Howard Hughes Corp., the U.S. property company spun off last year from General Growth Properties Inc., reported a narrower fourth-quarter loss after recording a tax benefit.
The net loss was $4.6 million, or 12 cents a share, compared with a loss of $535.9 million, or $14.21 a share, a year earlier, the Dallas-based company said in a statement yesterday. The company recorded a $651 million tax benefit in the fourth quarter.
Howard Hughes owns master-planned residential communities and commercial real estate, including Summerlin, a 22,500-acre (9,100 hectare) residential project in Las Vegas, the metropolitan area with the highest foreclosure rate in the U.S. Among other Howard Hughes properties is South Street Seaport, a shopping center in Manhattan that Chicago-based General Growth tried to sell prior to its April 2009 bankruptcy.
“We are establishing a comprehensive long-term strategic plan for each of our assets which will allow us to focus our resources on the most attractive opportunities within our portfolio,” David Weinreb, the company’s chief executive officer, said in the statement. “The company’s unique collection of assets provides us with a great opportunity to create long-term value for our stockholders.”
Howard Hughes sold $24.5 million in land in its master-planned developments in the fourth quarter, compared with $3.9 million a year earlier.
‘Difficult to Value’
The company recorded $503.4 million in writedowns in 2010, $405.3 of which was in its master-planned communities business as demand for homes slumped. Purchases of new homes fell in February to the slowest pace on record and prices dropped to the lowest level since December 2003, Commerce Department data showed March 23.
“The difficulty is that the real estate assets owned by HHC are notoriously difficult to value,” Chairman William Ackman said in a letter to shareholders yesterday. “First, you should consider that their long-term value -- the value that can be achieved by a long-term owner -- is, in my opinion, materially higher than their liquidation value.”
The earnings statement was released after the close of regular U.S. trading. Shares of Howard Hughes fell $1.62, or 2.3 percent, to $68.25 in New York Stock Exchange composite trading yesterday. They gained 77 percent since the spinoff in November from General Growth, the second-largest U.S. mall owner after Simon Property Group Inc., based in Indianapolis.