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Item 1A. Risk Factors

2026-02-19 compared with 2025-02-26 · 127 added, 74 removed, 334 unchanged (38% of the section changed)

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The ability of the ultimate buyers of condominiums to finance their purchases is generally dependent on their personal savings and availability of third-party financing.

Consequently, the demand for condominiums could be adversely affected by increases in interest rates (which generally rose in the period from 2022 through 2024), unavailability of mortgage financing, increasing housing costs, and unemployment levels.

Consequently, the demand for condominiums could be adversely affected by increases in interest rates, unavailability of mortgage financing, increasing housing costs, and unemployment levels.

Levels of income and savings, including retirement savings, available to condominium purchasers can be affected by declines in the capital markets.

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A significant amount of time may pass between the execution of a contract for the purchase of a condominium unit and the closing thereof.

The rate of defaults may increase from historical levels due to the personal finances of purchasers being negatively impacted as a result of changing macroeconomic and other conditions, including slow growth or recession, higher interest rates, high unemployment, inflation, and/or tighter credit.

The rate of defaults may increase from historical levels due to the personal finances of purchasers being negatively impacted as a result of changing macroeconomic and other conditions, including slow growth or recession, interest rate volatility, trade policies, high unemployment, inflation, and/or tighter credit.

Defaults by purchasers to pay any remaining portions of the sales prices for condominium units under contract may have an adverse effect on our business, financial condition, and results of operations.

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A tenant may experience a downturn in its business, due to a variety of factors including rising inflation or supply chain issues, which may weaken its financial condition and result in its failure to make timely rental payments or result in defaults under our leases.

The rate of defaults may increase from historical levels due to tenants’ businesses being negatively impacted by higher interest rates.

The rate of defaults may increase from historical levels due to tenants’ businesses being negatively impacted by interest rate volatility or trade policies.

In the event of default by a tenant, we may experience delays in enforcing our rights as the landlord and may incur substantial costs in protecting our investment.

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The concentration of our properties in certain states may make our revenues and the value of our assets vulnerable to adverse changes in local economic conditions.

Many of the properties we own are located in the same or in a limited number of geographic regions, including Texas, Hawai‘i, Nevada, and Maryland.

In October 2021, we announced the launch of Teravalis, a new large-scale master planned community in the West Valley of Phoenix, Arizona.

Our current and future operations at the properties in these states are generally subject to significant fluctuations by various factors that are beyond our control such as the regional and local economy, which may be negatively impacted by material relocation by residents, industry slowdowns, plant closings, increased unemployment, lack of availability of consumer credit, levels of consumer debt, housing market conditions, adverse weather conditions, natural disasters, climate change and other factors, as well as the local real estate conditions, such as an oversupply of, or a reduction in demand for, retail space or retail goods and the availability and creditworthiness of current and prospective tenants.

Many of the properties we own are located in the same or in a limited number of geographic regions, including Arizona, Texas, Hawai‘i, Nevada, and Maryland.

Our operations at the properties in these states are generally subject to significant fluctuations by various factors that are beyond our control such as the regional and local economy, which may be negatively impacted by material relocation by residents, industry slowdowns, plant closings, increased unemployment, lack of availability of consumer credit, levels of consumer debt, housing market conditions, adverse weather conditions, natural disasters, climate change and other factors, as well as the local real estate conditions, such as an oversupply of, or a reduction in demand for, retail space or retail goods and the availability and creditworthiness of current and prospective tenants.

In addition, some of our properties are subject to various other factors specific to those geographic areas.

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Moreover, these properties may be affected by risks such as acts of terrorism and natural disasters, including major fires, floods, and earthquakes, as well as severe or inclement weather, which could also decrease tourism activity in Las Vegas or Hawai‘i.

Further, Summerlin is to some degree dependent on the gaming industry, which could be adversely affected by changes in consumer trends and preferences and other factors over which we have no control.

The gaming industry is characterized by an increasingly high degree of competition among a large number of participants, including riverboat casinos, dockside

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Further, Summerlin is to some degree dependent on the gaming industry, which could be adversely affected by changes in consumer trends and preferences and other factors over which we have no control.

The gaming industry is characterized by an increasingly high degree of competition among a large number of participants, including riverboat casinos, dockside casinos, land-based casinos, video lottery, sweepstakes, and poker machines, many of which are located outside of Las Vegas.

casinos, land-based casinos, video lottery, sweepstakes, and poker machines, many of which are located outside of Las Vegas.

