Good morning, and welcome to The Howard Hughes Corporation Q4 2021 Earnings Conference Call. All participants will be in listen-only mode. Should you need assistance, please signal a conference specialist by pressing the star key followed by zero. After today's presentation, there will be an opportunity to ask questions. To ask a question, you may press star then one on your telephone keypad. To withdraw your question, please press star then two. Please note, this event is being recorded. I would now like to turn the conference over to John Saxon. Please go ahead.
Good morning, and welcome to The Howard Hughes Corporation's Q4 2021 earnings call. With me today are David O'Reilly, Chief Executive Officer, Jay Cross, President, Carlos Olea, Chief Financial Officer, David Striph, President, Asset Management and Operations, and Peter Riley, General Counsel. Before we begin, I would like to direct you to our website, www.howardhughes.com, where you can download both our Q4 earnings press release and our supplemental package. The earnings release and supplemental package include reconciliations of non-GAAP financial measures that will be discussed today in relation to their most directly comparable GAAP financial measures. Certain statements made today that are not in the present tense or that discuss the company's expectations are forward-looking statements within the meaning of the federal securities laws.
Although the company believes that the expectations reflected in such forward-looking statements are based upon reasonable assumptions, we can give no assurance that these expectations will be achieved. Please see the forward-looking statement disclaimer in our Q4 earnings press release and the risk factors in our SEC filings for factors that could cause material differences between forward-looking statements and actual results. We are not under any duty to update forward-looking statements unless required by law. I will now turn the call over to our CEO, David O'Reilly.
Thank you, John, and good morning, everyone. Welcome to our Q4 2021 earnings call. We're glad you could join us today. Before we dive into the results, there are a few things I'd like to mention. First, today we welcome our new CFO, Carlos Olea, to his first HHC earnings call. Carlos has been with Howard Hughes since 2017 and was appointed to the CFO position in January. He has been an integral part of our senior leadership team over the past few years, most recently having served as our Chief Accounting Officer. He has an extensive understanding of our business, and we are very fortunate to have Carlos's talent and expertise on our executive team. Welcome, Carlos, and we look forward to hearing from you later on the call. Second, we're always striving to make it easier for you, our investors, to evaluate our performance.
With this in mind, we are making some upgrades to our quarterly disclosures that we hope you will find helpful. In our Q4 earnings release, we have introduced two notable additions. The first is a link to our HHC quarterly spotlight video. Every quarter, we will be releasing a new video that takes a look at some of the ongoing development activity taking place in our communities. This will help provide a visual sense of the progress taking place across the country in our various development projects, an aspect that cannot easily be presented on an earnings call. We're also now including in the earnings release our full-year guidance by segment for 2022. We feel that disclosing these metrics within our release will allow you to readily view our expectations.
Lastly, in our supplemental package, we've added a new page to include the Same-Store NOI of our operating assets to help provide additional clarity to the performance of our properties. We hope that all of these new additions to our disclosures will add transparency and be helpful in providing the clearest possible view into the value creation opportunities at Howard Hughes. All right, let's move on to 2021 results. I will begin with a recap of the incredible year we had at HHC and cover the highlights of our master plan communities in the Seaport. I'll then hand the call over to our Head of Operations, Dave Striph, who will cover the results of our operating asset segment. Our President, Jay Cross, will provide updates on our development projects in Ward Village.
Carlos will conclude the call with a review of our financial results before we open the lines for Q&A. I'm pleased to report that 2021 was the strongest year in Howard Hughes's 11-year history. Our performance during the year was nothing short of outstanding, with record-breaking results across virtually every segment of our business. Even after facing numerous headwinds that impacted several industries throughout the year, our various segments prevailed and either met or exceeded all guidance expectations for the full year. Land sales within our MPCs generated record high earnings that rose 51% year-over-year. Our operating assets notched their highest NOI figure to date with a 19% increase from 2020. Ward Village saw its highest condo sales volume in the community's history during 2021.
At the Seaport, Pier 17 foot traffic increased 68% compared to the pre-pandemic level seen in 2019. Even more impressive is that all of these results were achieved with 33% less overhead compared to 2019, representing $40 million in G&A cost reductions. Over the last two years, the communities in our portfolio have seen an influx of people fleeing high-density cities as they migrate to lower-cost areas offering a better quality of life.
This migration pattern has persisted for some time, and the pandemic has only helped accelerate the trend further, which was a significant contributing factor to the record-high results we produced this past year. Strong operating results generated significant cash flow and a balance sheet equipped with nearly $850 million of cash that we were able to deploy into our business, a new acquisition, and our shares over the last year. We started 2021 with a launch of over 2 million sq ft of new developments, including office, multi-family, and for sale condominium projects. Throughout the year, we continued to see strong signs of underlying demand in our communities and announced additional developments, including three medical office buildings, a single-family for rent community, and another condo tower, which we will begin construction in 2022.
