Item 9A. Controls and Procedures
ITEM 9A. Controls and Procedures
Evaluation of Disclosure Controls and Procedures
We have established disclosure controls and procedures, as such term is defined in Rule 13a-15(e) and 15d-15(e) under the Exchange Act, that are designed to ensure that information required to be disclosed by us in the reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by us in the reports that we file or submit under the Exchange Act is accumulated and communicated to management, including our principal executive officer and principal financial officer as appropriate, to allow timely decisions regarding required disclosure. Our management, with the participation of our principal executive officer and principal financial officer, evaluated the effectiveness of our disclosure controls and procedures as of December 31, 2025. Based on this evaluation, our principal executive officer and principal financial officer concluded that our disclosure controls and procedures were effective as of December 31, 2025.
Management’s Annual Report on Internal Control over Financial Reporting
Our management is responsible for establishing and maintaining adequate internal control over financial reporting, as defined in Rules 13a-15(f) and 15d-15(f) of the Exchange Act. Our management, with the participation of our Chief Executive Officer and Chief Financial Officer, conducted an assessment of the effectiveness of our internal control over financial reporting as of December 31, 2025 based on the framework established in the Internal Control-Integrated Framework issued by the Committee of Sponsoring Organizations (COSO) of the Treadway Commission (2013 Framework). Based on this framework, our management concluded that our internal control over financial reporting was effective as of December 31, 2025.
In conjunction with the Hearthstone Venture acquisition, we are in the process of integrating the acquired operations, systems and processes into the Company’s overall internal control framework. Management excluded from its assessment of internal control over financial reporting as of December 31, 2025, the internal control over financial reporting of the Hearthstone Venture, which was acquired on July 31, 2025. This exclusion is consistent with guidance issued by the U.S. Securities and Exchange Commission that an assessment of a recently acquired business may be omitted from the scope of management's report on internal control over financial reporting in the year of acquisition. The Hearthstone Venture’s total assets and revenue represented approximately 3.8% of our total assets as of December 31, 2025 and approximately 10.7% of our total revenues for the year ended December 31, 2025, respectively. See a discussion of this acquisition in Note 3 of our consolidated financial statements included in Part II, Item 8 of this report.
The effectiveness of our internal control over financial reporting as of December 31, 2025 has been audited by Deloitte & Touche LLP, an independent registered public accounting firm, as stated in their attestation report which is included herein.
Changes in Internal Control over Financial Reporting
During the quarter ended December 31, 2025, there were no changes in our internal control over financial reporting that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
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REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the shareholders and the Board of Directors of Five Point Holdings, LLC
Opinion on Internal Control over Financial Reporting
We have audited the internal control over financial reporting of Five Point Holdings, LLC and subsidiaries (the “Company”) as of December 31, 2025, based on criteria established in Internal Control — Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). In our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of December 31, 2025, based on criteria established in Internal Control — Integrated Framework (2013) issued by COSO.
We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the consolidated financial statements as of and for the year ended December 31, 2025, of the Company and our report dated March 6, 2026, expressed an unqualified opinion on those financial statements.
As described in Management’s Annual Report on Internal Control over Financial Reporting, management excluded from its assessment the internal control over financial reporting at Hearthstone Residential Holdings, LLC, which was acquired on July 31, 2025, and whose financial statements constitute 3.8% of total assets and 10.7% of total revenue, of the consolidated financial statement amounts as of and for the year ended December 31, 2025. Accordingly, our audit did not include the internal control over financial reporting at Hearthstone Residential Holdings, LLC.
Basis for Opinion
The Company’s management is responsible for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting, included in the accompanying Management’s Annual Report on Internal Control over Financial Reporting. Our responsibility is to express an opinion on the Company’s internal control over financial reporting based on our audit. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects. Our audit included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, testing and evaluating the design and operating effectiveness of internal control based on the assessed risk, and performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion.
Definition and Limitations of Internal Control over Financial Reporting
A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.
Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.
/s/ DELOITTE & TOUCHE LLP
Costa Mesa, California
March 6, 2026
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ITEM 9B. Other Information
Not applicable .
ITEM 9C. Disclosure Regarding Foreign Jurisdictions that Prevent Inspections
Not applicable.
PART III
ITEM 10. Directors, Executive Officers and Corporate Governance
The information required by this item will be included in the Proxy Statement for our 2026 Annual Meeting of Shareholders to be filed by the Company with the Securities and Exchange Commission no later than 120 days after the close of our fiscal year ended December 31, 2025 (the “Proxy Statement”). The information in the Proxy Statement relevant to this item is incorporated herein by reference.
We have adopted an insider trading policy applicable to our directors, officers, employees, and other covered persons, and have implemented processes for the Company that we believe are reasonably designed to promote compliance with insider trading laws, rules and regulations, and the New York Stock Exchange listing standards. It is our policy to comply with U.S. insider trading laws and regulations, including with respect to transactions in our own securities. A copy of our insider trading policy is filed as Exhibit 19.1 to this Annual Report on Form 10-K.
ITEM 11. Executive Compensation
The information in the Proxy Statement relevant to this item is incorporated herein by reference.
ITEM 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters
The information in the Proxy Statement relevant to this item is incorporated herein by reference, except for the information required by Item 201(d) of Regulation S-K, which is provided below.
The following table contains certain information with respect to our equity compensation plan in effect as of December 31, 2025.
Plan category Number of securities to be issued
upon exercise of
outstanding options, warrants and rights
(a) Weighted-average
exercise price of
outstanding
options, warrants and rights
(b) Number of securities remaining available for future issuance under equity compensation plans (excluding securities reflected in column (a))
(c)
Equity compensation plans approved by shareholders — — 1,439,767
ITEM 13. Certain Relationships and Related Transactions, and Director Independence
The information in the Proxy Statement relevant to this item is incorporated herein by reference.
ITEM 14. Principal Accountant Fees and Services
The information in the Proxy Statement relevant to this item is incorporated herein by reference.
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PART IV
ITEM 15. Exhibits, Financial Statement Schedules
(a)(1) The following consolidated financial statements are contained in Part II, Item 8 of this Report.
Financial Statements - Five Point Holdings, LLC Page in this Report
Report of Independent Registered Public Accounting Firm (Public Company Accounting Oversight Board identification number 34 )
40
Consolidated Balance Sheets as of December 31, 202 5 and 202 4
42
Consolidated Statements of Operations for the years ended December 31, 202 5 , 202 4 and 20 23
43
Consolidated Statements of Comprehensive Income for the years ended December 31, 202 5 , 202 4 and 202 3
44
Consolidated Statements of Capital for the years ended December 31, 202 5 , 202 4 and 20 23
45
Consolidated Statements of Cash Flows for the years ended December 31, 202 5 , 202 4 and 202 3
46
Notes to the Consolidated Financial Statements
47
(a)(2) The following financial statement schedules are included in this Report:
Financial Statement Schedule - Five Point Holdings, LLC
Schedule III—Real Estate and Accumulated Depreciation
91
Financial Statements - Heritage Fields LLC
Independent Auditor’s Report
92
Consolidated Balance Sheets as of December 31, 202 5 and 202 4
94
Consolidated Statements of Operations for the years ended December 31, 202 5 , 202 4 and 202 3
95
Consolidated Statements of Capital for the years ended December 31, 202 5 , 202 4 and 202 3
96
Consolidated Statements of Cash Flows for the years ended December 31, 202 5 , 202 4 and 202 3
97
Notes to the Consolidated Financial Statements
98
Information required by other schedules has either been incorporated in the consolidated financial statements and accompanying notes or is not applicable.