Furthermore, competition from internet lotteries, sweepstakes, and other internet-wagering gaming services, which allow their customers to wager on a wide variety of sporting events and play Las Vegas-style casino games from home or in non-casino settings, could negatively impact the population in the Las Vegas area.

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In the event that oil prices fall and remain depressed for a sustained period, demand may decrease for housing and commercial space in The Woodlands, Bridgeland, and The Woodlands Hills.

Additionally, the success of Summerlin, our master planned community in Las Vegas, Nevada, and Teravalis, our new master planned community in the Phoenix, Arizona region, may be negatively impacted by changes in temperature due to climate change, increased stress on water supplies caused by climate change and population growth and other factors over which we have no control.

Additionally, Summerlin and Teravalis may be negatively impacted by changes in temperature due to climate change, increased stress on water supplies caused by climate change and population growth and other factors over which we have no control.

If any or all of the factors discussed above were to occur and result in our inability to sell or lease our residential and commercial property in any of these geographic regions, it would likely have a material adverse effect on our business, financial condition, and results of operations.

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All of these factors reduce our ability to respond to changes in the performance of our investments and could adversely affect our business, financial condition, and results of operations.

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Some of our properties are subject to potential natural or other disasters.

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We cannot predict the extent of damage that may result from such adverse weather events, which depend on a variety of factors beyond our control.

Some of our properties, including Houston-area MPCs and Ward Village, are located in regions that could be affected by increases in sea levels, the frequency or severity of hurricanes and tropical storms, or environmental disasters, whether such events are caused by global climate changes or other factors.

Some of our properties, including Houston-area MPCs and Ward

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Village, are located in regions that could be affected by increases in sea levels, the frequency or severity of hurricanes and tropical storms, or environmental disasters, whether such events are caused by global climate changes or other factors.

Additionally, adverse weather events can cause widespread property damage and significantly depress the local economies in which the Company operates and have an adverse impact on the Company’s business, financial condition, and operations.

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Acting as a principal may also mean that we pay a contractor before we have been reimbursed by our tenants or have received the entire purchase price of a condominium unit from the purchaser.

This exposes us to additional risks of collection in the event of a bankruptcy, insolvency, or a

This exposes us to additional risks of collection in the event of a bankruptcy, insolvency, or a purchaser default.

The reverse can occur as well, where a contractor we have paid files for bankruptcy protection or commits fraud with the funds before completing a project which we have funded in part or in full.

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purchaser default.

The reverse can occur as well, where a contractor we have paid files for bankruptcy protection or commits fraud with the funds before completing a project which we have funded in part or in full.

Cybersecurity risks and incidents, such as a breach of the Company’s privacy or information security systems, or those of our vendors or other third parties, could compromise our information and expose us to liability, which would cause our business and reputation to suffer.

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While we do not have direct customer or supplier relationships in these regions, sanctions, export controls, cyberattacks, and disruptions to energy markets could indirectly impact our supply chain and the cost of goods necessary for construction.

In particular, recent executive actions and trade policies implemented or proposed by the current U.S.

administration, including the imposition or threat of significant tariffs on imported goods, including construction materials and other critical

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In addition, recent tariffs imposed or threatened by President Trump on imported goods, including construction materials and other critical supplies, could increase our costs and reduce availability of necessary materials.

These tariffs, as well as potential retaliatory measures by other countries, may further impact global trade flows, exacerbate inflation, and contribute to higher interest rates or general economic uncertainty.

supplies, could increase our costs and reduce availability of necessary materials.

These tariffs, as well as potential retaliatory measures by other countries, may further impact global trade flows, exacerbate inflation, and contribute to interest rate volatility or general economic uncertainty.

Such factors could negatively impact our business partners, employees, and customers or otherwise adversely affect our financial condition and results of operations.

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If any potential business opportunity is expressly presented to a director exclusively in his or her director capacity, the director will not be permitted to pursue the opportunity, directly or indirectly through a controlled affiliate in which the director has an ownership interest, without the approval of the independent members of our board of directors.

In 2024, we completed the spinoff of Seaport Entertainment Group Inc.

into an independent publicly traded company, and we may not achieve some or all of the Spinoff’s expected benefits.

On July 31, 2024, we completed the spinoff of Seaport Entertainment Group Inc.

(the Spinoff), as an independent, publicly traded company.

