Q2 2024 Five Point Holdings LLC Earnings Call

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Yes.

Unknown Attendee: Greetings and welcome to the Five Point Holdings second quarter 2024 conference call. As a reminder, this call is being recorded. Today's call may include forward-looking statements regarding five points: business, financial condition, operations, cash flow, strategy, and process. Forward-looking statements represent five points estimates on dates of this conference call and are not intended to give any assurance as to actual future results. Because forward-looking statements relate to matters that have not yet occurred, these statements aren't inherently subject to risk and uncertainty. Many factors could affect future results and may cause five points actual activities or results to differ materially from the activities and results anticipated in forward-looking statements.

Operator: Greetings and welcome to the Five Point Holdings second quarter 2024 conference. As a reminder, this call is being recorded.

Speaker Change: Greetings and welcome to the five point Holdings' second quarter 2024 conference call. As a reminder, this call is being recorded today's call may include forward looking statements regarding five point's business financial condition operations cash flow strategy and prospects.

Operator: Today's call may include forward-looking statements regarding five points business, financial condition, operations, cash flow, strategy, and policy. Forward-looking statements represent five points estimates on dates of this conference call and are not intended to give any assurance, at the actual future. Because forward-looking statements relate to matters that have not yet occurred, these statements are inherently subject to risk add-ons, Many factors could affect future results and may cause Five Point's actual activities or results to differ materially from the activities and results anticipated in forward-looking, These factors include those described in today's press release and Five Point's FEC filings, including those in the risk factor section of Five Point's most recent annual report on Form 10-K filed with the FEC. Please note that Five Point assumes no obligation to update any forward-looking statements. Now I would like to turn the call over to Dan Hedigan, Chief Executive Officer. Thank you, Paul. Good afternoon.

Well, we're looking statements represented five point estimates on the date of this conference call and are not intended to give any insurance.

The actual future results.

Such forward looking statements relate to matters that have not yet occurred. These statements are inherently subject to risks and uncertainties. Many factors could affect future results and may cause five point's I call activities or results to differ materially from the activities and results anticipated in forward looking statements.

Unknown Attendee: These factors include those described in today's press release and five points SEC filing, including those in the risk-factor section of Five Points' most recent annual report on Form 10-K filed with the SEC. Please note that five point assumes no obligations to update any forward-looking statement.

Speaker Change: These factors include those described in today's press release, and five Point's E filings, including those in the risk factors section of five Point's. Most recent annual report on Form 10-K filed with the SEC. Please note that five point assumes no obligation to update any forward looking statements.

Unknown Attendee: Now, I would like to turn the call over to Dan Hedigan, Chief Executive Officer.

Speaker Change: Now I would like to turn the call over to Dan had again Chief Executive Officer.

Daniel Hedigan: Thank you, Paul. Good afternoon, and thank you for joining our call.

Daniel Hedigan: And thank you for joining our call. Just a little announcement: I am recovering from a cold, so my voice is going to sound a little bit different. And hopefully, it doesn't flare up in the middle of the call.

Dan: Thank you Paul Good afternoon, and thank you for joining our call I'm, just oh, well announcements, where and I am recovering from a cold. So my voice is going to sound a little bit.

Daniel Hedigan: Just a little announcement for Ann. I am recovering from a cold, so my voice is going to sound a little bit different, and hopefully it doesn't flare up in the middle of the call, but I just want to let you all know that. I have with me today, Kim Tobler, our Chief Financial Officer, Mike Alvarado, our Chief Operating Officer and Chief Legal Officer, and Leo Kee, our Senior Vice President of Finance and Reporting. Stuart Miller, our Executive Chairman, is joining us remotely.

Dan: Different and hopefully it doesn't flare up in the middle of the of the call, but that's we'll let you all know that I have with me today, Kim Tobler, our Chief Financial Officer, Mike Alvarado, Our Chief operating officer, and Chief Legal Officer.

Speaker Change: Leo key our senior Vice President of finance and reporting.

Speaker Change: Miller, our executive Chairman is joining us remotely.

Daniel Hedigan: On today's call, I'll update you on our Q2 results, on our team's focus during the quarter, and the steps you're taking to implement our strategic priorities. Next, I've asked Mike Alvarado to overview five points of experience managing and participating in our joint venture at the Great Park, giving the meaningful improvement and execution at the venture over the past two years. We believe this experience represents a proxy for potential opportunities to grow as we look towards the future in our existing master plan communities and beyond.

Daniel Hedigan: But I just want to let you all know that I have with me today Kim Tobler, our Chief Financial Officer, Mike Alvarado, our Chief Operating Officer and Chief Legal Officer, and Leo Kee, our Senior Vice President of Finance and Reporting. Stuart Miller, our Executive Chairman, is joining us remotely. On today's call, I'll update you on our Q2 results, on our team's focus during the quarter, and the steps we are taking to implement our strategic priorities.

Dan: On today's call I'll update you on our Q2 results on our team's focus during the quarter and the steps were taking to implement our strategic priorities.

Daniel Hedigan: Next, I've asked Mike Alvarado to outline Five Point's experience managing and participating in our joint venture at the Great Park, given the meaningful improvement and execution of the venture over the past two years. We believe this experience represents a proxy for potential opportunities to grow as we look towards the future in our existing master plan communities and beyond. Last, Kim will give an overview of the company's financial performance and condition with some limited guidance for the third quarter and the full year. We'll then open the line for questions to our management team. So let's begin.

Dan: Next I've asked Mike Alvarado overview, five points experience managing and participating in our joint venture at the Great Park, given the meaningful improvement and execution at the venture over the past two years.

Dan: We believe this experience represents a proxy for potential opportunities to grow as we look towards the future and our existing master plan communities and beyond.

Daniel Hedigan: Last, Kim will give an overview of the company's financial performance and condition, with some limited guidance for the third quarter in the full year. We'll then open the line for questions to our management team.

Last Ken will give an overview of the company's financial performance and condition with some limited guidance for the third quarter and the full year.

Ken: We'll then open the line for questions to our management team.

