Ward Village owner’s profit rises 60%

Condominium sales in Kakaako helped the owner of Ward Village earn a $202 million profit last year that was up about 60 percent from $127 million the year before.

Howard Hughes Corp. reported its financial results for the year Thursday and said sales from two roughly $400 million condo towers at its Kakaako high-rise community development project contributed significantly.

“We continue to transform Ward Village into a vibrant neighborhood offering unique retail experiences, dining and entertainment, along with exceptional residences and workforce housing set among open public spaces and pedestrian-friendly streets,” the company said in its annual report.

The Texas-based company, which also has a collection of real estate operations in about 15 mainland states which includes a waterfront redevelopment project in New York, retail properties and master-planned communities where the company sells land, noted that the biggest source for the $1 billion in revenue it generated last year was condo sales.

Condo sale revenue totaled $486 million last year, compared with $305 million the year before and $84 million the year before that. Hughes Corp. said the increase last year related to revenue from its Waiea and Anaha towers in Kakaako.

Unlike some development firms, Hughes Corp. doesn’t wait until a tower is completed and condo buyers complete their purchases before the company counts revenue and profit on its books. Instead, Hughes Corp. recognizes a share of revenue from pending condo sales in relation to how much of a tower is built. This is an acceptable accounting practice called “percentage of completion” but won’t be allowed after this year.

Hughes Corp. did not break down revenue by project.

The company finished building Waiea in November and closed most sales last year along with several in January. In total, 143 of Waiea’s 174 units have been sold through the end of January, and the average unit price is $3.6 million. The developer has claimed revenue from Waiea since late 2014.

At Anaha, where the average unit price is about $1.2 million, 301 of 317 units have been sold as of the end of January. Hughes Corp. began recognizing revenue from Anaha in mid-2015. The tower was about 66 percent finished at the end of last year. Completion is expected between July and September.

Hughes Corp. has two other towers at Ward Village under construction — Ae‘o and Ke Kilohana — but did not count revenue from either last year because they are in the early stages of rising.