In structuring and completing the Spinoff, we anticipated certain benefits that may not be achieved, may be delayed, or may be less advantageous than we anticipate for a variety of reasons.

Following the Spinoff, we may be more susceptible to market fluctuations and other adverse events than prior to the Spinoff, and our business is less diversified than the combined businesses prior to the Spinoff.

RISKS RELATED TO OUR NEW HOLDING COMPANY STRATEGY AND OUR RELATIONSHIP WITH PERSHING SQUARE

Pershing Square has the ability to influence our policies and operations and its interests may not in all cases be aligned with other stockholders.

Pershing Square beneficially owns approximately 46.7% of our outstanding common stock as of February 12, 2026.

William Ackman, the Chief Executive Officer of Pershing Square, is the Executive Chairman of our board of directors.

Additionally, Mr.

Ryan Israel, the Chief Investment Officer of Pershing Square, is our Chief Investment Officer and a member of our board of directors, and Mr.

Ben Hakim, the President of Pershing Square, is a member of our board of directors.

Accordingly, Pershing Square has the ability to influence our policies and operations, including the appointment of management, future issuances of our common stock or other securities, the payment of dividends, if any, on our common stock, the incurrence or modification of debt by us, amendments to our amended and restated certificate of incorporation and amended and restated bylaws and the entering into of extraordinary transactions, and its interests may not in all cases be aligned with other stockholders’ interests.

Pershing Square has submitted the Pershing Square Proposals, which may be a distraction to our board of directors, management, and employees and could have a material adverse impact on our business and operations.

In August 2024, Pershing Square announced its intent to evaluate the possibility of various potential alternatives with respect to its investment in the Company, including a possible transaction in which it (either alone or together with one or more potential co-investors) might acquire all or substantially all of the shares of common stock in the Company not owned by Pershing Square and its affiliates, and in connection therewith take the Company private.

Following Pershing Square’s August 2024 announcement, our board of directors formed a Special Committee, composed of independent directors to review any proposal by Pershing Square.

Following the August 2024 announcement, Pershing Square has engaged in additional communications with the Special Committee, including, as previously disclosed, submitting on January 13, 2025, a proposal (the January 13 Pershing Square Proposal) pursuant to which Pershing Square would acquire additional shares of the Company’s common stock in a merger transaction between the Company and a newly formed merger subsidiary of Pershing Square Holdco, L.P., upon the consummation of which Pershing Square would own a majority of the Company’s common stock.

On February 18, 2025, Pershing Square announced that it had withdrawn the January 13 Pershing Square Proposal and submitted a modified proposal (the February 18 Pershing Square Proposal) under which it would purchase from the Company $900 million of the Company’s Common Stock for $90 per share.

Pershing Square currently beneficially owns approximately 37.4% of the Company's common stock.

Should the transaction contemplated by the February 18 Pershing Square Proposal be consummated, Pershing Square’s beneficial ownership would increase to 48.0%.

There can be no assurance that the Company will pursue this proposed transaction or any further proposed modification thereof that Pershing Square submits, or any other strategic outcome, and HHH does not intend to comment further on this matter unless and until further disclosure is determined to be appropriate or necessary.

The Special Committee is currently evaluating these matters to determine the appropriate course of action and process.

On May 5, 2025, HHH entered into a Share Purchase Agreement (Purchase Agreement), by and between HHH and Pershing Square Holdco, L.P.

(PS Holdco), pursuant to which HHH sold to PS Holdco 9,000,000 newly issued shares of the Company’s common stock for an aggregate purchase price of $900 million.

In connection with the Purchase Agreement, we also entered into several other agreements with Pershing Square, including a Services Agreement and a Shareholder Agreement.

Pursuant to the terms of the Services Agreement, Pershing Square will support the Company’s new diversified holding company strategy by providing services to the Company, such as (i) investment advisory services, (ii) making recommendations with respect to hedging, balance sheet optimization, and capital allocation, (iii) executing transactions, (iv) assisting the Company with business and corporate development functions, (v) making voting recommendations for the Company’s investments, (vi) assisting with and advising on fundraising, (vii) monitoring operations of the Company and its investments, subject to the day-to-day authority and responsibility of management of the Company, (viii) providing recommendations for persons to serve as designees or deputies of the Chief Investment Officer, (ix) engaging and supervising third-party service providers, (x) making dividend payment recommendations, and (xi) providing other services as may be agreed upon.

The Services Agreement has an initial ten-year term and will have successive renewal terms of ten years.