In October, we acquired Douglas Ranch in Phoenix West Valley for $600 million. This new shovel-ready MPC spans 37,000 acres in one of the nation's fastest-growing regions and becomes the largest MPC in our portfolio. We were able to recycle the capital generated from our non-core asset sales into this fully entitled MPC that will develop from the ground up over the next several decades. In Trillium, the first 3,000-acre village of Douglas Ranch, we have been working at a breakneck pace to install the infrastructure needed to contract the first 1,000 lots to home builders in 2022. In November, we announced our $250 million share buyback program. During the Q4 , we purchased over one million shares for $97 million.
We continued buying back more shares after the new year and completed our full $250 million buyback program in early February. In total, we repurchased 2.6 million shares, or nearly 5% of HHC's total shares outstanding, at an average price of $96.05 per share, a sizable discount to our intrinsic value. Now let's turn to the results at our master-planned communities. Our MPC segment had a tremendous year, generating $317 million of earnings before taxes, the highest in the history of the company. As more and more residents flock to our communities, home builders race to replenish their land holdings. In 2021, these builders purchased a staggering 565 acres of residential land, a 50% increase over 2020.
During a period when most experts thought home sales would taper, we saw an acceleration with 2,761 new homes sold in our communities. 37 homes ahead of 2020, which was a record year at the time. Summerlin had a standout year and made up 78% of the total MPC earnings generated in 2021. The most notable performance driver was the sale of a massive 216-acre super pad that closed in December for $135 million. It's important to keep in mind that large super pad sales of this size only occur once every few years. This 216-acre super pad was unique in that we were able to deliver the parcel fully undeveloped, allowing us to bypass the cost and added time of installing the infrastructure ourselves.
Because we did not incur additional costs on this bulk sale, the pricing was altered accordingly, causing Summerlin's residential price per acre in 2021 to decrease by 9% year-over-year. Had we taken the typical approach of putting the infrastructure in ourselves, we would have achieved a higher price per acre, but it would have taken an additional two years to deliver with net proceeds almost identical to the undeveloped super pad sale. Robust results in Summerlin were also fueled by the Summit, our exclusive gated community developed in partnership with Discovery Land. In 2021, we saw an accelerated pace of the closings of custom lots and condos, driving $59 million of earnings to HHC, an increase of over 3x what was generated in 2020. In Houston, we saw continued strength out of Bridgeland and The Woodlands Hills.
Despite facing a challenging year with inclement weather, slower permitting, and supply constraints, Bridgeland saw an uptick in activity during the Q4 , driving EBT 4% higher year-over-year. As this community matures, we continue to see steady increases in its price per acre. In 2021, the price of Bridgeland's residential land increased nearly 7% over the previous year to $468,000 per acre. In The Woodlands Hills, EBT for the full year rose 66% compared to 2020 as more and more residents migrated to this community. New home sales increased rapidly by 50% versus the prior year, signifying the strength of demand in this MPC. This robust pace has corresponded to higher prices as we saw the residential price per acre rise 9% over 2020 to $337,000 per acre.
Despite all this heightened activity, there still remains a significant housing imbalance between supply and demand. On the supply side, we see a severe lack of lot inventory on the ground that has reached all-time lows in Houston and Las Vegas. Demand side of the equation, however, remains strong, and we don't expect to see this slowing anytime soon. At the Seaport, we saw a tremendous increase in activity. In 2021, we had 2.6 million visitors at Pier 17 versus 1.5 million in 2019 prior to the pandemic. This increase is a testament to the iconic destination and the appeal of what we are creating through our revitalization efforts at this historic neighborhood. The opening of two new restaurants in 2021, as well as the reopening of the summer concert series and the attraction of the greens on the Pier 17 rooftop.
The Seaport has generated a lot of excitement and attention throughout the city. In 2021, the Seaport reported a 4% greater NOI loss from 2020, primarily related to our landlord operations due to the lingering impacts from the pandemic. Our restaurants, events, and sponsorships, however, saw a meaningful increase in activity, driving Seaport revenue higher by 130% year-over-year, as this one of a kind location continues to draw crowds. The increase in our top line is impressive, especially when considering the constrained labor market and adverse effects of the Delta and Omicron variants that impacted New York City.
The Seaport closed out 2021 with two huge milestones on the development front, including the completion of the core and shell of the Tin Building and the final approval of our ULURP at 250 Water Street, both of which Jay will speak to in more detail. With that good news, I'm gonna turn the call over to David Striph.
Thank you, David. In 2021, our operating assets delivered their highest NOI on record, bringing in $227 million. We ended the year with all stabilized asset types leased above 90%, largely ahead of pre-pandemic levels. On a same-store basis, NOI grew 14% over 2020, primarily driven by continuous improvements in retail, accelerated leasing at our latest multifamily developments, and the return of Minor League Baseball at our ballpark in downtown Summerlin. As you can see, we have published Same-Store NOI for the first time. However, we do not believe this is the best way to measure our progress. Unlike most real estate companies, we have the enviable ability to continually develop new product as demand dictates at outsized risk-adjusted returns in our master-planned communities.
