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FivePoint Soars 42% on Record-Breaking Q4

Developer FivePoint Holdings on Jan. 23 reported a record-breaking fourth quarter, causing a 42% one day jump in its share price.

The surge in FivePoint stock brought the real estate company’s shares to its highest price since March 2022, a month after Dan Hedigan was named chief executive.

The increase continued on Jan. 27, when shares jumped 8.2%, the same day that Nasdaq dropped more than 3%. Shares of FivePoint have almost tripled in the past two years; the company now sports a $925.2 million market cap (NYSE: FPH).

Irvine-based FivePoint posted “stronger than expected net income” of $121 million, which set a new record and was also the seventh consecutive quarter of net income, Hedigan told investors on a conference call. It more than doubled the reported net income of $58.7 million in the fourth quarter of 2023.

Hedigan said the record-high quarter was the result of FivePoint closing five new home programs with 372 home sites at the Great Park Neighborhoods in Irvine. FivePoint closed those programs with a single builder, at an aggregate purchase price of $309.3 million.
That works out to $9.6 million an acre, or about $800,000 per homesite, far higher than the typical $5 million an acre, or $500,000 a homesite.

Property records indicate that luxury homebuilder Toll Brothers was the buyer. Toll (NYSE:TOL), a frequent partner of FivePoint, a week ago opened a pair of models elsewhere at Great Park Neighborhoods, with starting prices around $3 million.
It’s a stark difference from the commercial side.

In December, City of Hope announced it would pay $88.5 million to buy 52 acres of undeveloped land and a building at the FivePoint Gateway office complex in Irvine from FivePoint. That deal worked out to less than $2 million an acre.

Hedigan told analysts that “even while the commercial office market remains depressed, the implied cap rate for this sale was 5.2%.”

The Founder Returns

Company founder and former CEO Emile Haddad will be playing a bigger role in the company, FivePoint Chief Operating Officer Mike Alvarado told analysts.

“To assist us in sourcing new capital and structuring potential joint ventures, we have extended the engagement of our former CEO, Emile Haddad, under a modified incentive base consulting arrangement,” Alvarado said during the FivePoint Holdings earnings call.
“We expect Emile Haddad to accelerate Five Point’s growth strategy prospects over the next few years.”

Hedigan also said FivePoint Holdings expects its earnings for 2025 to exceed what it reported for 2024.

“We expect to see earnings growth of approximately 10%, bringing us close to $200 million in net income,” Hedigan said during the earnings call.

About 143 houses in Irvine were sold during the last quarter of 2024, a slight dip from the 166 sold in the third quarter, FivePoint said. Hedigan attributed the drop in quarterly sales to “seasonality.”

“We currently have 14 actively selling programs in Great Park Neighborhoods with five additional programs planned to open later this year,” Hedigan said during his company’s earnings call. “With the existing and future plan programs, we’ll be able to continue to offer a wide variety of housing options in Great Park Neighborhoods.”

FivePoint is also going through a bidding process for home builders to begin work on an additional 572 houses in Irvine’s Great Park area.

“Builders are completing due diligence with the expectation that these land sales will close in the fourth quarter of this year,” Hedigan said. “We received strong interest in all nine programs and awarded the sites to six different builders. The offered sales prices are also consistent or higher than our most recent sales.”

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Parimal Rohit
Parimal Rohit
Parimal M. Rohit has nearly two decades of experience in journalism and recently covered Texas real estate for CoStar News and Austin Business Journal. He was also the editor of The Log, covering Southern California's and Northern Mexico's maritime and environmental spaces. Throughout his career, Rohit has also covered the Los Angeles Lakers, Los Angeles Dodgers, Bollywood and California politics. Rohit won 12 reporting awards from the San Diego Press Club, including best environmental reporting and best essay/commentary, and the Fort Worth chapter of the Society of Professional Journalists. His hobbies include photography, podcasting, travel and filmmaking. He is also the recipient of several fellowships, including one through the USC Annenberg Center for Health Journalism and another through the RK Mellon Foundation.
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