(a)(3) The following exhibits are filed with this Report or incorporated by reference:
Exhibit Exhibit Description
3.1 Certificate of Formation of Registrant, as amended (Exhibit 3.1 to Registrant’s Registration Statement on Form S-11 filed April 7, 2017 is incorporated herein by this reference)
3.2 Second Amended and Restated Limited Liability Company Agreement of Five Point Holdings, LLC (Exhibit 3.1 to Registrant’s Current Report on Form 8-K dated May 15, 2017 is incorporated herein by this reference)
4.1 Description of Shares (Exhibit 4.1 of the Company’s Annual Report on Form 10-K for the year ended December 31, 2019 is incorporated herein by this reference)
4.2 Indenture, dated as of September 25, 2025, among Five Point Operating Company, LP, Five Point Capital Corp., the Guarantors party thereto, and Computershare Trust Company, N.A., as trustee (Exhibit 4.1 to the Current Report on Form 8-K filed on September 26, 2025 is incorporated herein by this reference)
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10.1 Limited Partnership Agreement of Five Point Operating Company, LP, dated as of October 1, 2017 (Exhibit 10.1 to the Current Report on Form 8-K filed on October 2, 2017 is incorporated herein by this reference)
10.2 Fourth Amended and Restated Limited Liability Company Agreement of Heritage Fields LLC, dated as of April 21, 2017, by and among Five Point Heritage Fields, LLC, Heritage Fields Capital Co-Investor Member LLC, MSD Heritage Fields, LLC, LenFive, LLC, LNR HF II, LLC, and FPC-HF Venture I, LLC (Exhibit 10.17 to Amendment No. 1 to Registrant’s Registration Statement on Form S-11 filed April 24, 2017 is incorporated herein by this reference)
10.3 First Amendment to Fourth Amended and Restated Limited Liability Company Agreement of Heritage Fields LLC, dated as of November 15, 2022, by and among Five Point Heritage Fields, LLC, Heritage Fields Capital Co-Investor Member LLC, MSD Heritage Fields, LLC, and LNR HF II, LLC (Exhibit 10.2 of the Company’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2023 is incorporated herein by this reference)
10.4 Second Amended and Restated Operating Agreement of The Shipyard Communities, LLC (Exhibit 10.2 to Registrant’s Registration Statement on Form S-11 filed April 7, 2017 is incorporated herein by this reference)
10.5 First Amendment to the Second Amended and Restated Limited Liability Company Agreement of The Shipyard Communities, LLC (Exhibit 10.4 of the Company’s Annual Report on Form 10-K for the year ended December 31, 2018 is incorporated herein by this reference)
10.6 Limited Liability Company Agreement of Five Point Office Venture Holdings I, LLC, dated as of August 4, 2017 (Exhibit 10.1 to the Current Report on Form 8-K filed on August 10, 2017 is incorporated herein by this reference)
10.7 First Amendment to Limited Liability Company Agreement of Five Point Office Venture Holdings I, LLC, dated as of August 17, 2023, by and among FPOVHI Member, LLC, Irvine Office Member, L.L.C., and LNR BC, LLC (Exhibit 10.1 of the Company’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2023 is incorporated herein by this reference)
10.8 Registration Rights Agreement, dated as of May 2, 2016, by and among the Registrant and the persons named therein (Exhibit 10.3 to Registrant’s Registration Statement on Form S-11 filed April 7, 2017 is incorporated herein by this reference)
10.9 Amended and Restated Voting and Standstill Agreement, dated as of May 2, 2016, by and among the Registrant, Five Point Holdings, Inc., and the persons named on Exhibit A thereto (Exhibit 10.19 to Registrant’s Registration Statement on Form S-11 filed April 7, 2017 is incorporated herein by this reference)
10.10 Amended and Restated Securities Purchase Agreement, dated as of April 3, 2017, by and among the Registrant, Five Point Operating Company, LLC, LenFive, LLC and Lennar Homes of California, Inc. (Exhibit 10.20 to Registrant’s Registration Statement on Form S-11 filed April 7, 2017 is incorporated herein by this reference)
10.11 Tax Receivable Agreement, dated as of May 2, 2016, by and among the Registrant and the other parties named therein (Exhibit 10.5 to Registrant’s Registration Statement on Form S-11 filed April 7, 2017 is incorporated herein by this reference)
10.12* Amended and Restated 2016 Incentive Award Plan (Appendix A to the Company’s Proxy Statement filed April 26, 2019 is incorporated herein by this reference)
10.13* Five Point Holdings, LLC 2023 Incentive Award Plan (Appendix A to the Company’s Proxy Statement filed April 28, 2023 is incorporated herein by this reference)
10.14* Five Point Holdings, LLC Senior Management Severance and Change in Control Plan (Exhibit 10.11 of the Company’s Annual Report on Form 10-K for the year ended December 31, 2018 is incorporated herein by this reference)
10.15* Employment Transition Agreement, dated as of August 23, 2021, by and among Emile Haddad, Five Point Operating Company, LP, Five Point Communities Management, Inc., and Five Point Holdings, LLC (Exhibit 10.1 of the Company’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2021 is incorporated herein by this reference)
10.16 Advisory Agreement, dated as of August 23, 2021, by and between Emile Haddad and Five Point Operating Company, LP (Exhibit 10.2 of the Company’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2021 is incorporated herein by this reference)
10.17 First Amendment to Advisory Agreement, dated as of December 1, 2024, by and between Emile Haddad and Five Point Operating Company, LP (Exhibit 10.17 of the Company’s Annual Report on Form 10-K for the year ended December 31, 2024 is incorporated herein by this reference)
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10.18 Form of Indemnification Agreement by and between the Registrant and each of its Directors and Executive Officers (Exhibit 10.7 to Registrant’s Registration Statement on Form S-11 filed April 7, 2017 is incorporated herein by this reference)
10.19 Second Amended and Restated Contribution and Sale Agreement, dated as of July 2, 2015, and amended and restated as of May 2, 2016, by and among the Registrant, Five Point Holdings, Inc., Newhall Intermediary Holding Company, LLC, Newhall Land Development, LLC, The Shipyard Communities, LLC, Heritage Fields LLC, Five Point Communities Management, Inc., Five Point Communities, LP and the other parties named therein (Exhibit 10.4 to Registrant’s Registration Statement on Form S-11 filed April 7, 2017 is incorporated herein by this reference)
10.20 Transition Services Agreement, dated as of May 2, 2016, by and between the Registrant and Lennar (Exhibit 10.8 to Registrant’s Registration Statement on Form S-11 filed April 7, 2017 is incorporated herein by this reference)
10.21 Disposition and Development Agreement (Candlestick Point and Phase 2 of the Hunters Point Shipyard), dated June 3, 2010, by and between the Redevelopment Agency of the City and County of San Francisco and CP Development Co., LP (Exhibit 10.9 to Registrant’s Registration Statement on Form S-11 filed April 7, 2017 is incorporated herein by this reference)
10.22 First Amendment to Disposition and Development Agreement (Candlestick Point and Phase 2 of the Hunters Point Shipyard), dated December 19, 2012, by and between the Successor Agency to the Redevelopment Agency of the City and County of San Francisco and CP Development Co., LP (Exhibit 10.10 to Registrant’s Registration Statement on Form S-11 filed April 7, 2017 is incorporated herein by this reference)
10.23 Second Amendment to Disposition and Development Agreement (Candlestick Point and Phase 2 of the Hunters Point Shipyard), dated December 1, 2014, by and between the Successor Agency to the Redevelopment Agency of the City and County of San Francisco and CP Development Co., LP (Exhibit 10.11 to Registrant’s Registration Statement on Form S-11 filed April 7, 2017 is incorporated herein by this reference)
10.24 Third Amendment to Disposition and Development Agreement (Candlestick Point and Phase 2 of the Hunters Point Shipyard), dated as of August 10, 2018, by and between CP Development Co., LLC and the Successor Agency to the Redevelopment Agency of the City and County of San Francisco (Exhibit 10.1 to the Current Report on Form 8-K filed on August 16, 2018 is incorporated herein by this reference).