Daniel Hedigan: So let's begin. I'm very pleased to report a strong quarterly performance as we continue to focus on fortifying our balance sheet by generating revenue, controlling our expenses, and carefully managing our capital spend to match near-term revenues. In the second quarter, we generated net income of $38.2 million, which reflects the continued strength of builder demand for residential land. In this quarter, most self-performance is driven by execution in our Great Park community. As evidenced in part by our closing during the quarter of 12.3 acres of land at the Great Park, $96.1 million, that is $7.8 million per acre at a 70% profit margin.

Ken: So let's begin.

Daniel Hedigan: I'm very pleased to report a strong quarterly performance as we continue to focus on fortifying our balance sheet by generating revenue, controlling our expenses, and carefully managing our capital spend to match near-term revenues. In the second quarter, we generated net income of $38.2 million, which reflects the continued strength of builder demand for residential land. In this quarter, most of our performance is driven by execution in our Great Park community, as evidenced in part by our closing during the quarter of 12.3 acres of land at the Great Park for $96.1 million, betting $7.8 million per acre at a 70% profit margin.

Ken: I'm very pleased to report a strong quarterly performance as we continue to focus on fortifying our balance sheet by generating revenue controlling our expenses and carefully managing our capital spend to match near term revenues.

Ken: In the second quarter, we generated net income of $38 $2 million, which reflects the continued strength of builder demand for residential land.

Ken: And this quarter most of our performance is driven by execution of our Great Park community.

Ken: As evidenced in part by our closing during the quarter, a 12.3 acres of land at the Great Park for $96 $1 million that is $7 $8 million per acre at a 70% profit margin.

Daniel Hedigan: This sale contributed to the $15.5 million of equity and earnings for unconsolidated investments for the quarter. Additional income to arrive some participation in better performance on prior land sales in the Great Park. Additionally, consistent with our folks in holding down costs, we held our overall S-G-A-N at $12.2 million, which is slightly less than the second quarter of last year and the first quarter of this year. During the quarter, in addition to the previously mentioned closed sale, our Great Park venture also signed the contract to sell additional home sites in our next development area for $9.6 million an acre, for a total purchase price of just over $300 million.

Daniel Hedigan: This sale contributed to the $15.5 million of equity and earnings from unconsolidated investments for the quarter. Additionally, consistent with our focus on holding down costs, we held our overall SG&A at $12.2 million, which is slightly less than the second quarter of last year and the first quarter of this year.

Ken: This sale contributed to the $15 5 million of equity and earnings from unconsolidated investments for the quarter.

Ken: Additionally income derived some participation and better performance from prior land sales in the Great Park.

Ken: Additionally, consistent with our focus on holding down costs, we held our overall SG&A to $12 $2 million, which is slightly less in the second quarter of last year and the first quarter of this year.

Daniel Hedigan: During the quarter, in addition to the previously mentioned closed sale, our great partner Fincher also signed a contract to sell additional home sites in our next development area for $9.6 million an acre for a total purchase price of just over $300 million. This sale is anticipated to close in the fourth quarter of the year. Our venture also recently marketed for sale additional residential land and another development area in the Great Park that we would anticipate closing in the first half of next year.

Ken: During the quarter. In addition to the previously mentioned closed sale are Great Park venture also signed a contract to sell additional homesites in our next development area for $9 $6 million an acre for a total purchase price of just over $300 million.

Daniel Hedigan: This sale is anticipated closing the fourth quarter of the year. Our venture also recently marketed for sale additional residential land and another development area in the Great Park, and we would anticipate closing in the first half of next year. We are not surprised that we received strong builder interest in these home sites with continued increases in per-acre land values, and we are now in negotiations to document those transactions. While increases in per-acre land values can be attributed in part to market conditions, we've gone allowing builders to design the home programs in our communities, and this change has also contributed towards the higher land residential values for us.

Ken: This sales anticipated to close in the fourth quarter of the year.

Ken: Our venture also recently marketed for sale additional residential land in another development area in the Great Park, and we would anticipate closing in the first half of next year.

Daniel Hedigan: We are not surprised that we received strong builder interest in these home sites with continuing increases in per acre land values, and we are now in negotiations to document those transactions, while increases in per acre land values can be attributed in part to market conditions. We've begun allowing builders to design the home programs in our communities, as this change has also contributed towards higher land residual values for us.

Ken: We're not surprised that we received strong builder interest Neal the Nissan sites with continuing increases in per acre land values. We're now in negotiations with document those transactions.

Ken: While the increases in per acre of land values can be attributed in part to market conditions.

Ken: Allowing builders to design the home programs in our communities. As this change is also contributed towards the higher land residual values for us.

Daniel Hedigan: As we look to increase the engagement we have with our guest builders in design to drive land value, we will always maintain our role as master developer to ensure that we segment the programs being built and sold by the builders in order to maintain an appropriate velocity in each community. While the news regarding interest rates and inflation continue to send mixed signals during the quarter, we are able to achieve the results due to the team's execution and our ability to capitalize on the fact that California generally, and our community specifically, may an incredibly under-supplied residential land market.

Daniel Hedigan: As we look to increase the engagement we have with our GIF builders and design to drive land value, we will always maintain our role as master developer to ensure that we segment the programs being built and sold by the builders in order to maintain an appropriate velocity in each community. While the news regarding interest rates and inflation continued to send mixed signals during the quarter, we were able to achieve these results due to the team's execution and our ability to capitalize on the fact that California generally, and our community specifically, remain in chronically undersupplied residential landmarks. The shortage is primarily driven by California's challenging land use approval process.

Ken: As we look to increase the engagement, we have a hard guest builders and design to drive land value.

<unk> always maintained our role as mass developer to ensure that we segment. The program was being built and sold by the builders in order to maintain an appropriate philosophy in each community.

Speaker Change: While the news regarding interest rates and inflation continued to send mixed signals during the quarter were able to achieve the results did it seems execution and our ability to capitalize on the fact that California, generally and Archimedes civically, meaning chronically under supplied residential landmarks.

Daniel Hedigan: This shortage is primarily driven by California's challenging land use approval process. We expect shortage of entitled land and existing home inventory continue to drive strong demand from builders.