When these new projects go through their initial lease up, we do expect a slightly negative impact on our existing supply, which obviously affects Same-Store NOI. The long-term value we are creating by developing these new assets far exceeds any short-term impact on Same-Store NOI. When you see a decline in same-store results, it likely means that we are creating additional long-term value for our shareholders. Our retail assets have made a substantial recovery with NOI rising 44% year-over-year to $58 million in 2021. The increase in NOI was driven by our tenant mix, which strengthened coming out of the pandemic, in addition to the consistent improvement in retail collections, which rose to 89% during the Q4 . The majority of this recovery has occurred in Downtown Summerlin and Ward Village, which together make up two-thirds of our retail footprint.
We are hopeful that the impacts of COVID-19 will continue to dissipate, which should further support improved travel and tourism in areas like Ward Village on the island of Oahu and contribute to additional retail growth in 2022. Turning to multifamily, these assets produced NOI of $33 million in 2021, representing a 75% increase compared to 2020. While a portion of these results was driven by achieving higher rents at our existing properties, the majority of the increase was attributed to the lease up of new product. To put this in perspective, in 2020, we had four newly constructed multifamily developments in The Woodlands, Bridgeland, and Downtown Columbia that were in the beginning stages of leasing up. These assets generated a combined $398,000 of NOI in 2020.
Flash forward to 2021, and these assets were leased up and fully stabilized just a year later, generating $13 million of NOI during the full year. These types of results clearly demonstrate the level of demand in our communities. With over 1,100 additional units actively under construction, we can expect to continue to see our multifamily NOI expand. In Downtown Summerlin, Las Vegas Ballpark generated NOI of $6 million in 2021, well above the $3.6 million loss reported in 2020. During the Q2 and Q3 of 2021, our Minor League Baseball team, the Las Vegas Aviators, hosted a full season of games at the stadium, most of which were at full capacity.
This drove NOI significantly higher year-over-year as there was no Minor League Baseball season in 2020 due to COVID, causing the ballpark to report a loss for that year. Our office assets produced NOI of $110 million in 2021, a 4% decline from 2020. This decline was primarily related to one of our office towers in The Woodlands, 9950 Woodloch Forest, which had a short-term lease back agreement in place with Occidental Petroleum for five floors of temporary space during the H1 of 2020. Excluding the reduction due to the ending of this short-term lease, our office NOI was largely flat year-over-year. In the back half of 2021, the office environment began showing signs of strength as more and more companies had employees returning to the office.
In the Q4 alone, we signed full floor leases with two companies in the energy tech and crypto space in The Woodlands. In downtown Columbia, a leading investment bank recently signed a lease to relocate its headquarters to one of our office buildings. In Summerlin, we're developing a new spec office building with pre-leasing activity already underway. We view these trends as strong catalysts for additional office leasing in 2022, which we expect to intensify as more residents and businesses migrate to our communities. With that, I will now turn the call over to our President, Jay Cross.
Thanks Dave, and good morning everyone. 2021 was also an excellent year from a development standpoint, with the launch of several new projects across various product types within our communities. Because we only build to meet demand, and the fact that we have over 2 million sq ft of new development underway with additional projects coming down the pipeline, this speaks to the immense growth we are experiencing in our regions. We currently have three multi-family projects under construction, totaling 1,100 units in downtown Columbia, Summerlin, and Bridgeland. Along with a 267,000 sq ft office building in Summerlin that is already 25% pre-leased. Despite supply disruptions and escalated material costs, we remain on time and on budget, and expect to deliver these projects between the middle of 2022 and early 2023.
Also in 2021, we announced the introduction of a new product to HHC's portfolio, medical office buildings. We recently commenced construction on two medical office buildings in The Woodlands, totaling 53,000 sq ft, which we expect to be delivered in early 2023. These projects bring additional health and wellness amenities to the community and reinforce healthcare as the number one employment sector in The Woodlands. Building on the success of the Merriweather District, we have turned our attention to the Lakefront District in downtown Columbia, and last month announced a $325 million development opportunity consisting of medical office, residential, and retail offerings. For the first phase of development, we are launching a state-of-the-art medical office building encompassing 86,000 sq ft, which is 20% pre-leased and with strong interest for the balance.
This project will commence construction during the Q1 of 2022. It kickstarts our major development pipeline in the Lakefront District and establishes the area as a prominent healthcare destination. As part of the Lakefront rejuvenation, we will also bring 675 multi-family units to market to capture the growing residential demand in Downtown Columbia. Lakefront North represents over 600,000 sq ft of residential development divided among three buildings. We expect construction for these units to begin within the next 12 months. All of the projects that we either have underway or will be commencing soon represent 3.4 million sq ft of development, and this is just to keep up with the pace of demand in our communities.