10.25 Fourth Amendment to Disposition and Development Agreement (Candlestick Point and Phase 2 of the Hunters Point Shipyard), dated as of August 6, 2025, by and between CP Development Co., LLC and the Successor Agency to the Redevelopment Agency of the City and County of San Francisco (Exhibit 10.1 to the Current Report on Form 8-K filed on August 12, 2025 is incorporated herein by this reference)
10.26 Interim Lease, dated as of December 3, 2004, by and between the Redevelopment Agency of the City and County of San Francisco and Lennar/BVHP, LLC (Exhibit 10.12 to Registrant’s Registration Statement on Form S-11 filed April 7, 2017 is incorporated herein by this reference)
10.27 First Amendment to the Interim Lease, dated as of October 16, 2008, by and between Redevelopment Agency of the City and County of San Francisco and HPS Development Co., LP (Exhibit 10.13 to Registrant’s Registration Statement on Form S-11 filed April 7, 2017 is incorporated herein by this reference)
10.28 Second Amendment to the Interim Lease, dated as of May 31, 2011, by and between Redevelopment Agency of the City and County of San Francisco and HPS Development Co., LP (Exhibit 10.14 to Registrant’s Registration Statement on Form S-11 filed April 7, 2017 is incorporated herein by this reference)
10.29 Third Amendment to the Interim Lease, dated as of November 8, 2013, by and between the Successor Agency to the Redevelopment Agency of the City and County of San Francisco and HPS Development Co., LP (Exhibit 10.15 to Registrant’s Registration Statement on Form S-11 filed April 7, 2017 is incorporated herein by this reference)
10.30 Fourth Amendment to the Interim Lease, dated as of September 1, 2015, by and among the Successor Agency to the Redevelopment Agency of the City and County of San Francisco, HPS Development Co., LP and CP Development Co., LP (Exhibit 10.16 to Registrant’s Registration Statement on Form S-11 filed April 7, 2017 is incorporated herein by this reference)
10.31 Fifth Amendment to the Interim Lease, effective as of March 1, 2017, by and among The Successor Agency to the Redevelopment Agency of the City and County of San Francisco, HPS Development Co., LP and CP Development Co., LLC (Exhibit 10.1 to Registrant’s Current Report on Form 8-K dated May 15, 2017 is incorporated herein by this reference)
10.32 Entitlement Transfer Agreement, dated as of December 6, 2016, by and between CPHP Development Co., LLC and The Shipyard Communities, LLC (Exhibit 10.28 to Amendment No. 1 to Registrant’s Registration Statement on Form S-11 filed April 24, 2017 is incorporated herein by this reference)
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10.33 Second Amended and Restated Development and Management Agreement, dated as of April 21, 2017, by and among Heritage Fields El Toro, LLC, Five Point Communities Management, Inc., Five Point Operating Company, LLC and Five Point Communities, LP (Exhibit 10.32 to Amendment No. 1 to Registrant’s Registration Statement on Form S-11 filed April 24, 2017 is incorporated herein by this reference)
10.34 First Amendment to Second Amended and Restated Development Management Agreement, dated as of June 10, 2022, by and among Heritage Fields El Toro, LLC, Five Point Communities Management, Inc., Five Point Operating Company, LP and Five Point Communities, LP (Exhibit 10.1 to the Current Report on Form 8-K filed on June 16, 2022 is incorporated herein by this reference)
10.35 Second Amendment to Second Amended and Restated Development Management Agreement, dated as of December 28, 2022, by and among Heritage Fields El Toro, LLC, Five Point Communities Management, Inc., Five Point Operating Company, LP and Five Point Communities, LP (Exhibit 10.1 to the Current Report on Form 8-K filed on January 4, 2023 is incorporated herein by this reference)
10.36 Third Amendment to Second Amended and Restated Development Management Agreement, dated as of September 16, 2024, by and among Heritage Fields El Toro, LLC, Five Point Communities Management, Inc., Five Point Operating Company, LP and Five Point Communities, LP (Exhibit 10.1 to the Current Report on Form 8-K filed on September 18, 2024 is incorporated herein by this reference).
10.37 Termination of Development Management Agreement (Candlestick Point Mixed-Use Project) (Exhibit 10.27 of the Company’s Annual Report on Form 10-K for the year ended December 31, 2018 is incorporated herein by this reference)
10.38 Second Amended and Restated Credit Agreement, dated as of October 21, 2025, by and among Five Point Operating Company, LP, Zions Bancorporation, N.A. dba California Bank & Trust, as administrative agent and as a lender, and JPMorgan Chase Bank, N.A., CIBC Bank USA, Banc of California, and Comerica Bank, as lenders (Exhibit 10.2 to the Current Report on Form 8-K filed on October 23, 2025 is incorporated herein by this reference)
10.39 Contribution and Purchase Agreement, dated as of June 19, 2025, by and among Five Point Holdings, LLC, Hearthstone, Inc., Mark Porath and certain affiliated family trusts, and Hearthstone Residential Holdings, LLC (Exhibit 10.1 to the Current Report on Form 8-K filed on June 20, 2025 is incorporated herein by this reference)
10.40 Form of Warrant to Purchase Class A Common Shares, dated February 6, 2026, issued by the Company to certain affiliates of Blue Owl Capital Inc. (Exhibit 4.1 to the Current Report on Form 8-K filed on February 1 0, 2026 is incorporated herein by this reference)
19.1 Five Point Holdings, LLC Policy on Insider Trading**
21.1 List of Subsidiaries**
23.1 Consent of Independent Registered Public Accounting Firm**
31.1 Certification of Principal Executive Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002**
31.2 Certification of Principal Financial Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002**
32.1 Certification of Principal Executive Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002**
32.2 Certification of Principal Financial Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002**
97 Five Point Holdings, LLC Policy for Recovery of Erroneously Awarded Compensation (Exhibit 97 of the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2023 is incorporated herein by this reference)
101.INS XBRL Instance Document - the instance document does not appear in the Interactive Data File because XBRL tags are embedded within the Inline XBRL document
101.SCH XBRL Taxonomy Extension Schema Document
101.CAL XBRL Taxonomy Extension Calculation Linkbase Document
101.DEF XBRL Taxonomy Extension Definition Linkbase Document
101.LAB XBRL Taxonomy Extension Label Linkbase Document
101.PRE XBRL Taxonomy Extension Presentation Linkbase Document
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104 Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101).