Speaker Change: <unk> is primarily driven by California's challenging land use approval process.

Daniel Hedigan: Shortages of entitled land and existing home inventory will continue to drive strong demand from builders. Moving to our balance sheet, we ended the quarter in a healthy liquidity position with $217 million in cash and $0 drawn on our $125 million revolver, giving us a total liquidity of $342 million. Kim will cover more details regarding our financials during his comments. I mean, I'll expand a bit on the general market conditions. While interest rates trended up during most of the second quarter, they trended down towards the end of the quarter and generally have continued in that direction since quarter end. A continued lack of existing home inventory, a couple of low unemployment, and fairly strong consumer confidence has helped sustain demand for new homes in our communities, and therefore land acquisitions from our guest builders. A delimiting factor on new home demand remains affordability, which is driven in large part by the impact of higher interest

Speaker Change: We expect sorted shortages of entitled land and existing home inventory continue to drive strong demand from builders.

Daniel Hedigan: Moving to our balance sheet, we need the quarter in a healthy liquidity position with 217 million in cash, and zero dollars drawn on our 125 million revolver. We're going to set total liquidity at 342 million. Chemical will provide more details regarding financials during his comments.

Speaker Change: Moving to our balance sheet, we ended the quarter in a healthy liquidity position with $217 million in cash and still at $0 drawn on our 125 million revolver give us a total liquidity of 342 million.

Speaker Change: Ken will cover more details regarding our financial.

Ken: During his comments.

Daniel Hedigan: Let me now expand a bit on general market conditions. While interest rates trended up during most of the second quarter, they turned it down towards the end of the quarter and generally have continued in that direction since quarter-in. The continued lack of existing home inventory, coupled with low unemployment and fairly strong consumer confidence, has helped sustain demand for new homes in our communities, and therefore land acquisitions from our guest builders. The limiting factor on new home demand remains affordability, which is driven in large part by the impact of higher interest rates. Conditions in our markets remain relatively strong for home builders.

Speaker Change: I mean, now expand a bit on general market conditions.

While interest rates trend trended up during most of the second quarter. They turned it down towards the end of the quarter and generally have continued in that direction since quarter end.

Speaker Change: Your continued lack of existing home inventory, coupled with low unemployment and fairly strong consumer confidence has helped sustain demand for new homes in our communities and therefore land acquisitions from our guest builders.

Speaker Change: The limiting factor on new home demand remains affordability, just driven in large part by the impact of higher interest rates.

Daniel Hedigan: Conditions in our markets remain relatively strong for homebuilders. As we have mentioned in the past, our homebuilders, who are, for the most part, large, publicly owned builders, have a variety of incentive structures to mitigate the impacts of interest rates to support new home sales. With the ability to adjust those incentives in response to interest rate movements, these homebuilders remain uniquely able to capture and sustain demand to allow new home sales to continue.

Speaker Change: Conditions in our markets remain relatively strong for homebuilders as we have mentioned in the past our homebuilders still for the most part are large publicly owned builders.

Daniel Hedigan: As we have mentioned in the past, our home builders, who for the most part are large, publicly owned builders, have a variety of incentive structures to mitigate the impacts of interest rates to support new home sales. With the ability to adjust those incentives and response interest rate movements, these home builders may uniquely able to capture and sustain demand to allow new home sales to continue. While there have been reports of us slowing in new home sales nationally in Q2, we saw our gift builders close 84 new home sales at Philancia compared to 62 in Q1 and 63 new home sales at Great Park compared to 69 in Q1 despite very limited inventory.

Speaker Change: Have a variety of incentive structures to mitigate the impacts of interest rates to support new home sales.

Speaker Change: With the ability to adjust those incentives a response to interest rate movements. These homebuilders remain uniquely able to capture and sustained demand for a lot of new home sales to continue.

Daniel Hedigan: While there have been reports of a slowing in new home sales nationally in Q2, we saw our gift builders close 84 new home sales at Valencia, compared to 62 in Q1, and 63 new home sales at Great Park, compared to 69 in Q1, despite very limited inventory on the Commercial Land side of our business. We are currently only actually marketing two sites at the Great Park as commercially oriented land, and our other communities won't come in line for some time. But we are still seeing interest from both developers and users for these sites.

Speaker Change: There have been reports of a slowing in new home sales nationally.

Speaker Change: In Q2, we saw our guest builders closed 84, new home sales at Valencia compared to 62 in Q1 and 63, New home sales at Great Park compared to 69 in Q1, despite very limited inventory.

Daniel Hedigan: At a commercial land side of our business, we currently are only actually marketing two sites at the Great Park as a commercial-oriented land in our other communities won't come aligned for some time while we are still seeing interest from both developers and users for these sites. We're also looking at opportunities to repurpose these sites for residential use given the depth of the man and values being driven by residential uses, much like we did with the 35-acre commercial site in Philancia that we converted to a residential use.

Speaker Change: The commercial land side of our business. We currently are only actually marketing two sites at the Great Park as a commercial oriented land and our other communities won't come online for some time.

Speaker Change: While we are still seeing interest from both developers and users for these sites. We're also looking at opportunities to repurpose. These sites for residential use given the depth of demand and values being driven by residential uses much like we did with the 35 acre commercial site in for lunch at that we converted to a residential use.

Daniel Hedigan: We're also looking at opportunities to repurpose these sites for residential use, given the depth of demand and values being driven by residential uses. Much like we did with the 35-acre commercial site in Valencia that we converted to residential use.

Daniel Hedigan: We'll have more reports on this in the coming quarters.

Speaker Change: Well have more to report on this in the coming quarters.

Daniel Hedigan: Let me now provide you with some updates on our communities, starting first with the Great Park neighborhoods. As a reminder, the Great Park is the most mature of our communities and its ongoing contribution to our financial results. Reflect the benefit that we and our Great Park venture partners are receiving from the investments made in this community in prior years. During the first quarter, those are our Great Park communities sold 63 homes. As I noted earlier, that number is lower than normal to the limit number of open-builder programs in Great Park. During the quarter, there are only two to three actively selling products in our two open neighborhoods.

