Howard Hughes Holdings Inc

Our Strategic Developments assets generally require substantial future development to maximize their value. Other than our condominium properties, most of the properties and projects in this segment do not generate revenues. Our expenses relating to these assets are primarily related to costs associated with constructing the assets, selling condominiums, marketing costs associated with our Strategic Developments, carrying costs including, but not limited to, property taxes and insurance, and other ongoing costs relating to maintaining the assets in their current condition. If we decide to redevelop or develop a Strategic Developments asset, we expect that with the exception of the residential portion of our condominium projects, upon completion of development, the asset would likely be reclassified to Operating Assets when the asset is placed in service and NOI would become a meaningful measure of its operating performance. All development costs discussed herein are exclusive of land costs.

Segment EBTSegment EBT for Strategic Developments is presented below:

Strategic Developments segment EBT increased $12.1 million compared to the prior-year period primarily due to the following:

–Condominium cost of sales includes a decrease of $16.1 million due to charges related to the defect remediation at Waiea incurred in the second quarter of 2023, that did not reoccur in the current quarter.

This increase to EBT was partially offset by the following:

–Depreciation increased $2.9 million compared to the prior-year period primarily due to accelerated depreciation for the Kalae model unit, which was decommissioned in the second quarter of 2024, to allow for the construction of future tower model units.

–Condominium sales, net of cost of sales decreased $1.7 million, excluding the change in remediation costs of $16.1 million discussed above, due to the timing of condominium closings. We had no condominium closings during the three months ended June 30, 2024, compared to 11 units at ‘A‘ali‘i and 4 units at Kō'ula during the prior-year quarter. The lower volume of condominium closings is expected as our completed towers are now 100.0% sold and the next tower, Victoria Place, is not scheduled for completion until late 2024.

Strategic Developments segment EBT increased $10.1 million compared to the prior-year period primarily due to the following:

–Condominium cost of sales includes a decrease of $13.1 million due to charges related to the defect remediation at Waiea. We charged$3.0 million in the first quarter of 2024, to fund the final remediation expenditures, compared to$16.1 million of additional costs charged in the prior-year period.

–Operating costs decreased $3.1 million, primarily due to a decrease in legal costs compared to the prior-year period.

These increases to EBT were partially offset by the following:

–Condominium sales, net of cost of sales decreased $4.1 million, excluding the change in remediation costs of$13.1 million discussed above, due to the timing of condominium closings. We had no condominium closings during the six months ended June 30, 2024, compared to 15 units at ‘A‘ali‘i and 5 units at Kō'ula and during the prior-year period.

–Depreciation increased $3.4 million compared to the prior-year period primarily due to accelerated depreciation for the Kalae model unit, which was decommissioned in the second quarter of 2024, to allow for the construction of future tower model units.

Condominiums Condominium revenue is recognized when construction of the condominium tower is complete and unit sales close, leading to variability in revenue recognized between periods.

Completed Condominiums

Ward Village As of June 30, 2024, our six completed condominiums in Ward Village, Ae`o, Ke Kilohana, Anaha, Waiea, ‘A‘ali‘i, and Kō‘ula, are completely sold.

Condominiums Under Construction

Ward Village As of June 30, 2024, 97.4% of the units at our four towers under construction, Victoria Place, The Park Ward Village, Ulana Ward Village, and Kalae are under contract.

We broke ground on Victoria Place in February 2021 and expect to complete construction in the fourth quarter of 2024. Victoria Place, which is 100.0% presold, will consist of 349 one-, two-, and three-bedroom units.

We broke ground on The Park Ward Village in October 2022 and expect to complete construction in 2026. The Park Ward Village will consist of 545 studio, one-, two-, and three-bedroom residences. As of June 30, 2024, we have entered into contracts for 522 units, representing 95.8% of total units.

We broke ground on Ulana Ward Village in January 2023 and expect to complete construction in 2025. Ulana Ward Village, which is 100.0% presold, will consist of 696 studio, one-, two-, and three-bedroom units. All units are designated as workforce housing units and are being offered to local residents who meet certain maximum income and net worth requirements.

We broke ground on Kalae in June 2024, and expect to complete construction in 2027. Kalae will consist of 329 one-, two-, and three-bedroom residences. As of June 30, 2024, we have entered into contracts for 303 units, representing 92.1% of total units.

Predevelopment Condominiums

Ward Village We launched public presales for The Launiu in February 2024. The Launiu will consist of 485 studio, one-, two-, and three-bedroom residences. As of June 30, 2024, we have entered into contracts for 248 units, representing 51.1% of total units.

The Woodlands We launched public presales of our first condominium project in The Woodlands in March 2024. The Ritz-Carlton Residences, The Woodlands will consist of 111 one-, two-, three-, and four-bedroom residences. The development sits on the last available large-scale residential site on Lake Woodlands, spanning roughly eight acres across approximately 1,200 feet of premier lakefront shoreline. As of June 30, 2024, we have entered into contracts for 72 units, representing 64.9% of total units.

The following provides further detail for all condominium projects as of June 30, 2024:

(a)The retail portions of these projects are 100% leased and have been placed in service.

(b)The retail portion of this project has been placed in service and is 56% leased.

(c)The Park Ward Village will include approximately 26,800 square feet of retail space.

(d)Ulana Ward Village will include approximately 32,100 square feet of retail space.

(e)Kalae will include approximately 2,000 square feet of retail space.

(f)The Launiu will include approximately 10,000 square feet of retail space.

(g)The Ritz-Carlton Residences will include approximately 5,800 square feet of retail space.