Billionaire investor Bill Ackman is best known for his large stakes in companies like Chipotle (NYSE: CMG) and Restaurant Brands International (NYSE: QSR), but there’s one stock in the portfolio of Ackman’s Pershing Square hedge fund that could be the most interesting investment of all.
I’m talking about Howard Hughes Holdings (NYSE: HHH), which is one of the most unique real estate companies in the market. Pershing Square owns about 18.8 million shares worth $1.6 billion at the current price, which gives Ackman and his investors a 37% stake in Howard Hughes.
Since this company isn’t exactly a household name, here’s a quick overview of what it does, some of the reasons why Ackman might like it so much, and what to keep in mind if you decide to invest.
What does Howard Hughes Holdings do?
Howard Hughes Holdings’ primary business is developing master-planned communities, or MPCs. These are large-scale developments that could be more accurately describes as small cities, rather than the smaller neighborhoods you might think of when you hear the term “communities.”
Some major examples of the company’s MPCs include The Woodlands and a couple of other communities in the Houston area with over 140,000 residents. There’s the 22,500-acre Summerlin community in Las Vegas. And the oldest of the group is Columbia, Maryland, which is located between D.C. and Baltimore.
Howard Hughes’ business model is designed for long-term value creation. The company acquires a large piece of land (such as the 37,000 acres it acquired in the Phoenix area a couple years ago), and sells a small portion of it to homebuilders, who develop residential communities. The presence of these homes creates demand for commercial assets like offices and retail properties, which Howard Hughes builds and collects rental income from. These commercial amenities make the
The post One of the Top Billionaire Investors Owns 37% of This Real Estate Company – and I Can’t Believe It’s This Cheap first appeared on Insie Mesenza.