Daniel Hedigan: We'll have more to report on this in the coming quarters. Meanwhile, let me now provide you with some updates on our communities, starting first with the Great Park neighborhood. As a reminder, Great Park is the most mature of our communities, and its ongoing contribution to our financial results reflects the benefit that we and our Great Park Venture partners are receiving from the investments made in this community in prior years. During the first quarter, builders in our Great Park community sold 63 homes.

Speaker Change: Let me now provide you with some updates on our communities starting first with the Great Park neighborhoods.

Speaker Change: As a reminder, it's a great park is the most mature of our communities and its ongoing contribution to our financial results reflect the benefit that we and our Great Park venture partners are receiving from the investments made in this community in prior years.

Yeah.

Speaker Change: During the first quarter there wasn't a great Park community sold 63 homes as I noted earlier that number is lower than normal due to limited number of open builder programs with great Park during the quarter. There were only two to three actively selling products and our two open neighborhoods.

Daniel Hedigan: As I noted earlier, that number is lower than normal due to the limited number of open builder programs at Great Park. During the quarter, there were only two to three actively selling products in our two open neighborhoods.

Daniel Hedigan: Our source neighborhood currently has one builder product on Prasale, and Luna Park, our newest neighborhood, only has two builder products on Prasale. We anticipated another six builder products open in the third quarter at Luna Park. As these programs unfold, we'll once again be able to offer a wide variety of housing options in Great Park neighborhoods. Despite the limited inventory, we are encouraged by sustained interest in traffic in the community, affirming the ongoing appeal of the Great Park neighborhoods to respective home buyers. As I mentioned earlier, there remains strong home builder interest inquiry and home sites at Great Park.

Daniel Hedigan: Our Solis neighborhood currently has one builder product open for sale, and Luna Park, our newest neighborhood, only has two builder products open for sale. Anticipate another six builder products to open in the third quarter at Luna Park. As these programs open, we'll once again be able to offer a wide variety of housing options in Great Park Neighborhood. Despite the limited inventory, we are encouraged by sustained interest in the community, affirming the ongoing appeal of the Great Park neighborhood to prospective homebuyers.

Speaker Change: Our souls neighborhood. It currently has one builder builder product home for sale and Luna Park, our newest neighborhood only has two builder products all of them for sale.

Speaker Change: We anticipate another six builder products to open in the third quarter at Luna Park.

Speaker Change: As these programs also will once again be able to offer a wide variety of housing options in great Park neighborhoods.

Despite the limited inventory.

Speaker Change: We are encouraged by sustained interest in traffic in that community affirming the ongoing appeal the great Park neighborhoods prospective homebuyers.

Daniel Hedigan: As I mentioned earlier, there remains strong homebuilder interest in acquiring home sites at Great Park. In this quarter, we completed the bidding process for a group of five new residential programs, which are under a signed contract with a meaningful deposit received by the Great Park Venture. We have also completed the bidding process or negotiated the contracts with our home builder partners for the sale of five additional programs with approximately 400 home sites.

Speaker Change: As I mentioned earlier, there remains strong homebuilder interest inquiry Homesites at Great Park and this quarter, we completed the bidding process for a group of five new residential programs, which is under a signed contract, but a meaningful deposit received by the Great Park venture.

Daniel Hedigan: In this quarter, we completed the bidding process for a group of five new residential programs, which is under a signed contract with a meaningful deposit received by the Great Park venture. We have also completed the bidding process or negotiating the contracts with our home builder partners for sale of five additional programs for the approximately 400 home sites.

Speaker Change: We have also completed the bidding process or negotiating the contracts with our homebuilder partners for sale of five additional programs with approximately 400 homesites.

Daniel Hedigan: We'll have more reports on these programs later in the year. Now I'll move to Valencia, our other active community. Flincha is still in its early stages of development with many future phases of land delivery ahead of it, which will enable us to add much needed supply for housing, particularly in the Los Angeles market. During the second quarter, our gift builders sold 84 new homes. Valencia's initial phase of 1,268 homes is now sold out.

Daniel Hedigan: We'll have more reporting on these programs later in the year.

Speaker Change: I'll have more report on these programs later in the year.

Daniel Hedigan: Now, I'll move to Valencia, our other active community. Valencia is still in its early stages of development, with many future phases of land delivery ahead of it, which will enable us to add much needed supply for housing, particularly in the Los Angeles market. During the second quarter, our guest builder sold 84 new homes. Valencia's initial phase of 1,268 homes is now sold out. In our current Valencia development areas, we have seven builder programs open and actually selling. Additionally, from the land we sold it in the last year, there are six programs in Tissue Open in late 2024 and early 25, offering more product diversity for respective home buyers.

Speaker Change: Now I'll move to Valencia or other active community.

Speaker Change: So that is still in its early stages of development with many future phases of land delivery ahead of it which will enable us to add much needed supply for housing, particularly in the Los Angeles market.

Speaker Change: During the second quarter, our guest builders sold 84 new homes.

Speaker Change: Bunches initial phase 1200, six eight homes is now sold out.

Daniel Hedigan: In our current flinching development areas, we have seven builder programs open and actually selling. Additionally, from the land we sold at the end of last year, there are six programs anticipated to open in late 2024 and early 2025, offering more product diversity for prospective homebuyers. As I noted above, on our last call, and in the last few calls, we discussed the potential conversion of a 35-acre site from commercial to residential use, which is permitted under our flexible zoning.

Speaker Change: And our current flinching development areas, we have seven builder programs opened in actually selling Additionally.

Speaker Change: Additionally from the land we sold it in the last year. There are six programs, we anticipate won't put in late 'twenty 'twenty four and early 'twenty five.

Speaker Change: Offering more product diversity perspective homebuyers.

Daniel Hedigan: As I noted above, on our last call, last few calls, we have discussed the potential conversion of a 35-acre site from commercial to residence use, which is permitted under our flexible zoning. We are now finalizing a contract with a home builder to sell this 35-acre mix use site for 179 homes, so the sale is anticipated to close in the fourth quarter of this year. We've also completed the bidding process for four additional programs with approximately 300 home sites, and we currently anticipate that these four programs will also close in the fourth quarter of this year.

