HHH

HHH's underlying real estate engine is performing well: the 10-K explicitly calls 2025 'exceptional,' with MPC EBT up 36% YoY to a record $476.1M on heightened homebuilder demand at Summerlin and Bridgeland, and Operating Assets NOI hitting a record $262.0M (+7% ex-dispositions) on office lease-up at The Woodlands, Merriweather, and Summerlin (484,000 sq ft of new/expanded office leases signed). Ward Village's under-construction condos are 93% pre-sold, representing $1.9B of contracted future revenue — meaningful visibility. Operating cash flow grew to $462M (+16.6%) and the balance sheet is liquid: $1.47B cash plus $515M undrawn Bridgeland Notes capacity and $686.6M of undrawn development commitments.

The headline numbers look much worse than the business: FY2025 revenue fell 15.8% and net income fell 37.3% purely because the prior year's Ward Village closings were a luxury tower (high margin) while 2025 closings were Ulana, a workforce tower management explicitly notes ran at a 'break even gross margin' by design. Prior year also benefited from one-time Waiea insurance proceeds. Strategic Developments swung from +$282.8M EBT to a -$13.9M loss for these same product-mix reasons plus a Columbia legal-judgment accrual. Strip the optics and the core compounders (MPC + Operating Assets) accelerated. Share count rose 18.3% from the May 2025 $900M Pershing Square issuance at $100/share — a meaningful vote of confidence at a premium to today's $69.89.