* Management contract or compensatory plan or arrangement
** Filed herewith
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ITEM 16. Form 10-K Summary
None.
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SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
FIVE POINT HOLDINGS, LLC
By:
/s/ Daniel Hedigan
Daniel Hedigan
President and Chief Executive Officer
Date:
March 6, 2026
Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.
Principal Executive Officer:
Daniel Hedigan /s/ Daniel Hedigan
President and Chief Executive Officer Date: March 6, 2026
Principal Financial and Accounting Officer:
Kim Tobler /s/ Kim Tobler
Chief Financial Officer, Treasurer and Vice President
Date: March 6, 2026
Directors:
Kathleen Brown /s/ Kathleen Brown Sam Levinson /s/ Sam Levinson
Date: March 6, 2026 Date: March 6, 2026
William Browning /s/ William Browning Stuart Miller /s/ Stuart Miller
Date: March 6, 2026 Date: March 6, 2026
Jonathan Foster /s/ Jonathan Foster Michael Rossi /s/ Michael Rossi
Date: March 6, 2026 Date: March 6, 2026
Emile Haddad /s/ Emile Haddad Michael Winer /s/ Michael Winer
Date: March 6, 2026 Date: March 6, 2026
Gary Hunt /s/ Gary Hunt
Date: March 6, 2026
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SCHEDULE III—REAL ESTATE AND ACCUMULATED DEPRECIATION
December 31, 2025
($ in thousands) Initial Cost
Costs Capitalized
Subsequent
to Acquisition (a)
Gross Amounts at
Which Carried at
Close of Period (b)
Description
Location
Encumbrances Land
Buildings
and
Improvements
Land
Buildings
and
Improvements
Land Buildings
and
Improvements Total
Accumulated
Depreciation Date of
Construction Date
Acquired /
Completed
Depreciation
Life
Valencia- Land under development Los Angeles
County, CA $ — $ 111,172 $ — $ 852,489 $ — $ 963,661 $ — $ 963,661 $ — 2009 N/A
Candlestick and The San Francisco Shipyard- Land under development San
Francisco,
CA — 1,038,154 — 441,464 — 1,479,618 — 1,479,618 — 2016 N/A
Agriculture- Operating property Los Angeles
County, CA
Ventura
County, CA — 40,634 1,114 ( 13,477 ) 2,657 27,157 3,771 30,928 (c)
2,509 2009 (d)
Total $ — $ 1,189,960 $ 1,114 $ 1,280,476 $ 2,657 $ 2,470,436 $ 3,771 $ 2,474,207 (e)
$ 2,509 (e)
(a) Costs capitalized subsequent to acquisitions are net of land sales for real estate development properties and net of disposals, transfers and impairment write-downs for operating properties.
(b) The aggregate cost of land and improvements for federal income tax purposes is approximately $ 1.8 billion (unaudited). This basis does not reflect the Company’s deferred tax assets and liabilities as these amounts are computed based upon the Company’s outside basis in their partnership interest.
(c) Included in properties and equipment, net in the consolidated balance sheet.
(d) See Note 2 of the Notes to Consolidated Financial Statements for information related to depreciation.
(e) Reconciliation of “Real Estate and Accumulated Depreciation”:
Reconciliation of Real Estate
2025 2024 2023
(In thousands)
Balance at beginning of year $ 2,328,791 $ 2,243,679 $ 2,269,325
Improvements and additions (1)
184,107 186,454 145,911
Inventory relief from real estate sold ( 29,219 ) ( 90,085 ) ( 106,397 )
Reimbursements and recoveries ( 9,472 ) ( 11,257 ) ( 65,160 )
Balance at end of year $ 2,474,207 $ 2,328,791 $ 2,243,679
(1) Improvements and additions include noncash project accruals and capitalized interest.
Reconciliation of Accumulated Depreciation
2025 2024 2023
(In thousands)
Balance at beginning of year $ 2,345 $ 2,284 $ 2,152
Additions 164 124 132
Disposals — ( 63 ) —
Balance at end of year $ 2,509 $ 2,345 $ 2,284
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INDEPENDENT AUDITOR’S REPORT
To the Members of
Heritage Fields LLC
Irvine, California
Opinion
We have audited the consolidated financial statements of Heritage Fields LLC and subsidiaries (the “Company”), which comprise the consolidated balance sheets as of December 31, 2025 and 2024, and the related consolidated statements of operations, members’ capital, and cash flows for each of the three years in the period ended December 31, 2025, and the related notes to the consolidated financial statements (collectively referred to as the “financial statements”).
In our opinion, the accompanying financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2025 and 2024, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2025 in accordance with accounting principles generally accepted in the United States of America.
Basis for Opinion
We conducted our audits in accordance with auditing standards generally accepted in the United States of America (GAAS). Our responsibilities under those standards are further described in the Auditor’s Responsibilities for the Audit of the Financial Statements section of our report. We are required to be independent of the Company and to meet our other ethical responsibilities, in accordance with the relevant ethical requirements relating to our audits. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.
Responsibilities of Management for the Financial Statements
Management is responsible for the preparation and fair presentation of the financial statements in accordance with accounting principles generally accepted in the United States of America, and for the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of financial statements that are free from material misstatement, whether due to fraud or error.
In preparing the financial statements, management is required to evaluate whether there are conditions or events, considered in the aggregate, that raise substantial doubt about the Company’s ability to continue as a going concern for one year after the date that the financial statements are available to be issued.
Auditor’s Responsibilities for the Audit of the Financial Statements
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion. Reasonable assurance is a high level of assurance but is not absolute assurance and therefore is not a guarantee that an audit conducted in accordance with GAAS will always detect a material misstatement when it exists. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control. Misstatements are considered material if there is a substantial likelihood that, individually or in the aggregate, they would influence the judgment made by a reasonable user based on the financial statements.
In performing an audit in accordance with GAAS, we:
• Exercise professional judgment and maintain professional skepticism throughout the audit.
• Identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, and design and perform audit procedures responsive to those risks. Such procedures include examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements.
• Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control. Accordingly, no such opinion is expressed.
• Evaluate the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluate the overall presentation of the financial statements.
• Conclude whether, in our judgment, there are conditions or events, considered in the aggregate, that raise substantial doubt about the Company’s ability to continue as a going concern for a reasonable period of time.
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We are required to communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit, significant audit findings, and certain internal control-related matters that we identified during the audit.