Speaker Change: As I noted above on our last call last few calls.

Speaker Change: Gus the potential conversion of a 35 acre site from commercial to residents use which is permitted under our flexible zoning.

Daniel Hedigan: We are now finalizing a contract with a homebuilder to sell this 35-acre mixed-use site for 179 homes, but the sale is anticipated to close in the fourth quarter of this year. We've also completed the bidding process for four additional programs with approximately 300 home sites. We currently anticipate that these four programs will also close in the fourth quarter of this year.

Speaker Change: We're now finalizing a contract with a homebuilder to sell this 35 acre mixed use site for 179 homes the sale anticipated to close in the fourth quarter of this year.

Speaker Change: We also completed the bidding process for four additional programs with approximately 300 home sites. We currently anticipate that this role for programs also closed in the fourth quarter of this year.

Daniel Hedigan: As we work closely with our builders of all products in Valencia, it has become clear that the current fire insurance situation in California is requiring us to move away from attached programs to single-family homes in the attached kind of minions to meet current insurance underwriting restrictions to allow for more reasonable insurance premiums. The state is also working to address the current limits on insurance availability. Our proactive approach will allow us to continue to meet the demand for housing in California.

Daniel Hedigan: As we work closely with our builders to develop products in Valencia, it has become clear that the current fire insurance situation in California is requiring us to move away from attached programs to single-family homes and detached condominiums to meet current insurance underwriting restrictions to allow for more reasonable insurance premiums. While the state is also working to address the current limits on insurance availability, our proactive approach will allow us to continue to meet the demand for housing in California.

Speaker Change: As we work closely with our builders developed products of lunch at it has become clear that the current fire insurance situation in California.

Speaker Change: Brian Us to move away from a cash programs to single family homes in the attached condominium to meet current insurance underwriting restrictions allow from a reasonable insurance premiums.

Speaker Change: The state is also working to address the current limits on insurance availability, our proactive approach will allow us to continue to meet the demand for housing in California.

Daniel Hedigan: Finally, we continue to work in Los Angeles County and other agencies perfecting entitlements for our future development areas, which will allow for delivery of thousands of additional home sites in commercial acreage, and will add much need to supply to this land constrained market. While the state is in passing a variety of new laws in the effort to expedite delivery of housing, the regulatory approval process remains challenging to complete it in a timely manner. That said, we have been in this business a long time with our proven track record of delivering first-class master plan communities. We hope to finalize these approval processes with a reasonable balance between expediency and feasible conditions.

Daniel Hedigan: Finally, we continue to work with Los Angeles County and other agencies to perfect the entitlements for our future development areas, which will allow for the delivery of thousands of additional home sites and commercial acreage that will add much needed supply to this land-constrained market. While the state is passing a variety of new laws in an effort to expedite the delivery of housing, the regulatory approval process remains challenging to get completed in a timely manner.

Speaker Change: Finally, we continue to work in Los Angeles County, and other agencies protect the entitlements for our future development areas, which will allow for delivery of thousands of additional homesites in commercial acreage will add much needed supply to this land constrained market.

Speaker Change: While the status in passing a variety of new laws in effort to expedite delivery of housing the regulatory approval process remains challenging to get completed in a timely manner.

Daniel Hedigan: That said, we have been in this business a long time with our proven track record of delivering first-class master plan communities. We hope to finalize these approval processes with a reasonable balance between expediency and feasible conditions. Turning to San Francisco, I'm happy to report that the city, county, and other regulatory agencies have initiated the public approval process to rebalance the entitlements between our two San Francisco communities, Candlestick and the Shipyard.

Speaker Change: That said, we have been in this business a long time with our proven track record of delivering first class Masterplan communities, we hope to finalize these approval processes with a reasonable balance between expediency and feasible conditions.

Daniel Hedigan: Turning to San Francisco, I'm happy to report that the city, county, and other applicable regulatory agencies have initiated the public approval process to rebalance the entitlements between our two San Francisco communities, Candlestick and the Shipyard. Advice discussed before, we are seeking the rebalancing to enable development of Candlestick and the standalone project. This rebalancing will allow us to begin the development of Candlestick without having to wait for the Navy to complete its remediation activities in the shipyard. With the current momentum to complete the rebalancing, we are now trying to identify a partner to work with us on this amazing piece of property to begin the process of creating a large mixed-use community that has always been envisioned for these irreplaceable sites along the San Francisco Bay, starting with Candlestick.

Speaker Change: Turning to San Francisco I'm happy to report that the city County, other applicable regulatory agencies have initiated the public approval process dream balanced to rebalance the entitlements between our two San Francisco communities Candlestick and the shipyard.

Daniel Hedigan: As I discussed before, we are seeking rebalancing to enable the development of Candlestick as a standalone project. This rebalancing will allow us to begin the development of Candlestick without having to wait for the Navy to complete its remediation activities at the shipyard.

Speaker Change: But as discussed before we are seeking the rebalancing to enable the development of a candle stick at a standalone project.

Speaker Change: This rebalancing will allow us to begin to development at candlestick without having to wait for the Navy to complete its remediation activities at the shipyard.

Daniel Hedigan: With the current momentum to complete the rebalancing, we're now turning our efforts to identifying a partner to work with us on this amazing piece of property to begin the process of creating a large mixed-use community that has always been envisioned for these irreplaceable sites along the San Francisco Bay, starting with Candlesticks. We expect that a properly constructed partnership can work much like our Great Park Partnership, with capital partners working closely with our management oversight team.

Speaker Change: With the current momentum to complete the rebalancing for now turn their efforts did identifying a partner to work with US on this amazing piece of property to begin the process of creating a large mixed use communities that have always been envisioned but he's irreplaceable sites, along the San Francisco Bay, starting with Candlestick.

Daniel Hedigan: We expect that a properly constructed partnership can work much like our great-part partnership, the capital partners working closely with our management oversight team. This coordinated engagement will focus on maximizing value and executing a well-crafted development plan.

We expect that a properly constructive partnership can work much like our Great Park partnership with capital partners working closely with our management oversight team. This coordinated engage with a focus on maximizing value and executing a well crafted development plan.

