UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 10-Q
(Mark One)
For the quarterly period ended March 31, 2026
OR
For the transition period from to
Commission File Number 001-38088
(Exact name of registrant as specified in its charter)
| (State or other jurisdiction of incorporation or organization) | (I.R.S. Employer Identification No.) | ||||||||||||||||
(Address of Principal Executive Offices) | (Zip code) | ||||||||||||||||
(949 ) 349-1000
(Registrant’s telephone number, including area code)
Not Applicable
(Former name, former address, and former fiscal year, if changed since last report)
Securities registered pursuant to Section 12(b) of the Act:
| Title of each class | Trading Symbol(s) | Name of each exchange on which registered | ||||||
Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
Large accelerated filer | ☐ | ☒ | ||||||||||||
Non-accelerated filer | ☐ | Smaller reporting company | ||||||||||||
Emerging growth company | ||||||||||||||
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒
As of April 17, 2026, 72,406,686 Class A common shares and 76,096,410 Class B common shares were outstanding.
FIVE POINT HOLDINGS, LLC
TABLE OF CONTENTS
FORM 10-Q
Page | ||||||||
PART I. FINANCIAL INFORMATION | ||||||||
ITEM 1. | ||||||||
ITEM 2. | ||||||||
ITEM 3. | ||||||||
ITEM 4. | ||||||||
PART II. OTHER INFORMATION | ||||||||
ITEM 1. | ||||||||
ITEM 1A. | ||||||||
ITEM 2. | ||||||||
ITEM 3. | ||||||||
ITEM 4. | ||||||||
ITEM 5. | ||||||||
ITEM 6. | ||||||||
CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS
This report contains forward-looking statements that are subject to risks and uncertainties. These statements concern expectations, beliefs, projections, plans and strategies, anticipated events or trends and similar expressions concerning matters that are not historical facts. When used, the words “anticipate,” “believe,” “expect,” “intend,” “may,” “might,” “plan,” “estimate,” “project,” “should,” “will,” “would,” “result” and similar expressions that do not relate solely to historical matters are intended to identify forward-looking statements. This report may contain forward-looking statements regarding: our expectations of our future revenues, costs and financial performance; the impact of inflation and interest rates; future demographics and market conditions, including housing supply levels, in the areas where our communities are located; the outcome of pending litigation and its effect on our operations; the timing of our development activities; the timing of future real estate purchases or sales, including anticipated deliveries of homesites and anticipated amenities in our communities; and the timing and expected benefits of planned and potential transactions and acquisitions.
We caution you that any forward-looking statements presented in this report are based on our current views and information currently available to us. Forward-looking statements are subject to risks, trends, uncertainties and factors that are beyond our control. We believe these risks and uncertainties include, but are not limited to, the following:
•risks associated with the real estate industry;
•downturns in economic conditions or demographic changes at the national, regional or local levels, particularly in the areas where our properties are located;
•our ability to successfully execute planned and potential transactions, including acquisitions of assets or other interests, and the potential failure to realize the expected benefits of such transactions in the expected timeframes or at all;
•uncertainty and risks related to zoning and land use laws and regulations, including environmental planning and protection laws;
•risks associated with development and construction projects;
•adverse developments in the economic, political, competitive or regulatory climate of California;
•loss of key personnel;
•uncertainties and risks related to adverse weather conditions, natural disasters and climate change;
•fluctuations in interest rates;
•the availability of cash for distribution and debt service and exposure to risk of default under debt obligations;
•exposure to liability relating to environmental and health and safety matters;
•uncertainties and risks related to public health issues such as a major epidemic or pandemic;
•exposure to litigation or other claims;
•insufficient amounts of insurance or exposure to events that are either uninsured or underinsured;
•intense competition in the real estate market and our ability to sell properties at desirable prices;
•fluctuations in real estate values;
•potential impairment charges and adjustments related to the accounting of our real estate assets and investments;
•changes in property taxes;
•risks that increased tariffs will increase development costs or impact pricing for our land;
•risks associated with our trademarks, trade names and service marks;
•conflicts of interest with our directors;
•general volatility of the capital and credit markets and the price of our Class A common shares; and
•risks associated with public or private financing or the unavailability thereof.
Please see Part I, Item 1A, “Risk Factors” in our Annual Report on Form 10-K for the year ended December 31, 2025, as well as other risks and uncertainties detailed from time to time in our subsequent Quarterly Reports on Form 10-Q and other filings with the Securities and Exchange Commission, for a more detailed discussion of these and other risks.
Should one or more of these risks or uncertainties materialize, or should underlying assumptions prove incorrect, actual results may vary materially from those anticipated, estimated or projected. We caution you therefore against relying on any of these forward-looking statements.
While forward-looking statements reflect our good faith beliefs, they are not guarantees of future performance. They are based on estimates and assumptions only as of the date of this report. We undertake no obligation to update or revise any forward-looking statement to reflect changes in underlying assumptions or factors, new information, data or methods, future events or other changes, except as required by applicable law.
PART I. FINANCIAL INFORMATION
ITEM 1. Financial Statements
FIVE POINT HOLDINGS, LLC
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands, except shares)
(Unaudited)
| March 31, 2026 | December 31, 2025 | ||||||||||
ASSETS | |||||||||||
INVENTORIES | $ | $ | |||||||||
INVESTMENT IN UNCONSOLIDATED ENTITIES | |||||||||||
PROPERTIES AND EQUIPMENT, NET | |||||||||||
| INTANGIBLE ASSETS, NET—RELATED PARTY | |||||||||||
| GOODWILL | |||||||||||
CASH AND CASH EQUIVALENTS | |||||||||||
RESTRICTED CASH AND CERTIFICATES OF DEPOSIT | |||||||||||
RELATED PARTY ASSETS | |||||||||||
OTHER ASSETS | |||||||||||
TOTAL | $ | $ | |||||||||
LIABILITIES AND CAPITAL | |||||||||||
LIABILITIES: | |||||||||||
Notes payable, net | $ | $ | |||||||||
Accounts payable and other liabilities | |||||||||||
Related party liabilities | |||||||||||
Deferred income tax liability, net | |||||||||||
Payable pursuant to tax receivable agreement | |||||||||||
Total liabilities | |||||||||||
| COMMITMENTS AND CONTINGENT LIABILITIES (Note 12) | |||||||||||
| REDEEMABLE NONCONTROLLING INTERESTS | |||||||||||
CAPITAL: | |||||||||||
Class A common shares; No par value; Issued and outstanding: March 31, 2026— | |||||||||||
Class B common shares; No par value; Issued and outstanding: March 31, 2026— | |||||||||||
Contributed capital | |||||||||||
Retained earnings | |||||||||||
Accumulated other comprehensive loss | ( | ( | |||||||||
Total members’ capital | |||||||||||
Noncontrolling interests | |||||||||||
Total capital | |||||||||||
TOTAL | $ | $ | |||||||||
See accompanying notes to unaudited condensed consolidated financial statements.
1
FIVE POINT HOLDINGS, LLC
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except share and per share amounts)
(Unaudited)
| Three Months Ended March 31, | |||||||||||
| 2026 | 2025 | ||||||||||
REVENUES: | |||||||||||
Land sales | $ | $ | |||||||||
Land sales—related party | |||||||||||
Management services—related party | |||||||||||
Operating properties | |||||||||||
Total revenues | |||||||||||
COSTS AND EXPENSES: | |||||||||||
Land sales | |||||||||||
Management services | |||||||||||
Operating properties | |||||||||||
Selling, general, and administrative | |||||||||||
Total costs and expenses | |||||||||||
| OTHER INCOME: | |||||||||||
Interest income | |||||||||||
Miscellaneous | |||||||||||
| Total other income | |||||||||||
| EQUITY IN (LOSS) EARNINGS FROM UNCONSOLIDATED ENTITIES | ( | ||||||||||
| (LOSS) INCOME BEFORE INCOME TAX BENEFIT (PROVISION) | ( | ||||||||||
| INCOME TAX BENEFIT (PROVISION) | ( | ||||||||||
| NET (LOSS) INCOME | ( | ||||||||||
| LESS NET (LOSS) INCOME ATTRIBUTABLE TO NONCONTROLLING INTERESTS | ( | ||||||||||
| NET (LOSS) INCOME ATTRIBUTABLE TO THE COMPANY | $ | ( | $ | ||||||||
| NET (LOSS) INCOME ATTRIBUTABLE TO THE COMPANY PER CLASS A SHARE | |||||||||||
| Basic | $ | ( | $ | ||||||||
Diluted | ( | ||||||||||
WEIGHTED AVERAGE CLASS A SHARES OUTSTANDING | |||||||||||
| Basic | |||||||||||
Diluted | |||||||||||
| NET (LOSS) INCOME ATTRIBUTABLE TO THE COMPANY PER CLASS B SHARE | |||||||||||
Basic and diluted | $ | ( | $ | ||||||||
WEIGHTED AVERAGE CLASS B SHARES OUTSTANDING | |||||||||||
| Basic and diluted | |||||||||||
See accompanying notes to unaudited condensed consolidated financial statements.
2
FIVE POINT HOLDINGS, LLC
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE (LOSS) INCOME
(In thousands)
(Unaudited)
| Three Months Ended March 31, | |||||||||||
| 2026 | 2025 | ||||||||||
| NET (LOSS) INCOME | $ | ( | $ | ||||||||
OTHER COMPREHENSIVE INCOME: | |||||||||||
| Reclassification of actuarial loss on defined benefit pension plan included in net (loss) income | |||||||||||
Other comprehensive income before taxes | |||||||||||
| INCOME TAX BENEFIT (PROVISION) RELATED TO OTHER COMPREHENSIVE INCOME | ( | ||||||||||
OTHER COMPREHENSIVE INCOME—Net of tax | |||||||||||
| COMPREHENSIVE (LOSS) INCOME | ( | ||||||||||
| LESS COMPREHENSIVE (LOSS) INCOME ATTRIBUTABLE TO NONCONTROLLING INTERESTS | ( | ||||||||||
| COMPREHENSIVE (LOSS) INCOME ATTRIBUTABLE TO THE COMPANY | $ | ( | $ | ||||||||
See accompanying notes to unaudited condensed consolidated financial statements.
3
FIVE POINT HOLDINGS, LLC
CONDENSED CONSOLIDATED STATEMENTS OF CAPITAL
(In thousands, except share amounts)
(Unaudited)
| Class A Common Shares | Class B Common Shares | Contributed Capital | Retained Earnings | Accumulated Other Comprehensive Loss | Total Members’ Capital | Noncontrolling Interests | Total Capital | ||||||||||||||||||||||||||||||||||||||||
| BALANCE - December 31, 2025 | $ | $ | $ | ( | $ | $ | $ | ||||||||||||||||||||||||||||||||||||||||
Net loss(1) | — | — | — | ( | — | ( | ( | ( | |||||||||||||||||||||||||||||||||||||||
| Share-based compensation | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||
| Reacquisition of share-based compensation awards for tax-withholding purposes | ( | — | ( | — | — | ( | — | ( | |||||||||||||||||||||||||||||||||||||||
| Settlement of restricted share units for Class A common shares | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||
Other comprehensive income—net of tax of $ | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||
Adjustment to liability recognized under tax receivable agreement—net of tax of $ | — | — | ( | — | — | ( | — | ( | |||||||||||||||||||||||||||||||||||||||
Adjustment of noncontrolling interest in the Operating Company | — | — | — | ( | ( | ||||||||||||||||||||||||||||||||||||||||||
| BALANCE - March 31, 2026 | $ | $ | $ | ( | $ | $ | $ | ||||||||||||||||||||||||||||||||||||||||
| BALANCE - December 31, 2024 | $ | $ | $ | ( | $ | $ | $ | ||||||||||||||||||||||||||||||||||||||||
| Net income | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||
| Share-based compensation | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||
| Reacquisition of share-based compensation awards for tax-withholding purposes | ( | — | ( | — | — | ( | — | ( | |||||||||||||||||||||||||||||||||||||||
| Issuance of share-based compensation awards | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||
| Settlement of restricted share units for Class A common shares | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||
Other comprehensive income—net of tax of $ | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||
Adjustment to liability recognized under tax receivable agreement—net of tax of $ | — | — | ( | — | — | ( | — | ( | |||||||||||||||||||||||||||||||||||||||
Adjustment of noncontrolling interest in the Operating Company | — | — | — | ( | ( | ||||||||||||||||||||||||||||||||||||||||||
| BALANCE - March 31, 2025 | $ | $ | $ | ( | $ | $ | $ | ||||||||||||||||||||||||||||||||||||||||
(1) Total net income excludes net income of $0.6 million attributable to redeemable noncontrolling interests (see Note 6).
See accompanying notes to unaudited condensed consolidated financial statements.
4
FIVE POINT HOLDINGS, LLC
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
(Unaudited)
| Three Months Ended March 31, | |||||||||||
| 2026 | 2025 | ||||||||||
| CASH FLOWS FROM OPERATING ACTIVITIES: | |||||||||||
| Net (loss) income | $ | ( | $ | ||||||||
| Adjustments to reconcile net (loss) income to net cash (used in) provided by operating activities: | |||||||||||
| Equity in (loss) earnings from unconsolidated entities | ( | ||||||||||
| Return on investment from Great Park Venture | |||||||||||
| Return on investment from Gateway Commercial Venture | |||||||||||
| Return on investment from other equity method investments | |||||||||||
| Deferred income taxes | ( | ||||||||||
| Depreciation and amortization | |||||||||||
| Share-based compensation | |||||||||||
| Changes in operating assets and liabilities: | |||||||||||
| Inventories | ( | ( | |||||||||
| Related party assets | ( | ||||||||||
| Other assets | |||||||||||
| Accounts payable and other liabilities | ( | ||||||||||
| Related party liabilities | ( | ||||||||||
| Net cash (used in) provided by operating activities | ( | ||||||||||
| CASH FLOWS FROM INVESTING ACTIVITIES: | |||||||||||
| Return of investment from Great Park Venture | |||||||||||
| Return of investment from Gateway Commercial Venture | |||||||||||
| Return of investment from other equity method investments | |||||||||||
| Contributions to unconsolidated entities | ( | ||||||||||
| Purchase of properties and equipment | ( | ||||||||||
| Net cash (used in) provided by investing activities | ( | ||||||||||
| CASH FLOWS FROM FINANCING ACTIVITIES: | |||||||||||
| Payment of financing costs | ( | ||||||||||
| Related party reimbursement obligation | ( | ||||||||||
| Reacquisition of share-based compensation awards for tax-withholding purposes | ( | ( | |||||||||
| Payment under tax receivable agreement | ( | ||||||||||
| Distributions to redeemable noncontrolling interests | ( | ||||||||||
| Net cash used in financing activities | ( | ( | |||||||||
| NET (DECREASE) INCREASE IN CASH, CASH EQUIVALENTS, AND RESTRICTED CASH | ( | ||||||||||
| CASH, CASH EQUIVALENTS, AND RESTRICTED CASH—Beginning of period | |||||||||||
| CASH, CASH EQUIVALENTS, AND RESTRICTED CASH—End of period | $ | $ | |||||||||
SUPPLEMENTAL CASH FLOW INFORMATION (Note 13)
See accompanying notes to unaudited condensed consolidated financial statements.