/s/ DELOITTE & TOUCHE LLP
Costa Mesa, California
March 6, 2026
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HERITAGE FIELDS LLC AND SUBSIDIARIES
(A Delaware Limited Liability Company)
CONSOLIDATED BALANCE SHEETS
AS OF DECEMBER 31, 2025 AND 2024
(In thousands)
December 31,
2025 2024
ASSETS
LAND UNDER DEVELOPMENT $ 153,117 $ 274,738
CASH AND CASH EQUIVALENTS
187,574 118,256
CONTRACT ASSETS, RECEIVABLES AND OTHER ASSETS—Net 28,090 169,604
TOTAL
$ 368,781 $ 562,598
LIABILITIES, REDEEMABLE INTERESTS, AND MEMBERS’ CAPITAL
LIABILITIES:
Accrued management fees $ 111,856 $ 160,710
Land sales deposits
13,594 66,945
Accounts payable and other liabilities
50,485 54,622
Total liabilities
175,935 282,277
COMMITMENTS AND CONTINGENCIES (Note 7)
MEMBERS’ CAPITAL
192,846 280,321
TOTAL
$ 368,781 $ 562,598
See notes to consolidated financial statements.
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HERITAGE FIELDS LLC AND SUBSIDIARIES
(A Delaware Limited Liability Company)
CONSOLIDATED STATEMENTS OF OPERATIONS
FOR THE YEARS ENDED DECEMBER 31, 2025, 2024 AND 2023
(In thousands)
Year Ended December 31,
2025 2024 2023
REVENUES:
Land sales
$ 825,659 $ 612,806 $ 554,825
Total revenues 825,659 612,806 554,825
COSTS AND EXPENSES:
Land sales 195,900 144,876 237,309
Management fee
43,013 113,934 65,395
Selling, general and administrative
9,621 11,033 10,927
Total costs and expenses
248,534 269,843 313,631
EQUITY IN EARNINGS FROM JOINT VENTURE — — 1,926
INTEREST INCOME 7,354 6,221 7,490
NET INCOME $ 584,479 $ 349,184 $ 250,610
See notes to consolidated financial statements.
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HERITAGE FIELDS LLC AND SUBSIDIARIES
(A Delaware Limited Liability Company)
CONSOLIDATED STATEMENTS OF MEMBERS’ CAPITAL
FOR THE YEARS ENDED DECEMBER 31, 2025, 2024 AND 2023
(In thousands)
MEMBERS’ CAPITAL—January 1, 2023
$ 576,835
Cash distributions (411,168)
Net income 250,610
MEMBERS’ CAPITAL—December 31, 2023
416,277
Cash distributions (485,140)
Net income 349,184
MEMBERS’ CAPITAL—December 31, 2024
280,321
Cash distributions (671,954)
Net income 584,479
MEMBERS’ CAPITAL—December 31, 2025
$ 192,846
See notes to consolidated financial statements.
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HERITAGE FIELDS LLC AND SUBSIDIARIES
(A Delaware Limited Liability Company)
CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE YEARS ENDED DECEMBER 31, 2025, 2024 AND 2023
(In thousands)
Year Ended December 31,
2025 2024 2023
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income $ 584,479 $ 349,184 $ 250,610
Adjustments to reconcile net income to net cash provided by operating activities:
Cost of land sales 195,900 144,876 237,309
Equity in earnings from joint venture — — (1,926)
Return on investment from joint venture — — 871
Changes in operating assets and liabilities:
Land under development (74,279) (28,262) (22,768)
Contract assets, receivables and other assets, net 141,514 (2,811) (125,125)
Accrued management fees (48,854) 39,739 (3,378)
Land sales deposits
(53,351) 49,798 17,147
Accounts payable and other liabilities (4,137) 8,898 16,847
Net cash provided by operating activities 741,272 561,422 369,587
CASH FLOWS FROM INVESTING ACTIVITIES:
Contributions to joint venture — — (25)
Distributions from joint venture (return of investment) — — 3,351
Net cash provided by investing activities — — 3,326
CASH FLOWS FROM FINANCING ACTIVITIES:
Legacy Interest distributions — (18,075) (48,179)
Payments of cash flow participation debt — (1,005) (1,838)
Percentage Interest distributions (671,954) (485,140) (411,168)
Net cash used in financing activities
(671,954) (504,220) (461,185)
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS 69,318 57,202 (88,272)
CASH AND CASH EQUIVALENTS—Beginning of year
118,256 61,054 149,326
CASH AND CASH EQUIVALENTS—End of year
$ 187,574 $ 118,256 $ 61,054
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION—
Cash paid for interest, all of which was capitalized to inventories
$ 36,903 $ 26,631 $ 23,388
See notes to consolidated financial statements.
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HERITAGE FIELDS LLC AND SUBSIDIARIES
(A Delaware Limited Liability Company)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
1. DESCRIPTION OF ORGANIZATION AND OPERATIONS
Heritage Fields LLC, a Delaware limited liability company (the “Company”), was formed on January 20, 2005. On July 12, 2005, the Company purchased property that was the site of the former Marine Corps Air Station, El Toro from the United States Department of the Navy (“Navy”), located in Irvine, California (the “Property”). On December 22, 2005, the Company conveyed its rights, title, and interests in the Property to the Company’s subsidiary, Heritage Fields El Toro, LLC, a Delaware limited liability company (“HF El Toro”) at the Company’s original cost for the purpose of developing and selling homesites and certain commercial sites in a mixed-use and residential community located on the Company’s Property (the “Project”).
The Company previously had two classes of membership interests, Percentage Interests and Legacy Interests. The Company is managed by an Executive Committee comprised of representatives appointed by only the holders of Percentage Interests. The holders of Legacy Interests were entitled to receive certain priority distributions, which were fully satisfied during the year ended December 31, 2024, and as a result of which, the Legacy Interests are no longer deemed to be outstanding. The holders of the Percentage Interests will receive all other distributions.
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Basis of Consolidation —The accompanying consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) and include the Company’s accounts and all of its direct and indirect wholly-owned subsidiaries’ accounts. All intercompany transactions and balances have been eliminated in consolidation.
Reclassification of prior period amounts —During the year ended December 31, 2025, the Company combined certain line items in which the Company determined separate disclosure within the financial statements was not meaningful to the users of the financial statements. These presentation changes did not affect the total capital balance or net income in any of the periods reported.
Use of Estimates —The preparation of consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the date of the consolidated financial statements, and the reported amounts of revenues and expenses during the reported period. Actual results could differ from those estimates.
Concentration of Credit Risk —The Company’s inventories are all located in Irvine, California. The Company is subject to risks incidental to the ownership, development, and operation of commercial and residential real estate. These include, among others, the risks normally associated with changes in the general economic climate in the communities in which the Company operates, trends in the real estate industry, availability of land for development, changes in tax laws, interest rate levels, availability of financing, and potential liability under environmental and other laws.
The Company’s credit risk relates primarily to cash and cash equivalents, notes receivable and contract assets. Cash accounts at certain institutions are currently insured by the Federal Deposit Insurance Corporation up to $250,000 in aggregate. At various times the Company maintained cash account balances in excess of insured amounts.
