Howard Hughes Corp., which launched a strategic review earlier in 2019, unveiled a plan to sell approximately $2 billion of noncore assets and announced the appointment of Paul Layne as its new CEO.
The company will look to sell the assets over the next 12 to 18 months as it aims to refocus on its core master-planned communities. The planned sale is expected to generate net cash proceeds of $600 million and will be used for share repurchases and development opportunities in its core assets. The on-the-block properties are outside the master-planned communities of Ward Village in Hawaii and the Seaport District in New York.
Under its transformation plan, the company will eliminate its holding-company-type organizational structure and move to a decentralized regional management model. It will also consolidate its corporate headquarters in Dallas with its largest regional office in The Woodlands in Houston.
The strategy is estimated to reduce the company's annual overhead expenses by $45 million to $50 million.
Layne most recently was president of the central region, the company noted, adding that CFO David O'Reilly will have an enhanced role. David Weinreb and Grant Herlitz will step down from their roles as CEO and president, respectively. Layne will replace Weinreb on the board.
One-time charges in relation to relocation expenses, retention and severance payments are expected to be about $38 million to $40 million and will be predominantly expensed in the fourth quarter.