5
FIVE POINT HOLDINGS, LLC
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
1. BUSINESS AND ORGANIZATION
Five Point Holdings, LLC, a Delaware limited liability company (the “Holding Company” and, together with its consolidated subsidiaries, the “Company”), is an owner and developer of mixed-use planned communities in California. The Company also provides capital solutions to the U.S. homebuilding industry primarily through the management of land banks. The Holding Company owns all of its assets and conducts all of its operations through Five Point Operating Company, LP, a Delaware limited partnership (the “Operating Company”), and its subsidiaries.
The Company has two classes of shares outstanding: Class A common shares and Class B common shares. Holders of Class A common shares and holders of Class B common shares are entitled to one vote for each share held of record on all matters submitted to a vote of shareholders, and are both entitled to receive distributions at the same time. However, the distributions paid to holders of Class B common shares are in an amount per share equal to 0.0003 multiplied by the amount paid per Class A common share.
The Company presents noncontrolling interests on the Company’s condensed consolidated balance sheet and classifies such interests within capital but separate from the Company’s Class A and Class B members’ capital or outside of capital when the criteria for temporary capital classification have been met. Noncontrolling interests represent equity interests in the Company’s consolidated subsidiaries held by partners in the Operating Company, excluding the Holding Company, members in The Shipyard Communities, LLC (the “San Francisco Venture”), excluding the Operating Company, and members in Hearthstone Residential Holdings, LLC (“HRH”) or its subsidiaries (HRH, together with its consolidated subsidiaries, the “Hearthstone Venture”), excluding the Operating Company (see Note 6).
The Company has an entity structure in which the Company’s two largest equity owners, Lennar Corporation (“Lennar”) and GFFP Holdings, LLC (“GFFP”), separately hold, in addition to interests in the Company’s common shares, equity interests in both the Operating Company and the San Francisco Venture that can be exchanged for, at the Company’s option, either the Company’s Class A common shares or cash. The diagram below presents a simplified depiction of the Company’s organizational structure as of March 31, 2026:
(1) A wholly owned subsidiary of the Holding Company serves as the sole managing general partner of the Operating Company. As of March 31, 2026, the Company owned approximately 65.4 % of the outstanding Class A Common Units of the Operating Company. After a one year holding period, a holder of Class A Common Units of the Operating Company can exchange the units for, at the Company’s option, either Class A common shares of the Holding Company, on a one -for-one basis, or cash equal to the fair market value of such shares. Until Class A Common Units of the Operating Company are exchanged or redeemed, the capital
6
associated with Class A Common Units of the Operating Company not held by the Holding Company is presented within “noncontrolling interests” on the Company’s condensed consolidated balance sheet. Assuming the exchange of all other outstanding Class A Common Units of the Operating Company and all outstanding Class A units of the San Francisco Venture (see (2) below), that are not held by the Company, based on the closing price of the Company’s Class A common shares on April 17, 2026 ($5.25 ), the equity market capitalization of the Company was approximately $779.8 million.
(2) The Operating Company owns all of the outstanding Class B units of the San Francisco Venture, the entity developing the Candlestick and The San Francisco Shipyard communities. The Class A units of the San Francisco Venture, which the Operating Company does not own, are intended to be economically equivalent to Class A Common Units of the Operating Company. As the holder of all outstanding Class B units of the San Francisco Venture, the Operating Company is entitled to receive 99 % of available cash from the San Francisco Venture after the holders of Class A units in the San Francisco Venture have received distributions equivalent to the distributions, if any, paid on Class A Common Units of the Operating Company. Class A units of the San Francisco Venture can be exchanged, on a one -for-one basis, for Class A Common Units of the Operating Company (see Note 6). Until exchanged or redeemed through the Operating Company, the capital associated with Class A units of the San Francisco Venture is presented within “noncontrolling interests” on the Company’s condensed consolidated balance sheet.
(3) Together, the Operating Company, Five Point Communities, LP (“FP LP”), and Five Point Communities Management, Inc. (“FP Inc.” and together with FP LP, the “Management Company”) own 100 % of Five Point Land, LLC (“FPL”), the entity developing Valencia, a mixed-use planned community located in northern Los Angeles County, California. The Operating Company has a controlling interest in the Management Company.
(4) The Company owns a 37.5 % percentage interest in Heritage Fields LLC (the “Great Park Venture”) and serves as its administrative member. However, management of the Great Park Venture is vested in the four voting members, who have a total of five votes. Major decisions generally require the approval of at least 75 % of the votes of the voting members. The Company has two votes, and the other three voting members each have one vote, so the Company is unable to approve any major decision without the consent or approval of at least two of the other voting members. The Company does not include the Great Park Venture as a consolidated subsidiary, but rather as an equity method investee, in its condensed consolidated financial statements.
(5) The Company owns a 75 % interest in Five Point Office Venture Holdings I, LLC (the “Gateway Commercial Venture”). The Company manages the Gateway Commercial Venture, however, the manager’s authority is limited. Major decisions by the Gateway Commercial Venture generally require unanimous approval by an executive committee composed of two people designated by the Company and two people designated by another investor. Some decisions require approval by all of the members of the Gateway Commercial Venture. The Company does not include the Gateway Commercial Venture as a consolidated subsidiary, but rather as an equity method investee, in its condensed consolidated financial statements.
(6) In July 2025, the Operating Company, through its wholly owned subsidiary, acquired 75 % of the Class A units of HRH. Management of HRH is vested in an executive committee consisting of three voting members. The Operating Company has the ability to appoint two of the members. Major decisions generally require the approval of at least two-thirds of the voting members. The Operating Company has a controlling financial interest in HRH and includes the Hearthstone Venture as a consolidated subsidiary in its condensed consolidated financial statements (see Notes 3 and 6).
2. BASIS OF PRESENTATION
Unaudited interim financial information—The accompanying condensed consolidated financial statements are unaudited and have been prepared in accordance with U.S. generally accepted accounting principles (“U.S. GAAP”) for interim financial information, the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and notes required by U.S. GAAP for complete financial statements. These condensed consolidated financial statements should be read in conjunction with the Company’s Annual Report on Form 10-K for the year ended December 31, 2025. In the opinion of management, all adjustments (including normal recurring adjustments) considered necessary for a fair presentation have been included. Operating results and cash flows for the three months ended March 31, 2026 are not necessarily indicative of the operating results and cash flows that may be expected for the full year.
Use of estimates—The preparation of financial statements in conformity with U.S. 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 financial statements, and the reported amounts of revenues and expenses during the reporting periods. Management evaluates its estimates on an ongoing basis and makes revisions to these estimates and related disclosures as experience develops or new information becomes known. Actual results could differ from those estimates.
7
Miscellaneous other income—Miscellaneous other income consisted of the following (in thousands):
| Three Months Ended March 31, | |||||||||||
| 2026 | 2025 | ||||||||||
| Net periodic pension benefit | $ | $ | |||||||||
Other | |||||||||||
| Total miscellaneous other income | $ | $ | |||||||||
Recently adopted and issued accounting pronouncements—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. 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. ACQUISITIONS
On July 31, 2025 (the “Acquisition Date”), the Company acquired substantially all of the assets associated with the residential asset management business of Hearthstone, Inc., a provider of capital solutions to the U.S. homebuilding industry, by purchasing 75 % of the outstanding Class A units of HRH for an all cash purchase price of $57.6 million. This acquisition positions the Company as an active manager of capital solutions for the homebuilding industry primarily through land banking.
The acquisition was accounted for as a business combination under ASC Topic 805, Business Combinations (“ASC 805”).
The following table summarizes the amounts recognized for the estimated fair value of the assets acquired, liabilities assumed and noncontrolling interests of the Hearthstone Venture and resulting goodwill as of the Acquisition Date (in thousands):
| Consideration | $ | ||||
| Recognized amounts of identifiable assets acquired and liabilities assumed | |||||
| Cash and cash equivalents | |||||
| Related party receivables and contract assets | |||||
| Investment in funds | |||||
| Intangible assets | |||||
| Other assets | |||||
| Total assets | |||||
| Accounts payable and other liabilities | |||||
| Total liabilities | |||||
| Net identifiable assets acquired | |||||
| Goodwill | |||||
| Net assets acquired | |||||
| Less: redeemable noncontrolling interests in the Hearthstone Venture | |||||
| $ | |||||
8
A third-party valuation specialist assisted the Company in estimating the fair values of the assets acquired, liabilities assumed and noncontrolling interests in the Hearthstone Venture. The identifiable intangible assets acquired include investor relationships and joint venture projects, which were valued at $7.3 million and $6.4 million, respectively. The fair values of these intangible assets were determined using income-based valuation approaches, specifically the multi-period excess earnings method. The investor relationships intangible asset was valued based on projected revenue growth and estimated attrition rates of existing investors, while the joint venture projects intangible asset was valued based on projected net revenue from existing joint venture contracts. The estimated remaining useful lives of both intangible assets are seven years
The fair value of the noncontrolling interests (see Note 6) was based on the stated unit values, which the Company determined approximated fair value, and discounted cash flow analyses. These fair value measurements are based on significant inputs that are not observable in the market and thus represent a fair value measurement categorized within Level 3 of the fair value hierarchy. Key assumptions include discount rates consistent with expected returns on comparable private real estate funds ranging from 15 % to 20 %.
Goodwill primarily represents the value of expected operational synergies, enhanced scale and market presence, the assembled workforce, and other intangible benefits expected to be realized from integrating the Hearthstone Venture platform with the Company’s existing operations. The Company expects $39.8 million, the portion of goodwill attributable to its ownership interest, will be deductible for tax purposes. All of the goodwill was assigned to the Hearthstone segment. At March 31, 2026, the carrying value of goodwill was $69.8 million.
Unaudited Pro Forma
The following table presents the Company’s unaudited pro forma consolidated revenues and net income for the three months ended March 31, 2025 as if the Hearthstone Venture acquisition had occurred on January 1, 2025 (in thousands):
| Revenues | $ | |||||||
| Net income | ||||||||
These amounts have been calculated after applying the Company’s accounting policies, including acquisition costs in the earnings of the earliest period and adjusting the results of the Hearthstone Venture to reflect amortization for intangible assets and tax effects.
9
4. REVENUES
The following tables present the Company’s consolidated revenues disaggregated by revenue source and reporting segment (in thousands):
| Three Months Ended March 31, 2026 | |||||||||||||||||||||||||||||
| Valencia | San Francisco | Great Park(1) | Hearthstone | Total | |||||||||||||||||||||||||
Land sales and land sales—related party | $ | $ | $ | $ | $ | ||||||||||||||||||||||||
Management services—related party | |||||||||||||||||||||||||||||
| Operating properties | |||||||||||||||||||||||||||||
| Operating properties leasing revenues | |||||||||||||||||||||||||||||
| $ | $ | $ | $ | $ | |||||||||||||||||||||||||
| Three Months Ended March 31, 2025 | |||||||||||||||||||||||
| Valencia | San Francisco | Great Park(1) | Total | ||||||||||||||||||||
Land sales and land sales—related party | $ | $ | $ | $ | |||||||||||||||||||
Management services—related party | |||||||||||||||||||||||
| Operating properties | |||||||||||||||||||||||
| Operating properties leasing revenues | |||||||||||||||||||||||
| $ | $ | $ | $ | ||||||||||||||||||||
The opening and closing balances of the Company’s contract assets for the three months ended March 31, 2026 were $89.7 million ($87.5 million related party, see Note 9) and $91.1 million ($88.8 million related party, see Note 9), respectively. The net increase of $1.4 million for the three months ended March 31, 2026 between the opening and closing balances of the Company’s contract assets primarily resulted from performance fee revenue recognized by the Hearthstone Venture prior to payments due (see Note 9). At March 31, 2026 and December 31, 2025, the Company had a $1.9 million and $5.1 million contract liability, respectively, for incentive compensation payments received under the Company’s amended and restated development management agreement with the Great Park Venture (“A&R DMA”) that were received prior to the satisfaction of the associated performance obligation. The contract liability is included in related party liabilities on the accompanying condensed consolidated balance sheets.
The opening and closing balances of the Company’s contract assets for the three months ended March 31, 2025 were $101.8 million ($100.8 million related party, see Note 9) and $80.1 million ($79.3 million related party, see Note 9), respectively. The net decrease of $21.7 million for the three months ended March 31, 2025 between the opening and closing balances of the Company’s contract assets primarily resulted from the receipt of $30.4 million in incentive compensation payments from the Great Park Venture and the receipt of variable price participation consideration from homebuilders from prior period land sales partially offset by additional incentive compensation revenue recognized during the period that resulted from changes in the estimated constrained transaction price of the A&R DMA (see Note 9).
Other than the incentive compensation contract liability, the opening and closing balances of the Company’s other receivables from contracts with customers and contract liabilities for the three months ended March 31, 2026 and 2025 were insignificant.
5. INVESTMENT IN UNCONSOLIDATED ENTITIES
Great Park Venture
The Operating Company owned 37.5 % of the Great Park Venture’s percentage interests as of March 31, 2026. During the three months ended March 31, 2026, the Great Park Venture made no distributions to holders of percentage interests. During the three months ended March 31, 2025, the Great Park Venture made aggregate distributions of $300.9 million to holders of percentage interests, of which the Company received $112.9 million for its 37.5 % percentage interest.
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The Great Park Venture is the owner of Great Park Neighborhoods, a mixed-use planned community located in Orange County, California. The Company, through the A&R DMA, as amended, manages the planning, development and sale of land at the Great Park Neighborhoods and supervises the day-to-day affairs of the Great Park Venture. The Great Park Venture is governed by an executive committee of representatives appointed by the holders of percentage interests. The Company serves as the administrative member but does not control the actions of the executive committee. The Company accounts for its investment in the Great Park Venture using the equity method of accounting.