Cash equivalents —Cash equivalents are short-term investments that have original maturity dates of three months or less. The carrying amount approximates fair value due to the short-term nature of these investments.
Land under development —Land under development is stated at cost, unless it is determined to be impaired, in which case the impaired land under development is written down to fair value. Land under development includes land, land development costs, real estate taxes, and interest related to development. Included in land development costs are costs to entitle and permit the land for its intended use; costs incurred for infrastructure projects, such as schools, sewer, and roads; and site costs such as grading and amenities to bring the land to a finished state. Certain land development costs are reimbursable through development agreements or other agreements with City of Irvine (the “City”) or other agencies or recoverable through insurance or other agreements and offset development costs when received. Total reimbursements and recoveries were $63.8 million, $167.3 million and $89.6 million for the years ended December 31, 2025, 2024 and 2023, respectively. Development overhead and selling expenses are expensed as incurred.
Cost of land sales are allocated to residential homesites and commercial sites within the Project using the relative sales value method. Since this method requires the Company to estimate future development costs and expected revenue for the entire Project, the profit margin on subsequent land sales will be affected by both changes in the estimated total revenues, as well as any changes in the estimated total development costs of the Project. Accordingly, these estimates are reviewed regularly and
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revised for changes in actual experience, changes in revenue and cost estimates and changes in development plans. Given that development expenditures are capitalized to land under development and reflected in the consolidated statements of operations over the periods in which the Company has land sales, which generally includes future periods, the non-cash cost of land sales are reflected as an add back to net income in the consolidated statements of cash flows.
Land under development is reviewed for potential impairment when events or changes in circumstances indicate that the carrying value of land under development may not be recoverable. Impairment indicators for the Project include, but are not limited to significant increases in land development costs, significant decreases in pace and pricing of home sales within the Project and surrounding areas, and political and societal events that may negatively impact the local economy. There were no impairments identified for the years ended December 31, 2025, 2024 and 2023.
Investment in joint venture —For investments in entities that the Company does not control, but exercises significant influence, the Company uses the equity method of accounting. The Company’s judgment with regard to control involves consideration of various factors including the form of ownership, representation of the entity’s governance, and the ability to participate in policy-making decisions. Investments accounted for under the equity method of accounting are recorded at cost and adjusted for the Company’s share of cash contributions, cash distributions, and gain or loss of the entity’s earnings. The Company eliminates a portion of intra-entity profits resulting from land sales between the Company and the joint venture until the assets are sold to a third-party.
In 2021, the Company obtained a 10% interest in an entity (the “Landbank Venture”) organized for the purpose of taking assignment from homebuilders land purchase and sale agreements and purchasing residential lots within the Project while concurrently entering into option and development agreements with homebuilders in which the homebuilder retains the option to purchase the land to construct and sell homes. The Company sold land to the Landbank Venture in 2021 and eliminated its pro-rata share of the intra-entity profits generated from the sale through earnings (loss) from unconsolidated entities until the land was sold by the Landbank Venture to third-party homebuilders.
As of December 31, 2023, the third-party homebuilders had exercised all the options from the option and development agreements with the Landbank Venture, and the Landbank Venture had distributed all available cash, and the Company’s investment in the Landbank Venture had no carrying value.
Note Receivables —Note receivables held by the Company are reflected at principal and accrued interest amounts due, net of an allowance for expected credit losses or discounts, if any. Interest payments are accrued in the period earned based on the stated interest rate and the outstanding principal balance, less any interest discounts stipulated by the note. Included in contract assets, receivables and other assets, net on the accompanying consolidated balance sheets are notes and accrued interest receivables that the Company has with builders that are constructing affordable housing apartments on the Project (“Affordable Notes”). The Company records a discount on the principal balance for Affordable Notes when the note is zero interest bearing or contains other terms that are below market rate. Any such discount on Affordable Notes is capitalized as a project cost. The Company monitors the payment provisions of each note when determining past due or delinquency status.
Revenue Recognition —Under Accounting Standards Codification (“ASC”) Topic 606, Revenue From Contracts With Customers (“ASC 606”), revenues from land sales are recognized when the Company satisfies the performance obligation at a point in time, which typically occurs when the control of the land passes to its customers. Revenue is recognized in an amount that reflects the consideration the Company expects to be entitled to receive (i.e. the transaction price) in exchange for the transfer of land. The transaction price typically contains fixed and variable components in which the fixed consideration represents the stated purchase price for the land. Some of the Company’s purchase and sale agreements contain a profit participation provision, a variable form of consideration, whereby the Company receives from homebuilders a portion of profit after the builder has received an agreed-upon margin from home sales. If the project profitability falls short of the participation threshold, no additional revenues are received. Profit participation revenue of $24.5 million, $39.8 million and $21.0 million were recognized for the years ended December 31, 2025, 2024 and 2023, respectively. In addition, some residential homesite sale agreements contain a price participation provision, a variable form of consideration, requiring the homebuilder to pay additional consideration as a percentage of the home sale price. Price participation revenue of $19.5 million, $67.6 million and $144.9 million were recognized for the years ended December 31, 2025, 2024 and 2023, respectively. The Company estimates the amount of variable price and profit consideration it expects to be entitled to receive and recognizes revenue and a contract asset at the time of land sale to the extent that it is not probable that a significant reversal of revenues would result when the contingency of the variable consideration is resolved. The Company utilizes current home sale pricing offered by homebuilders in the community along with estimates of price appreciation and construction costs when determining the estimate of the amount of variable consideration to recognize.
A contract asset or liability is recognized when the timing of the satisfaction of a performance obligation is different from the timing of the payments made by customers. Contract assets typically consist of estimates of contingent or variable consideration that has been included in the transaction price and recognized as revenue before the contingency is resolved and the contractual payment is due. Contract liabilities typically consist of payments received prior to satisfying the associated performance obligation, including land sale deposits received from a customer. Changes in estimates of variable components of
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transaction prices could result in cumulative catch-up adjustments to revenue and contract assets in periods after the Company transfers control of the land to the builder.
Fair Value Measurements —The accounting guidance for fair value measurements and disclosures emphasizes that fair value is a market-based measurement, not an entity-specific measurement. Therefore, a fair value measurement should be determined based on the assumptions that market participants would use in pricing the asset or liability. As a basis for considering market participant assumptions in fair value measurements, the guidance establishes a fair value hierarchy that distinguishes between market participant assumptions based on market data obtained from sources independent of the reporting entity and the reporting entity’s own assumptions about market participant assumptions. The hierarchy classifies the inputs used to determine fair value into three levels as follows:
Level 1 —Quoted prices for identical instruments in active markets.
Level 2 —Quoted prices for similar instruments in active markets or inputs, other than quoted prices, that are observable for the instrument either directly or indirectly.
Level 3 —Significant inputs to the valuation model are unobservable.
In instances where the determination of the fair value measurement is based on inputs from different levels of the fair value hierarchy, the level in the fair value hierarchy within which the entire fair value measurement falls is based on the lowest level input that is significant to the fair value measurement in its entirety. The Company’s assessment of the significance of a particular input to the fair value measurement in its entirety requires judgment and consideration of factors specific to the asset or liability.
