Emile Haddad started FivePoint Holdings LLC in 2009, during the worst real estate market in a generation, when the future of what would become Irvine’s Great Park Neighborhoods was very much in doubt.
Last week, FivePoint (NYSE: FPH) announced the company’s founder, chairman and CEO would be stepping aside from day-to-day duties at the Irvine-based builder of master-planned communities.
The exec change comes amid a booming housing market, with local land and home prices near record levels. FivePoint recently completed one of its largest land sales to date, a $328 million deal for 774 home sites in Irvine. What’s more, the company recently passed a notable milestone, in fulfilling a set of priority payments to early investors in the Irvine mega-project.
Why step down now, when the going’s good?
“I started FivePoint during one of the most challenging real estate markets, and the company is now hitting on all cylinders,” Haddad told the Business Journal last week.
“With the success of the company and a great team behind it, I now finally have the luxury to step back and work on the company’s bigger picture,” he said.
Haddad will remain with the company under the Chairman Emeritus and senior advisor title, and will also serve on FivePoint’s board.
New Leadership Structure
For Haddad, his big picture focus now means working with city and state officials to solve housing and development challenges, and working to foster innovation in the next steps of development at FivePoint’s master-planned communities: Great Park Neighborhoods, Valencia in Los Angeles and Candlestick and The San Francisco Shipyard in San Francisco.
The three communities will ultimately include about 40,000 residential homes and 23 million square feet of commercial space.
Those entitlements make FivePoint the largest community developer in California’s coastal markets.
The Business Journal earlier this month was first to report on Haddad’s work to boost the amount of housing entitlements on his land in Irvine, as a way to address the shortage of affordable housing options in the area.
“I’m still going to be doing what I did before, with Great Park Neighborhoods getting most of my focus. There are a lot of opportunities to prove our concept there,” Haddad said.
What he won’t be doing is dealing with the minutiae of running a publicly traded company. FivePoint went public in 2017 at $14 a share. Its stock now trades around $8, giving the company a roughly $1.2 billion valuation.
“As the chairman and CEO of a publicly traded company, I didn’t have the luxury to do the things I wanted to do before, but now I have that ability to look toward the bigger picture and still be involved with the company,” he said.
New President, Chairman
There’s not a formal CEO replacement for Haddad, at least yet.
Longtime FivePoint executive Lynn Jochim has been promoted to the president’s role at the company. She will also keep her chief operating officer title.
Regulatory filings indicate she will also serve as interim “principal executive officer” for FivePoint.
Stuart Miller, executive chairman of homebuilding giant and large FivePoint shareholder Lennar Corp. (NYSE: LEN), was named executive chairman of the Irvine company, a new role at FivePoint.
“Shareholders will get the benefit of having the expertise of the three of us,” Haddad said.
FivePoint’s promotion of Jochim, a 2019 Business Journal Women in Business honoree, comes as no surprise.
Jochim was among the first employees at FivePoint, an upstart real estate land development firm that Haddad spun off from Miami-based Lennar, which cemented its name locally with the 2005 buy of the former El Toro Marine base in Irvine.
Jochim has long been a driving force at FivePoint, specifically at what is now Great Park Neighborhoods, where nearly 7,000 home sites have been sold to date.
The Irvine project is currently designed to include 10,500 homesites, as well as 4.9 million square feet of commercial space.
“Lynn and I have worked together for 22 years, we’ve been through a lot together,” Haddad said. “She’s been largely running the company for about two years now, so it’s not that big of a change.”
Miller stepped down as CEO of Lennar last year to become executive chairman of the homebuilder, FivePoint’s largest shareholder with a 39% stake.
Lennar’s valued around $33 billion; its shares have roughly doubled in price the past four years.
Miller will primarily handle public-facing assets of the Irvine firm, work with investors, and drive shareholder value, according to a statement.
“I personally look forward to working with Lynn and the management team, along with Emile, to continue to build the FivePoint franchise as a leader in community lifestyle development, environmental innovation, social equity and civic engagement,” Miller said.
Mixed-Use Expert
With Jochim and Miller tapped to handle day-to-day operations and Wall Street obligations at the firm, Haddad, who owns 3% of FivePoint’s shares, said he hopes to focus on the future vision of the company’s master-planned communities.
“This transition gives me the ability to expand on the different initiatives, such as implementing life science and healthcare components at Great Park Neighborhoods,” Haddad said.
During his tenure as CEO, Haddad guided much of the entitlement and development of the 2,100-acre Great Park Neighborhoods. He also spearheaded construction and funding for much of the amenities built at the adjacent, city-owned Orange County Great Park.
He has made healthcare and wellness a cornerstone to the company’s land, with tenant improvements well underway at City of Hope’s new campus at the FivePoint Gateway office complex (see story).
Bigger Picture
Haddad’s bigger picture ties in with his larger goal of creating model cities of the future, with social equity in mind.
As such, one of Haddad’s first goals in working with government officials includes tackling the housing crisis, and coming up with solutions to increase affordable housing across the state.
Haddad has experience on the government and political front, and not just through his entitlement and land development expertise.
Last year, he was appointed by Gov. Gavin Newsom to the California Business and Jobs Recovery Task Force, where Haddad also served as co-chair of the Capital Markets & Infrastructure subcommittee.
“I will make sure our company stays true to our original vision, which is to create diverse mixed-use communities of the future,” Haddad said.