The carrying value of the Company’s investment in the Great Park Venture is higher than the Company’s underlying share of equity in the carrying value of net assets of the Great Park Venture, resulting in a basis difference. The Company’s earnings or losses from the equity method investment are adjusted by amortization and accretion of the basis differences as the assets (mainly inventory) and liabilities that gave rise to the basis difference are sold, settled or amortized.
During the three months ended March 31, 2025, the Great Park Venture recognized no land sale revenues to related parties of the Company and $285.4 million in land sale revenues to third parties, of which $138.4 million relates to homesites sold to an unaffiliated land banking entity whereby Lennar retained the option to acquire these homesites in the future from the land bank entity.
The following table summarizes the statements of operations of the Great Park Venture for the three months ended March 31, 2026 and 2025 (in thousands):
| Three Months Ended March 31, | |||||||||||
| 2026 | 2025 | ||||||||||
| Land sale and related party land sale revenues | $ | $ | |||||||||
Cost of land sales | ( | ||||||||||
Other costs and expenses | ( | ( | |||||||||
| Net (loss) income of Great Park Venture | $ | ( | $ | ||||||||
| The Company’s share of net (loss) income | $ | ( | $ | ||||||||
| Basis difference amortization, net | ( | ||||||||||
| Equity in (loss) earnings from Great Park Venture | $ | ( | $ | ||||||||
The following table summarizes the balance sheet data of the Great Park Venture and the Company’s investment balance as of March 31, 2026 and December 31, 2025 (in thousands):
| March 31, 2026 | December 31, 2025 | ||||||||||
Inventories | $ | $ | |||||||||
Cash and cash equivalents | |||||||||||
| Contract assets, receivables and other assets, net | |||||||||||
Total assets | $ | $ | |||||||||
Accounts payable and other liabilities | $ | $ | |||||||||
| Capital (percentage interest) | |||||||||||
Total liabilities and capital | $ | $ | |||||||||
The Company’s share of capital in Great Park Venture | $ | $ | |||||||||
Unamortized basis difference | |||||||||||
The Company’s investment in the Great Park Venture | $ | $ | |||||||||
Gateway Commercial Venture
The Company owned a 75 % interest in the Gateway Commercial Venture as of March 31, 2026. The Gateway Commercial Venture is governed by an executive committee in which the Company is entitled to appoint two individuals. One of the other members of the Gateway Commercial Venture is also entitled to appoint two individuals to the executive committee. The unanimous approval of the executive committee is required for certain matters, which limits the Company’s ability to control the Gateway Commercial Venture, however, the Company is able to exercise significant influence and therefore accounts for its investment in the Gateway Commercial Venture using the equity method. The Company is the manager of the Gateway Commercial Venture, with responsibility to manage and administer its day-to-day affairs.
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The Five Point Gateway Campus (the “Five Point Gateway Campus”) is a 73 -acre office, medical, research and development campus located within the Great Park Neighborhoods consisting of four buildings totaling approximately one million square feet. During the year ended December 31, 2024, the Gateway Commercial Venture sold its remaining interests in the Five Point Gateway Campus, which included an approximately 189,000 square foot commercial office building and approximately 50 acres of commercial land on which up to an additional 189,000 square feet of commercial space can be developed, for a purchase price of $88.5 million. The purchase price consisted of $45.0 million in cash paid at closing and a $43.5 million note that matures in December 2026.
The Company’s investment balance in the Gateway Commercial Venture was $32.8 0.4
Hearthstone Funds
The Hearthstone Venture has ownership interests in individual funds (the “Hearthstone Funds”) that primarily engage in land banking. The Hearthstone Venture is the general partner or managing member of each fund and holds an economic interest between 1 % and 3 %. The Hearthstone Funds make investments in separate project limited partnerships that acquire land to be developed and contract with preapproved homebuilders through option and development agreements to construct improvements and purchase lots on agreed-upon terms and conditions. The Hearthstone Venture does not have a controlling financial interest in any of the Hearthstone Funds, however, the Hearthstone Venture has the ability to significantly influence the operating and financial policies of the Hearthstone Funds, and therefore it accounts for its investments in the funds using the equity method.
Several of the Hearthstone Funds utilize financing arrangements to partially fund the acquisition of land. The debt is non-recourse to the Hearthstone Venture other than in the case of customary “bad act” exceptions or bankruptcy or insolvency events.
At March 31, 2026 and December 31, 2025, the Hearthstone Venture’s investments in the Hearthstone Funds were $19.5 million and $18.9 million, respectively, and it recognized $0.3 million in equity in earnings for the three months ended March 31, 2026.
6. NONCONTROLLING INTERESTS
The Operating Company
The Holding Company’s wholly owned subsidiary is the managing general partner of the Operating Company, and at March 31, 2026, the Holding Company and its wholly owned subsidiary owned approximately 65.4 % of the outstanding Class A Common Units and 100 % of the outstanding Class B Common Units of the Operating Company. The Holding Company consolidates the financial results of the Operating Company and its subsidiaries and records a noncontrolling interest for the remaining 34.6 % of the outstanding Class A Common Units of the Operating Company that are owned separately by affiliates of Lennar and GFFP.
After a 12 month holding period, holders of Class A Common Units of the Operating Company may exchange their units for, at the Company’s option, either (i) Class A common shares on a one -for-one basis (subject to adjustment in the event of share splits, distributions of shares, warrants or share rights, specified extraordinary distributions and similar events), or (ii) cash in an amount equal to the market value of such shares at the time of exchange. In either situation, an equal number of that holder’s Class B common shares will automatically convert into Class A common shares, at a ratio of 0.0003 Class A common shares for each Class B common share. This exchange right is currently exercisable by all holders of outstanding Class A Common Units of the Operating Company.
With each exchange of Class A Common Units of the Operating Company for Class A common shares, the Holding Company’s percentage ownership interest in the Operating Company and its share of the Operating Company’s cash distributions and profits and losses will increase. Additionally, other issuances of common shares of the Holding Company or common units of the Operating Company result in changes to the noncontrolling interest percentage. Such equity transactions result in an adjustment between members’ capital and the noncontrolling interest in the Company’s condensed consolidated balance sheet and statement of capital to account for the changes in the noncontrolling interest ownership percentage as well as any change in total net assets of the Company.
The terms of the Operating Company’s Limited Partnership Agreement (“LPA”) provide for the payment of tax distributions to the Operating Company’s partners in an amount equal to the estimated income tax liabilities resulting from taxable income or gain allocated to those parties. The tax distribution provisions in the LPA were included in the Operating Company’s governing documents adopted prior to the Company’s initial public offering and were designed to provide funds necessary to pay tax liabilities for income that might be allocated, but not paid, to the partners.
There were no
Generally, tax distributions are treated as advance distributions under the LPA and are taken into account when determining the amounts otherwise distributable or as an adjustment to the shares issuable upon an exchange of Class A Common Units under the LPA.
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During the three months ended March 31, 2026 and 2025, the Holding Company’s ownership interest in the Operating Company changed as a result of net equity transactions related to the Company’s share-based compensation plan.
The San Francisco Venture
The San Francisco Venture has three classes of units—Class A, Class B and Class C units. The Operating Company owns all of the outstanding Class B units of the San Francisco Venture. All of the outstanding Class A units are owned by Lennar and GFFP. The Class A units of the San Francisco Venture are intended to be substantially economically equivalent to the Class A Common Units of the Operating Company. The Class A units of the San Francisco Venture represent noncontrolling interests to the Operating Company.
Holders of Class A units of the San Francisco Venture can redeem their units at any time and receive Class A Common Units of the Operating Company on a one -for-one basis (subject to adjustment in the event of share splits, distributions of shares, warrants or share rights, specified extraordinary distributions and similar events). If a holder requests a redemption of Class A units of the San Francisco Venture that would result in the Holding Company’s ownership of the Operating Company falling below 50.1 %, the Holding Company has the option of satisfying the redemption with Class A common shares instead. The Company also has the option, at any time, to acquire outstanding Class A units of the San Francisco Venture in exchange for Class A Common Units of the Operating Company. The 12 month holding period for any Class A Common Units of the Operating Company issued in exchange for Class A units of the San Francisco Venture is calculated by including the period that such Class A units of the San Francisco Venture were owned. This exchange right is currently exercisable by all holders of outstanding Class A units of the San Francisco Venture.
Redeemable Noncontrolling Interest (San Francisco Class C units)
In 2019, the San Francisco Venture issued 25.0 million Class C units to an affiliate of Lennar in exchange for a contribution of $25.0 million to the San Francisco Venture. Provided that Lennar completes the construction of a certain number of new homes in Candlestick as contemplated under purchase and sale agreements with the Company, the San Francisco Venture is required to redeem the Class C units if and when the Company receives reimbursements from the Mello-Roos community facilities district formed for the development, in an aggregate amount equal to 50 % of any reimbursements received up to a maximum amount of $25.0 million. The San Francisco Venture also maintains the ability to redeem the then outstanding balance of Class C units for cash at any time. Upon a liquidation of the San Francisco Venture, the holders of Class C units are entitled to a liquidation preference. The maximum amount payable by the San Francisco Venture pursuant to redemptions or liquidation of the Class C units is $25.0 million. The holders of Class C units are not entitled to receive any other forms of distributions and are not entitled to any voting rights. In connection with the issuance of the Class C units, the San Francisco Venture agreed to spend $25.0 million on the development of infrastructure and/or parking facilities at the Company’s Candlestick development. At each of March 31, 2026 and December 31, 2025, $25.0
Redeemable Noncontrolling Interest (Hearthstone Venture)
Interests in the Hearthstone Venture include Class A units and Class B units of HRH. The Class A units represent common equity interests that participate in profits and losses proportionately, while the Class B units represent a separate class of nonvoting preferred interests. The Class B units have a stated value of $1,000 per unit and accrue a preferred return at a rate equal to 10 % per annum or less, as defined in HRH’s operating agreement. The Class B interests are entitled to receive distributions of unpaid preferred return and capital prior to any distributions to the Class A unit members. At March 31, 2026, the Company held 75 % of the outstanding Class A units. Other members of HRH held the remaining 25 % of the outstanding Class A units and 9,847 Class B units representing 100 % of the outstanding Class B units. In the event HRH calls capital, the portion attributable to the Class A units held by the other members will be satisfied by automatic conversion of Class B units into Class A units at a value of $1,000 per Class B unit, until all Class B units are fully converted.
The Class A units and Class B units held by other members of HRH are redeemable at the option of the Company or the other members after July 31, 2031, and upon the occurrence of certain events prior to July 31, 2031. The redemption value of the Class A units will be fair market value as of the redemption date, while the redemption value of Class B units will be equal to $1,000 per unit plus any unpaid preferred return. Class A units and Class B units held by other members are included in redeemable noncontrolling interests on the condensed consolidated balance sheets. The redeemable noncontrolling interests are measured at the greater of carrying amount or redemption value at each reporting date.
HRH consolidates subsidiary asset management entities (collectively, the “Hearthstone Professional Entities”). Each of the Hearthstone Professional Entities is governed by a limited liability company agreement under which HRH serves as managing member, and legacy members hold minority ownership interests. The legacy members are entitled to receive distributions of profits and fees generated from legacy investment and management activities, including certain promote fees, in accordance with the terms of their respective operating agreements. These distribution rights are limited to historical projects and diminish over time as the related investments in those projects are realized or liquidated. The legacy member interests will be fully redeemed once all distributions and allocations to which they are entitled have been made. The legacy member interests are included in redeemable noncontrolling interests on the condensed consolidated balance sheets.
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The carrying amount of the Hearthstone Venture redeemable noncontrolling interests as of March 31, 2026 and December 31, 2025 were as follows (in thousands):
| HRH Class A Unit Noncontrolling Interests | HRH Class B Unit Noncontrolling Interests | Hearthstone Professional Entities Noncontrolling Interests | Total Hearthstone Venture Redeemable Noncontrolling Interests | ||||||||||||||||||||
| BALANCE - December 31, 2025 | $ | $ | $ | $ | |||||||||||||||||||
| Hearthstone Venture net income allocation | |||||||||||||||||||||||
| Class B unit conversions | ( | ||||||||||||||||||||||
| Distributions and redemptions | ( | ( | ( | ( | |||||||||||||||||||
| BALANCE - March 31, 2026 | $ | $ | $ | $ | |||||||||||||||||||
7. CONSOLIDATED VARIABLE INTEREST ENTITY
The Holding Company conducts all of its operations through the Operating Company, a consolidated VIE, and as a result, substantially all of the Company’s assets and liabilities represent the assets and liabilities of the Operating Company, other than items attributed to income taxes and the payable pursuant to a tax receivable agreement (“TRA”). The Operating Company has investments in and consolidates the assets and liabilities of the San Francisco Venture, FP LP, FPL and the Hearthstone Professional Entities, all of which have also been determined to be VIEs.
The San Francisco Venture is a VIE as the other members of the venture, individually or as a group, are not able to exercise kick-out rights or substantive participating rights. The Company applied the variable interest model and determined that it is the primary beneficiary of the San Francisco Venture and, accordingly, the San Francisco Venture is consolidated in the Company’s results. In making that determination, the Company evaluated that the Operating Company has unilateral and unconditional power to make decisions in regards to the activities that significantly impact the economics of the VIE, which are the development of properties, marketing and sale of properties, acquisition of land and other real estate properties and obtaining land ownership or ground lease for the underlying properties to be developed. The Company is determined to have more-than-insignificant economic benefit from the San Francisco Venture because, excluding Class C units, the Operating Company can prevent or cause the San Francisco Venture from making distributions on its units, and the Operating Company would receive 99 % of any such distributions made (assuming no distributions had been paid on the Class A Common Units of the Operating Company). In addition, the San Francisco Venture is only allowed to make a capital call on the Operating Company and not any other interest holders, which could be a significant financial risk to the Operating Company.
As of March 31, 2026, the San Francisco Venture had total combined assets of $1.49 billion, primarily comprised of $1.49 billion of inventories, and total combined liabilities of $24.9 million, including $18.6 million in related party liabilities.
As of December 31, 2025, the San Francisco Venture had total combined assets of $1.48 billion, primarily comprised of $1.48 billion of inventories, and total combined liabilities of $68.8 million, including $64.7 million in related party liabilities.