The Company pays Pershing Square a quarterly base advisory fee of $3.75 million and a quarterly variable advisory fee equal to 0.375% of the excess value of the quarter-end stock price of the Company’s common stock minus

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Uncertainty regarding the Pershing Square Proposals may be disruptive to our business, which could have a negative effect on our operations, financial condition or results of operations.

Management and employee distraction related to Pershing Square’s unsolicited interest also may adversely impact our ability to optimally conduct our business and pursue our strategic objectives.

Responding to the Pershing Square Proposals, and any further proposals or activities that may follow from it, will require attention from our board of directors, management and employees, and has required, and may continue to require, us to incur additional expenses and costs.

RISKS RELATED TO THE SPINOFF AND OUR RELATIONSHIP WITH SEAPORT ENTERTAINMENT

In 2024, we completed the spinoff of Seaport Entertainment into an independent publicly traded company, and we may not achieve some or all of the spinoff’s expected benefits.

On July 31, 2024, we completed the spinoff of Seaport Entertainment as an independent, publicly traded company.

In structuring and completing the spinoff, we anticipated certain benefits that may not be achieved, may be delayed, or may be less advantageous than we anticipate for a variety of reasons.

Following the spinoff, we may be more susceptible to market fluctuations and other adverse events than prior to the spinoff, and our business is less diversified than the combined businesses prior to the spinoff.

Seaport Entertainment may fail to perform its obligations under various transaction agreements that we entered into in connection with the spinoff.

In connection with the spinoff, we entered into several agreements with Seaport Entertainment that, among other things, provide a framework for the Company’s relationship with Seaport Entertainment after the spinoff, including a separation agreement, a transition services agreement, a tax matters agreement, and an employee matters agreement.

These agreements, as well as the separation and distribution evidencing the spinoff, determine the allocation of assets and liabilities between us and Seaport Entertainment following the spinoff and include various related terms and conditions, including indemnifications related to liabilities and obligations.

We will rely on Seaport Entertainment to satisfy its performance and payment obligations under these agreements.

If Seaport Entertainment is unable to satisfy these obligations, including its indemnification obligations, we could incur operational difficulties or losses that could have an adverse effect on our business, financial condition, and results of operations.

the reference price of $66.15, multiplied by existing share count as of the transaction date, which will not increase with the issuance of new shares of common stock.

Among other things, the Shareholder Agreement provides that, at any meeting of stockholders where directors are to be elected, (a) so long as PS Holdco, Pershing Square and their respective affiliates, including investment funds managed by one or more affiliates (collectively, the Purchaser Group), beneficially own at least 17.5% of the outstanding shares of Common Stock on a fully diluted basis, PS Holdco may nominate for election a number of directors equal to 25% of the total number of members of the Board as constituted after giving effect to such election, rounded up (e.g., three directors in the case of an 11-member Board) (such director, a PS Board Designee), and (b) so long as the Purchaser Group beneficially owns less than 17.5% but at least 10% of the outstanding shares of Common Stock on a fully diluted basis, PS Holdco may nominate for election a number of PS Board Designees equal to 10% of the total number of members of the Board as constituted after giving effect to such election, rounded up (e.g., two directors in the case of an 11-member Board).

If the Purchaser Group owns less than 10% of the outstanding shares of Common Stock on a fully diluted basis, PS Holdco no longer has the right to nominate any PS Board Designees.

Ackman, Ben Hakim, and Ryan Israel currently serve as the PS Board Designees.

Accordingly, Pershing Square has the ability to influence our policies and operations, including the appointment of management, business development and investment strategies, future issuances of our common stock or other securities, the payment of dividends, if any, on our common stock, the incurrence or modification of debt by us, amendments to our amended and restated certificate of incorporation and amended and restated bylaws and the entering into of extraordinary transactions, and its interests may not in all cases be aligned with other stockholders’ interests.

Our recent shift in business strategy, including the planned acquisition of Vantage, will create additional and different risks than those we face in our existing real estate business.

Since the announcement of our transaction with Pershing Square in May 2025, we have been executing on our strategy to become a diversified holding company, including by entering into the Purchase and Sale Agreement with Vantage on December 17, 2025, pursuant to which the Company will acquire Vantage for a purchase price of $2.1 billion (subject to certain adjustments).

As part of this strategy, we expect to acquire controlling stakes in high-quality, durable growth public and private operating companies while continuing to invest in and grow our core real estate development and Master Planned Communities business.

