Howard Hughes Corp. moved the head office to Woodlands in the middle of the transition
Howard Hughes Corp., the publicly traded real estate company that owns some of the nation's largest master planned communities, is moving its headquarters to The Woodlands and has shaken up leadership roles, appointing Houstonian Paul Layne as CEO. [19659002] The company, which had previously announced a strategic review, also said it plans to reduce aviation spending by as much as $ 50 million per year, sell $ 2 billion worth of real estate and execute a growth plan for its master-planned communities. [19659003] Layne, president of the company's central region, its largest regional office, replaces David Weinreb, who also gives up his seat on the board of Layne. Grant Herlitz, its president, is also leaving the company.
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announcement of the shake done after markets closed Monday, sending the company's shares down 23 percent in afternoon trading.
Howard Hughes Corp. owns, manages and develops commercial real estate, residential and mixed use throughout the United States. Properties include Woodlands, Woodlands Hills and Bridgeland in the greater Houston area, as well as Summerlin in Las Vegas, Ward Village in Honolulu, Columbia in Maryland and the Seaport District in New York.
Layne, a company chief since 2012, helped lead more than $ 1.2 billion in development of office, retail, apartment, hotel and storage properties in The Woodlands.
He joined the company with a background in office development and marketing. Prior to joining Howard Hughes, he was Executive Vice President of Brookfield Properties Corp., overseeing a 9.7 million-square-foot portfolio in downtown Houston.
“We are taking bold and decisive steps to better position the company in the long term,” said Layne in a statement. "We believe a leaner, more focused and decentralized approach dedicated to delivering high returns and delighting our customers will generate tremendous value for our shareholders and continue to strengthen the communities we operate in."
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The company's central region includes The Woodlands, The Woodlands Hills and Bridgeland.
Chairman Bill Ackman, CEO of New York hedge fund Pershing Square Capital Management said the changes will allow the firm to be more focused and profitable.
“Paul's extensive acquisition, development and operating experience combined with his superb leadership style have earned him the respect of the board and the entire Howard Hughes team. Paul's effective operational approach with our headquarters from Dallas to Houston will allow Howard Hughes to be a more focused, profitable and free cash flow generating company, "Ackman said in a statement.
Chief Financial Officer David O & # 39; Reilly will work with Layne to implement the transition plan, which will eliminate the company's organizational structure of the holding company type and move to a decentralized regional governance model.
One-time costs associated with relocation, retention and severance payments are expected to be between $ 38 million and $ 40 million .
The company said it had identified about $ 2 billion of so-called non-core businesses it expects to sell over the next 12 to 18 months, and it estimates to make $ 600 million in sales, which after repayment and transaction costs will be used to repurchase shares and its residential environments Some of the properties are located outside the most planned communities, although a hospitality portfolio and an MD Anderson facility, both in The Woodlands, were also listed among non-core assets, according to a strategic assessment document released by the company on Tuesday.
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