Those assets are owned by, and those liabilities are obligations of, the San Francisco Venture, not the Company. The San Francisco Venture’s operating subsidiaries are not guarantors of the Company’s obligations, and the assets held by the San Francisco Venture’s operating subsidiaries may only be used as collateral for the obligations of the operating subsidiaries. The creditors of the San Francisco Venture do not have recourse to the assets of the Operating Company, as the VIE’s primary beneficiary, or of the Holding Company.
The Company and the other members do not generally have an obligation to make capital contributions to the San Francisco Venture. In addition, there are no liquidity arrangements or agreements to fund capital or purchase assets that could require the Company to provide financial support to the San Francisco Venture. The Company does not guarantee any debt of the San Francisco Venture. However, the Operating Company has guaranteed the performance of payment by the San Francisco Venture in accordance with the redemption terms of the Class C units of the San Francisco Venture (see Note 6).
FP LP and FPL are VIEs because the other partners or members have disproportionately fewer voting rights, and substantially all of the activities of the entities are conducted on behalf of the other partners or members and their related parties. The Operating Company, or a wholly owned subsidiary of the Operating Company, is the primary beneficiary of FP LP and FPL.
As of March 31, 2026, FP LP and FPL had total combined assets of $1.1 billion, primarily comprised of $986.2 million of inventories, $4.0 million of intangibles and $77.3 million in related party assets, and total combined liabilities of $55.3 million, including $52.5 million in accounts payable and other liabilities and $2.8 million in related party liabilities.
As of December 31, 2025, FP LP and FPL had total combined assets of $1.1 billion, primarily comprised of $963.7 million of inventories, $4.4 million of intangibles and $77.2 million in related party assets, and total combined liabilities of $60.7 million, including $54.7 million in accounts payable and other liabilities and $6.0 million in related party liabilities.
14
The Hearthstone Professional Entities are VIEs, as the other members of such entities, either individually or as a group, are not able to exercise kick-out rights and do not hold substantive participating rights. HRH is the primary beneficiary of the Hearthstone Professional Entities. As of March 31, 2026 and December 31, 2025, the total combined assets of the Hearthstone Professional Entities were $34.3 million and $33.0 million, respectively, which primarily comprised of investments in the Hearthstone Funds, and total combined liabilities were $0.3 million and $0.3 million, respectively.
The Company evaluates its primary beneficiary designation on an ongoing basis and assesses the appropriateness of the VIE’s status when events have occurred that would trigger such an analysis. During the three months ended March 31, 2026 and 2025, there were no VIEs that were deconsolidated.
8. INTANGIBLE ASSETS, NET—RELATED PARTY
Intangible assets consist of (i) the contract value of the incentive compensation provisions of the A&R DMA with the Great Park Venture and (ii) identifiable intangible assets acquired in connection with the acquisition of the Hearthstone Venture (see Note 3). The intangible assets acquired through the Hearthstone Venture acquisition include (i) investor relationships representing established relationships with institutional investors and capital partners that are expected to contribute recurring fee revenues and (ii) joint venture projects representing contractual rights to earn management and performance fees from existing residential financing and development arrangements. The incentive compensation intangible asset will be amortized over the contract period based on the pattern in which the economic benefits are expected to be received, while the Hearthstone Venture intangible assets will be amortized on a straight-line basis over an estimated useful life of seven years .
The carrying amount and accumulated amortization of the intangible assets as of March 31, 2026 and December 31, 2025 were as follows (in thousands):
| March 31, 2026 | December 31, 2025 | ||||||||||||||||||||||||||||||||||
| Gross carrying amount | Accumulated amortization | Net book value | Gross carrying amount | Accumulated amortization | Net book value | ||||||||||||||||||||||||||||||
| Hearthstone intangible assets | $ | $ | ( | $ | $ | $ | ( | $ | |||||||||||||||||||||||||||
| Great Park A&R DMA incentive compensation | ( | ( | |||||||||||||||||||||||||||||||||
| $ | $ | ( | $ | $ | $ | ( | $ | ||||||||||||||||||||||||||||
Intangible asset amortization expense, as a result of revenue recognition attributable to incentive compensation, was $0.3 million and $1.2 million for the three months ended March 31, 2026 and 2025, respectively. Amortization expense is included in the cost of management services in the accompanying condensed consolidated statements of operations and is included in the Great Park segment.
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9. RELATED PARTY TRANSACTIONS
Related party assets and liabilities included in the Company’s condensed consolidated balance sheets as of March 31, 2026 and December 31, 2025 consisted of the following (in thousands):
| March 31, 2026 | December 31, 2025 | ||||||||||
Related Party Assets: | |||||||||||
| Contract assets (see Note 4) | $ | $ | |||||||||
Other | |||||||||||
| $ | $ | ||||||||||
Related Party Liabilities: | |||||||||||
Reimbursement obligation | $ | $ | |||||||||
Other | |||||||||||
| $ | $ | ||||||||||
Development Management Agreement with the Great Park Venture (Incentive Compensation Contract Asset)
In 2010, the Great Park Venture, the Company’s equity method investee, engaged the Management Company under a development management agreement to provide management services to the Great Park Venture. The compensation structure in place consists of a base fee and incentive compensation. Incentive compensation is 9 % of distributions available to be made by the Great Park Venture to its percentage interest holders. In December 2022, the Company and the Great Park Venture entered into a second amendment to the A&R DMA establishing the terms of service through December 31, 2024 (the “First Renewal Term”). In September 2024, the Company and the Great Park Venture entered into a third amendment to the A&R DMA. Under the third amendment, the term of the A&R DMA was renewed through December 31, 2026 (the “Second Renewal Term”). If the A&R DMA is not extended by mutual agreement of the parties beyond December 31, 2026 and the Company is no longer providing management services subsequent to December 31, 2026, the Company will be entitled to 6.75 % of distributions paid thereafter.
During the three months ended March 31, 2026, the Great Park Venture made no incentive compensation payments to the Company. During the three months ended March 31, 2025, the Great Park Venture made incentive compensation payments of $30.4 million to the Company.
For the three months ended March 31, 2026 and 2025, the Company recognized revenue from management services of $6.9 million and $12.6 million , respectively, related to all management fees under the A&R DMA, and such revenues are included in management services—related party in the accompanying condensed consolidated statements of operations and are included in the Great Park segment. At March 31, 2026 and December 31, 2025, included in contract assets in the table above is $76.6 million and $76.3 million, respectively, attributed to incentive compensation revenue recognized but not yet due (see Note 4), and included in other related party liabilities is $1.9 million and $5.1 million, respectively, attributed to payments received for incentive compensation revenue not yet recognized (see Note 4).
Reimbursement Obligation
The San Francisco Venture has entered into reimbursement agreements for which it has agreed to reimburse an affiliate of Lennar for a portion of the EB-5 loan liabilities and related interest that were assumed by an affiliate of Lennar in connection with the Formation Transactions.
Pursuant to a reimbursement deferral agreement with an affiliate of Lennar, principal and interest payments under the related party reimbursement obligation were deferred from October 2023 through December 31, 2025. During the three months ended March 31, 2026, the Company paid $40.1 million in principal and $6.2 million in accrued and current interest.
Operating Agreements with Hearthstone Funds (Performance Fee Contract Asset)
The Hearthstone Venture manages the operations and assets of the Hearthstone Funds and is entitled to receive asset management fees and in some cases performance fees from those funds upon the achievement of certain performance hurdles. During the three months ended March 31, 2026, the Hearthstone Venture recognized performance fee revenue of $1.2 million, and at March 31, 2026 and December 31, 2025, included in contract assets in the table above is $11.5 million and $10.4 million, respectively, attributed to performance fee revenue recognized but not yet due (see Notes 3 and 4).
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10. NOTES PAYABLE, NET
At March 31, 2026 and December 31, 2025, notes payable, net consisted of the following (in thousands):
| March 31, 2026 | December 31, 2025 | ||||||||||
| $ | $ | ||||||||||
| Unamortized debt issuance costs | ( | ( | |||||||||
| $ | $ | ||||||||||
Senior Notes
On September 25, 2025, the Operating Company and Five Point Capital Corp., a direct wholly owned subsidiary of the Operating Company (the “Co-Issuer” and, together with the Operating Company, the “Issuers”), offered, sold and issued $450.0 million aggregate principal amount of 8.000 % unsecured senior notes due October 1, 2030 (the “2030 Notes”). The 2030 Notes accrue interest at a rate of 8.000 % per annum. Interest on the 2030 Notes is payable semi-annually in arrears on April 1 and October 1, commencing April 1, 2026. The 2030 Notes are guaranteed, jointly and severally, by certain direct and indirect subsidiaries of the Operating Company and are redeemable at the option of the Issuers, in whole or in part, at a declining call premium as set forth in the indenture governing the 2030 Notes, plus accrued and unpaid interest.
Revolving Credit Facility
The Operating Company has a $217.5 million unsecured revolving credit facility that matures in July 2029. Any borrowings under the revolving credit agreement will bear interest at CME Term 1 Month plus a margin of either 2.25 % or 2.50 % based on the Company’s leverage ratio. The revolving credit facility may be further extended to July 2030, subject to the satisfaction of certain conditions, including the approval of the administrative agent and lenders. As of March 31, 2026, no
11. TAX RECEIVABLE AGREEMENT
12. COMMITMENTS AND CONTINGENCIES
The Company is subject to the usual obligations associated with entering into contracts for the purchase, development and sale of real estate, which the Company does in the routine conduct of its business. The operations of the Company are conducted through the Operating Company and its subsidiaries, and in some cases, the Holding Company will guarantee the payment by or performance of the Operating Company or its subsidiaries. The Company has operating leases for its corporate office and other facilities and the Holding Company is a guarantor to some of these lease agreements. are included in other assets and are included in accounts payable and other liabilities on the condensed consolidated balance sheets and were as follows as of March 31, 2026 and December 31, 2025 (in thousands):
| March 31, 2026 | December 31, 2025 | ||||||||||
| Operating lease right-of-use assets | $ | $ | |||||||||
| Operating lease liabilities | $ | $ | |||||||||
Performance and Completion Bonding Agreements
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 of the Company’s development obligations. The Company had outstanding performance bonds of $347.6 million and $344.9 million as of March 31, 2026 and December 31, 2025, respectively.
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Candlestick and The San Francisco Shipyard Disposition and Development Agreement
The San Francisco Venture is a party to a disposition and development agreement with the Successor to the Redevelopment Agency of the City and County of San Francisco (the “San Francisco Agency”) in which the San Francisco Agency has agreed to convey portions of Candlestick and The San Francisco Shipyard to the San Francisco Venture for development. The San Francisco Venture has agreed to reimburse the San Francisco Agency for reasonable costs and expenses actually incurred and paid by the San Francisco Agency in performing its obligations under the disposition and development agreement. The San Francisco Agency can also earn a return of certain profits generated from the development and sale of Candlestick and The San Francisco Shipyard if certain thresholds are met.
At each of March 31, 2026 and December 31, 2025, the San Francisco Venture had outstanding guarantees benefiting the San Francisco Agency for infrastructure and construction of certain park and open space obligations with aggregate maximum obligations of $198.9
Warrants
In February 2026, the Company issued warrants to certain affiliates of Blue Owl Capital Inc. (“Blue Owl”) to purchase up to 1,500,000 shares of the Company’s Class A common shares at an exercise price of $7.00 per share. The warrants were issued in connection with the formation of a new residential land banking fund between HRH and Blue Owl, which will be managed by HRH. The warrants vest based on aggregate capital contributions by Blue Owl to the partnership and, if vested, are exercisable for five years from issuance. No cash consideration was received by the Company in exchange for the issuance of the warrants.
Letters of Credit
At each of March 31, 2026 and December 31, 2025, the Company had outstanding letters of credit totaling $1.0 1.0
Legal Proceedings
Hunters Point Litigation
In May 2018, residents of the Bayview Hunters Point neighborhood in San Francisco filed a putative class action in San Francisco Superior Court naming Tetra Tech, Inc. and Tetra Tech EC, Inc., an independent contractor hired by the U.S. Navy to conduct testing and remediation of toxic radiological waste at The San Francisco Shipyard (“Tetra Tech”), Lennar and the Company as defendants (the “Bayview Action”). The plaintiffs allege that, among other things, Tetra Tech fraudulently misrepresented its test results and remediation efforts. The plaintiffs are seeking damages against Tetra Tech and the Company and have requested an injunction to prevent the Company and Lennar from undertaking any development activities at The San Francisco Shipyard. The Company believes that it has meritorious defenses to the allegations in the Bayview Action and may have insurance and indemnification rights against third parties with respect to the claims.
In February 2026, the parties to the Bayview Action entered into a settlement agreement, which includes $10.8 million in damages to be paid out of insurance proceeds under a joint insurance policy held by the Company and Lennar, as well as a dismissal with prejudice to be entered on behalf of the Company. The settlement amount is expected to be funded in full by the insurance policy. Payment of the settlement and dismissal of the lawsuit are conditioned upon delivery of releases from the approximately 6,500 plaintiffs in the Bayview Action. There can be no assurance that such releases will be delivered timely, or at all, or that the settlement will take effect as described above.
Other
Other than the actions outlined above, the Company is also a party to various other claims, legal actions, and complaints arising in the ordinary course of business, the disposition of which, in the Company’s opinion, will not have a material adverse effect on the Company’s condensed consolidated financial statements.
As a significant land owner and developer of unimproved land it is possible that environmental contamination conditions could exist that would require the Company to take corrective action. In the opinion of the Company, such corrective actions, if any, would not have a material adverse effect on the Company’s condensed consolidated financial statements.
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13. SUPPLEMENTAL CASH FLOW INFORMATION
Supplemental cash flow information for the three months ended March 31, 2026 and 2025 was as follows (in thousands):
| Three Months Ended March 31, | |||||||||||
| 2026 | 2025 | ||||||||||
| SUPPLEMENTAL CASH FLOW INFORMATION: | |||||||||||
| Cash paid for interest, all of which was capitalized to inventories | $ | $ | |||||||||
| Noncash lease expense | $ | $ | |||||||||
| NONCASH INVESTING AND FINANCING ACTIVITIES: | |||||||||||
| Adjustment to liability recognized under TRA | $ | $ | |||||||||
Noncash lease expense is included within the depreciation and amortization adjustment to net (loss) income on the Company’s condensed consolidated statements of cash flows.