Daniel Hedigan: This coordinated engagement will focus on maximizing value and executing a well-crafted development plan. I've asked Mike Alvarado to briefly describe the workings of our great partnership, which has driven its extraordinary performance as a model for future Five Point opportunities. Let me conclude by saying our second quarter has seen continuing progress on our three main priorities: generating revenue and positive cash flow, and controlling SG&A costs.

Daniel Hedigan: I've asked Mike Alvarado to briefly describe the workings of our great-part partnership, which is driven by its extraordinary performance as a model for future five-point opportunities. Let me conclude by saying our second quarter has seen continuing progress on three main priorities: generating revenue and positive cash flow, controlling SG&A costs, and managing capital spend to match near-term revenue opportunities. Additionally, our entire team is focusing on progressing entitlements for our next neighborhood in Blincha, and moving Candlestick forward through the rebalancing process and beginning development, while economic and geopolitical events may continue to impact the financial markets. Home buyers in our markets continue to show interest in our communities, and we believe that pent-up demand will continue to be a driving force for our land sales to builders.

Speaker Change: I've asked Mike Alvarado to briefly describe the workings of our Great Park partnership, which has driven its extraordinary performance as a model for future five point opportunities.

Speaker Change: Let me conclude by saying our second quarter has seen continuing progress on our three main priorities.

Unknown Attendee: It generated revenue and positive cash flow control.

Unknown Attendee: Controlling SG&A cost.

Daniel Hedigan: Managing capital spend to match near-term revenue opportunities. Additionally, our entire team is focused on progressing entitlements for our next neighborhoods in Valencia and moving Candlestick forward through the rebalancing process and beginning development. While economic and geopolitical events may continue to impact the financial markets, homebuyers in our markets continue to show interest in our communities, and we believe that pent-up demand will continue to be a driving force for our land sales to builders. However, land development is a very long game in California that has structurally produced a severe supply shortage.

Unknown Attendee: Managing capital spend to match near term revenue opportunities.

Unknown Attendee: Additionally, our entire team is focused on progressing entitlements for our next neighborhoods in Valencia, and moving candlestick forward through the balance in process and beginning development.

Unknown Attendee: While economic and geopolitical events may continue to impact the financial markets.

Unknown Attendee: Home buyers in our markets continue to show interest in our communities and we believe that pent up demand continue to be a driving force for our land sales to builders.

Daniel Hedigan: Land development is a very long game in California that has structure-produced a severe supply shortings. Our efforts state are ensuring we are well-positioned within that long game, while recognizing the importance of creating and maintaining shareholder value.

Unknown Attendee: Land developments at very long game in California that is structured produced a severe supply shortage our efforts there.

Daniel Hedigan: Our efforts today are ensuring we are well positioned within that long game while recognizing the importance of creating and maintaining shareholder value. Now, I turn it over to Mike, who will briefly discuss our partnership experience, and then to Kim, who will report on our financial results and will provide some limited guidance for the remainder of the year. Thanks, Dan.

Ensuring we are well positioned within that long game, all recognize the importance of creating and maintaining shareholder values.

Daniel Hedigan: Now let me turn over to Mike, who will briefly discuss our partnership experience, and then to Kim, who will report on our financial results, who will provide some limited guidance for the remainder of the year.

Unknown Attendee: Now, let me turn it over to Mike who will briefly discuss our partnership experience and then to Kim who report on our financial results I will provide some limited guidance for remainder of the year.

Unknown Attendee: Thanks, Dan.

Unknown Attendee: In the past, you have heard us talk about the life cycle of our three communities and where each one of them stands in terms of its development status. The Great Park is clearly the most mature of our communities in terms of development and revenue generation and has proven year after year the value creation within this community. What is more interesting about the Great Park, however, is its organizational and operational structure, which we believe has resulted in excellent performance.

Michael Alvarado: In the past, you have heard us talk about the life cycle of our three communities and where each one of them stands in terms of its development status. The great part is clearly the most mature of our communities in terms of development and revenue generation and is proving year after year the value creation within this community. What is more interesting about the great part, however, is its organizational and operational structure that we believe has resulted in excellent performance. The great part is the one master plan community asset in which we own a minority capital interests and operate under a joint venture management structure.

Speaker Change: In the past you have heard us talk about the lifecycle of our three communities and where each one of them stands in terms of its development status.

Unknown Attendee: The Great Park is clearly the most mature of our communities in terms of development and revenue generation and as proven year after year the value creation within this community.

Unknown Attendee: What is more interesting about the great Park. However is its organizational and operational structure that we believe has resulted in excellent performance.

Unknown Attendee: The Great Park is the one master plan community asset in which we own a minority capital interest and operate under a joint venture management structure. We operate and manage the Great Park Venture alongside our other capital partners, with whom we engage on a weekly basis in order to maximize value and return, and who provide a built-in system of accountability. Our partners provide their own unique perspectives on a variety of matters when dealing with developments of this scale, and together, with aligned interests, we have executed our plan with continuously improved bottom-line performance.

Unknown Attendee: The Great Park is the one master planned community asset in which we own a minority capital interest and operate under a joint venture management structure.

Michael Alvarado: We operate and manage the great part venture alongside our other capital partners, with whom we engage on a weekly basis in order to maximize value and returns and to provide a built-in system of accountability. Our partners provide their own unique perspectives on a variety of matters when dealing with developments of this scale. Together, with aligned interests, we have executed our plan with continuously improved bottom line performance. We believe this is a structural advantage to our existing business model. As I mentioned at the great part, we own an equity interest, but we also provide management services to the venture, and we earn an incentive promoted interest for excellent performance.

Unknown Attendee: We operate and manage the Great Park venture alongside our other capital partners with whom we engage on a weekly basis and in order to my maximize value and returns and who provide a built in system of accountability.

Unknown Attendee: Our partners provide their own unique perspectives on a variety of matters when dealing with developments of this scale and together with aligned interests. We have executed our plan with continuously improved bottom line performance.