At the Seaport, we have completed construction on the core and shell of the Tin Building, our 54,000 sq ft marketplace curated in partnership with Jean-Georges. The Tin Building, spread over three stories, will offer 21 different restaurant experiences in addition to an e-commerce platform for mobile ordering and delivery. We continue to make steady progress and remain on track to celebrate its grand opening this spring. As David mentioned, in December, we obtained the final approval from the City of New York for our 250 Water Street development project after navigating through the rigorous ULURP process. This approval allows for the transformation of an underutilized parking lot into a mixed-use development. Spanning 547,000 zoning sq ft, the project will include affordable and market rate apartments, office space, and community oriented spaces.
In 2022, we expect to begin a comprehensive remediation of the site and commence construction of foundations. In December, we also received approval for a 48-year ground lease extension at the Seaport, moving its expiration date from 2072 to 2120, which is a significant long-term value enhancement. Shifting over to Ward Village, 2021 saw the highest volume of condo sales in the community's history with $869 million in sales for units either closed or under contract. During theQ4, we completed construction on the fifth tower, ‘A‘ali‘i, and closed on a remarkable 663 units, generating $453 million in net revenue. Closing on this many units in less than 3 months is a logistical feat and speaks volumes about our talented team at Ward Village.
We are also making great headway in our two towers under construction, Kōʻula and Victoria Place. Both remain on time and on budget. Kōʻula ended the year 89% pre-sold, and we are on track to deliver this tower during the Q3 of 2022. Victoria Place is now 99% pre-sold with only three units remaining for a tower that will not be delivered until 2024 at truly incredible sales pace. Pre-sales at The Park Ward Village, the community's 8th mixed-use tower, launched in the middle of 2021, and after just six months of sales activity, ended the year with 84% of its units under contract. We have yet to even put a shovel in the ground for this tower, and to contract 459 units in such a short amount of time is unprecedented.
The sales pace has been so robust that The Park now holds the record for the fastest selling tower in the history of Ward Village, a title previously held by Victoria Place. Towards the end of 2021, we announced the plans for launch of Ulana Ward Village, the company's ninth condo project. This tower will consist of 696 units fully dedicated to workforce housing and satisfies our remaining reserved housing requirements in the community. Between our towers under construction and our latest tower pre-sales, we contracted 603 units in 2021. This represents significant future revenue that is secured by non-refundable deposits and will have a meaningful contribution to HHC's bottom line upon the completion of these towers, and will fuel the acceleration of new developments to come within our pipeline.
I would now like to hand the call over to our CFO, Carlos Olea, who will review our full year financial results.
Thank you, Jay. Good morning, everyone, and thank you for the kind welcome. In 2021, our business was able to navigate and adapt to the changing market dynamics that surfaced throughout the year, and we delivered tremendous results across the board. In summary, our MPCs produced $317 million of EBT in 2021, a 51% increase compared to 2020. Generated $129 million of EBT during the Q4 of 2021. A 49% increase compared to the prior year period. Our operating assets recorded $227 million of NOI during the year, representing a 19% increase compared to 2020, and produced $57 million of NOI during the Q4 of 2021. A 22% increase compared to the prior year period.
Ward Village, we generated annual condo profit of $121 million upon the completion of ‘A‘ali‘i, a substantial increase in profit of the prior year, as there were no condo closings in 2020. Finally, at the Seaport, we recorded an $18 million loss in NOI during the full year, resulting in a $770,000 decline over 2020, and a $5.8 million loss in NOI during the Q4 of 2021. A $2.6 million decline compared to the prior year period. Now let's take a look at how our actual results compare to guidance expectations, and what we anticipate delivering in 2022. As David mentioned in his opening remarks, for the first time, we have included full year 2022 guidance in our Q4 earnings release.
In doing so, we have slightly altered the layout to arrive at similar metrics provided in 2021. Over the last year, we raised our MPC earnings target three times, as land sales continued to tick higher. MPC EBT of $317 million came in well above our target of $275 million-$285 million. 2021 was certainly an outlier year for land sales, particularly due to the 216-acre super pad sale in Summerlin that closed in December. Mentioned earlier, a super pad sale of this size is not something that occurs every year. With that in mind, we expect MPC EBT to decline 25%-30% in 2022.
Even with this projected decline, the implied EBT range is still noticeably higher compared to our run rate over the last few years, which has been closer to $200 million. Our operating assets also exceeded guidance expectations with NOI of $227 million in 2021, compared to our guidance range of $200 million-$210 million. In 2022, we project NOI to decline between -2% and 0% year-over-year. We expect the leasing velocity and recovery in certain asset types to continue. Certain items reflected in our 2021 results will not be recognized in 2022. For example, during the Q3 of 2021, we sold our three hotels in The Woodlands, which produced $5 million of NOI during the year, and will obviously not be present in 2022.
In addition, we received $3.7 million in COVID-related deferral payments from tenants, and $1.7 million in lease termination fees in 2021 that we view as non-recurring items. In total, we received $10.4 million from items that will not be represented in our 2022 NOI results, or at least not represented to the same magnitude. Fueled by the closing of ‘A‘ali‘i during the Q4 , we delivered condo profit of $121 million in 2021, achieving the top end of our guidance range of $115 million-$125 million. In 2022, we expect to deliver condo sales of $650 million-$700 million with a gross margin between 26.5% and 27.5%.
