over the long term. With that said, and Jay mentioned this, I think, last quarter in his prepared remarks, it is harder today to make yields work on new development projects. And you should expect that we're going to see more of a rifle shot approach to picking those great assets that deliver outsized returns or they continue to catalyze the surrounding land around it that make those communities better places to live, drive home sales, drive higher rents, drive a better sense of place. Look, inflation costs are difficult, higher rates are difficult, exit valuations are clearly unknown right now given the lack of transactions going on. So I think that you'll continue to see us, again, take those rifle shot approaches, continue to move forward in Hawaii, where we don't seem to see those same type of impacts, and hence continue to deliver great margins and outsized risk-adjusted returns.

Got it. And then one more. Could you just talk about what the underwritten loan-to-value was, particularly on those office loan extensions you executed in October?

I'm hesitating, Peter, because I don't know what value is right now for office assets, even well-leased, cash-flowing office assets. Those extensions came with modest paydowns from their whole levels. I think the LTVs are very conservative where they are. I would venture 50 or sub-50, but it all depends on where you think the right office cap rate is. What you think office values are in this world, where there hasn't been a lot of transactional volume that would demonstrate what a well leased cash-flowing office asset in the Woodlands would be worth.

[Operator Instructions] The next question comes from John Kim with BMO.

A couple of questions on the spin-off. Just bigger picture, what is the relationship going to be post-spin between Howard Hughes and Seaport Entertainment? Will you have an ownership stake in the new entity? Will there be any management rights? And also on the balance sheet, it looks like there's just $150 million of debt at 250 Water Street. I was wondering how much leverage will be on each entity, post-spin?

All great questions, John. So the relationship between Seaport Entertainment and Howard Hughes will be very similar to the relationship that Howard Hughes had when it's gone out from GGP, and that we won't have an ongoing ownership stake in Seaport Entertainment, the shareholders of HHH today would expect to receive ownership in both HHH and Seaport Entertainment, post-spin. We won't have direct ownership. I think that we will contemplate and discuss with Anton and the management team there having some transition services agreements in place as he builds his back office and support, whether it's IT, HR, risk management, accounting, et cetera. And we're happy to provide those external services until he's able to build the team and stand it up on its own. Again, that will be a decision for Anton and the team to make over time. But from our perspective, we're helpful -- we're wide open to be supportive in making sure they're successful as they're spun out into their own public company. Your second question was about leverage at each company. And I'm going to go back to the comments I made earlier with Tony that we're still working through a lot of the consent process, approval and structuring that would determine ultimately whether 250 Water is in Seaport Entertainment, and whether the stadium, the Las Vegas Ballpark stadium here in Nevada is in the spin. If those are in, the leverage associated with them would travel with them, assuming we're able to achieve those lender consents. But again, we don't have any details to share at this time or any certainty around that. Once we do, we will absolutely make sure all our investors know so that you can follow the leverage stats of both companies, pre and post spin.

I appreciate the moving parts. And I know that the goal is to ultimately just simplify the story for Howard Hughes. But will this spinoff be accretive to earnings year 1?

It should be -- look, I've never really focused on decisions of driving next quarter's earnings. We've always been focused on driving the long-term value creation for our shareholders, increasing our net asset value on a per share basis over the long term. The impetus for this decision is not because we'll squeeze out $0.005 of FFO. And I honestly don't even know what our FFO was this quarter because I don't think it's relevant to value. And I think, what it will do is it will focus our company. It allows us to use our recurring free cash flow from these land sales right into the backyard of these communities, making them more dynamic places, making them better places to live, work, play, learn, discover, and continuing to drive value. I think Anton and the team there are going to have an incredible opportunity with Seaport Entertainment to maximize that asset, as it's really transitioned from a traditional real estate asset with development, tenants and leases to a true operations, to concert venues, to restaurants, to food halls, to activations. And if you take that opportunity, which we think is pretty wide throughout the country in terms of unlocking value at a lot of real estate assets using operational expertise and entertainment expertise, I think they have a huge runway in front of them.

Okay. On the EBT guidance and MPC, which you increased pretty significantly, that implies a very strong fourth quarter. And I was wondering if you could provide any color on the breakout between Summerlin, Bridgeland, any potential commercial land sales, and how many sales are under LOI already?