In embarking on this changed strategy, we are subject to risks such as being unable to identify and consummate transactions (including the Vantage Transaction) as part of the new strategy, as well as risks inherent in acquiring or making investments in operating companies, especially companies in industries unrelated to our existing real estate business.

Sources of risk arising from these types of transactions include financial, accounting, tax, and regulatory challenges;

difficulties with integration, business retention, execution of strategy, unforeseen liabilities or market conditions;

and other managerial or operating risks and challenges.

Any future transactions could also subject us to risks such as failure to obtain appropriate value, post-closing claims being levied against us, and disruption to our other businesses during the negotiation or execution process or thereafter.

Risk-mitigating provisions that we put in place in the course of negotiating and executing these transactions, such as due diligence efforts and indemnification provisions, may not be sufficient to fully address these risks and contingencies.

We may be unable to realize the anticipated benefits of the transactions with Pershing Square, the Vantage Transaction, and/or our new strategy, which could adversely impact our financial condition, results of operations, cash flows, the quoted trading price of our securities, and our ability to satisfy our debt service obligations.

FINANCIAL RISKS

Our indebtedness and changing interest rates could adversely affect our business, prospects, financial condition, or results of operations and prevent us from fulfilling our obligations under our Senior Notes and Loan Agreements.

As of December 31, 2025, our total consolidated debt was approximately $5.1 billion of which $2.1 billion was recourse to the Company or one of its subsidiaries.

In addition, as of December 31, 2024, we have $34.7 million of recourse guarantees associated with undrawn financing commitments.

In addition, as of December 31, 2025, we had $6.6 million of recourse guarantees associated with undrawn financing commitments.

As of December 31, 2025, our proportionate share of the debt of our unconsolidated ventures was $215.5 million based upon our economic interest.

All of this indebtedness is without recourse to the Company, with the exception of the collateral maintenance obligation for Floreo.

Subject to the limits contained in the indentures governing the $600 million Bridgeland Notes due 2029, the $750 million 5.375% senior notes due 2028, the $650 million 4.125% senior notes due 2029, and the $650 million 4.375% senior notes due 2031 (collectively, the Senior Notes), and any limits under our other debt agreements, we may need to incur substantial additional indebtedness from time to time, including project indebtedness for developments by our subsidiaries.

Subject to the limits contained in the indentures governing the $600 million Bridgeland Notes due 2029, the $750 million 5.375% senior unsecured notes due 2028, the $650 million 4.125% senior unsecured notes due 2029, and the $650 million 4.375% senior unsecured notes due 2031 (collectively, the senior unsecured notes), and any limits under our

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other debt agreements, we may need to incur substantial additional indebtedness from time to time, including project indebtedness for developments by our subsidiaries.

If we incur additional indebtedness or experience an adverse change in interest rates, the risks related to our level of indebtedness could intensify.

Specifically, an increased level of indebtedness could have important consequences, including:

– making it more difficult for us to satisfy our obligations with respect to our indebtedness, including the Senior Notes and Loan Agreements

– making it more difficult for us to satisfy our obligations with respect to our indebtedness, including the senior unsecured notes and loan agreements

– limiting our ability to obtain additional financing to fund future working capital, capital expenditures, debt service requirements, execution of our business strategy, or finance other general corporate requirements

– requiring us to make non-strategic divestitures, particularly when the availability of financing in the capital markets is limited, which may adversely impact sales prices

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– requiring a substantial portion of our cash flow to be allocated to debt service payments instead of other business purposes, thereby reducing the amount of cash flow available for working capital, capital expenditures, acquisitions, dividends, and other general corporate purposes

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– resulting in an event of default if we fail to satisfy our obligations under our indebtedness, which default could result in all or part of our indebtedness becoming immediately due and payable and, in the case of our secured debt, could permit the lenders to foreclose on our assets securing such debt

The indentures governing our Senior Notes, the Loan Agreements and our other debt agreements contain restrictions that may limit our ability to operate our business.

The indentures governing our Senior Notes contain certain restrictions that may limit our ability to operate.

The indentures governing our senior unsecured notes, the loan agreements, and our other debt agreements contain restrictions that may limit our ability to operate our business.

The indentures governing our senior unsecured notes contain certain restrictions that may limit our ability to operate.

In addition, the loan agreements contain representations and covenants customary for loan agreements of this type, including financial covenants related to maintenance of interest coverage ratios and loan-to-value ratios with respect to the certain mortgaged properties, taken as a whole.

