Howard Hughes Corporation (HHC +0.02%) is a developer of master-planned communities, and it couldn't have had a worse combination of geographical concentrations when the COVID-19 pandemic hit. The company's flagship community is in the Houston area and is very dependent on the oil industry (remember when oil prices went negative in early 2020?), the New York Seaport was closed for an extended period, and no U.S. economy was hit worse than Las Vegas, where Howard Hughes' Summerlin community is located.
Fortunately, the business has rebounded nicely. In this Fool Live video clip, recorded on Sept. 29, Fool.com contributor Matt Frankel asks CEO David O'Reilly about the impact of the pandemic on the company and how the business is doing now.
Matt Frankel: I wrote at the beginning of the pandemic that it was essentially a perfect storm for your company when you consider where your assets are. You're very levered to the Houston market and the oil prices went negative at one point. New York and Hawaii people weren't going to, no economy was affected more than Las Vegas during the pandemic. So it's like a perfect storm for your assets, what lessons did you learn from that and how has the business rebounded? Has that exceeded your expectations? What's really surprised you?
David O'Reilly: Yeah, it's a great question and I think you summed it up very well. When the pandemic hit, we also viewed it as a potential perfect storm and needed to plan for the worst and hope for the best. What really changed in three or four months really starting in June after the pandemic is we saw a flight out of dense urban environments, a flight from the West Coast, Northeast, Pacific, Northwest, and even the Midwest, into these great amenity-rich communities with easy access to nature, more outdoor living spaces.
Our home sales rebounded incredibly quickly. We saw more and more residents come in, well-educated workforce, and then businesses start to follow. What eventually looked like a perfect storm in a bad way, turned into incredible tailwinds for our business. I think one of the more tangible, lasting changes of this pandemic is one that we're experiencing everyday across our communities. Matt, I'm sure I'm older than you are, but I think when I grew up, I define success as working in a corner office in a big city, in a dense urban environment, and commuting out, and it was really all about the job.
Coming out of the pandemic, I think a lot of folks are rightfully so redefining success. Not just that corner office in a dense urban environment, but they can work in a small city like Summerlin in Las Vegas and The Woodlands, enjoy that professional success, but also enjoy that personal success of a short commute home and spending more time with their family. Immediate access to great trails, walking destinations, amenities that allow them to have so much more balance in their life and define success as achieving that balance.
Our communities fits squarely right in the middle of the strike zone of that and we've been able to take advantage of that, hitting record home sales in a couple of our communities and accelerating our development, as you mentioned, with 2 million square feet of new projects coming out of the ground earlier this year.