The following table provides a reconciliation of cash, cash equivalents, and restricted cash reported within the condensed consolidated balance sheets that sum to the total of the same such amounts shown in the condensed consolidated statements of cash flows for the three months ended March 31, 2026 and 2025 (in thousands):
| March 31, 2026 | March 31, 2025 | ||||||||||
| Cash and cash equivalents | $ | $ | |||||||||
| Restricted cash and certificates of deposit | |||||||||||
| Total cash, cash equivalents, and restricted cash shown in the condensed consolidated statements of cash flows | $ | $ | |||||||||
Amounts included in restricted cash and certificates of deposit represent amounts held as collateral on open letters of credit related to development obligations or because of other contractual obligations of the Company that require the restriction.
14. SEGMENT REPORTING
The Company’s reportable segments consist of:
• Valencia—includes the community of Valencia being developed in northern Los Angeles County, California. The Valencia segment derives revenues from the sale of residential and commercial land sites to homebuilders, commercial developers and commercial buyers.
• San Francisco—includes the Candlestick and The San Francisco Shipyard communities located on bayfront property in the City of San Francisco, California. The San Francisco segment derives revenues from the sale of residential and commercial land sites to homebuilders, commercial developers and commercial buyers.
• Great Park—includes the Great Park Neighborhoods being developed adjacent to and around the Orange County Great Park, a metropolitan park under construction in Orange County, California. This segment also includes management services provided by the Management Company to the Great Park Venture, the owner of the Great Park Neighborhoods. As of March 31, 2026, the Company had a 37.5 % percentage interest in the Great Park Venture and accounted for the investment under the equity method. The reported segment information for the Great Park segment includes the results of 100% of the Great Park Venture at the historical basis of the venture, which did not apply push down accounting at acquisition date. The Great Park segment derives revenues at the Great Park Neighborhoods from sales of residential and commercial land sites to homebuilders, commercial developers and commercial buyers and management services provided by the Company to the Great Park Venture.
• Hearthstone—includes the Hearthstone Venture residential asset management platform focused on managing residential land banking programs across multiple U.S. markets. The Hearthstone segment derives revenues from management fees.
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Segment operating results and reconciliations to the Company’s consolidated balances for the three months ended March 31, 2026 and 2025 are as follows (in thousands):
| Three Months Ended March 31, 2026 | |||||||||||||||||||||||||||||||||||||||||||||||||||||
| Valencia | San Francisco | Great Park | Hearthstone | Total reportable segments | Removal of Great Park Venture(1) | Add investment in Great Park Venture | Corporate and unallocated(2) | Total Consolidated | |||||||||||||||||||||||||||||||||||||||||||||
| Revenues | $ | $ | $ | $ | $ | $ | ( | $ | — | $ | $ | ||||||||||||||||||||||||||||||||||||||||||
| Less: | |||||||||||||||||||||||||||||||||||||||||||||||||||||
| Cost of land sales | — | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Management services | — | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Selling, general, and administrative | ( | — | |||||||||||||||||||||||||||||||||||||||||||||||||||
| Management fees-related party | ( | — | |||||||||||||||||||||||||||||||||||||||||||||||||||
Other segment items(3) | ( | ( | ( | ( | ( | ( | |||||||||||||||||||||||||||||||||||||||||||||||
| Segment profit (loss) / Net income (loss) | ( | ( | ( | ( | ( | ( | |||||||||||||||||||||||||||||||||||||||||||||||
| Other segment disclosures: | |||||||||||||||||||||||||||||||||||||||||||||||||||||
| Depreciation and amortization | — | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Interest income | ( | — | |||||||||||||||||||||||||||||||||||||||||||||||||||
Expenditures for long-lived assets, net(4) | ( | — | |||||||||||||||||||||||||||||||||||||||||||||||||||
(1) Represents the removal of the Great Park Venture operating results, which are included in the Great Park segment operating results at 100% of its historical basis, but are not included in the Company’s consolidated results as the Company accounts for its investment in the venture using the equity method of accounting.
(2) Corporate and unallocated activity is primarily comprised of corporate general and administrative expenses, interest income, income tax benefit of $0.9 million and equity in earnings from the Gateway Commercial Venture.
(3) Other segment items for each reportable segment include:
• Valencia—operating properties expenses, pension costs, miscellaneous other income and equity in earnings from unconsolidated entities.
• San Francisco—interest income.
• Great Park—interest income.
• Hearthstone—interest income and equity in earnings from Hearthstone Funds.
(4) Expenditures for long-lived assets are net of inventory cost reimbursements and other inventory cost recoveries and include noncash project accruals and capitalized interest. For the three months ended March 31, 2026, Valencia’s net expenditures include $0.4 million, San Francisco’s net expenditures include $0.6 million and Great Park Venture’s net expenditures include $11.5 million in inventory cost reimbursements and recoveries received.
| Three Months Ended March 31, 2025 | |||||||||||||||||||||||||||||||||||||||||||||||
| Valencia | San Francisco | Great Park | Total reportable segments | Removal of Great Park Venture(1) | Add investment in Great Park Venture | Corporate and unallocated(2) | Total Consolidated | ||||||||||||||||||||||||||||||||||||||||
| Revenues | $ | $ | $ | $ | $ | ( | $ | — | $ | $ | |||||||||||||||||||||||||||||||||||||
| Less: | |||||||||||||||||||||||||||||||||||||||||||||||
| Cost of land sales | ( | — | |||||||||||||||||||||||||||||||||||||||||||||
| Management services | — | ||||||||||||||||||||||||||||||||||||||||||||||
| Selling, general, and administrative | ( | — | |||||||||||||||||||||||||||||||||||||||||||||
| Management fees-related party | ( | — | |||||||||||||||||||||||||||||||||||||||||||||
Other segment items(3) | ( | ( | ( | ( | ( | ||||||||||||||||||||||||||||||||||||||||||
| Segment profit (loss) / Net income (loss) | ( | ( | ( | ( | |||||||||||||||||||||||||||||||||||||||||||
| Other segment disclosures: | |||||||||||||||||||||||||||||||||||||||||||||||
| Depreciation and amortization | — | ||||||||||||||||||||||||||||||||||||||||||||||
| Interest income | ( | — | |||||||||||||||||||||||||||||||||||||||||||||
Expenditures for long-lived assets, net(4) | ( | — | |||||||||||||||||||||||||||||||||||||||||||||
(1) Represents the removal of the Great Park Venture operating results, which are included in the Great Park segment operating results at 100% of its historical basis, but are not included in the Company’s consolidated results as the Company accounts for its investment in the venture using the equity method of accounting.
(2) Corporate and unallocated activity is primarily comprised of corporate general and administrative expenses, interest income, income tax provision of $9.5 million and equity in earnings from the Gateway Commercial Venture.
(3) Other segment items for each reportable segment include:
• Valencia—operating properties expenses, pension costs, miscellaneous other income and equity in earnings from unconsolidated entities.
• San Francisco—interest income.
• Great Park—interest income.
(4) Expenditures for long-lived assets are net of inventory cost reimbursements and other inventory cost recoveries and include noncash project accruals and capitalized interest. For the three months ended March 31, 2025, Valencia’s net expenditures include $0.5 million, San Francisco’s net expenditures include $0.6 million and Great Park Venture’s net expenditures include $7.4 million in inventory cost reimbursements and recoveries received.
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Segment assets and reconciliations to the Company’s consolidated balances at March 31, 2026 and December 31, 2025 are as follows (in thousands):
| March 31, 2026 | December 31, 2025 | ||||||||||||||||||||||
| Segment assets | Inventory assets | Segment assets | Inventory assets | ||||||||||||||||||||
| Valencia | $ | $ | $ | $ | |||||||||||||||||||
| San Francisco | |||||||||||||||||||||||
| Great Park | |||||||||||||||||||||||
| Hearthstone | |||||||||||||||||||||||
| Total reportable segments | |||||||||||||||||||||||
Removal of Great Park Venture(1) | ( | ( | ( | ( | |||||||||||||||||||
| Add investment in Great Park Venture | — | — | |||||||||||||||||||||
Corporate and unallocated(2) | |||||||||||||||||||||||
| Total Consolidated | $ | $ | $ | $ | |||||||||||||||||||
(1) Represents the removal of the Great Park Venture balances, which are included in the Great Park segment balances at 100% of its historical basis, but are not included in the Company’s balances as the Company accounts for its investment in the venture using the equity method of accounting.
(2) Corporate and unallocated assets consist of cash and cash equivalents, investment in the Gateway Commercial Venture, leasehold improvements, ROU assets, prepaid expenses and deferred financing costs.
15. SHARE-BASED COMPENSATION
The following table summarizes share-based equity compensation activity for the three months ended March 31, 2026:
| Share-Based Awards (in thousands) | Weighted-Average Grant Date Fair Value | ||||||||||
Nonvested at January 1, 2026 | $ | ||||||||||
Granted | $ | ||||||||||
Forfeited | ( | $ | |||||||||
Vested | ( | $ | |||||||||
Nonvested at March 31, 2026 | $ | ||||||||||
Share-based compensation expense was $1.8 million and $1.2 million for the three months ended March 31, 2026 and 2025, respectively. Share-based compensation expense is included in selling, general, and administrative expenses on the accompanying condensed consolidated statements of operations.
The estimated fair value at vesting of share-based awards that vested during the three months ended March 31, 2026 was $12.6 million. During the three months ended March 31, 2026 and 2025, the Company reacquired vested restricted Class A common shares for $6.1 million and $1.8 million, respectively, for the purpose of settling tax withholding obligations of employees. The reacquisition cost is based on the fair value of the Company’s Class A common shares on the date the tax obligation is incurred.
16. EMPLOYEE BENEFIT PLANS
Retirement Plan—The Newhall Land and Farming Company Retirement Plan (the “Retirement Plan”) is a defined benefit plan that is funded by the Company and qualified under the Employee Retirement Income Security Act. The Retirement Plan was frozen in 2004.
The components of net periodic benefit for the three months ended March 31, 2026 and 2025, are as follows (in thousands):
| Three Months Ended March 31, | |||||||||||
| 2026 | 2025 | ||||||||||
| Net periodic benefit: | |||||||||||
Interest cost | $ | $ | |||||||||
Expected return on plan assets | ( | ( | |||||||||
Amortization of net actuarial loss | |||||||||||
| Net periodic benefit | $ | ( | $ | ( | |||||||
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17. INCOME TAXES
Upon formation, the Holding Company elected to be treated as a corporation for U.S. federal, state, and local tax purposes. All operations are carried on through the Holding Company’s subsidiaries, the majority of which are pass-through entities that are generally not subject to federal or state income taxation, as all of the taxable income, gains, losses, deductions, and credits are passed through to the partners. The Holding Company is responsible for income taxes on its allocable share of the Operating Company’s income or gain.
During the three months ended March 31, 2026, the Company recorded a $0.9 million benefit for income taxes on pre-tax loss of $5.9 million. In the three months ended March 31, 2025, the Company recorded a $9.5 million provision for income taxes on pre-tax income of $70.1 million.
The effective tax rates for both the three months ended March 31, 2026 and 2025 differ from the 21% federal statutory rate and applicable state statutory rates primarily due to the disallowance of executive compensation expenses not deductible for tax and the pre-tax portion of income and losses that are passed through to the other partners of the Operating Company and the San Francisco Venture.
18. FINANCIAL INSTRUMENTS AND FAIR VALUE MEASUREMENTS AND DISCLOSURES
ASC Topic 820, Fair Value Measurement, emphasizes that 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 following hierarchy classifies the inputs used to determine fair value into three levels:
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
At each reporting period, the Company evaluates the fair value of its financial instruments compared to carrying values. Other than the Company’s notes payable, net, the carrying amount of the Company’s financial instruments, which includes cash and cash equivalents, restricted cash and certificates of deposit, certain related party assets and liabilities, and accounts payable and other liabilities, approximated the Company’s estimates of fair value at both March 31, 2026 and December 31, 2025.
The fair value of the Company’s notes payable, net, are estimated based on quoted market prices or discounting the expected cash flows based on rates available to the Company (level 2). At March 31, 2026, the estimated fair value of notes payable, net was $450.9 million, compared to a carrying value of $443.7 million. At December 31, 2025, the estimated fair value of notes payable, net was $470.2 million, compared to a carrying value of $443.3 million. During the three months ended March 31, 2026 and 2025, the Company had no assets that were measured at fair value on a nonrecurring basis.
19. EARNINGS PER SHARE
The Company uses the two-class method in its computation of earnings per share. The Company’s Class A common shares and Class B common shares are entitled to receive distributions at different rates, with each Class B common share receiving 0.03 % of the distributions paid on each Class A common share. Under the two-class method, the Company’s net income available to common shareholders is allocated between the two classes of common shares on a fully-distributed basis and reflects residual net income after amounts attributed to noncontrolling interests. In the event of a net loss, the Company determined that both classes share in the Company’s losses, and they share in the losses using the same mechanism as the distributions. The Company also has restricted share awards that have a right to non-forfeitable dividends while unvested and are contemplated as participating when the Company is in a net income position. These awards participate in distributions on a basis equivalent to other Class A common shares but do not participate in losses.
No distributions on common shares were declared for the three months ended March 31, 2026 or 2025.
Diluted income (loss) per share calculations for both Class A common shares and Class B common shares contemplate adjustments to the numerator and the denominator under the if-converted method for the convertible Class B common shares, the exchangeable Class A units of the San Francisco Venture and the exchangeable Class A Common Units of the Operating Company. The Company uses the treasury stock method or the two-class method when evaluating dilution for restricted stock units (“RSUs”), restricted shares, and performance restricted units and shares. The more dilutive of the two methods is included in the calculation for diluted income (loss) per share.
