Dallas-based real estate developer Howard Hughes Corp. is considering a sale.
The company commissioned investment bank Centerview Partners on Thursday to review its options, which could range from a sale or joint venture to divesting assets.
Howard Hughes' weak stock performance and slower than expected progress in a high profile development in New York City are driving the review forward. Its stock price has dropped from its high of $ 141.56 in July 2018. It was $ 93.62 when markets opened on Wednesday.
"The board and management are determined to close the significant gap between our stock price and the underlying net assets of the company," said CEO David R. Weinreb in a statement.
News of the possible sale provided a temporary respite. Stock prices rose so high that the New York Stock Exchange stopped trading the stock on Thursday morning. It continued to rise after trading resumed. By the end of the day, they rose 42% to $ 1
The Company's Seaport District project in Lower Manhattan takes longer than expected to commence operations, the company said in a letter to shareholders in 2018. Earlier this week, the company announced it had raised a $ 250 million loan for the project.
Seaport's plans weighed on the company's stock, said Alexander Goldfarb, senior real estate analyst at investment bank Sandler O & # 39; Neill and Partners.
"Management was aware that the development of the project would take years," Goldfarb said. "But Wall Street does not work in years – it works in minutes."
The project poses a unique risk to the company's finances. It is referred to as the annual filing by the Securities and Exchange Commission. Since Howard Hughes plans to own and operate a number of companies in the Seaport District, their earnings could impact the company.
"This is in contrast to our other retail properties, where we typically receive lease payments from unaffiliated tenants and are not necessarily affected by the operating performance of the underlying companies," the file said.
The Company As a possible hurdle for further development, the multistage land review process was cited in New York City. It's the same process Amazon has worked hard to circumvent its failed plans to open a headquarters.