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Houston

Howard Hughes eyes corporate restructure

The Woodlands-based firm lost nearly $23M in the first quarter of 2023

A photo illustration of Howard Hughes CEO David O’Reilly (Getty, Howard Hughes)
A photo illustration of Howard Hughes CEO David O’Reilly (Getty, Howard Hughes)

A major real estate player in Houston plans to restructure by summer’s end. 

Howard Hughes Holding Corporation will become the parent company, ultimately replacing the Howard Hughes Corporation on the New York Stock Exchange. 

Trading will continue uninterrupted during the transition. Existing stock shares will automatically be converted into shares of the Howard Hughes Holding Corporation, maintaining the ticker symbol HHC. The board of directors and the executive officers will retain their positions. The change is expected to be effective on or around Aug. 11, but the exact date has yet to be announced. 

By establishing a holding company, the corporation aims to gain flexibility in funding future investment opportunities and segregating assets and liabilities among separate subsidiaries. 

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The Woodlands-based company reported a loss of nearly $23 million in the first quarter of 2023. That is a notable decline compared to the prior year’s net income of $2.1 million. The dip was due to equity losses tied to the Tin Building in New York, decreased inventory and higher interest expenses. 

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As of the end of the first quarter, Howard Hughes held almost $418 million in cash, while its total debt amounted to $4.8 billion. Of this debt, about $226 million is slated for maturity in 2023 and 2024. However, the company moved to mitigate risk by successfully fixing, capping or hedging 100 percent of its debt.

Howard Hughes intends for the holding company reorganization to be a tax-free transaction for federal income tax purposes. This tax-efficient approach is designed to minimize any potential tax burdens or complexities associated with the reorganization that could affect stockholders. By optimizing the tax implications, the company also seeks to maximize value for its investors. 

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