Unknown Attendee: We believe this is a structural advantage to our existing business model. As I mentioned, at Great Park, we own an equity interest, but we also provide management services to the venture, and we earn an incentive-promoted interest for excellent performance. We are paid for our management services through a stipulated management fee that allows us to recover our costs for delivering these services plus that incentive compensation component, the promotion, that has delivered significant revenue to and earnings for the company.

Unknown Attendee: We believe this is a structural advantage to our existing business model.

Unknown Attendee: As I mentioned, that's a great park, we own an equity interest, but we also provide management services to the venture and we earn an incentive promoted interest for excellent performance.

Michael Alvarado: We are paid for our management services through a stipulated management fee that allows us to recover our costs for delivering these services. Plus, that incentive compensation component, the promote, that has delivered significant revenue to and earnings for the company. We believe this structure, an equity interest coupled with a management services component, is one that can be repeated in the future. Not only within our existing, our other existing communities, but also in future projects as we consider the growth of Five Point beyond our existing communities. We are enthusiastic about this business model and believe it can be replicated.

Unknown Attendee: We are paid for our management service is there a stipulated management fee that allows us to recover our costs for delivering these services plus that incentive compensation deposit.

Unknown Attendee: To promote that has delivered significant revenue to an earnings for the company.

Unknown Attendee: We believe this structure, an equity interest coupled with a management services component, is one that can be repeated in the future, not only within our existing communities but also in future projects as we consider the growth of Five Point beyond our existing community. We are enthusiastic about this business model and believe it can be replicated; bringing in capital partners reduces our capital investment and gives Five Point opportunities to move to an asset-light balance sheet model under a well-crafted partnership program.

Unknown Attendee: We believe this structure and equity and justice coupled with a management services component is one that can be repeated in the future not only within our existing our other existing communities, but also in future projects as we consider the growth of five point beyond our existing communities.

Unknown Attendee: We are enthusiastic about this business model and believe it can be replicated.

Michael Alvarado: Bringing in capital partners reduces our capital investment and gives five point opportunities to move to an asset lighter balance sheet model under a well crafted partnership program. Management fee income offsets our SUNA, while a promoted economic interest aligns interest, while embedding a system of accountability to drive performance. At Valencia, while there is more work to be done to advance our entitlements, once achieved, we expect to engage in a possible venture arrangement like the Great Park. With approvals in place, we view Valencia as no different than the great park in terms of potential for engagement with partners who can add value and also share in the development life cycle as this community matures.

Unknown Attendee: Bringing in capital partners reduces our capital investment and gives five point opportunities to move to an asset lighter balance sheet model under a well crafted partnership program.

Unknown Attendee: Management Fee Income offsets our S.U.N.A. while a promoted economic interest aligns interests while embedding a system of accountability to drive performance at Valencia. While there is more work to be done to advance our entitlements, once achieved, we expect to engage in a possible venture arrangement like the Great Park, with approvals in place. We view Valencia as no different than the Great Park in terms of potential for engagement with partners who can add value and also share in the development lifecycle as this community matures.

Unknown Attendee: Management fee income offsets our SG&A, while a promoted economic interest aligns interests, while embedding a system of accountability to drive performance.

Unknown Attendee: At Valencia.

Unknown Attendee: While there is more work to be done to advance our entitlements. Once achieved we expect to engage in a possible venture arrangement like the great Park.

Unknown Attendee: With approvals in place we view Valencia is no different than the great Park in terms of potential for engagement.

Unknown Attendee: With partners, who can add value and also share in the development lifecycle as this can be community matures.

Michael Alvarado: In San Francisco, as you know from our prior calls, we have been talking about a partner for some time now. As we finalize our entitlement rebalancing efforts, that accomplishment will provide a catalyst for advancing conversations with potential venture partners. We have a proven track record with a great part venture whose members have been seeing rising returns over the past several years, driven by our management working together with their active engagement. We believe this is a business model that can we can take advantage of as we look at other opportunities for future growth of the company.

Unknown Attendee: In San Francisco, as you know from our prior calls, we have been talking about a partner for some time now. As we finalize our entitlement rebalancing efforts, that accomplishment will provide a catalyst for advancing conversations with potential venture partners. We have a proven track record with a great park venture whose members have seen rising returns over the past several years, driven by our management working together with their active engagement. We believe this is a business model that we can take advantage of as we look at other opportunities for future growth of the company. We hope to have more to report on this in the near future. Now, let me turn it over to Kim to report on our financial results for the quarter. Thank you, Mike.

Unknown Attendee: In San Francisco as you know from our prior calls we have been talking about a partner for some time now.

Unknown Attendee: As we finalize our entitlement rebalancing efforts that accomplishment will provide a catalyst for advancing conversations with potential a bunch of partners.

Unknown Attendee: We have a proven track record with a great Park venture is met whose members have been seen have who have seen rising returns over the past several years driven by our management working together with their active engagement.

Unknown Attendee: We believe this is a business model that can we can take advantage of as we look at other opportunities for future growth of the company.

Michael Alvarado: We hope to have more to report on this in the near future.

We hope to have more to report on this in the near future.

Kim Tobler: Now let me turn it over to Kim to report on our financial results for the quarter.

Now, let me turn it over to Kim to report on our financial results for the quarter.

Kim Tobler: Thank you, Mike. Let me give you a little more background on our operating results. For the second quarter of 2024, we reported consolidated net income of $38.2 million, which was generated primarily from $47.2 million of revenue from incentive management compensation and $15.5 million of equity and earnings from our investment in the Great Park venture. As Dan noted, the great park ventures income for the quarter was largely generated by the sale of 105 home sites on 12.3 acres of land, with a sale price of $96.1 million and a profit margin of 70% before closing costs. You will note that the profit margin improved from last quarter to 60%.

Kim: Thank you Mike let.

Kim Tobler: Let me give you a little more background on our operating results. For the second quarter of 2024, we reported consolidated net income of $38.2 million, which was generated primarily from $47.2 million of revenue from incentive management compensation and $15.5 million of equity and earnings from our investment in the Great Park venture. As Dan noted, Great Park Ventures' income for the quarter was largely generated by the sale of 105 home sites on 12.3 acres of land with a sale price of $96.1 million and a profit margin of 70% before closing costs. You will note that the profit margin improved from last quarter's 60%. This sale comes out to $7.8 million per acre.

