Construction Financing Challenges
Q: How is the construction lending environment affecting your projects?
A: David O'Reilly noted that obtaining construction loans has become significantly harder, with a shortage of lenders willing to finance certain product types like multifamily assets. Despite the challenges, they are still getting all the projects done, though it takes longer and is more difficult to secure financing. Interestingly, the easiest construction loans are on condos in Hawaii, as lenders are confident in repayment from presold units. " "

Seaport Entertainment Spin-off Timing
Q: Is the Seaport Entertainment spin-off still on track for later this fall?
A: O'Reilly is optimistic about completing the spin in the third quarter of this year. However, this depends on factors outside their control, such as SEC approvals and obtaining consents on loans. They also expect 250 Water Street to be included in the spin. "

Teravalis Lot Sales Progress
Q: How confident are you about the initial lot sales at Teravalis?
A: During the fourth quarter, they contracted over 500 lots, and an additional 300 in January. While there is always risk in closing contracts, they believe they have great momentum and are moving forward with horizontal development. "

Operating Properties NOI Outlook
Q: Are there any known move-outs in your office portfolio that could impact NOI?
A: They expect meaningful growth in the multifamily portfolio but acknowledge potential headwinds. Specifically, they are cautious about projecting percentage rents from retailers and have some office tenants who moved out or declared bankruptcy, like WeWork. Positive momentum from new leases will be partially offset by these move-outs. "

Superpad Sales Strategy
Q: Can you explain how superpad sales work and their outlook?
A: In Summerlin, they sell superpads to homebuilders, which is unique compared to selling finished lots in other markets like Houston. They provide utilities up to the superpad entry, and homebuilders handle the internal improvements. This results in a lower price per acre but higher net profitability per acre due to reduced infrastructure costs for the company. "

Project Returns Amid High Financing Costs
Q: Will project returns exceed current high construction loan costs?
A: For projects like the Ritz-Carlton condominiums, they expect exceptional margins and positive leverage, regardless of higher financing costs. For other projects, like multifamily developments, they may experience negative leverage due to yields being lower than financing costs, but these projects still create value for shareholders. "

Plans for Additional Condos
Q: Are there opportunities for more condos in other MPCs?
A: Absolutely. Beyond Ritz in The Woodlands and Ward Village, they are exploring sites in Summerlin. While it's premature to discuss details, they aim to leverage their successful team from Ward Village to expand condominium developments in other master-planned communities. "

Office Leasing Expectations
Q: What are your leasing expectations at One Hughes Landing and 1725 Hughes Boulevard?
A: With their headquarters building now fully leased, tenant demand has shifted to Hughes Landing properties. They have a good pipeline and are engaging with several tenants, feeling positive about leasing momentum in these locations. "