The Howard Hughes Corporation
Update
01/10/23
The Howard Hughes Corporation® Executes $1.3 Billion in Recent Financings
The Howard Hughes Corporation® (NYSE: HHC) has closed $1.3 billion in key financings across its national portfolio, increasing the company's liquidity to over $800 million. The recent closings—which include refinancing of the company's Senior Secured Corporate Credit Facility and various financings across its national portfolio—further bolster the company's balance sheet as well as its financial flexibility and demonstrate its ability to execute accretive financings in a challenging capital markets environment.
With the new financings, HHC was able to fully retire the company's Senior Secured Corporate Credit Facility, which had an outstanding balance of approximately $242.2 million. These financings include a non-recourse, five-year $200 million term loan secured by certain retail collateral in Ward Village® and led by Bank of America, along with a limited-recourse, three-year $75 million term loan secured by 10-70 Corporate Center and One Mall North in Columbia, Maryland and led by J.P. Morgan.
The company has also refinanced assets in its Maryland and Texas regions. Two separate refinancings for projects in Downtown Columbia® total $193 million—a $117 million loan for the multi-family apartment community Juniper and a $76 million loan for the Class-A office building 6100 Merriweather. Both were used to replace existing construction loans that faced initial maturities this year.
In The Woodlands®, the company has refinanced its Creekside Park The Grove multifamily asset with a $57 million non-recourse, 10-year loan that replaces the $40 million construction loan originally on the property.
The company also closed on a new $200 million upsize loan for HHC's Bridgeland® Credit Facility which increases the total facility to $475 million. The $200 million in additional capacity can be drawn on in the future based on historical and future reimbursable development spend (MUD receivables), enhancing HHC's liquidity.
In The Woodlands, the company closed on a new $50 million loan for Lakefront North—a Class-A office property that was originally unencumbered. This loan is non-recourse and has a 10-year term.
HHC also closed on three pivotal construction loans. In Honolulu, the company closed on a $264 million construction loan for the development of Ulana, the newest residential tower to break ground at Ward Village that is 97.1% pre-sold as of December 31, 2022. In Phoenix, the company closed on a $165 million facility that will fund horizontal development investments at Floreo, the 3,000-acre first village of Teravalis™. In Bridgeland, HHC closed on a $54 million construction loan for Wingspan, the company's first build-for-rent residential development.
These new construction loans follow the company's August closing on a $392 million construction loan for the development of The Park Ward Village, the eighth residential tower at Ward Village which broke ground in October and is 91.9% pre-sold as of December 31, 2022.
"The financings speak to the inherent value of our assets and position The Howard Hughes Corporation to successfully navigate the various economic challenges that may lie ahead in the coming year," said David R. O'Reilly, Chief Executive Officer of The Howard Hughes Corporation. "Our closing of $1.3 billion in new loans over the past months across office, retail, multifamily and condominium projects speaks to the incredible capabilities of HHC's capital markets team and the strength of our national portfolio."
These refinancings further extend HHC's overall debt maturity profile, which already had limited near-term maturities owing to several successful refinancings and bond offerings over the past two years. In total, these new financings reduce debt maturities over the next 24 months to less than $155 million and extend the company's weighted average debt maturity to approximately 7.5 years and add meaningful liquidity to HHC's already robust cash position. The combination of these actions leaves HHC's balance sheet well positioned heading into 2023 with a total liquidity of over $800 million.
