{"id":1004756877,"date":"2025-05-06T04:00:12","date_gmt":"2025-05-06T12:00:12","guid":{"rendered":"https:\/\/www.commercialsearch.com\/news\/?p=1004756877"},"modified":"2025-05-06T23:40:29","modified_gmt":"2025-05-07T07:40:29","slug":"behind-pershing-squares-900m-acquisition-of-howard-hughes","status":"publish","type":"post","link":"https:\/\/www.commercialsearch.com\/news\/behind-pershing-squares-900m-acquisition-of-howard-hughes\/","title":{"rendered":"Behind Pershing Square\u2019s $900M Acquisition of Howard Hughes"},"content":{"rendered":"
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\"Property<\/a>
Howard Hughes purchased 9950 Woodloch Forest Drive, a Class A office building in The Woodlands, Texas, in 2019 and subsequently relocated its headquarters there. Image courtesy of CommercialEdge<\/em><\/figcaption><\/figure><\/div>\n\n\n

It likely escaped the attention of none of our readers that Monday\u2019s announcement by Pershing Square that it will pay $900 million to acquire Howard Hughes Holdings Inc. included this prominent sentence: \u201cPershing Square\u2019s investment will enable HHH to become a diversified holding company by acquiring controlling stakes in high-quality, durable growth public and private operating companies while continuing to invest in and grow the company\u2019s core real estate development and master-planned communities business<\/em>\u201d (emphasis added).<\/p>\n\n\n\n

Wall Street\u2019s reaction has been positive but modest, with the stock price showing no undue gyration.<\/p>\n\n\n\n

One of the reasons might be the relatively tame changes in the HHH C-suite. Pershing Square Chairman & CEO Bill Ackman will be HHH\u2019s executive chairman. Pershing Square Chief Investment Officer Ryan Israel will take the same role at HHH, which will be a new position there.<\/p>\n\n\n\n

Other than that, there reportedly will be no other changes in the HHH leadership team, which will still be headed by CEO David O\u2019Reilly, though he will have \u201cexpanded roles and responsibilities.\u201d<\/p>\n\n\n\n

In a commentary issued Monday, Piper Sandler predicted that master-planned communities will \u201cremain the mainstay but will slowly ebb as other investments grow. We don\u2019t see any change to how HHH manages, invests or operates its MPCs. In the near-term, the MPC\u2019s will likely drive the valuation but as HHH deploys PS\u2019 $900 million, will morph toward bottom-line earnings growth and reflect the aggregate business exposure.\u201d<\/p>\n\n\n\n

Among Piper Sandler\u2019s takeaways from a conversation with Ackman on Monday was that \u201cHHH will seek an investment grade rating to reduce the company’s cost of capital.\u201d<\/p>\n\n\n\n

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READ ALSO<\/strong>: Is M&A Activity Back in Commercial Real Estate?<\/a><\/p>\n\n\n\n

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HHH made a couple of bread-and-butter office deals in metro Houston last summer.<\/p>\n\n\n\n

In the first, the company secured $130 million<\/a> to refinance 9950 Woodloch Forest Drive, a 601,000-square-foot Class A office building in The Woodlands, Texas. The non-recourse note has a five-year term and amortizes on a 30-year schedule, at a fixed rate of 7.07 percent. Wells Fargo and Argentic Real Estate Finance originated the loan.<\/p>\n\n\n\n

And in the second, the company acquired Waterway Plaza II<\/a>, a 142,400-square-foot, six-story office building in The Woodlands Town Center, for $19.2 million. The property was 55 percent occupied, which the company described as providing needed inventory to its office portfolio in The Woodlands MPC, which was then 96 percent leased.<\/p>\n\n\n\n

A history in CRE<\/h2>\n\n\n\n

Alongside his numerous and often high-profile other investments, commercial real estate has been an important through line of the career of Pershing Square Chairman & CEO and now HHH Executive Chairman Bill Ackman.<\/p>\n\n\n\n

He co-founded Pershing Square Capital Management in 2004, the same year that General Growth Properties purchased the original Howard Hughes Corp. Five years later, GGP went through the largest bankruptcy in the history of U.S. real estate.<\/p>\n\n\n\n

After receiving $375 million in debtor-in-possession funding from Pershing Square, GGP exited bankruptcy in 2010. As part of its post-bankruptcy reorganization, the company spun off Howard Hughes Corp. as Howard Hughes Holdings. HHH was a long-time investment of Pershing\u2019s from 2010 to 2024, during which Ackman was HHH\u2019s chairman.<\/p>\n\n\n\n

In yesterday\u2019s announcement, Ackman declared himself \u201cdelighted to return to HHH as its executive chairman,\u201d adding that the company \u201chas built substantial value for shareholders in recent years that has largely gone unrecognized due to the high cost of capital that the market assigns to the company in light of its pure-play exposure to real estate development and community creation.\u201d<\/p>\n","protected":false},"excerpt":{"rendered":"