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Any such defaults could materially impair our financial condition and liquidity.

In addition, if the lenders under any of our debt agreements or other obligations accelerate the maturity of those obligations, we cannot assure that we will have sufficient assets to satisfy our obligations under the notes or our other debt.

In addition, if the lenders under any of our debt

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agreements or other obligations accelerate the maturity of those obligations, we cannot assure that we will have sufficient assets to satisfy our obligations under the notes or our other debt.

We may be unable to develop and expand our properties without sufficient capital or financing.

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We may be unable to access or acquire financing due to the market volatility and uncertainty.

We may be unable to obtain an anchor store, mortgage lender and property partner approvals that are required for any such development,

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redevelopment, or expansion.

We may be unable to obtain an anchor store, mortgage lender and property partner approvals that are required for any such development, redevelopment, or expansion.

We may abandon redevelopment or expansion activities already underway that we are unable to complete due to the inability to secure additional capital to finance such activities.

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In addition, if redevelopment, expansion, or reinvestment projects are unsuccessful, the investment in such projects may not be recoverable, in full or in part, from future operations or sale resulting in impairment charges.

Adverse changes in our credit ratings could increase our financing costs and limit market access.

We and certain of our subsidiaries may be evaluated by one or more nationally recognized credit rating agencies.

Ratings reflect each agency’s assessment of factors such as liquidity, leverage, capital structure, cash flow stability, asset quality, business profile, corporate governance, and market conditions, and they can be downgraded, placed on negative watch, revised in outlook, or withdrawn at any time.

A downgrade or other adverse action, or the announcement of a review, could increase interest rates and fees on new or existing debt;

narrow the pool of investors willing or permitted to invest in our securities;

require additional collateral, tighter covenants, shorter maturities, or other unfavorable terms;

and reduce the trading price and liquidity of our securities.

These outcomes could raise our overall cost of capital, constrain access to bank and capital markets, reduce financial flexibility, and impair execution of our strategy and our ability to meet obligations, any of which could materially adversely affect our business, financial condition, results of operations, and cash flows.

We may be unable to refinance our indebtedness on favorable terms, or at all.

We have a substantial amount of indebtedness, a significant portion of which will mature in the coming years.

Our strategy assumes continued access to the debt capital markets and other financing sources to refinance existing indebtedness, including property‑level mortgage loans, construction and development facilities, and unsecured or recourse borrowings, often before maturity.

Our ability to refinance our indebtedness on favorable terms, or at all, depends on factors beyond our control, including conditions in the credit and capital markets (such as interest rates, spreads, and lender appetite for real estate and construction lending);

our leverage, liquidity, interest coverage and credit ratings;

the performance and values of properties securing our debt and our broader portfolio;

changes in banking and other financial regulations;

and broader macroeconomic, geopolitical, and industry developments.

If we cannot refinance maturing indebtedness on acceptable terms, we may be forced to seek alternative financing on less favorable terms, use more of our available liquidity, sell assets, on disadvantageous terms or at unfavorable times in the market, delay or cancel development, redevelopment, or other capital projects, or issue equity or equity‑linked securities that could be dilutive to existing stockholders.

Even if refinancing is available, it may be at higher interest rates or subject to more restrictive covenants, which could increase our interest expense, reduce our financial flexibility, and constrain our ability to invest in our existing properties and development pipeline or pursue new investment opportunities.

Failure to refinance, repay, or otherwise address maturing indebtedness could lead to defaults, acceleration, foreclosure on collateral, and potential cross defaults or cross accelerations, any of which could materially adversely affect our business, financial condition, results of operations, cash flows, and ability to service our debt.

The Company is dependent on the operations and funds of its subsidiaries, including The Howard Hughes Corporation.

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Legal and contractual restrictions in agreements governing future indebtedness of any of the Company’s subsidiaries, as well as the financial condition and future operating requirements of any such subsidiaries, in each case, including HHC, may limit such subsidiaries’ ability to distribute cash to the Company.

If HHC or any of the Company’s other subsidiaries is limited in its ability to distribute cash to the Company, or if the earnings or other available assets of the Company’s subsidiaries are not sufficient to pay distributions or make loans to the Company in the amounts or at the times necessary for the Company to meet its financial obligations, then the Company’s business, financial condition, cash flows, results of operations, and reputation may be materially adversely affected.

