Howard Hughes Holdings (HHH) risk factors, FY2024 10-K

RISKS RELATED TO OUR INDUSTRY, MARKET AND CUSTOMERS

1. 01Our performance and the market value of our securities are subject to risks associated with our investments in real estate assets and with trends in the real estate industry
2. 02A downturn in the housing market or decline in general economic conditions could adversely affect our business, financial condition, and operations
3. 03Our condominium sales are sensitive to interest rates and the ability of consumers to obtain mortgage financing
4. 04Purchasers may default on their obligations to purchase condominiums
5. 05Downturn in tenants’ businesses may reduce our revenues and cash flows
6. 06We may be negatively impacted by the consolidation or closing of anchor stores
7. 07We may be unable to renew leases or re-lease available space
8. 08Significant competition could have an adverse effect on our business
9. 09The concentration of our properties in certain states may make our revenues and the value of our assets vulnerable to adverse changes in local economic conditions
10. 10Index to Financial Statements
11. 11Markets and the local economies surrounding our properties in Columbia, Maryland are heavily influenced by government spending and activity. A reduction of government spending in this market generally could decrease the demand for housing and retail space in this geographic region
12. 12Our business model includes entering into joint venture arrangements with strategic partners, and our strategic partners may have different interests than us
13. 13Because real estate is illiquid, we may not be able to sell properties when in our best interest
14. 14Some of our properties are subject to potential natural or other disasters

RISKS RELATED TO OUR BUSINESS OPERATIONS, INFRASTRUCTURE, AND STRATEGIC MATTERS

1. 15Our MPC segment is highly dependent on homebuilders
2. 16We are exposed to risks associated with the development, redevelopment, or construction of our properties
3. 17Our development projects may subject us to certain liabilities
4. 18Cybersecurity risks and incidents, such as a breach of the Company’s privacy or information security systems, or those of our vendors or other third parties, could compromise our information and expose us to liability, which would cause our business and reputation to suffer
5. 19The security measures that we and our vendors put in place cannot provide absolute security, and the information technology infrastructure we and our vendors use may be vulnerable to criminal cyber-attacks or data security incidents
6. 20Global economic and political instability, geopolitical conflicts, and changes in U.S. trade policies, including tariffs, could adversely affect our business, financial condition, or results of operations
7. 21Some of our directors are involved in other businesses including real estate activities and public and/or private investments and, therefore, may have competing or conflicting interests with us
8. 22Pershing Square has the ability to influence our policies and operations and its interests may not in all cases be aligned with other stockholders
9. 23Pershing Square has submitted the Pershing Square Proposals, which may be a distraction to our board of directors, management, and employees and could have a material adverse impact on our business and operations

RISKS RELATED TO THE SPINOFF AND OUR RELATIONSHIP WITH SEAPORT ENTERTAINMENT

1. 24In 2024, we completed the spinoff of Seaport Entertainment into an independent publicly traded company, and we may not achieve some or all of the spinoff’s expected benefits
2. 25Seaport Entertainment may fail to perform its obligations under various transaction agreements that we entered into in connection with the spinoff

FINANCIAL RISKS

1. 26Our indebtedness and changing interest rates could adversely affect our business, prospects, financial condition, or results of operations and prevent us from fulfilling our obligations under our Senior Notes and Loan Agreements
2. 27The indentures governing our Senior Notes, the Loan Agreements and our other debt agreements contain restrictions that may limit our ability to operate our business
3. 28We may be unable to develop and expand our properties without sufficient capital or financing
4. 29The Company is dependent on the operations and funds of its subsidiaries, including The Howard Hughes Corporation
5. 30We are subject to risks associated with hedging arrangements
6. 31We may not realize the value of our tax assets
7. 32Inflation has adversely affected us in recent years, and could continue to adversely affect us in future periods, by increasing costs beyond what we can recover through price increases
8. 33Some potential losses are not insured

REGULATORY, LEGAL AND ENVIRONMENTAL RISKS

1. 34Our development, construction, and sale of condominiums are subject to state regulations and may be subject to claims from the condominium owner’s association at each project
2. 35Development of properties entails a lengthy, uncertain and costly entitlement process
3. 36Government regulations and legal challenges may delay the start or completion of the development of our communities, increase our expenses, or limit our homebuilding or other activities
4. 37We may be subject to increased compliance costs to comply with new and contemplated government regulations relating to energy standards and climate change
5. 38We may be subject to potential costs to comply with environmental laws
6. 39Compliance with the Americans with Disabilities Act may be a significant cost for us
7. 40Catastrophic events, including climate change, may adversely affect our business
8. 41Water and electricity shortages could have an adverse effect on our business, financial condition, and results of operations
9. 42Tax increases and changes in tax rules may adversely affect our financial results

GENERAL RISKS

1. 43Loss of key personnel could adversely affect our business and operations
2. 44Possible terrorist activity or other acts of violence could adversely affect our financial condition and results of operations
3. 45Our stock price may continue to be volatile
4. 46The Company may not obtain the anticipated benefits of the holding company structure
5. 47Anti-takeover provisions in our certificate of incorporation, our by-laws, Delaware law, stockholder’s rights agreement and certain other agreements may prevent or delay an acquisition of us, which could decrease the trading price of our common stock