Howard Hughes Holdings Inc.HHH
Howard Hughes Holdings Inc. Leases Disclosure
18. Leases | ||
The Company has lease agreements with lease and non-lease components and has elected to aggregate these components into a single component for all classes of underlying assets. Certain of the Company’s lease agreements include non-lease components such as fixed common area maintenance charges.
Lessee Arrangements The Company determines whether an arrangement is a lease at inception. Operating leases are included in Operating lease right-of-use assets and Operating lease obligations on the Consolidated Balance Sheets. Right-of-use assets represent the Company’s right to use an underlying asset for the lease term and lease liabilities represent the Company’s obligation to make lease payments arising from the lease. Operating lease right-of-use assets and liabilities are recognized at commencement date based on the present value of future minimum lease payments over the lease term. As most of the Company’s leases do not provide an implicit rate, the Company uses an estimate of the incremental borrowing rate based on the information available at the lease commencement date in determining the present value of future lease payments. The Operating lease right-of-use asset also includes any lease payments made, less any lease incentives and initial direct costs incurred. The Company does not have any finance leases.
The Company’s lessee agreements consist of operating leases primarily for ground leases and other real estate. The Company’s leases have remaining lease terms of approximately 1 year to approximately 24 years, excluding extension options. The Company considers its strategic plan and the life of associated agreements in determining when options to extend or terminate lease terms are reasonably certain of being exercised. Leases with an initial term of 12 months or less are not recorded on the Consolidated Balance Sheets; the Company recognizes lease expense for these leases on a straight-line basis over the lease term. Certain of the Company’s lease agreements include variable lease payments based on a percentage of income generated through subleases, changes in price indices and market rates, and other costs arising from operating, maintenance, and taxes. The Company’s lease agreements do not contain residual value guarantees or restrictive covenants. The Company leases certain buildings constructed on its ground leases to third parties.
The Company’s leased assets and liabilities are as follows:
| thousands | 2025 | 2024 | |||||||||
| Operating lease right-of-use assets | $ | 5,231 | $ | 5,806 | |||||||
| Operating lease obligations | 4,868 | 5,456 | |||||||||
Future minimum lease payments as of December 31, 2025, are as follows:
| thousands | Operating Leases | ||||
| 2026 | $ | 956 | |||
| 2027 | 898 | ||||
| 2028 | 616 | ||||
| 2029 | 622 | ||||
| 2030 | 381 | ||||
| Thereafter | 5,300 | ||||
| Total lease payments | 8,773 | ||||
| Less: imputed interest | (3,905) | ||||
| Present value of lease liabilities | $ | 4,868 | |||
Other information related to the Company’s lessee agreements is as follows:
| Supplemental Consolidated Statements of Cash Flows Information | Year ended December 31, | ||||||||||
| thousands | 2025 | 2024 | |||||||||
| Cash paid for amounts included in the measurement of lease liabilities: | |||||||||||
| Operating cash flows on operating leases | $ | 992 | $ | 759 | |||||||
| Other Information | 2025 | 2024 | |||||||||
| Weighted-average remaining lease term (years) | |||||||||||
| Operating leases | 16.3 | 16.4 | |||||||||
| Weighted-average discount rate | |||||||||||
| Operating leases | 7.2 | % | 7.1 | % | |||||||
Lessor Arrangements The Company receives rental income from the leasing of retail, office, multifamily, and other space under operating leases, as well as certain variable tenant recoveries. Operating leases for retail, office, and other properties are with a variety of tenants and have a remaining average term of approximately five years. Lease terms generally vary among tenants and may include early termination options, extension options, and fixed rental rate increases or rental rate increases based on an index. Multifamily leases generally have a term of 12 months or less. Minimum rent revenues related to operating leases are as follows:
| Year ended December 31, | |||||||||||
| thousands | 2025 | 2024 | |||||||||
| Total minimum rent payments | $ | 246,603 | $ | 235,652 | |||||||
Total future minimum rents associated with operating leases are as follows:
| thousands | Total Minimum Rent | ||||
| 2026 | $ | 248,354 | |||
| 2027 | 248,617 | ||||
| 2028 | 226,818 | ||||
| 2029 | 207,142 | ||||
| 2030 | 181,921 | ||||
| Thereafter | 619,494 | ||||
| Total | $ | 1,732,346 | |||
Minimum rent revenues are recognized on a straight‑line basis over the terms of the related leases when collectability is reasonably assured and the tenant has taken possession of, or controls, the physical use of the leased asset. Percentage rent in lieu of fixed minimum rent is recognized as sales are reported from tenants. Minimum rent revenues reported in the Consolidated Statements of Operations also include amortization related to above-market and below‑market tenant leases on acquired properties.
Historical Timeline
| Fiscal Year | Filed | |
|---|---|---|
| 2025 | Feb 19, 2026 | Showing above |
| 2024 | Feb 26, 2025 | |
| 2023 | Feb 27, 2024 | |
About Leases Disclosures
Lease disclosures under ASC 842 provide a comprehensive view of a company's leased asset portfolio, including the split between operating and finance leases, discount rates used to present-value future payments, and the maturity schedule of lease obligations. This section reveals a significant source of off-balance-sheet commitments that were largely hidden before the current standard.
Key signals: the weighted-average discount rate affects the size of recorded lease liabilities — a higher rate reduces the reported obligation, so compare the chosen rate against the company's incremental borrowing rate. The operating versus finance lease mix affects both EBITDA and operating income presentation. Watch the maturity table for concentration risk: large payment cliffs in specific years may create cash flow pressure. Variable lease payments excluded from the liability measurement represent real obligations that do not appear on the balance sheet. Compare total lease costs against prior-year operating lease expense to assess the true economic burden.