The implied condo profit projected in 2022 reflects a 51% increase at the midpoint compared to 2021. The increase is primarily attributed to the closing of our sixth tower, Kōʻula, which is set to complete construction during the Q3 , as well as additional closings at ‘A‘ali‘i, which ended the year 90% sold. We reported full year G&A of $82 million, which came in at the lower end of our $80-$85 million guidance range. This represents significant cost reductions compared to our pre-COVID run rate of $122 million as we continue to streamline our business and follow the strategic plan we outlined in 2019. In 2022, we expect cash G&A to range between $75 million-$80 million. For comparison purposes, cash G&A in 2021 was $72 million.
I would now like to provide a recap of non-core asset disposals in 2021. During the year, we sold five non-core assets, generating $196 million in net proceeds after debt repayment. Since announcing our non-core asset strategy back in October of 2019, we have disposed of 13 non-core assets with net proceeds after debt repayment of $401 million. We are now two-thirds of the way to our goal of $600 million in net proceeds, which we expect to achieve upon the eventual sales of 110 North Wacker in Chicago and The Outlet Collection at Riverwalk in New Orleans. Turning to our balance sheet. We ended the year with $843 million of cash, a sizable stockpile that leaves us well positioned to deploy capital into additional opportunities in 2022.
On the financing side, we were able to effectively take advantage of the capital markets given the low interest rate environment, and we closed on $2.7 billion in financings to further strengthen our balance sheet. This activity was made up of $2.1 billion in permanent financing and $628 million of construction financings to support development spending at our latest projects under construction. Please refer to our 10-K and supplemental package for additional details on specific financing activity in 2021. With that, I would not like to turn the call back over to David for closing remarks.
Thank you, Carlos. Before we open up the lines for Q&A, I wanna highlight just a few key points. First, the record results delivered in 2021 prove just how uniquely positioned we are to generate outsized returns through various market cycles. At a time when inflation, interest rates, and supply pressures have disrupted some businesses, we have experienced an acceleration and are positioned for additional growth thanks to our diversified self-funding business model. Second, our strategy remains clear. How you live, how we build. The development activity taking place in our communities is a testament to the level of demand we are actively trying to capture. We don't expect that trend to abate anytime soon.
Third, the desirability of our communities continues to become more and more apparent as individuals seek to find a better quality of life where they can live, work, and play all in one cohesive setting. In 2021, The Woodlands was ranked as the best place to live in America. Summerlin was ranked as the third top-selling MPC in the country. Columbia was rated the best city to find a new high-paying job in the U.S. Finally, 2021 was a perfect example of how our capital allocation strategy drives meaningful value creation. We used the free cash flow from our NOI, MPC EBT, as well as condo and non-core asset sales to reinvest into our business by announcing 3.4 million sq ft of new developments at outsized risk-adjusted returns.
Investing $600 million to acquire Douglas Ranch and repurchasing $250 million of our own shares, all of which will increase our net asset value on a per-share basis. I'd now like to begin the Q&A portion of the call. We'll start by answering the first few questions that have been generated by Say Technologies and will be read by John Saxon. John, can you please read the first question?
Yeah, sure, David. Our first question asks, can you comment on the state of the rental market in Summerlin? External reports show that broader Las Vegas rent is up double digits. Is there potential to accelerate the build-out of Downtown Summerlin to add more multi-family supply? Dave, do you wanna take a crack at that question?
Sure. Great question. We have had tremendous rent growth in Summerlin, with 2021 asking rents increasing about 14.5% over 2020 at our two existing properties, Constellation and Tanager. Even with rents that are among the highest in the valley, we have nearly 400 units in Summerlin at the end of the year, essentially fully leased. This is clearly a sign of robust underlying demand, which is why we started our third project in Summerlin in 2021, Tanager Echo. Echo brings an additional 294 units to the market. We expect delivery in the Q1 of 2023.
Thanks, Dave. Our next question. Has HHC considered funding or improving schools into elite college feeders as a way to make MPCs more desirable to live in and increase land values? Jay, would you like to answer that question?
Sure. Obviously, we consider schools and houses of worship as very critical to MPC success. In the case of Summerlin and The Woodlands, the K-12 education systems that we've developed over time are among the best in their metropolitan regions. In the case of The Woodlands, which is our most mature community, we have over 30 schools across the 28,000 acres. In Bridgeland, we recently sold land to a top private school who are relocating their campus to Bridgeland and house up to 1,000 K-12 students. This is in addition to Bridgeland High, which has already sent a football team to the state championship, and an elementary school which is on its way. Finally, we also would like to pursue, in addition to lower school education, community colleges and universities.
A good example of that is in Summerlin, where we recently sold a 17-acre commercial parcel to Roseman University, who are building a medical school for over 800 students and employees. We clearly consider this to be a priority in all of our MPCs.