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The following table summarizes the basic and diluted (loss) earnings per share calculations for the three months ended March 31, 2026 and 2025 (in thousands, except shares and per share amounts):
| Three Months Ended March 31, | |||||||||||
| 2026 | 2025 | ||||||||||
Numerator: | |||||||||||
| Net (loss) income attributable to the Company | $ | ( | $ | ||||||||
| Adjustments to net (loss) income attributable to the Company | ( | ( | |||||||||
| Net (loss) income attributable to common shareholders | $ | ( | $ | ||||||||
Numerator—basic common shares: | |||||||||||
| Net (loss) income attributable to common shareholders | $ | ( | $ | ||||||||
Less: net income allocated to participating securities | |||||||||||
| Allocation of basic net (loss) income among common shareholders | $ | ( | $ | ||||||||
| Numerator for basic net (loss) income available to Class A common shareholders | $ | ( | $ | ||||||||
| Numerator for basic net (loss) income available to Class B common shareholders | $ | ( | $ | ||||||||
Numerator—diluted common shares: | |||||||||||
| Net (loss) income attributable to common shareholders | $ | ( | $ | ||||||||
| Reallocation of income from dilutive potential securities | |||||||||||
Less: net income allocated to participating securities | |||||||||||
| Allocation of diluted net (loss) income among common shareholders | $ | ( | $ | ||||||||
| Numerator for diluted net (loss) income available to Class A common shareholders | $ | ( | $ | ||||||||
| Numerator for diluted net (loss) income available to Class B common shareholders | $ | ( | $ | ||||||||
Denominator: | |||||||||||
| Basic weighted average Class A common shares outstanding | |||||||||||
Diluted weighted average Class A common shares outstanding | |||||||||||
| Basic and diluted weighted average Class B common shares outstanding | |||||||||||
| Basic (loss) earnings per share: | |||||||||||
Class A common shares | $ | ( | $ | ||||||||
Class B common shares | $ | ( | $ | ||||||||
| Diluted (loss) earnings per share: | |||||||||||
Class A common shares | $ | ( | $ | ||||||||
Class B common shares | $ | ( | $ | ||||||||
Anti-dilutive potential RSUs | |||||||||||
Anti-dilutive potential Performance RSUs | |||||||||||
| Anti-dilutive potential Class A common shares from warrants | |||||||||||
Anti-dilutive potential Restricted Shares (weighted average) | |||||||||||
| Anti-dilutive potential Class A common shares from exchanges (weighted average) | |||||||||||
20. ACCUMULATED OTHER COMPREHENSIVE LOSS
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ITEM 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations
Forward-Looking Statements
The following discussion contains management’s discussion and analysis of our financial condition and results of operations and should be read in conjunction with our unaudited condensed consolidated financial statements and related notes included under Part I, Item 1 of this report and our audited consolidated financial statements included in our Annual Report on Form 10-K for the fiscal year ended December 31, 2025. “Us,” “we,” and “our” refer to Five Point Holdings, LLC, together with its consolidated subsidiaries. This discussion contains forward-looking statements and involves numerous risks and uncertainties, including but not limited to those described in the “Risk Factors” section of our Annual Report on Form 10-K for the fiscal year ended December 31, 2025, as well as other risks and uncertainties detailed from time to time in our subsequent Quarterly Reports on Form 10-Q and other filings with the Securities and Exchange Commission. Actual results could differ materially from those set forth in any forward-looking statements. See “Cautionary Statement Regarding Forward-Looking Statements.”
Overview
We conduct all of our business in or through our operating company, Five Point Operating Company, LP (the “operating company”). We are, through a wholly owned subsidiary, the sole managing general partner and owned, as of March 31, 2026, approximately 65.4% of the operating company. The operating company directly or indirectly owns equity interests in:
•Five Point Land, LLC, which owns The Newhall Land & Farming Company, a California limited partnership, the entity that is developing Valencia, our community in northern Los Angeles County, California;
•The Shipyard Communities, LLC (the “San Francisco Venture”), which is developing Candlestick and The San Francisco Shipyard, our communities in the City of San Francisco, California;
•Heritage Fields LLC (the “Great Park Venture”), which is developing Great Park Neighborhoods, our community in Orange County, California;
•Five Point Office Venture Holdings I, LLC (the “Gateway Commercial Venture”), which previously owned portions of the Five Point Gateway Campus, a commercial office, research and development and medical campus located within the Great Park Neighborhoods;
•Five Point Communities, LP and Five Point Communities Management, Inc. (together, the “management company”), which provide development management services for the Great Park Neighborhoods; and
•Hearthstone Residential Holdings, LLC (the “Hearthstone Venture”), which is primarily engaged in providing asset management services to land banking funds (the “Hearthstone Funds”) that are primarily focused on acquiring, developing and managing residential lot option programs. We acquired a controlling financial interest in the Hearthstone Venture on July 31, 2025.
The operating company consolidates and controls the management of all of these entities, except for the Great Park Venture, the Gateway Commercial Venture and the Hearthstone Funds. The operating company owns a 37.5% percentage interest in the Great Park Venture and a 75% interest in the Gateway Commercial Venture and accounts for its interest in both using the equity method. The Hearthstone Venture generally has between a 1% and 3% interest in an individual Hearthstone Fund and accounts for such interest using the equity method.
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Operational Highlights
We reported a consolidated net loss of $5.0 million for the three months ended March 31, 2026, compared to net income of $60.6 million for the three months ended March 31, 2025. Our results for the quarter were primarily driven by the timing of residential land sales, as we did not complete any significant land closings during the period, and revenues were primarily generated from management services at our Great Park and Hearthstone segments. Selling, general and administrative (“SG&A”) expense totaled $14.7 million for the three months ended March 31, 2026. At March 31, 2026, we had $332.6 million in cash and $217.5 million available under our revolving credit facility, giving us total liquidity of $550.1 million.
While market conditions remained uncertain during the first quarter of 2026, with consumer confidence impacted by macroeconomic and geopolitical factors, as well as a challenging mortgage rate environment, we continued to focus on execution of key operating priorities, including generating revenue and positive cash flow, controlling our SG&A costs, managing our capital spend to match near-term revenue opportunities, and seeking growth opportunities through strategic relationships. During the quarter, however, we continued to see demand for homes and homesites at both our Great Park Neighborhoods and Valencia communities, although at a more measured pace. We did not complete any significant residential land sales during the quarter and expect our land sale activity to be weighted toward the third and fourth quarters.
At Valencia, our guest builders sold 90 homes during the first quarter of 2026, compared to 69 homes during the first quarter of 2025. At the Great Park Neighborhoods, guest builders sold a total of 82 homes during the first quarter of 2026, compared to 233 homes during the first quarter of 2025. While absorption has moderated compared to prior periods, we continue to see engagement from homebuyers across our communities and remain focused on managing the pace and structure of land sales to optimize long-term value.
During the first quarter of 2026, our Hearthstone platform continued to expand, including the closing of two new funds with approximately $600 million of equity commitments. As of March 31, 2026, the platform managed approximately $3.4 billion in assets under management and continues to generate management services revenue and provide a source of capital-light growth.
Results of Operations
The timing of our land sale revenues is influenced by several factors, including the sequencing of the planning and development process and market conditions at our communities. As a result, we have historically experienced, and expect to continue to experience, variability in results of operations between comparable periods.
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The following table summarizes our consolidated historical results of operations for the three months ended March 31, 2026 and 2025:
| Three Months Ended March 31, | |||||||||||
| 2026 | 2025 | ||||||||||
| (in thousands) | |||||||||||
Statement of Operations Data | |||||||||||
Revenues | |||||||||||
Land sales | $ | — | $ | 98 | |||||||
Land sales—related party | — | — | |||||||||
Management services—related party | 12,984 | 12,551 | |||||||||
Operating properties | 597 | 508 | |||||||||
Total revenues | 13,581 | 13,157 | |||||||||
Costs and expenses | |||||||||||
Land sales | — | — | |||||||||
Management services | 6,894 | 3,061 | |||||||||
Operating properties | 1,580 | 1,487 | |||||||||
Selling, general, and administrative | 14,749 | 14,765 | |||||||||
Total costs and expenses | 23,223 | 19,313 | |||||||||
| Other income | |||||||||||
Interest income | 3,267 | 4,050 | |||||||||
Miscellaneous | 608 | 775 | |||||||||
| Total other income | 3,875 | 4,825 | |||||||||
| Equity in (loss) earnings from unconsolidated entities | (145) | 71,439 | |||||||||
| (Loss) income before income tax benefit (provision) | (5,912) | 70,108 | |||||||||
| Income tax benefit (provision) | 942 | (9,522) | |||||||||
| Net (loss) income | (4,970) | 60,586 | |||||||||
| Less net (loss) income attributable to noncontrolling interests | (2,743) | 37,302 | |||||||||
| Net (loss) income attributable to the company | $ | (2,227) | $ | 23,284 | |||||||
Three Months Ended March 31, 2026 and 2025
Revenues. Revenues increased by $0.4 million, or 3.2%, to $13.6 million for the three months ended March 31, 2026, from $13.2 million for the three months ended March 31, 2025. The increase in revenues was primarily due to management services revenue recognized at our new Hearthstone segment, partially offset by a decrease in management services revenue at our Great Park segment during the three months ended March 31, 2026.
Cost of management services. Cost of management services increased by $3.8 million, or 125.2%, to $6.9 million for the three months ended March 31, 2026, from $3.1 million for the three months ended March 31, 2025. The increase was primarily due to the cost of management services recognized at our new Hearthstone segment, partially offset by a decrease in intangible asset amortization expense at our Great Park segment.
Equity in (loss) earnings from unconsolidated entities. Our consolidated results reflect our share in the earnings or losses of our interests in our unconsolidated entities, including the Great Park Venture and the Gateway Commercial Venture, within equity in earnings from unconsolidated entities on our condensed consolidated statement of operations. Our segment results for the Great Park segment present the results of the Great Park Venture at the book basis of the venture within the segment.
Equity in loss from unconsolidated entities was $0.1 million for the three months ended March 31, 2026, a decrease from equity in earnings of $71.4 million for the three months ended March 31, 2025. Equity in loss for the three months ended March 31, 2026 was primarily a result of recognizing our share of the net loss generated by the Great Park Venture during the quarter, and equity in earnings for the three months ended March 31, 2025 was primarily a result of recognizing our share of the net income generated by the Great Park Venture from land sales during the quarter.
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Income taxes. Pre-tax loss of $5.9 million for the three months ended March 31, 2026 resulted in a $0.9 million tax benefit. Pre-tax income of $70.1 million for the three months ended March 31, 2025 resulted in a $9.5 million tax provision. We assessed the realization of our net deferred tax asset and the need for a valuation allowance and determined that at March 31, 2026, it was more likely than not that the net deferred tax asset would be realizable, and we had no valuation allowance recorded. Our effective tax rate for the three months ended March 31, 2026 increased slightly as compared to our effective tax rate for the three months ended March 31, 2025 primarily due to the increase in disallowance of executive compensation expenses not deductible for tax.
Net (loss) income attributable to noncontrolling interests. Until exchanged for our Class A common shares or, at our election, cash, noncontrolling interests represent interests held by other partners in the operating company and other members of the San Francisco Venture. Redeemable noncontrolling interests that contain features that may result in cash settlement include the interests held by other members in the Hearthstone Venture and its subsidiaries and Class C interests in the San Francisco Venture. Net (loss) income attributable to the noncontrolling interests on the condensed consolidated statement of operations represents the portion of earnings or losses attributable to the interests in our subsidiaries held by the noncontrolling interests.
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Segment Results and Financial Information
Our reportable operating segments include our three community segments, Valencia, San Francisco and Great Park, and our Hearthstone segment:
•Our Valencia segment includes operating results related to the Valencia community and agricultural operations in Los Angeles and Ventura Counties, California.
•Our San Francisco segment includes operating results for the Candlestick and The San Francisco Shipyard communities.
•Our Great Park segment includes operating results for the Great Park Neighborhoods community as well as development management services provided by the management company for the Great Park Venture.
•Our Hearthstone segment includes the operating results for the Hearthstone Venture, which owns and operates our residential asset management platform. The operating results for the Hearthstone segment are presented from the acquisition date of July 31, 2025.
The following tables reconcile the results of operations of our segments to our consolidated results for the three months ended March 31, 2026 and 2025 (in thousands):
| Three Months Ended March 31, 2026 | |||||||||||||||||||||||||||||||||||||||||||||||||||||
| Valencia | San Francisco | Great Park | Hearthstone | Total reportable segments | Corporate and unallocated | Total under management | Removal of unconsolidated entities(1) | Total consolidated | |||||||||||||||||||||||||||||||||||||||||||||
| REVENUES: | |||||||||||||||||||||||||||||||||||||||||||||||||||||
| Land sales | $ | — | $ | — | $ | 3,607 | $ | — | $ | 3,607 | $ | — | $ | 3,607 | $ | (3,607) | $ | — | |||||||||||||||||||||||||||||||||||
| Land sales—related party | — | — | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||
Management services—related party(2) | — | — | 6,856 | 6,128 | 12,984 | — | 12,984 | — | 12,984 | ||||||||||||||||||||||||||||||||||||||||||||
| Operating properties | 420 | 177 | — | — | 597 | — | 597 | — | 597 | ||||||||||||||||||||||||||||||||||||||||||||
| Total revenues | 420 | 177 | 10,463 | 6,128 | 17,188 | — | 17,188 | (3,607) | 13,581 | ||||||||||||||||||||||||||||||||||||||||||||
| COSTS AND EXPENSES: | |||||||||||||||||||||||||||||||||||||||||||||||||||||
| Land sales | — | — | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||
Management services(2) | — | — | 2,111 | 4,783 | 6,894 | — | 6,894 | — | 6,894 | ||||||||||||||||||||||||||||||||||||||||||||
| Operating properties | 1,580 | — | — | — | 1,580 | — | 1,580 | — | 1,580 | ||||||||||||||||||||||||||||||||||||||||||||
| Selling, general, and administrative | 2,500 | 1,561 | 1,150 | — | 5,211 | 10,688 | 15,899 | (1,150) | 14,749 | ||||||||||||||||||||||||||||||||||||||||||||
| Management fees—related party | — | — | 7,130 | — | 7,130 | — | 7,130 | (7,130) | — | ||||||||||||||||||||||||||||||||||||||||||||
| Total costs and expenses | 4,080 | 1,561 | 10,391 | 4,783 | 20,815 | 10,688 | 31,503 | (8,280) | 23,223 | ||||||||||||||||||||||||||||||||||||||||||||
| OTHER INCOME: | |||||||||||||||||||||||||||||||||||||||||||||||||||||
| Interest income | — | 1 | 1,869 | 14 | 1,884 | 3,252 | 5,136 | (1,869) | 3,267 | ||||||||||||||||||||||||||||||||||||||||||||
| Miscellaneous | 608 | — | — | — | 608 | — | 608 | — | 608 | ||||||||||||||||||||||||||||||||||||||||||||
| Total other income | 608 | 1 | 1,869 | 14 | 2,492 | 3,252 | 5,744 | (1,869) | 3,875 | ||||||||||||||||||||||||||||||||||||||||||||
| EQUITY IN EARNINGS (LOSS) FROM UNCONSOLIDATED ENTITIES | 207 | — | — | 302 | 509 | 397 | 906 | (1,051) | (145) | ||||||||||||||||||||||||||||||||||||||||||||
| SEGMENT (LOSS) PROFIT/LOSS BEFORE INCOME TAX BENEFIT | (2,845) | (1,383) | 1,941 | 1,661 | (626) | (7,039) | (7,665) | 1,753 | (5,912) | ||||||||||||||||||||||||||||||||||||||||||||
| INCOME TAX BENEFIT | — | — | — | — | — | 942 | 942 | — | 942 | ||||||||||||||||||||||||||||||||||||||||||||
| SEGMENT (LOSS) PROFIT/NET LOSS | $ | (2,845) | $ | (1,383) | $ | 1,941 | $ | 1,661 | $ | (626) | $ | (6,097) | $ | (6,723) | $ | 1,753 | $ | (4,970) | |||||||||||||||||||||||||||||||||||
(1) Represents the removal of the Great Park Venture operating results, which are included in the Great Park segment operating results at 100% of the venture’s historical basis but are not included in our consolidated results as we account for our investment in the venture using the equity method of accounting.
