Five Point Holdings, LLC, an owner and developer of large mixed-use, master-planned communities in California, including the Santa Clarita Valley, reported Thursday its second quarter 2020 results.

“While we remain cautious about current market conditions, our strong balance sheet and liquidity position give us confidence, and we are encouraged by the positive sentiment of homebuilders and the consistent pace of home sales at our Great Park Neighborhoods community, said Emile Haddad, Five Points chairman and CEO. “The recent commercial sales at the Five Point Gateway Campus are strong evidence of the value we are creating within our communities.”

Second Quarter 2020 Consolidated Results
Liquidity and Capital Resources
As of June 30, 2020, total liquidity of $339.7 million was comprised of cash and cash equivalents totaling $215.1 million and borrowing availability of $124.7 million under our $125.0 million unsecured revolving credit facility. Total capital was $1.8 billion, reflecting $2.9 billion in assets and $1.1 billion in liabilities and redeemable noncontrolling interests.

Results of Operations for the Three Months Ended June 30, 2020
Revenues: Revenues of $24.3 million for the three months ended June 30, 2020 were primarily generated from land sales at our Valencia segment.

Equity in earnings from unconsolidated entities:Equity in earnings from unconsolidated entities was $23.9 million for the three months ended June 30, 2020, comprised of a $4.1 million loss from our 37.5% percentage interest in the Great Park Venture and earnings of $28.0 million from our 75% interest in the Gateway Commercial Venture.

Selling, general, and administrative: Selling, general, and administrative expenses were $16.3 million for the three months ended June 30, 2020.

Net income: Consolidated net income for the quarter was $14.2 million. The net income attributable to noncontrolling interests totaled $7.6 million, resulting in net income attributable to the Company of $6.6 million.

Segment Results
Valencia Segment (formerly Newhall): Total segment revenues were $17.9 million for the second quarter of 2020. Revenues were mainly attributable to the sale of land entitled for 70 homesites on approximately seven acres in Valencia. The base purchase price was $16.6 million and the gross margin was approximately 30%. Selling, general, and administrative expenses were $2.7 million for the three months ended June 30, 2020.

San Francisco Segment: Selling, general, and administrative expenses were $2.6 million for the three months ended June 30, 2020.

Great Park Segment: The Great Park segment’s net loss for the quarter was $10.2 million, which included net income of $1.8 million from management services and a net loss of $12.0 million attributed to the Great Park Venture. We do not include the Great Park Venture as a consolidated subsidiary in our consolidated financial statements but rather account for it as an equity method investee. After adjusting to account for a difference in investment basis, the Company’s equity in loss from the Great Park Venture was $4.1 million for the three months ended June 30, 2020.

Commercial Segment: In May 2020, the Gateway Commercial Venture closed on the sale of approximately 11 acres of land and an approximately 189,000 square foot building to City of Hope for a purchase price of $108.0 million. The sale of this land and building, which had a carrying value of approximately $67.5 million, resulted in a gain of approximately $37.4 million, net of transaction costs. Concurrently, the Gateway Commercial Venture made a debt payment of $30.0 million to its lender and made total distributions to its members of approximately $75.0 million, of which approximately $56.3 million was distributed to us. Segment net income was approximately $37.4 million, which included net income of $0.1 million from management services and net income of $37.3 million attributed to the Gateway Commercial Venture. We do not include the Gateway Commercial Venture as a consolidated subsidiary in our consolidated financial statements but rather account for it as an equity method investee. Our share of equity in earnings from the Gateway Commercial Venture totaled $28.0 million for the three months ended June 30, 2020.

Second Quarter 2020 and Recent Highlights
– Closed 70 previously sold homesites at Valencia with a base purchase price of $16.6 million, including a seller secured note that is payable in December 2020.

– $56.3 million distribution received from Gateway Commercial Venture from proceeds generated by the sale of approximately 11 acres of land and an approximately 189,000 square foot building to City of Hope.

– Company maintains liquidity of $339.7 million at June 30, 2020.

– Subsequent to the end of the second quarter, the Gateway Commercial Venture closed on the sale of two buildings at the Five Point Gateway Campus for a purchase price of $355 million.

About Five Point
Five Point, headquartered in Irvine, California, designs and develops large mixed-use, master-planned communities in Orange County, Los Angeles County, and San Francisco County that combine residential, commercial, retail, educational, and recreational elements with public amenities, including civic areas for parks and open space. Five Point’s communities include the Great Park Neighborhoods in Irvine, Valencia (formerly known as Newhall Ranch) in Los Angeles County, and Candlestick and The San Francisco Shipyard in the City of San Francisco. These communities are designed to include approximately 40,000 residential homes and approximately 23 million square feet of commercial space.