Income Taxes —The consolidated financial statements contain no provision for income taxes since the income or loss of the Company flows through to the members who are responsible for including their share of the taxable results of operations on their respective tax returns.
Accounting Standards Updates —In November 2024, the FASB issued ASU 2024-03, Income Statement - Reporting Comprehensive Income - Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses , which primarily requires disclosure of disaggregated information about certain income statement expense line items in the notes to the financial statements on an interim and annual basis. For entities that meet the definition of a public business entity, the standard is effective for fiscal years beginning after December 15, 2026, and interim periods within fiscal years beginning after December 15, 2027, with early adoption permitted and can be applied on either a prospective or retrospective basis. The Company is currently evaluating the effect of this update on the Company’s financial statement disclosures.
3. CONTRACT ASSETS, RECEIVABLES AND OTHER ASSETS, net
Contract assets, receivables and other assets, net as of December 31, 2025 and 2024, consisted of the following (in thousands):
December 31,
2025 2024
Affordable notes, net $ 12,470 $ 15,962
Contract assets 8,519 153,642
Other assets 7,101 —
Total contract assets, receivables and other assets, net $ 28,090 $ 169,604
Affordable Notes, net
Principal and interest collected on affordable notes, net, was $4.2 million, $0.6 million and $0.9 million for the years ended December 31, 2025, 2024 and 2023, respectively. Interest income on affordable notes, net, was $0.4 million, $0.4 million and $0.5 million for the years ended December 31, 2025, 2024 and 2023, respectively, and are included in interest income on the accompanying consolidated statements of operations. At December 31, 2025 and 2024, the Company had an allowance for credit losses of $1.3 million and $1.5 million, respectively, associated with the affordable notes.
Contract Assets
Contract assets consist of variable consideration such as price participation and profit participation. The opening and closing balances of the Company’s contract assets for the year ended December 31, 2025 were $153.6 million and $8.5 million, respectively. The net decrease of $145.1 million between the opening and closing balances of the Company’s contract assets primarily resulted from the receipt of $166.2 million in price participation payments from homebuilders attributed to prior land sales, partially offset by additional price participation revenue recognized during the period that resulted from changes in the
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estimated constrained variable consideration that reflects updated pricing and absorption assumptions used to calculate expected price participation payments.
The opening and closing balances of the Company’s contract assets for the year ended December 31, 2024 were $150.8 million and $153.6 million, respectively. The net increase of $2.9 million between the opening and closing balances of the Company’s contract assets primarily resulted from additional price participation revenue recognized during the period that resulted from changes in the estimated constrained variable consideration that reflects updated pricing and absorption assumptions used to calculate expected price participation payments, partially offset by the receipt of $63.7 million in price participation payments from homebuilders attributed to prior land sales.
4. CASH FLOW PARTICIPATION DEBT
In 2010, HF El Toro entered into an unsecured cash flow participation agreement in connection with a series of transfers, payoffs, and pay downs related to its then outstanding loan facility (“Debt Restructure”). The cash flow participation agreement, was determined to be a new debt instrument and in accordance with ASC 470-50, Modifications and Extinguishments was recorded at its fair value on the date of the Debt Restructure. Under the terms of the participation agreement, 4.66% of capital distributions (as defined in the participation agreement) made by HF El Toro are due to the holder of the participation agreement. When a participation payment is made or reasonably assured to be made, the Company used a proportional interest method to determine the portion of the payment that represents interest expense and the portion applied to the principal. The full amount of the principal balance had been satisfied as of December 31, 2024 and subsequent participation payments are recognized fully as additional interest on the original principal.
Total interest incurred related to the participation agreement during the years ended December 31, 2025, 2024 and 2023 was $36.9 million, $26.6 million and $23.4 million , respectively, and was capitalized to land under development in the accompanying consolidated balance sheets.
5. ACCOUNTS PAYABLE AND OTHER LIABILITIES
Accounts payable and other liabilities as of December 31, 2025 and 2024, consisted of the following (in thousands):
2025 2024
Accounts payable and retention payable $ 7,600 $ 11,602
Other liabilities:
Accrued liabilities
14,885 24,285
Development obligations (see Note 7) 28,000 18,735
Total accounts payable and other liabilities
$ 50,485 $ 54,622
6. RELATED PARTY TRANSACTIONS
Management Fee
HF El Toro and Five Point Communities Management, Inc., as nominee for the benefit of Five Point Communities, LP (the “Management Company”), are parties to a development management agreement in which the Management Company has been engaged to manage the development of the Project and to generally supervise the day-to-day affairs of the Project. The Management Company is an affiliate of a member of the Company that holds a 37.5% Percentage Interest. The development management agreement was amended and restated on May 2, 2016 and subsequently amended and restated on April 21, 2017 (“A&R DMA”) to among other things, extend the initial term until December 2021. The A&R DMA’s initial term was extended by mutual agreement of the parties to December 31, 2022 (the “2022 Extension”) and in December 2022, an amendment to the A&R DMA was entered into in which the A&R DMA was renewed through December 31, 2024 (the “First Renewal Term Amendment”). In September 2024, an amendment to the A&R DMA was entered into in which the A&R DMA has been renewed through December 31, 2026 (the “Second Renewal Term”). Under the Second Renewal Term, the annual fixed base management fee will be $13.5 million beginning in 2025, which reflects an increase from the $12.0 million annual fixed base management fee under the First Renewal Term. The incentive compensation provisions (described below) of the A&R DMA were not changed pursuant to the Second Renewal Term.
The total annual base management fee incurred for the years ended December 31, 2025, 2024 and 2023 was $13.5 million, $12.0 million and $12.0 million, respectively, and is included in management fee in the accompanying consolidated statements of operations. Incentive compensation payable to the Management Company is calculated generally as 9% of distributions in excess of the priority Legacy Interests. If the A&R DMA is not extended by mutual agreement of the Company and the Management Company beyond December 31, 2026, then the Management Company will remain entitled to future incentive compensation payments at a reduced rate equal to 6.75% of Distributions paid thereafter. Total incentive compensation
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management fee expense incurred with respect to the A&R DMA for the years ended December 31, 2025, 2024 and 2023 was $25.6 million, $82.0 million and $43.4 million, respectively, and is included in management fee in the accompanying consolidated statements of operations. The amount incurred for the years ended December 31, 2025, 2024 and 2023 represents an estimated amount of incentive compensation attributed to services provided during the periods that are determined to be probable of being paid. Management’s estimate is based on various underlying assumptions which include but are not limited to, the current and projected performance of the Project and the resulting cash that will be available for distributions. Changes in the estimated amount of aggregate payments probable of being made are recognized as a cumulative adjustment in the period the estimate changes. Actual payments of incentive compensation may differ materially from current estimates. During the years ended December 31, 2025, 2024 and 2023, the Company paid $68.0 million, $49.1 million and $41.6 million, respectively, in non-legacy incentive compensation. For the 2025 payment, $4.7 million represents payment for incentive compensation not yet recognized as expense and is included in other assets within contract assets, receivables and other assets, net in the accompanying consolidated balance sheet as of December 31, 2025. During the years ended December 31, 2024 and 2023, the Company paid $1.8 million and $4.9 million, respectively, in legacy incentive compensation to the Management Company. Non-legacy incentive compensation reflects incentive payments that resulted from distributions to Percentage Interest holders, and legacy incentive compensation reflects incentive payments that resulted from distributions to Legacy Interest holders. As of December 31, 2025 and 2024, $86.2 million and $123.9 million, respectively, was accrued for incentive compensation management fees due to the Management Company, and is included in accrued management fees in the accompanying consolidated balance sheets.