(2) For the Great Park segment, represents the revenues and expenses attributable to the management company for providing services to the Great Park Venture as applicable.
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| Three Months Ended March 31, 2025 | |||||||||||||||||||||||||||||||||||||||||||||||
| Valencia | San Francisco | Great Park | Total reportable segments | Corporate and unallocated | Total under management | Removal of unconsolidated entities(1) | Total consolidated | ||||||||||||||||||||||||||||||||||||||||
| REVENUES: | |||||||||||||||||||||||||||||||||||||||||||||||
| Land sales | $ | 98 | $ | — | $ | 285,403 | $ | 285,501 | $ | — | $ | 285,501 | $ | (285,403) | $ | 98 | |||||||||||||||||||||||||||||||
| Land sales—related party | — | — | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||
Management services—related party(2) | — | — | 12,551 | 12,551 | — | 12,551 | — | 12,551 | |||||||||||||||||||||||||||||||||||||||
| Operating properties | 334 | 174 | — | 508 | — | 508 | — | 508 | |||||||||||||||||||||||||||||||||||||||
| Total revenues | 432 | 174 | 297,954 | 298,560 | — | 298,560 | (285,403) | 13,157 | |||||||||||||||||||||||||||||||||||||||
| COSTS AND EXPENSES: | |||||||||||||||||||||||||||||||||||||||||||||||
| Land sales | — | — | 70,216 | 70,216 | — | 70,216 | (70,216) | — | |||||||||||||||||||||||||||||||||||||||
Management services(2) | — | — | 3,061 | 3,061 | — | 3,061 | — | 3,061 | |||||||||||||||||||||||||||||||||||||||
| Operating properties | 1,487 | — | — | 1,487 | — | 1,487 | — | 1,487 | |||||||||||||||||||||||||||||||||||||||
| Selling, general, and administrative | 3,296 | 1,163 | 2,760 | 7,219 | 10,306 | 17,525 | (2,760) | 14,765 | |||||||||||||||||||||||||||||||||||||||
| Management fees—related party | — | — | 7,858 | 7,858 | — | 7,858 | (7,858) | — | |||||||||||||||||||||||||||||||||||||||
| Total costs and expenses | 4,783 | 1,163 | 83,895 | 89,841 | 10,306 | 100,147 | (80,834) | 19,313 | |||||||||||||||||||||||||||||||||||||||
| OTHER INCOME: | |||||||||||||||||||||||||||||||||||||||||||||||
| Interest income | — | 15 | 1,693 | 1,708 | 4,035 | 5,743 | (1,693) | 4,050 | |||||||||||||||||||||||||||||||||||||||
| Miscellaneous | 775 | — | — | 775 | — | 775 | — | 775 | |||||||||||||||||||||||||||||||||||||||
| Total other income | 775 | 15 | 1,693 | 2,483 | 4,035 | 6,518 | (1,693) | 4,825 | |||||||||||||||||||||||||||||||||||||||
| EQUITY IN EARNINGS FROM UNCONSOLIDATED ENTITIES | 214 | — | — | 214 | 371 | 585 | 70,854 | 71,439 | |||||||||||||||||||||||||||||||||||||||
| SEGMENT (LOSS) PROFIT/INCOME BEFORE INCOME TAX PROVISION | (3,362) | (974) | 215,752 | 211,416 | (5,900) | 205,516 | (135,408) | 70,108 | |||||||||||||||||||||||||||||||||||||||
| INCOME TAX PROVISION | — | — | — | — | (9,522) | (9,522) | — | (9,522) | |||||||||||||||||||||||||||||||||||||||
| SEGMENT (LOSS) PROFIT/NET INCOME | $ | (3,362) | $ | (974) | $ | 215,752 | $ | 211,416 | $ | (15,422) | $ | 195,994 | $ | (135,408) | $ | 60,586 | |||||||||||||||||||||||||||||||
(1) Represents the removal of the Great Park Venture operating results, which are included in the Great Park segment operating results at 100% of the venture’s historical basis but are not included in our consolidated results as we account for our investment in the venture using the equity method of accounting.
(2) For the Great Park segment, represents the revenues and expenses attributable to the management company for providing services to the Great Park Venture as applicable.
Valencia Segment
Our Valencia property consists of approximately 15,000 acres in northern Los Angeles County and can currently include up to approximately 21,000 homesites and approximately 9.3 million square feet of commercial space. The actual commercial square footage and number of homesites are subject to change as we further refine our development plans to optimize land values. The current communities under development in Valencia complement the neighboring communities that were previously developed by us. We began selling homesites in the first development area at Valencia in 2019, and as of March 31, 2026 we had sold 3,088 homesites.
San Francisco Segment
Located almost equidistant between downtown San Francisco and the San Francisco International Airport, Candlestick and The San Francisco Shipyard consist of approximately 800 acres of bayfront property in the City of San Francisco. Candlestick and The San Francisco Shipyard can include up to approximately 12,000 homesites and approximately 6.3 million square feet of commercial space. The actual commercial square footage and number of homesites are subject to change based on ultimate use and land planning.
In November 2024, we received approvals from the City and County of San Francisco to (among other things) transfer approximately two million square feet of research and development and office space to Candlestick from The San Francisco Shipyard. Candlestick now has the potential to include up to approximately 2.8 million square feet of research and development and office space, approximately 7,200 homesites, and approximately 550,000 square feet of retail, hotel, entertainment and community uses. We have commenced engineering for the next phase of infrastructure at Candlestick and expect to begin construction in the first half of 2026.
Our development at Candlestick and The San Francisco Shipyard is not subject to San Francisco’s Proposition M growth control measure, which imposes annual limitations on office development and is applicable to all other developers with projects in the city. This means the full amount of permitted commercial square footage at Candlestick and The San Francisco Shipyard can be
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constructed as we determine, including all at once, even though Proposition M may delay new office developments elsewhere in San Francisco.
At The San Francisco Shipyard, approximately 408 acres are still owned by the U.S. Navy and will not be conveyed to us until the U.S. Navy satisfactorily completes its finding of suitability to transfer, or “FOST,” process, which involves multiple levels of environmental and governmental investigation, analysis, review, comment and approval. Based on our discussions with the U.S. Navy, we had previously expected the U.S. Navy to deliver this property between 2019 and 2022. However, allegations that Tetra Tech, Inc. and Tetra Tech EC, Inc. (collectively, “Tetra Tech”), contractors hired by the U.S. Navy, misrepresented sampling results at The San Francisco Shipyard have resulted in data reevaluation, governmental investigations, criminal proceedings, lawsuits, and a determination by the U.S. Navy and other regulatory agencies to undertake additional sampling. These activities have delayed the remaining land transfers from the U.S. Navy and could lead to additional legal claims or government investigations, all of which could in turn further delay or impede our future development of such parcels. Our development plans were designed with the flexibility to adjust for potential land transfer delays, and we have the ability to shift the phasing of our development activities to account for potential delays caused by U.S. Navy retesting, but there can be no assurance that these matters and other related matters that may arise in the future will not have further material impacts on our development plans.
We have been, and may in the future be, named as a defendant in lawsuits seeking damages and other relief arising out of alleged contamination at The San Francisco Shipyard and Tetra Tech’s alleged misrepresentations of related sampling work. See Note 12 to our condensed consolidated financial statements included under Part I, Item 1 of this report.
Hearthstone Segment
We have a 75% controlling financial interest in the Hearthstone Venture, which operates our residential asset management platform providing capital solutions to the U.S. homebuilding industry, primarily through land banking. The Hearthstone Venture’s operations include managing funds that acquire fully entitled residential land parcels and enter into option and development agreements with U.S. homebuilders. The funds then engage the homebuilders to complete the horizontal development of the land, after which the homebuilders acquire the fully developed homesites from the funds pursuant to the option agreements. The Hearthstone Venture manages these lot option programs across multiple U.S. markets, working with capital partners consisting of state employee pension plans and institutional and private equity. The Hearthstone Venture sources projects mainly from large U.S. publicly-traded homebuilders. The Hearthstone Venture receives asset management fees and under some arrangements may also receive performance fees upon achievement of stipulated investor returns. We completed our acquisition of the Hearthstone Venture on July 31, 2025. As of March 31, 2026, the Hearthstone Venture had $3.4 billion in assets under management, which consisted of approximately 30,000 lots with 12 separate homebuilders across 17 states.
Great Park Segment
We have a 37.5% percentage interest in the Great Park Venture, and we account for our investment using the equity method of accounting. We have a controlling interest in the management company, an entity which performs development management services at Great Park Neighborhoods. We do not include the Great Park Venture as a consolidated subsidiary in our condensed consolidated financial statements. However, because of the relationship between the management company and the Great Park Venture, we assess our investment in the Great Park Venture based on the financial information for the Great Park Venture in its entirety, and not just our equity interest in it. As a result, our Great Park segment consists of the operations of both the Great Park Venture and the development management services provided by the management company at the Great Park Venture.
Great Park Neighborhoods consists of approximately 2,100 acres in Orange County and is being built around the approximately 1,300 acre Orange County Great Park, a metropolitan public park that is under construction. Great Park Neighborhoods can include up to approximately 11,800 homesites and approximately 4.1 million square feet of commercial space. The actual commercial square footage and number of homesites are subject to change based on ultimate use and land planning. The Great Park Venture sold the first homesites in April 2013 and, as of March 31, 2026, had sold 9,603 homesites (including 853 affordable homesites).
Three Months Ended March 31, 2026 and 2025
Land sales and related party land sales revenues. Land sales and related party land sales revenues decreased to $3.6 million for the three months ended March 31, 2026, from $285.4 million for the three months ended March 31, 2025. The decrease was primarily attributable to the recognition of revenue from the sale of residential land at the Great Park Neighborhoods entitled for an aggregate of 325 homesites on 23.6 acres during the three months ended March 31, 2025, compared to no land sales during the same period in 2026. For the 2025 land sales, the base purchase price was $278.9 million, and 197 of the homesites were sold to an unaffiliated land banking entity whereby Lennar retained the option to acquire the homesites in the future from the land bank entity.
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During the three months ended March 31, 2026 and 2025, revenues also included changes in estimates of variable consideration, including profit participation and price participation, from those amounts previously recorded by the Great Park Venture. During the three months ended March 31, 2026 and 2025, the Great Park Venture recognized $3.6 million and $2.4 million, respectively, in profit participation revenues. During the three months ended March 31, 2025, the Great Park Venture recognized additional estimated variable consideration of $4.0 million for price participation related to a residential land sale that closed in 2023. As of December 31, 2025, substantially all of the homes related to the 2023 land sale had been sold to homebuyers.
Cost of land sales. The Great Park Venture closed no land sales and therefore had no cost of land sales for the three months ended March 31, 2026, compared to cost of land sales of $70.2 million for the three months ended March 31, 2025. The cost of land sales includes both actual and estimated future capitalized costs allocated based upon relative sales values. Since this method requires the Great Park Venture to estimate future development costs and the expected sales prices for future land sales, the profit margin on subsequent parcels sold will be affected by both changes in the estimated total revenues, as well as any changes in the estimated total cost of the project.
Management fee revenues. Management fee revenues are revenues generated by the management company from development management services provided to the Great Park Venture. In September 2024, the development management agreement with the Great Park Venture was renewed by mutual agreement of the parties through December 31, 2026 (the “second renewal term”). The annual fixed base fee is $13.5 million and the incentive compensation provisions of the development management agreement remain unchanged through the second renewal term. The decrease in management services related party revenue was mainly attributable to a decrease in variable incentive compensation revenue recognized during the three months ended March 31, 2026. For the three months ended March 31, 2026 and 2025, we recognized $3.5 million and $9.2 million, respectively, attributable to variable incentive compensation, which reflects changes in the estimate of the amount of incentive compensation we expected to be entitled to receive and changes in constraints on the estimate.
Management services costs and expenses. Included within management services costs and expenses are general and administrative costs and expenses incurred by the management company’s project team that is managing the development of the Great Park Neighborhoods. We also include amortization expense related to the intangible asset attributable to the incentive compensation provisions of the development management agreement with the Great Park Venture within management services costs and expenses. Corporate and non-project team salaries and overhead are not allocated to management services costs and expenses or to our reportable segments and are reported in selling, general, and administrative costs in the condensed consolidated statements of operations. Management services costs and expenses decreased by $1.0 million, or 31.0%, to $2.1 million for the three months ended March 31, 2026, from $3.1 million for the three months ended March 31, 2025. The decrease was mainly attributable to a decrease in intangible asset amortization expense recognized during the three months ended March 31, 2026.
Selling, general, and administrative. SG&A expenses decreased by $1.6 million, or 58.3%, to $1.2 million for the three months ended March 31, 2026, from $2.8 million for the three months ended March 31, 2025. The decrease was mainly attributable to a decrease in marketing expenses and property maintenance expenses.
Management fees—related party. Management fees decreased by $0.7 million to $7.1 million for the three months ended March 31, 2026, from $7.9 million for the three months ended March 31, 2025. Management fees incurred by the Great Park Venture are comprised of base development management fees and incentive compensation fees. In general, incentive compensation fees will be paid based on a percentage of distributions made to holders of the Great Park Venture’s membership interests. When payments are deemed probable of being made, the Great Park Venture recognizes the expense ratably over the period services are expected to be provided. When estimates of the amount of incentive compensation probable of being paid change, the Great Park Venture records a cumulative adjustment in the period in which the estimate changes. The decrease in management fees—related party was mainly attributable to changes in the estimate of the amount of incentive compensation fees probable of being paid that resulted in a cumulative adjustment recognized during the three months ended March 31, 2026 that was lower than the cumulative adjustment recognized during the three months ended March 31, 2025.