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the Company in the amounts or at the times necessary for the Company to meet its financial obligations, then the Company’s business, financial condition, cash flows, results of operations, and reputation may be materially adversely affected.

We are subject to risks associated with hedging arrangements.

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Certain provisions of the Internal Revenue Code could limit our ability to fully utilize certain tax assets if we were to experience a change in control.

As of December 31, 2024, we have approximately $802.7 million of federal net operating loss carryforwards.

As of December 31, 2025, we had approximately $708.6 million of federal net operating loss carryforwards.

If certain change in control events were to occur, the cash flow benefits we might otherwise have received could be decreased.

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If this happens, we might remain obligated for any mortgage debt or other financial obligations related to the property.

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REGULATORY, LEGAL AND ENVIRONMENTAL RISKS

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Transfer of control can result in claims with respect to deficiencies in operating funds and reserves, construction defects, and other condominium-related matters by the condominium association and/or third-party condominium unit owners.

Any material claims in these areas could negatively affect our reputation in condominium development and ultimately have a material adverse effect on our business, financial condition, and results of operations.

Any material claims in these areas could negatively

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affect our reputation in condominium development and ultimately have a material adverse effect on our business, financial condition, and results of operations.

Development of properties entails a lengthy, uncertain and costly entitlement process.

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Such environmental laws may affect, for example, how we manage storm water runoff, wastewater discharges, and dust;

how we develop or operate on properties on or affecting

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resources such as wetlands, endangered species, cultural resources, or areas subject to preservation laws;

how we develop or operate on properties on or affecting resources such as wetlands, endangered species, cultural resources, or areas subject to preservation laws;

and how we address contamination.

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Noncompliance with environmental laws could result in fines and penalties, obligations to remediate, permit revocations, and other sanctions.

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We may be subject to potential costs to comply with environmental laws.

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Additionally, COVID-19 disrupted our business and a resurgence of it, or another pandemic, could have a material adverse effect on our business, financial performance and condition, operating results, and cash flows.

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Water and electricity shortages could have an adverse effect on our business, financial condition, and results of operations.

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Taxes for financial reporting purposes and cash tax liabilities in the future may be adversely affected by changes in such tax rules.

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GENERAL RISKS

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Any one of these events might decrease demand for real estate, decrease or delay the occupancy of new or redeveloped properties, and limit access to capital or increase the cost of capital.

Our stock price may continue to be volatile.

The trading price of our common stock is likely to continue to be volatile due to the stock market’s routine periods of large or extreme volatility.

Our stock price may be volatile.

The trading price of our common stock may be volatile due to the stock market’s routine periods of large or extreme volatility.

This volatility often has been unrelated or disproportionate to the operating performance of particular companies, including ours.

Factors that affect our trading price may include the following:

– results of operations that vary from the expectations of securities analysts and investors, including our ability to finance and achieve the anticipated benefits of the spinoff

Factors that could affect our trading price include the following:

– results of operations that vary from the expectations of securities analysts and investors, including our ability to consummate and achieve the anticipated benefits of the Vantage Transaction

– changes in expectations as to our future financial performance, including financial estimates and investment recommendations by securities analysts and investors

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If we were involved in securities litigation, it could have a substantial cost and divert resources and the attention of executive management from our business regardless of the outcome of such litigation.

We are exposed to risks related to the adoption and use of artificial intelligence (AI).

We are subject to various risks associated with the adoption and utilization of AI technologies by both our company and our competitors.

The inherent complexity and rapid evolution of AI technology may hinder our ability to effectively implement these capabilities, potentially leading to significant costs without corresponding benefits to our business or customer value.

Our AI implementations may result in errors or unintended outcomes due to algorithmic flaws, inadequate training data, or inherent biases, which could expose us to liability and reputational damage.

Additionally, we face competitive risks if our adoption of AI or other machine learning technologies is not done timely or as effectively as that of our competitors.

AI technology also presents unique challenges related to data privacy, cybersecurity, and ethical considerations, which could impact our business operations.

The regulatory landscape is continuously evolving, with new laws and regulations being proposed or enacted by various jurisdictions.

Compliance with these diverse requirements could increase our operational costs, and any actual or perceived regulatory violations could subject us to enforcement

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actions, penalties, and reputational harm.

The combined effect of these interrelated risks could materially and adversely affect our business operations, financial condition, and competitive position.

The technologies or models we rely upon may undergo major updates or shifts while our AI features are already live in the market.

