Hughes posts loss of $1.1M in quarter
Howard Hughes Corp. said lower condominium sales and increased corporate restructuring costs and consulting fees for technology and data integration projects contributed to a $1.1 million loss during the fourth quarter, compared with a $37.3 million profit during the same period a year earlier.
The Texas company, which is moving its headquarters to Houston in August, took a one-time charge in the quarter of $34.3 million, or 79 cents per share, associated with retention and severance payments in connection with management changes and the company’s corporate relocation.
The company’s restructuring expenses included $5 million for employee relocation, $23.6 million for severance and other benefits for former executives, $5.6 million for employee severance and a $4.7 million loss on the sale of the company plane.
After announcing a transformation plan in October, the Hughes board authorized $100 million for a share buyback program. The company purchased
$54 million before becoming a finalist in the bidding for what would become its largest acquisition to date.
That acquisition — totaling $565 million — included two office towers comprising 1.4 million square feet, a 125,801-square-foot warehouse and 9.3 acres in The Woodlands. The buildings were purchased from Occidental Petroleum, which acquired them with its purchase of Anadarko Petroleum. The Hughes Corp. renamed the office buildings The Woodlands Towers at The Waterway.
The tower acquisition increased the company’s office portfolio in The Woodlands by about 50 percent.
“It protects against competitors entering the market and provides us with new inventory,” Hughes
CEO Paul Layne said Friday morning in a conference call to discuss fourth quarter earnings.
Occidental is leasing both 808,000 square feet in the larger of the two towers and thewarehouse for 13 years.
For the remainder of the space, Layne said, “we are seeing very strong activity in the market and are engaged with several prospects.”
Hughes also purchased another Occidental property, the former ConocoPhillips
campus in West Houston, a 1.3 millionsquare-foot office campus on 63 acres in west Houston. The company renamed the property Century Park and has listed it for sale.
The Howard Hughes Corp. owns, manages and develops commercial, residential and mixed-use properties throughout the U.S. Its portfolio includes the Seaport District in New York; Columbia, Md.; The Woodlands, The Woodlands Hills and Bridgeland in the Greater Houston area, as well as Summerlin, Las Vegas; and Ward Village in Honolulu.
The company posted quarterly revenue of $284 million, down from $465 million a year earlier. Funds from operations fell $35.3 million, or 81 cents per share, during the quarter, compared with the same period in 2018.