Thank you, Jay. For our next question, will more stores be built around the Woodlands Hills in the near future? Jay, would you also like to answer that?
Sure. The Woodlands Hills is our youngest MPC, which only began selling homes a few years ago. Generally speaking, the retail follows form. In the case of The Woodlands Hills, we currently have 2,000 residents, and so we will expect to soon begin to build some convenience retail. In the case of somewhere like Bridgeland where we have 8,000 homes, we've now progressed from strip retail into supermarket retail. As we build up more homes, we'll eventually move into high street and town center retail. The retail has to follow the growth of the homes.
Thank you, Jay. For our next question, can you summarize the current non-condo revenue, such as retail in Ward Village, and outline how, as Ward Village gets denser with more towers, the company can generate recurring profits rather than the one-time profits that condo sales generate? Carlos, would you like to answer that?
Sure. Thank you, John. Outside of condominium sales, income at Ward Village is primarily derived from a retail portfolio that has a stabilized NOI target of $26 million. This portfolio is made up of 1 million sq ft, and it consists of existing retail that will be eventually redeveloped and newly constructed retail. When we deliver a new tower, the ground floor typically includes premier retail that commands higher rents and drives up NOI.
Out of our 1 million sq ft retail in Ward Village, we still have 550,000 sq ft pending and slated for redevelopment.
Thank you, Carlos. We have another question on Ward Village. How does the company price the Ward Village condos? More amazing pre-sales, which is great, but doesn't this indicate robust demand and perhaps an opportunity to price these condos higher? David, would you like to answer that question?
Yeah, sure, John. It's a great question, and I'm always asking the team the same question because as much as we love selling fast, and hitting our margin targets, we do wanna make sure that we're pricing as close to perfection as we can. We determine pricing not just based on where the tower is located, first row, second row, third row, with the front row closest to the ocean getting the highest price premium. We're looking at all the recent sales of our existing units and other units across the island. When we first launch a tower, we are a little bit more conscious because we wanna generate those pre-sales that beget deposits and construction financing that allow us to move forward on these projects with what we think is a nominal equity investment.
The sales pace at Victoria Place and The Park, it's been nothing short of tremendous. It has been tremendous despite multiple price increases across both towers throughout their sale process. As we see certain stacks and certain units become more popular, we're driving prices higher there, almost reviewing them on a daily basis. We haven't hit that point where we're really slowing down sales because it's not from a lack of price increases.
Thank you, David. Now I'll ask our last pre-submitted question through Say. How and when does the company decide to sell super pads versus smaller parcels? When selling smaller parcels, how many acres are typical? Are they sold to a single builder? Are they auctioned? Please help us understand how the land sale process works. David, would you like to answer that?
Yeah, John. I think this question is probably driven around our most recent super pad sale of 216 acres in Summerlin and what drives the decision-making there. I'll address that first, and then I'll take a step back and talk a little bit about the process that we go through when we sell land in Summerlin. You know, that super pad sale, as I said in my prepared remark, we were able to deliver that to the home builders, and it was two builders that bought that pad raw. We were able to get that sale done much sooner than we would have had we invested in that infrastructure to deliver a more finished product to the builder.
From a net proceeds perspective, we feel like we did better than we would have had we invested the capital and waited 1.5 , 2 years to sell it, and absolutely from a net present value perspective. In general, with all of our super pads, which can range anywhere from 20-25 acres to, in this case, 216 acres, we're running an auction process. We're having multiple bidders, multiple home builders bid on those parcels, on those super pads, and we're looking to maximize price per acre, our price participation on the back end, maximize deposits, and the shortest timeframe to close. There's a lot of factors that go into it, but we're always trying to drive the highest net present value in terms of that cash that comes to the company as part of that bid process.
Thank you, David. Okay, operator, we can open up the lines for those with questions on the call.
We will now begin the question-and-answer session. To ask a question, you may press star then one on your telephone keypad. If you are using a speakerphone, please pick up your handset before pressing the keys. To withdraw your question, please press star then two. Our first question is from Anthony Paolone with JP Morgan. Please go ahead.
Great. Thanks. Good morning. First question is, I was wondering if we could spend a minute on capital allocation for 2022. Can you start by giving us a sense as to what do you plan on development starts, and then also, perhaps spending in the year, and then on the flip side, non-core sales and room for buybacks?
It's a great question, Anthony, and I wish I had the perfect prescription to give you the exact dollar amount for 2022. So much of our new developments will be driven by the market demand in each one of our communities and will be driven by the amount of free cash flow that we generate. I would expect that 2022 will be similar to 2021, and that you'll see us allocate a meaningful amount of capital into new developments, some of the multifamily that Jay referenced earlier, specifically in downtown Columbia, Tanager Echo in Summerlin, as well as here in The Woodlands. I think that if we're able to generate incremental proceeds and hit our guidance targets and potentially generate some capital from non-core asset sales, we could also be back in the market with another buyback as well.
