Howard Hughes Holding’s Earnings Wobble as Ackman Asks For More Time
•February 20, 2026
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Companies Mentioned
Why It Matters
The turnaround highlights how activist investors are repurposing legacy real‑estate assets amid shifting demographics and regulatory pressures, affecting valuation benchmarks for mixed‑use portfolios.
Key Takeaways
- •Ackman bought HHH for $900 million in May 2025
- •HHH Q4 2025 net income fell 57% year‑over‑year
- •$2.1 billion Vantage Group deal expected to close this quarter
- •Office NOI rose 11%, multifamily NOI up 6% in 2025
- •Stock at $77, 5% up year‑to‑date, still 25% below peak
Pulse Analysis
Bill Ackman's entry into Howard Hughes Holdings marks a rare convergence of activist private‑equity strategy and large‑scale commercial real‑estate. By converting a master‑planned community developer into a broader holding platform, Pershing Square aims to unlock hidden value in under‑leveraged assets such as office and multifamily properties. The $900 million acquisition price reflects both confidence in the underlying cash‑flow engine and the premium investors are willing to pay for a company positioned to benefit from interstate migration trends, especially as policy shifts in blue states push residents toward markets where HHH has a strong presence.
Financially, HHH’s 2025 results underscore the challenges of a transitional year. Net income dropped to $123.8 million, a 57% contraction, while adjusted operating cash flow slipped 16% to $446 million. Nevertheless, the firm recorded record earnings before taxes of $476 million from land sales, and its core operating assets delivered an 8% rise in net operating income, driven by an 11% jump in office NOI and a 6% increase in multifamily NOI. The pending $2.1 billion Vantage Group acquisition adds an insurance revenue stream, diversifying earnings and potentially stabilizing cash flow amid volatile real‑estate cycles.
For investors, the key narrative is whether Ackman's strategic pivot can translate into sustainable valuation uplift. The modest 5% share‑price gain to $77 suggests market skepticism, yet the stock remains significantly discounted from its 2021 high, indicating upside potential. Geographic headwinds—such as regulatory pressures in California and New York—are being offset by growth opportunities in Texas, Arizona, and Nevada, where HHH’s residential footprint is expanding. As the Vantage deal closes and asset‑management efficiencies take hold, HHH could emerge as a benchmark for hybrid real‑estate‑holding models, reshaping how capital is allocated across property types and ancillary businesses.
Howard Hughes Holding’s Earnings Wobble as Ackman Asks For More Time
The Bill Ackman era is now upon Howard Hughes Holdings (HHH), but the famed corporate raider conceded there is more work to be done as he turns the commercial real estate firm known for its master-planned communities into a diversified holding company.
Ackman outlined his plans for the firm Friday morning in a fourth-quarter 2025 earnings call, where he conceded there’s more work to be done after his private equity shop, Pershing Square Capital Management, spent $900 million to purchase HHH in May 2025.
“Tbe question I receive from shareholders is how should we think about this business and what are the metrics we should follow?” said Ackman. “When you think about Howard Hughes, it’s very challenging in our view and it’s hard to get to a proper indication of value using a conventional approach.”
With Ackman at the helm, HHH moved to acquire the Vantage Group Holdings insurance business in December 2025 for $2.1 billion, a deal that is expected to close this quarter.
HHH stock now trades at $77 per share, up 5 percent from where it was one year ago, but still 25 percent lower than five-year high of $102 per share set in April 2021.
“We think the stock is super cheap,” said Ackman. “We have to do a better job of helping investors understand the business.”
HHH reported net income of $123.8 million for full-year 2025, compared to net income of $285.2 million in 2024, a drop of 57 percent. The firm’s adjusted operating cash flow of $446 million in 2025 was down 16 percent from the $535 million it reported in 2024.
Howard Hughes reported adjusted operating cash flow of $93 million and total net operating income of $68 million in the fourth quarter of 2025, compared to operating cash flows of $199 million and net operating income of $68 million in the third quarter of 2025.
HHH CEO David O’Reilly said that 2025 “was both transformative strategically, but it was also one of the stronger operating years in our history,” as he highlighted how the master-planned community real estate business generated a firm record $476 million earnings before taxes, largely from selling 621 residential acres at an average price of $890,000 per acre.
But O’Reilly emphasized that while sales within a master-planned community generate episodic quarterly earnings tied to land deals, the firm’s operating assets, mainly in office and multifamily, serve as HHH’s “cash flow engine.”
O’Reilly noted the firm’s total net operating income (NOI) for assets hit $276 million, an 8 percent year-over-year increase, led largely by office NOI increasing by 11 percent and multifamily rising 6 percent.
“This really reflects the strong leasing momentum and the disciplined asset management executed throughout the year,” he said. “Occupancy across our stabilized portfolio remains healthy.”
Ackman said politicians in blue states like California and New York are passing laws and operating in ways that encourage residents to move to states such as Texas, Arizona and Nevada, where Howard Hughes has a large residential presence.
But he also conceded the market has not yet fully understood his plans for the firm.
“There continues to be some turnover from the shareholder base from more traditional pure-play real estate investors to investors open to investing in a diversified holding company,” he said. “But the company itself, the real estate operation, is really running on all cylinders.”
Brian Pascus can be reached at [email protected].
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