Such updates could force us to retrain or redeploy our own AI systems at inopportune times, increasing our costs and delaying upgrades or product releases.

Furthermore, the vendor might unexpectedly discontinue certain features or stop supporting the version on which our platform depends.

Any such mid-deployment disruption could result in downtime, diminished accuracy or usability, and ultimately damage our brand reputation and customer experience.

The Company may not obtain the anticipated benefits of the holding company structure.

If circumstances prevent the Company from taking advantage of the strategic and business opportunities that it expects to realize from the holding company structure, the Company would nevertheless bear the costs incurred in connection with the holding company structure, which could adversely affect the Company’s business, financial condition, cash flows, and results of operations.

Anti-takeover provisions in our certificate of incorporation, our by-laws, Delaware law, stockholder’s rights agreement and certain other agreements may prevent or delay an acquisition of us, which could decrease the trading price of our common stock.

Anti-takeover provisions in our certificate of incorporation, our by-laws, Delaware law, Shareholder Agreement, Standstill Agreement, and certain other agreements may prevent or delay an acquisition of us, which could decrease the trading price of our common stock.

Our certificate of incorporation and bylaws contain the following limitations:

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The statute generally defines an interested stockholder as any person that is the owner of 15% or more of the outstanding voting stock or is our affiliate or associate and was the owner of 15% or more of outstanding voting stock at any time within the three-year period immediately before the date of determination.

We have granted a waiver of the applicability of the provisions of Section 203 of the DGCL to Pershing Square Capital Management, L.P., PS Management GP, LLC and William A.

Ackman (together, Pershing Square) such that Pershing Square may increase its position in our common stock up to 40% of the outstanding shares without being subject to Section 203’s restrictions on business combinations.

As such, Pershing Square, through its ability to accumulate more common stock than would otherwise be permitted under Section 203, has the ability to become a large holder that would be able to affect matters requiring approval by Company stockholders, including the election of directors and approval of mergers or other business combination transactions.

The Board’s Corporate Governance Guidelines reflect that it will grant to any stockholder a waiver of the applicability of Section 203 of the DGCL to the acquisition of up to 40% of the Company’s outstanding voting stock upon the request of such stockholder, subject to the Board’s fiduciary duties and applicable law.

In connection with the Pershing Square Issuance, we granted a waiver of the applicability of the provisions of Section 203 of the DGCL to Pershing Square Capital Management, L.P., PS Management GP, LLC and William A.

Ackman (together, Pershing Square) with respect to Pershing Square’s purchase of our common stock in connection therewith.

Also, in connection with the Pershing Square Issuance, we also entered into the Standstill Agreement.

Pursuant to the Standstill Agreement, (i) Pershing Square agreed not to acquire beneficial ownership of more than 47.0% of our common stock and (ii) for all matters being voted on at a stockholder meeting or in a consent solicitation that the Board recommends that stockholders approve, the voting power of the shares held by PS Holdco, Pershing Square and their respective affiliates will be limited to 40% of the total voting power of our outstanding common stock (the voting cap), with the excess of any shares held by them over the voting cap (the excess shares) to be voted in proportion to the votes cast by unaffiliated stockholders.

The voting cap applies across all matters, except with respect to voting to elect PS Board Designees, for which no voting cap applies.

For all matters being voted on at a stockholder meeting or in a consent solicitation that the Board has recommended that stockholders not approve, PS Holdco, Pershing Square and their respective affiliates may vote all of their shares “against” such matter, or it may vote their shares up to the voting cap “for” such matter, with the excess shares to be voted them in proportion to the votes cast by unaffiliated stockholders.

As such, Pershing Square, a large holder that is able to affect matters requiring approval by Company stockholders, including the election of directors and approval of mergers or other business combination transactions.

The Board’s Corporate Governance Guidelines also reflect that it will grant to any stockholder a waiver of the applicability of Section 203 of the DGCL to the acquisition of up to 40% of the Company’s outstanding voting stock upon the request of such stockholder, subject to the Board’s fiduciary duties and applicable law.

These anti-takeover provisions could make it more difficult for a third party to acquire us, even if the third-party’s offer may be considered beneficial by many of our stockholders.

As a result, our stockholders may be limited in their ability to obtain a premium for their shares.

As a result, our stockholders may be limited in their ability to obtain

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a premium for their shares.

These provisions could limit the price that investors might be willing to pay in the future for shares of our common stock.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 1A. Risk Factors