You know, as we've talked about in the past, we think one of the greatest benefits of Howard Hughes is that we're able to self-fund this development, self-fund our buybacks, and self-fund what we do by generating that net proceeds from NOI, MPC, EBT, profits from condo sale, and profit from non-core asset sales. Depending on the magnitude of those non-core asset sales and the demand for new developments and where we see the highest risk-adjusted returns that will drive the most accretion to net asset value per share, that's where we'll continue to allocate capital.
Sitting here today, not knowing where our share price will be throughout the year and not knowing what demand will be in the back half of the year for new developments, it's tough to say that we have specific targets in terms of what we would allocate in terms of those capital allocation buckets.
Okay. Can you give any update on North Wacker or any other non-core sales that you think are a little bit further along that we could expect?
You know, 110 North Wacker and Riverwalk in New Orleans are the two non-core assets that are at the top of the list in terms of potential dispositions in 2022. As we get to a point where, you know, we have a transaction that we can announce, we'd be happy to communicate that. As of today, there's no further update other than what we've said, you know, previously.
Okay. Then the other question I had was just at 9950 Woodloch Forest. I think it shows in the supp, an expectation to stabilize in 2022. I guess, you know, how realistic is that? And if it is, and you get that leased this year, when do you think the actual NOI is captured? Because I think that's probably one of the biggest variances between, like, in place and expected stabilized NOI through the portfolio.
Absolutely. That's a building that we bought with a very short-term lease from Occidental for only six months of the year when we bought it, and really inherited the building entirely empty. We've gotten it to where it is today on a four-by-four basis in the face of a pandemic and a very challenging leasing market for office product in Houston. I'm still optimistic that we can get the balance of the building leased and get to a stabilized occupancy by the end of the year. I do think that the stabilized NOI will take a little bit beyond that as there is free rent in the market, and we don't see that going away anytime soon. That NOI probably won't be in until late 2023, early 2024, assuming the leasing velocity continues the way we've seen over the past six months.
Okay, great. Thank you.
The next question is from Jonathan Petersen with Jefferies. Please go ahead.
Great. Thanks. Just a couple questions for me. On your guidance for sales at Ward Village, I think the margin is a little bit lower than what we've seen in recent years. I know, I think you said you're doing some workforce housing there. I mean, is that kind of the reason why? I kind of think in the current housing environment, maybe margins would be higher.
We're driving pricing higher, which, you know, given the demand that we've seen, you would expect margins to potentially grow. We're also dealing with some cost inflation and some increased construction costs and labor costs that are impacting the cost side of the equation. With that said, the balance of the units that we're expecting to record in 2022 are both Kahala, which is entirely market-rate, and ‘A‘ali‘i, which has a mix of both market-rate and reserved housing in the building. That combination of both market and reserved housing has had a modest impact on those margins, which has taken it a tick below that 30% that we like to achieve on all of our towers.
Okay. All right. I guess sticking with development margins and on the multifamily side, I think we noticed at Starling at Bridgeland and at Tanager Echo, the costs looked like they were up. I'm sure in line with the cost pressures you're talking about. But I think we saw the expected yield at Starling at Bridgeland go down to 7% from 8%. I guess with where apartment rents are moving, I kind of would have thought those would offset each other. Maybe I don't know if you can talk a little more about what we're seeing there.
Yeah. I would say that we're always updating our costs in terms of how we're underwriting things, in terms of what we're seeing in the market. I'm not necessarily changing our underwritten rents in the projection to stabilize yield. I think we have a great opportunity to outperform that 7% with higher rents. You know, I think our job here is to underpromise and overdeliver, and that's what we're gonna continue to try to do.
Okay. Really appreciate the Same-Store NOI numbers. Of course, I'm gonna ask you if you can put it in your guidance. It's never enough. You know, you talked about the total portfolio growing at 0%-2%. I realize you have some of the kind of the COVID back rents you got in 2021 falling off. I don't know if you could kind of level set it with the kind of the non-core moving pieces. I mean, what is kind of a rough Same-Store NOI, you know, portfolio growth number as we look into 2022?
Yeah. There was a couple of factors that impacted the guidance that Carlos mentioned in his prepared remarks. The first is the sale of the hotel portfolio, and that generated $5 million in NOI this past year that won't, obviously, come in in 2022, as well as the $4.2 million of COVID one-time rent catch-ups from last year and lease termination fees of just over $1 million. It's just north of $10 million in terms of, you know, that non-recurring amount that won't come in. From a makeup of what's driving it, you know, obviously retail will be negatively impacted by those one-time hits. Hotels have terrible same-store and will be falling off the chart altogether, of course.
Office, we expect to be roughly flat, which means that growth that's gonna offset that negative $10 million hit will be generated almost entirely by our multifamily portfolio.
Got it. Okay. That makes sense. All right. Thank you. Appreciate it.
Of course.
Again, if you have a question, please press star then one. The next question comes from Hamed Khorsand with BWS Financial. Please go ahead.