I would say that sitting here in November, we have a pretty good visibility into the last 7 weeks of the year in terms of what we have under LOI, what we have under contract, that's just subject to typical closing conditions. I think the mix, as you'll see in the fourth quarter, will be largely in line with the third quarter in terms of Summerlin, Bridgeland, et cetera. And look, some of the unknowns out there are what's the builder price participation, right? And we had another incredible quarter this year of builder price participation that in an 8% mortgage rate environment, you don't expect folks to be paying premiums on homes above where we had sold the land, but it continues to happen, it continues to materialize. So those happy surprises, if you will, are tough to model and tough to know because you never know what those exact home sales will be until they close. We don't expect any material commercial sales in the fourth quarter.

Okay. And final one for me. On the Chevron sale at Bridgeland, great company to get to help spur development. They did get -- seem like they got attractive pricing on their commercial land acquisition. Was that discounted pricing, given they are essentially the anchor of the commercial? Or is that reflective of land prices today?

Look, I would tell you that the first purchase that they made, the initial 77 acres, I think it was a very full value, a very fair value. And honestly, I think that we charge more for the land than any other site that they were looking at in Houston. The second sale that had occurred this quarter of the 13 acres, that is land that they wanted to control for privacy reasons. It's land that's restricted to green space. So in light of that, I think it's a fair price.

Okay. So that's not going to be used for R&D?

No, that's adjacent land to the initial campus that they bought that they wanted to use to make sure they maintain their privacy.

The next question is a follow-up from Anthony Paolone with JPMorgan.

I just had one, just if you could remind me. On the Woodlands Towers, and then in Ward Village retail, for those 2, both have pretty high leased rates, but there's still this big gap between sort of the in place and the expected stabilized NOI. Can you remind me, like for those 2, what needs to happen to kind of get there?

Yes, absolutely. Great question, Tony. The Woodlands Towers is pretty simple. We just have to burn off free rent and build-out tenant space and get cash coming in the door. So I think we have a pretty short runway on time before we close the gap between the in-place NOI and stabilized NOI. It's really just the burn-off of abatements and timing of recently signed leases. Ward Village is a longer story because as you know, with each tower that we develop, we're knocking down older retail, taking away NOI, spending 2.5 years to build the tower that has new retail on the ground floor and then leasing that square footage up at a much higher rate, driving NOI higher. So it's one step back, 2 steps forward. To get to that stabilized NOI, it's going to take, again, the next 4 to 5 years as we build out the remainder of Ward Village, knocking down one block and building, a block in its place at a much higher NOI yield.

The next question is a follow-up from Alexander Goldfarb with Piper Sandler.

David, given the success of Ward Village, at what point do you start the discussions with the local municipalities about further development phases beyond what you currently have entitled?

I would love to answer it thoughtfully, honestly and accurately without giving away too much on this call. Look, we have 5 years, 6 years of runway ahead of us with the entitlements that we have. We think we have the opportunity to unlock some value and land West of Ward that we won't have touched when we've used our entitlement, and some other blocks in between buildings where there's opportunities such as Ward Entertainment center. It's too early to comment on that. We have a long road ahead of us in terms of being able to unlock value there. And I don't want to distract too much from the clear value creation we have in front of us in the next short term, with focus on what could be in years 6 through 12.

Okay. Cool. I just know everything out there takes a while, but it sounds like you have plenty of runway.

Yes. Look, it would be a bad move on our part, if we didn't start thinking about that a long time ago, and working on it very much real time, right? I mean, with the machine that's there under Doug's leadership and Bonnie's leadership in sales and the entire design, development and construction team that has grown into its maturity in Ward Village, our goal there is to make sure that we keep that team busy forever. And we're going to be looking under every stone over there to make sure that we can continue to unlock value using the expertise and scale with that team.

This concludes our question-and-answer session. At this time, I would like to turn the conference back over to David O'Reilly for any closing remarks.

Just want to thank everyone again for joining us. It was, in our view, nothing short of a spectacular quarter across our core business segments. We look forward to speaking with you at the upcoming conferences, our next earnings call. And if there's any questions in between, by all means, please feel free to reach out. Thank you again.

The conference has now concluded. Thank you for attending today's presentation, and you may now disconnect.