While remaining committed to its roots in real estate, Howard Hughes will now have a broader scope.<\/p>\n","protected":false},"author":882,"featured_media":1004717371,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[21808,21783,23891,21742],"tags":[52612,37680,33156],"class_list":["post-1004756877","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-featured","category-investment","category-national","category-latest","tag-howard-hughes-holdings","tag-pershing-square-capital-management","tag-the-howard-hughes-corporation"],"acf":[],"yoast_head":"\nBehind Pershing Square\u2019s $900M Acquisition of Howard Hughes - Commercial Property Executive<\/title>\n<meta name=\"description\" content=\"Pershing Square\u2019s $900 million acquisition of Howard Hughes means no shift away from commercial real estate.\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.commercialsearch.com\/news\/behind-pershing-squares-900m-acquisition-of-howard-hughes\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Behind Pershing Square\u2019s $900M Acquisition of Howard Hughes\" \/>\n<meta property=\"og:description\" content=\"Pershing Square\u2019s $900 million acquisition of Howard Hughes means no shift away from commercial real estate.\" \/>\n<meta property=\"og:url\" content=\"https:\/\/www.commercialsearch.com\/news\/behind-pershing-squares-900m-acquisition-of-howard-hughes\/\" \/>\n<meta property=\"og:site_name\" content=\"Commercial Property Executive\" \/>\n<meta property=\"article:publisher\" content=\"https:\/\/www.facebook.com\/CPExecutive\" \/>\n<meta property=\"article:published_time\" content=\"2025-05-06T12:00:12+00:00\" \/>\n<meta property=\"article:modified_time\" content=\"2025-05-07T07:40:29+00:00\" \/>\n<meta property=\"og:image\" content=\"https:\/\/www.commercialsearch.com\/news\/wp-content\/uploads\/sites\/46\/2024\/06\/11983-1.jpg\" \/>\n\t<meta property=\"og:image:width\" content=\"640\" \/>\n\t<meta property=\"og:image:height\" content=\"480\" \/>\n\t<meta property=\"og:image:type\" content=\"image\/jpeg\" \/>\n<meta name=\"author\" content=\"Scott Baltic\" \/>\n<meta name=\"twitter:card\" content=\"summary_large_image\" \/>\n<meta name=\"twitter:creator\" content=\"@cpexecutive\" \/>\n<meta name=\"twitter:site\" content=\"@cpexecutive\" \/>\n<script type=\"application\/ld+json\" class=\"yoast-schema-graph\">{\"@context\":\"https:\/\/schema.org\",\"@graph\":[{\"@type\":\"WebPage\",\"@id\":\"https:\/\/www.commercialsearch.com\/news\/behind-pershing-squares-900m-acquisition-of-howard-hughes\/\",\"url\":\"https:\/\/www.commercialsearch.com\/news\/behind-pershing-squares-900m-acquisition-of-howard-hughes\/\",\"name\":\"Behind Pershing Square\u2019s $900M Acquisition of Howard Hughes - Commercial Property Executive\",\"isPartOf\":{\"@id\":\"https:\/\/www.commercialsearch.com\/news\/#website\"},\"primaryImageOfPage\":{\"@id\":\"https:\/\/www.commercialsearch.com\/news\/behind-pershing-squares-900m-acquisition-of-howard-hughes\/#primaryimage\"},\"image\":{\"@id\":\"https:\/\/www.commercialsearch.com\/news\/behind-pershing-squares-900m-acquisition-of-howard-hughes\/#primaryimage\"},\"thumbnailUrl\":\"https:\/\/www.commercialsearch.com\/news\/wp-content\/uploads\/sites\/46\/2024\/06\/11983-1.jpg\",\"datePublished\":\"2025-05-06T12:00:12+00:00\",\"dateModified\":\"2025-05-07T07:40:29+00:00\",\"author\":{\"@id\":\"https:\/\/www.commercialsearch.com\/news\/#\/schema\/person\/61ac1450f3ffaa0e850b834c28526555\"},\"description\":\"Pershing Square\u2019s $900 million acquisition of Howard Hughes means no shift away from commercial real estate.\",\"breadcrumb\":{\"@id\":\"https:\/\/www.commercialsearch.com\/news\/behind-pershing-squares-900m-acquisition-of-howard-hughes\/#breadcrumb\"},\"inLanguage\":\"en-US\",\"potentialAction\":[{\"@type\":\"ReadAction\",\"target\":[\"https:\/\/www.commercialsearch.com\/news\/behind-pershing-squares-900m-acquisition-of-howard-hughes\/\"]}]},{\"@type\":\"ImageObject\",\"inLanguage\":\"en-US\",\"@id\":\"https:\/\/www.commercialsearch.com\/news\/behind-pershing-squares-900m-acquisition-of-howard-hughes\/#primaryimage\",\"url\":\"https:\/\/www.commercialsearch.com\/news\/wp-content\/uploads\/sites\/46\/2024\/06\/11983-1.jpg\",\"contentUrl\":\"https:\/\/www.commercialsearch.com\/news\/wp-content\/uploads\/sites\/46\/2024\/06\/11983-1.jpg\",\"width\":640,\"height\":480,\"caption\":\"Howard Hughes purchased the asset in 2019 and subsequently relocated its headquarters there. 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