Commercial Sub-Management Agreement
Effective June 30, 2013, HF El Toro terminated its commercial development sub-management agreement (“Sub-MA”) with a member of the Company that holds a 12.5% Percentage Interest in the Company. Under the terms of the Sub-MA, certain incentive compensation provisions were vested upon termination. Incentive compensation payments become payable, calculated generally, as 2% of distributions (as defined in the Sub-MA) in excess of the priority Legacy Interests. During the years ended December 31, 2025, 2024 and 2023, total incentive compensation management fee expense incurred pertaining to the Sub-MA was $3.9 million, $20.0 million and $10.0 million, respectively, and is included in management fee in the accompanying consolidated statements of operations. As of December 31, 2025 and 2024, $25.6 million and $36.8 million, respectively, of incentive compensation management fee pertaining to the Sub-MA was accrued and is included in accrued management fees in the accompanying consolidated balance sheets. The amount accrued at December 31, 2025 and 2024 represents an estimated amount of incentive compensation determined to be earned and probable of being paid. Management’s estimate is based on various underlying assumptions which include but are not limited to, the current and projected performance of the Project and the resulting cash that will be available for distributions. Changes in the estimated amount of aggregate payments probable of being made in future periods will be recognized as a cumulative adjustment to management fee expense in the period the estimate changes. Actual payments of incentive compensation may differ materially from current estimates. During the years ended December 31, 2025, 2024 and 2023, the Company paid $15.1 million, $11.3 million and $10.3 million, respectively, in incentive compensation pertaining to the Sub-MA.
Purchase and Sale Agreements
In the normal course of business, the Company may enter into purchase and sale agreements or other contracts with the Company’s members or affiliates of members.
There were no land sale revenues recognized from related party transactions during the year ended December 31, 2025. Land sale revenues recognized from related party transactions was $22.6 million and $16.2 million during the years ended December 31, 2024 and 2023, respectively, and is included in land sales in the accompanying consolidated statements of operations. The related party land sale revenues primarily relate to profit participation.
7. COMMITMENTS AND CONTINGENCIES
In the routine conduct of its business, the Company is subject to the usual obligations associated with entering into contracts for the purchase, development, and sale of real estate.
In the ordinary course of business and as a part of the entitlement and development process, the Company is required to provide performance bonds to ensure completion of certain development obligations. The Company had outstanding performance bonds of $52.8 million and $54.0 million as of December 31, 2025 and 2024, respectively.
On September 8, 2009, the Irvine City Council approved an Amended and Restated Development Agreement (the “ARDA”) between HF El Toro and the City (on behalf of itself and now as successor agency to the dissolved Irvine Redevelopment Agency, which Irvine Redevelopment Agency was an original party to the ARDA). The ARDA became effective on December 27, 2010 and obligated the Company to construct certain defined public infrastructure improvements (i.e. joint backbone improvements) in and around the Project. The Company will have the right to reimbursement for a portion of the public infrastructure improvement costs from the City of Irvine Community Facilities District No. 2013-3 (“CFD”). The CFD is
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supported by special taxes levied on landowners within the improvement areas of the CFD. The CFD will also fund certain improvements, operations and maintenance costs of the Orange County Great Park (the “Park”). The Company, as a landowner within the improvement areas will be subject to the special taxes while it owns land within the improvement areas.
On November 26, 2013, HF El Toro and the City entered into a second adjacent landowner agreement (“ALA II”) in which HF El Toro committed to construct or cause the construction of a portion of the Park (the “Great Park Improvements”), which otherwise would have been an obligation of the City to construct under the terms of the ARDA. In addition to the Great Park Improvements, the ALA II and a memorandum of understanding (“MOU”) regarding funding of Marine Way infrastructure improvements committed HF El Toro to perform on certain other defined items as well as it committed HF El Toro to make $20.0 million of certain direct payments to the City beginning in August 2016. As also defined in the agreements, HF El Toro will have the right to receive up to an additional $40.0 million in CFD reimbursements for public infrastructure components of the Great Park Improvements.
During 2019, the Company and the City entered into an amendment to ALA II. The amendment altered the scope of the Great Park Improvements to include water polo, basketball and volleyball facilities that would initially be paid for by the Company and ultimately reimbursed to the Company by the CFD.
In October 2022, the Company and the City entered into the Framework Plan Implementation Agreement (“FPIA”). The FPIA terminated ALA II, as amended, upon the effective date of the FPIA and restructured the Company’s remaining development obligations to the City. Additionally, the Company agreed to pay $18.0 million to the City upon the City completing certain administrative steps which as of December 31, 2025 had not yet occurred. The FPIA became effective on May 16, 2023, subsequent to the completion of a series of approvals and administrative actions in connection with the formation of the new City of Irvine Communities Facilities District No. 2013-3B (“CFD 2013-3B”). CFD 2013-3B replaced the existing CFD for those development districts where development by the Company has not yet occurred. Upon the effective date of the FPIA, the Company’s remaining obligations under the ALA II were terminated. At each of December 31, 2025 and 2024, the carrying balance of amounts payable to the City related to the FPIA totaled $18.0 million and is included within accounts payable and other liabilities on the consolidated balance sheets.
In December 2025, the Company and the City entered into the Affordable Housing and Necessary Government Use Property Exchange Agreement (the “Exchange Agreement”). Under the Exchange Agreement, and subject to the satisfaction of certain exchange conditions, the Company agreed to convey approximately 35 acres of land to the City in exchange for approximately 26 acres owned by the City. Additionally, the Company agreed to pay $10.0 million to the City, consisting of $5.0 million due within one year following the close of escrow and an additional $5.0 million payment due upon the later of three years following the close of escrow or the City’s commencement of construction on certain authorized facilities. As of December 31, 2025, the carrying balance of amounts payable to the City related to the Exchange Agreement totaled $10.0 million and is included within accounts payable and other liabilities on the consolidated balance sheet.
The Company may be a party to various claims, legal actions, and complaints arising in the ordinary course of business. The Company believes, the disposition of these other matters would not have a material adverse effect on the Company’s consolidated financial condition, results of operations, or cash flows.
As a significant landowner, developer, and holder of commercial properties, there exists the possibility that environmental contamination conditions exist that would require the Company to take corrective action. The Company believes any potential costs will not materially affect its consolidated financial statements.
8. SUBSEQUENT EVENTS
The Company has evaluated subsequent events through March 6, 2026 the date the consolidated financial statements were issued, and has determined that, other than as disclosed, no events or transactions have occurred subsequent to December 31, 2025 that require adjustments to or disclosure in the Company’s consolidated financial statements.
* * * * * *
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