Morning. Thanks for taking the question. First question on the summit, could you provide an update on what is left in the partnership agreement in terms of acreage or timeline?
You know, we still have a little bit of product left to sell there. There's a couple of lots. There's some built product in terms of spec homes and condos that have not sold yet. We're trying to think of if there are creative ways that we may be able to potentially expand that partnership and increase the size of the project. You know, it's really difficult to prognosticate at that high end of a level in terms of how many sales we'll generate and what that will lead to in terms of earnings. If you go back in terms of the structure of the partnership agreement, we're into the profit split.
You know, the waterfall worked where we received our capital preferred return, our partner received their capital and a multiple on that capital, and then we've got into where we split all that incremental dollars of profit. We're very much into the split range right now, so everything that we're able to execute on over the coming year will accrue to the benefit of our shareholders on a 50/50 split. Again, it's very difficult to project when you're gonna sell that next $8 million lot or $10 million condo. Those are just less programmatic than a typical production home.
Is that a relationship that you've explored to pursue in the other MPCs, whether it's The Woodlands Hills or Bridgeland?
You know, look, we have a great relationship with Discovery Land, and we couldn't be more pleased with their execution in Summerlin at The Summit. If there are ways to continue to expand it into other locations, we will absolutely try to exploit that. I don't know that we see the buyer makeup or the demographics that would support a Discovery-like community in Bridgeland or The Woodlands Hills. It's something that we're gonna continue to push and see if there are ways that we can you know, recreate what has been an incredible partnership at The Summit.
Thanks for that. One last question. Just looking at the supplemental on the Ward Village condominiums. In Q3, you had for ‘A‘ali‘i $411 million in total development costs, and then in Q4, it's now at $395 million. But you're still projecting lower gross margins. Could you just provide some color into why the total development cost went down and how that factors into a lower gross margin?
Well, I would say that the gross margins for ‘A‘ali‘i are remaining consistent with what we've expected all along. I don't know that anything's changed there. Of course, we have meaningful contingencies with all of our large-scale developments, and if we're able to not spend those contingencies and realize cost savings, we'll absolutely do that. Just because we have a contingency, we're not intent on spending it. So, you know, as we're able to hopefully deliver without using those contingencies, that cost savings will materialize in what you see in the supplemental. With the completion of that project last year, obviously, you know, if we haven't spent it yet, chances are we won't spend it other than some reserves for whatever small defects could arise over the course of the next year or so.
I think, you know, hopefully we're able to realize other cost savings on other towers in the future, but those are very unpredictable to think about. ‘A‘ali‘i had a mix of both market rate and workforce housing within the tower. The overall profit margin of that building was slightly lower than what we'd see in a building that's 100% market rate, like a Kōʻula, Victoria Place, or The Park Ward Village.
Thank you.
Thank you.
The next question is from Connor Mitchell with Piper Sandler. Please go ahead.
Great. Thank you. Could you guys please speak to the housing and rental markets in Hawaii? It just seems like there was and may still be a housing sales boom similar to the other markets mentioned. Clearly the apartment sales are not slowing. Are people moving between the two? How do you think the residential markets are moving forward.
It's an interesting question, Connor, and I appreciate you asking. I would say that what we've seen in Hawaii has not changed over the past several years, and that there is a meaningful shortfall of housing units on the island just to meet the local demand, just to meet the population growth. Part of what we're able to do by building this master planned community vertical is to add to that housing stock to meet that inherent demand. Over the course of time, we've seen just over 50% of our buyers are local to Hawaii. I think that speaks volumes to how this product is meeting that local demand and helping to address that housing shortfall that exists in Hawaii.
Great. Thank you. Just going back to the capital allocation as well, how much are you guys thinking about any future buybacks, and will it more coincide with any non-core asset dispositions, or primarily market and stock price conditions?
It'll be a combination of those as well as the realization of cash flow from our land sales and NOI. As that capital comes into the home team, if you will, from non-core sales, from NOI, from MPC land sales and condo profit, that's where we think about our capital allocation strategy. There are gonna be times where you'll see us invest in new developments that outsize risk-adjusted returns, and times like you just saw this past quarter where we see a great opportunity to buy our own shares. It's not, you know, all one or the other. It will, in all likelihood, be a combination.
I think it's challenging to sit here today and say how much that buyback will be, what the timing will be without having great visibility into where our share price will be and the exact timing of some of those land sales and non-core asset sales.
Great. Thank you.
This concludes our question and answer session. I would like to turn the conference back over to David O'Reilly for any closing remarks.
We appreciate everyone joining today. Hopefully you've gotten correspondence on our Investor Day in April. If not, please reach out to John Saxon. We'd love to have you attend. We'll be doing an on-site tour in Summerlin, getting a chance to see all the incredible developments, including that super pad that we contracted and sold this past quarter, and hope to see as many of you there as possible. Thanks again for your participation. We look forward to talking to you soon.
The conference is now concluded. Thank you for attending today's presentation. You may now disconnect.