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The table below reconciles the Great Park segment results to the equity in (loss) earnings from our investment in the Great Park Venture that is reflected in the condensed consolidated statements of operations for the three months ended March 31, 2026 and 2025.
| Three Months Ended March 31, | |||||||||||
| 2026 | 2025 | ||||||||||
| (in thousands) | |||||||||||
| Segment profit from operations | $ | 1,941 | $ | 215,752 | |||||||
Less net income of management company attributed to the Great Park segment | 4,745 | 9,490 | |||||||||
| Net (loss) income of the Great Park Venture | (2,804) | 206,262 | |||||||||
| The Company’s share of net (loss) income of the Great Park Venture | (1,051) | 77,348 | |||||||||
| Basis difference amortization, net | — | (6,494) | |||||||||
| Equity in (loss) earnings from the Great Park Venture | $ | (1,051) | $ | 70,854 | |||||||
Liquidity and Capital Resources
As of March 31, 2026, we had $332.6 million of consolidated cash and cash equivalents, compared to $425.5 million at December 31, 2025. As of March 31, 2026, no funds had been drawn on and no letters of credit were outstanding on the operating company’s $217.5 million unsecured revolving credit facility.
Our short-term cash needs consist primarily of general and administrative expenses and development expenditures at Valencia and the Candlestick and The San Francisco Shipyard communities, interest payments under our senior notes and payments under a related party reimbursement obligation. Pursuant to a reimbursement deferral agreement, principal and interest payments under our related party reimbursement obligation were deferred through December 31, 2025, and during the three months ended March 31, 2026, the Company paid $40.1 million in principal and $6.2 million in accrued and current interest. Reimbursement payments may be further deferred when our related party receives an extension on the maturity date of the associated EB-5 loan liability. Our related party has a history of receiving maturity date extensions, however, further extensions are not within our control and there can be no assurance that any such extensions will be obtained in the future.
The development stages of our communities continue to require significant cash outlays on both a short-term and long-term basis, and we expect to invest significant amounts on continued horizontal development at Valencia over the next 12 months. We manage our development activities and expenditures to coincide with projected demand for our residential and commercial land with the objective of maintaining an appropriate level of liquidity. At Hearthstone, we expect to make co-investment contributions to our existing and new lot option funds as we invest in growing the Hearthstone management platform over the next 12 months. We typically contribute a 1% co-investment alongside our capital partners. We expect to meet our cash requirements for at least the next 12 months with available cash, distributions from our unconsolidated entities, collection of development management fees, including incentive compensation, under our development management agreement with the Great Park Venture, asset management fees at the Hearthstone Venture, proceeds from land sales, reimbursements from public financing and access to financing sources, including our revolving credit facility.
Our long-term cash needs relate primarily to future horizontal development expenditures and new investments and acquisitions, along with debt service and general and administrative expenses. We budget our cash development costs on an annual basis. Budgeted amounts are subject to change due to delays or accelerations in construction or regulatory approvals, changes in inflation rates and other increases (or decreases) in costs. We may also modify our development plans or change the sequencing of our communities in response to changing economic conditions, consumer preferences and other factors, which could have a material impact on the timing and amount of our development costs. Budgeted amounts are expected to be funded through a combination of available cash, cash flows from land sales at our communities and reimbursements from public financing, including community facilities districts, tax increment financing and local, state and federal grants. Cash flows from our communities may occur in uneven patterns as cash is primarily generated by land sales and reimbursements, which can occur at various points over the life cycle of our communities.
We currently expect to have sufficient capital to fund the horizontal development of our communities in accordance with our development plan and to pursue our growth strategies for several years. The level of capital expenditures in any given year may vary due to, among other things, the number of communities or neighborhoods under development and the number of planned deliveries, which may vary based on market conditions. We may seek to raise additional capital by accessing the debt or equity capital markets or with one or more revolving or term loan facilities or other public or private financing alternatives, including entering into joint ventures. These financings may not be available on attractive terms, or at all.
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We are committed under various performance bonds and letters of credit (“LOCs”) to perform certain development activities and provide certain guarantees in the normal course of the entitlement and development process.
We had outstanding performance bonds of $347.6 million as of March 31, 2026 predominantly related to our Valencia community.
At March 31, 2026, the San Francisco Venture had outstanding guarantees benefiting a municipal agency for infrastructure and construction of certain park and open space obligations with aggregate maximum obligations of $198.9 million.
Outstanding LOCs totaled $1.0 million at both March 31, 2026 and December 31, 2025. At both March 31, 2026 and December 31, 2025, we had $1.0 million in restricted cash and certificates of deposit securing certain of our LOCs. Additionally, under our revolving credit facility, we are able to utilize undrawn capacity to support the issuance of LOCs. As of March 31, 2026, no capacity under the revolving credit facility was used to support LOCs.
Several of the funds that the Hearthstone Venture manages utilize financing arrangements to partially fund the acquisition of land. The debt is non-recourse to the Hearthstone Venture other than in the case of customary “bad act” exceptions or bankruptcy or insolvency events.
We are a party to a tax receivable agreement (“TRA”) with current and former holders of Class A units of the operating company and the holders of Class A units of the San Francisco Venture. The TRA provides for payments by us to such investors or their successors in aggregate amounts equal to 85% of the cash savings, if any, in income tax that we realize as a result of certain tax attributes. We expect the TRA payments to be substantial. However, the actual amount and timing of any payments under the TRA will vary depending upon a number of factors, including the timing of exchanges of Class A units of the operating company or Class A units of the San Francisco Venture, the price of our Class A common shares at the time of such exchanges, the extent to which such exchanges are taxable and our ability to use the potential tax benefits, which will depend on the amount and timing of our taxable income and the rate at which we pay income tax. During the three months ended March 31, 2026, we made total payments of $0.7 million under the TRA. Additional TRA payments associated with California state taxes may become payable between 2027 and 2028 as a result of the passage in June 2024 of California Senate Bill 167, which, in part, suspends the usage of California net operating loss deductions for tax years 2024 through 2026. The majority of TRA payments, however, are not expected to begin for the next several years.
Summary of Cash Flows
The following table outlines the primary components of net cash (used in) provided by operating, investing and financing activities (in thousands):
| Three Months Ended March 31, | |||||||||||
| 2026 | 2025 | ||||||||||
Operating activities | $ | (44,502) | $ | 56,729 | |||||||
Investing activities | (281) | 42,501 | |||||||||
Financing activities | (48,197) | (1,776) | |||||||||
Cash Flows from Operating Activities. Net cash used in operating activities was $44.5 million for the three months ended March 31, 2026, compared to $56.7 million net cash provided by operating activities for the three months ended March 31, 2025. Major components of operating cash used in both periods consist of our continued investment in horizontal development at our communities and SG&A costs. During the three months ended March 31, 2026, we paid $6.2 million for accrued and current interest due under our related party reimbursement obligation.
During the three months ended March 31, 2026, we received total distributions of $2.8 million mostly from funds managed by the Hearthstone Venture, of which $0.9 million is reflected as a return on our investment (operating activity) in the statement of cash flows, with the balance reflected as an investing activity.
During the three months ended March 31, 2025, we received incentive compensation payments of $30.4 million under our development management agreement with the Great Park Venture. Additionally, we received total distributions of $112.9 million from the Great Park Venture, of which $70.9 million is reflected as a return on our investment (operating activity) in the statement of cash flows with the balance reflected as an investing activity.
Cash Flows from Investing Activities. Net cash used in investing activities was $0.3 million for the three months ended March 31, 2026, compared to $42.5 million net cash provided by investing activities for the three months ended March 31, 2025.
During the three months ended March 31, 2026, we received total distributions of $2.8 million mostly from funds managed by the Hearthstone Venture, of which $1.9 million is reflected as a return of our investment (investing activity) in the statement of
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cash flows. During the three months ended March 31, 2026, we co-invested $2.1 million to funds managed by the Hearthstone Venture.
During the three months ended March 31, 2025, we received total distributions of $112.9 million from the Great Park Venture, of which $42.0 million is reflected as a return of our investment (investing activity) in the statement of cash flows with the balance reflected as an operating activity.
Cash Flows from Financing Activities. Net cash used in financing activities was $48.2 million for the three months ended March 31, 2026, compared to $1.8 million net cash used in financing activities for the three months ended March 31, 2025.
For the three months ended March 31, 2026 and 2025, we used $6.1 million and $1.8 million, respectively, to net settle share-based compensation awards with employees for tax withholding purposes. We also made payments of $40.1 million to reduce our related party reimbursement obligation and $0.7 million under our tax receivable agreement during the three months ended March 31, 2026.
Changes in Capital Structure
During the three months ended March 31, 2026, our 65.4% ownership percentage in the operating company increased slightly primarily due to 2.4 million restricted share units that were settled for Class A common shares, partially offset by our reacquisition of approximately 1.1 million of such Class A common shares from employees for income tax withholding purposes upon vesting. The issuances and settlements resulted in the operating company issuing to us an equal number of Class A units of the operating company or retiring an equal number of Class A units of the operating company that we previously held.
The table below summarizes outstanding Class A units of the operating company and Class A units of the San Francisco Venture (redeemable on a one-for-one basis for Class A units of the operating company) held by us and held by noncontrolling interest members at March 31, 2026 and December 31, 2025.
| March 31, 2026 | December 31, 2025 | ||||||||||
| Class A units of the operating company: | |||||||||||
| Held by us | 72,320,181 | 71,100,768 | |||||||||
| Held by noncontrolling interest members | 38,226,137 | 38,226,137 | |||||||||
| 110,546,318 | 109,326,905 | ||||||||||
| Class A units of the San Francisco Venture held by noncontrolling interest members | 37,870,273 | 37,870,273 | |||||||||
| 148,416,591 | 147,197,178 | ||||||||||
At March 31, 2026, we had 76,096,410 Class B common shares outstanding that were held by the noncontrolling interest members of the operating company and the Class A unitholders of the San Francisco Venture. The Class B common shares will automatically convert to Class A common shares at a ratio of 0.0003 Class A common shares for each Class B common share. The conversions will occur when the holders of Class A units of the operating company, including Class A units that have been issued upon redemption of Class A units of the San Francisco Venture, are redeemed for, at our election, either our Class A common shares or cash.
Critical Accounting Estimates
There have been no significant changes to our critical accounting estimates during the three months ended March 31, 2026 as compared to those disclosed in Item 7, “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” which is presented in our Annual Report on Form 10-K for the fiscal year ended December 31, 2025.
ITEM 3. Quantitative and Qualitative Disclosures About Market Risk
Market risk is the risk of loss from adverse changes in market prices and interest rates. Our future earnings, cash flows and fair values relative to financial instruments are dependent upon prevailing market interest rates. Our primary market risk results from our indebtedness, which bears interest at fixed rates. Although we do not currently do so, we may in the future manage our market risk on floating rate debt by entering into swap arrangements to in effect fix the rate on all or a portion of the debt for varying periods up to maturity. This would, in turn, reduce the risks of variability of cash flows created by floating rate debt and mitigate the risk of increases in interest rates. Our objective when undertaking such arrangements would be to reduce our floating rate exposure, as we do not plan to enter into hedging arrangements for speculative purposes.
As of March 31, 2026, we had outstanding consolidated net indebtedness of $443.7 million, none of which bears interest based on floating interest rates.
We have not entered into any transactions using derivative financial instruments or derivative commodity instruments.
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ITEM 4. Controls and Procedures
Evaluation of Disclosure Controls and Procedures
Our management, with the supervision and participation of our Chief Executive Officer and our Chief Financial Officer (the “Certifying Officers”), has evaluated the effectiveness of the design and operation of our disclosure controls and procedures as of March 31, 2026. Our disclosure controls and procedures are designed to ensure that information required to be disclosed in the reports we file or submit under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), is recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission rules and forms and that such information is accumulated and communicated to management, including our Certifying Officers and our Board of Directors, as appropriate to allow timely decisions regarding required disclosure. Based upon that evaluation, the Certifying Officers concluded that our disclosure controls and procedures were effective as of March 31, 2026.
Changes in Internal Control Over Financial Reporting
There were no changes in our internal control over financial reporting identified in management’s evaluation pursuant to Rules 13a-15(d) or 15d-15(d) of the Exchange Act during the period covered by this report on Form 10-Q that materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
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PART II. OTHER INFORMATION
ITEM 1. Legal Proceedings
For disclosures of legal proceedings, see Note 12 to our condensed consolidated financial statements included under Part I, Item 1 of this report, which is incorporated herein by reference.
ITEM 1A. Risk Factors
In addition to the other information set forth in this report, you should carefully consider the factors discussed in “Part I, Item 1A, Risk Factors” in our Annual Report on Form 10-K for the year ended December 31, 2025, which could materially affect our business, financial condition and results of operations. There have been no material changes in our risk factors from those disclosed in our Annual Report on Form 10-K for the year ended December 31, 2025. The risks described in our Annual Report on Form 10-K are not the only risks facing our company. Additional risks and uncertainties not currently known to us or that we currently deem to be immaterial may also materially adversely affect our business, financial condition and results of operations.
ITEM 2. Unregistered Sales of Equity Securities and Use of Proceeds
None
ITEM 3. Defaults Upon Senior Securities
None
ITEM 4. Mine Safety Disclosures
Not Applicable
ITEM 5. Other Information
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ITEM 6. Exhibits
| Exhibit | Exhibit Description | ||||
| 10.1 | |||||
10.2# | |||||
31.1* | |||||
31.2* | |||||
32.1* | |||||
32.2* | |||||
| 101.INS | Inline 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 | Inline XBRL Taxonomy Extension Schema Document. | ||||
| 101.CAL | Inline XBRL Taxonomy Extension Calculation Linkbase Document. | ||||
| 101.DEF | Inline XBRL Taxonomy Extension Definition Linkbase Document. | ||||
| 101.LAB | Inline XBRL Taxonomy Extension Label Linkbase Document. | ||||
| 101.PRE | Inline XBRL Taxonomy Extension Presentation Linkbase Document. | ||||
| 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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SIGNATURES
Pursuant to the requirements 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 | ||||||||
(Principal Executive Officer) | ||||||||
By: | /s/ Kim Tobler | |||||||
Kim Tobler | ||||||||
Chief Financial Officer, Treasurer and Vice President | ||||||||
(Principal Financial Officer and Principal Accounting Officer) | ||||||||
Date: April 24, 2026
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