Kim: Let me give you a little more background on our operating results.

Kim: For the second quarter of 'twenty 'twenty four we reported consolidated net income of $38 $2 million, which was generated primarily from $47 $2 million of revenue from incentive management compensation.

Kim: And $15 $5 million of equity in earnings from our investment in the Great Park venture.

As Dan noted the Great Park Venture's income for the quarter was largely generated by the sale of 105 home sites on $12 three acres of land with a sale price of $96 $1 million and a profit margin of 70% before closing costs. You will note that the profit margin improved from last quarter's 60 per.

Kim Tobler: This sale comes out to a $7.8 million per acre. The venture also recognized $6.4 million of profit participation revenue related to prior to your land sales and $36.6 million of price participation revenue associated with last made length of 798 home sites, which is now the Luna Park community. I want to say about that additional price participation revenue later in my comments. Turning back to five points consolidated results. For the first six months of the year, we have recognized net income of $44.3 million. Our first half results included $61.1 million of total revenue and equity and earnings from the Great Park venture of $33.1 million.

Kim: Or sent.

Speaker Change: Let's see how it comes out to a $7 $8 million per acre.

Speaker Change: Essentially we're also recognized $6 $4 million of profit participation revenue related to prior year land sales and $36 $6 million of price participation revenue associated with lost Mays.

Speaker Change: Of 798 home sites, which is now the Luna Park community.

Speaker Change: I'll have more to say about that additional price participation revenue later in my comments.

Kim Tobler: The venture also recognized $6.4 million of profit participation revenue related to prior year land sales and $36.6 million of price participation revenue associated with last May's purchase of 798 homesites, which is now the Luna Park community. I'll have more to say about that additional price participation revenue later in my comments. Turning back to Five Points' consolidated results, for the first six months of the year, we recognized a net income of $44.3 million.

Speaker Change: Turning back to five points consolidated results for.

Speaker Change: For the first six months of the year, we have recognized net income of $44 $3 million.

Kim Tobler: Our first half results included $61.1 million of total revenue and equity and earnings from the Great Park venture of $33.1 million. Consistent with our continued focus on managing our costs, our second quarter SG&A expense was $2.2 million compared to the prior year's second quarter of $12.7 million and $12.9 million in the first quarter of this year. Now let me turn to liquidity in cash. We ended the quarter with $217.4 million of cash, as well as $125 million of availability on a revolving credit facility, resulting in total liquidity of $342.4 million.

Speaker Change: Our first half results included $61 $1 million of total revenue and equity in earnings from the Great Park venture of $33 1 million.

Kim Tobler: Consistent with our continued focus on managing our costs, our second quarter SG&A expense was $2.2 million compared to the prior year's second quarter of $12.7 million and $12.9 million in the first quarter of this year. Now let me turn to liquidity and cash. We ended the quarter with $217.4 million of cash, as well as $125 million of availability on a revolving credit facility, resulting in total liquidity of $342.4 million. At the end of the quarter, our debt to total capitalization was 20.6%. I'll also give you a little more detail around our cash flow for the quarter and year to date.

Speaker Change: Consistent with our continued focus on managing our costs, our second quarter SG&A expense was $2 $2 million compared to the prior year's second quarter of $12 $7 million and $12 $9 million in the first quarter of this year.

Kim Tobler: At the end of the quarter, our debt to total capitalization was 20.6%. I'll also give you a little more detail around our cash flow for the quarter and year to date. For the quarter before debt service, we had positive cash flow of $3 million. For the year to date, before debt service, including the senior note transaction costs, we had negative cash flow of $2.2 million.

Speaker Change: Now, let me turn to liquidity and cash we ended the quarter with $217 $4 million of cash as well as $125 million of availability on our revolving credit facility, resulting in total liquidity of $342 $4 million at the end of the quarter.

Speaker Change: Our debt to total capitalization was 26%.

Kim Tobler: The significant sources of cash have been equity distributions from the Great Park Venture of $23.4 million for the quarter and $47.3 million year to date, and Incentive Management Compensation of $6.3 million for the quarter and $12.8 million to date. The significant uses of cash other than SG&A and debt service have been development costs at Valencia of $14 million for the quarter and $31.4 million a year to date, which are largely related to entitlement activities and preparing for the sales expected to close in the fourth quarter.

Speaker Change: I'll also give you a little more detail around our cash flow for the quarter and year to date.

Kim Tobler: For the quarter, before debt service, we had positive cash flow of $3 million. For the year to date, before debt service, including the senior note transaction costs, we had negative cash flow of $2.2 million. The significant sources of cash have been equity distributions from the Great Park venture of $23.4 million for the quarter and $47.3 million year to date, an incentive management compensation of $6.3 million for the quarter and $12.8 million to date. The significant uses of cash other than SGNA and debt service have been development costs at Valencia of $14 million for the quarter, and $31.4 million a year to date, which are largely related to entitlement activities and preparing for the sales expected to close in the fourth quarter.

For the quarter before debt service, we had positive cash flow of $3 million for the year to date before debt service, including the senior note transaction costs, we had negative cash flow of $2 2 million.

Speaker Change: The significant sources of cash have been equity distributions from the great Park venture of $23 $4 million for the quarter and $47 $3 million year to date and.

Speaker Change: And incentives management compensation of $6 $3 million for the quarter and $12 $8 million to date.

Speaker Change: The significant uses of cash other than SG&A and debt service have been development costs at Valencia, a $14 million for the quarter and $31 $4 million year to date, which are largely related to entitlement activities and preparing for the sales expected to close in the fourth quarter.

Kim Tobler: In addition, we incurred development costs at San Francisco of $7.3 million for the quarter, and $8.4 million for the year that are largely associated with the rebalancing efforts and our litigation against Tetra Tech and the Navy. Last quarter, I took time to emphasize the significance of the great park venture in our financial results. This quarter, it continued to stand out in two particular places. Firstly, as an unconsolidated joint venture, we report our proportionate share of the venture's earnings and receive distributions for our ownership percentage interest. Secondly, we provide management services, as Mike discussed, to the Great Park Venture.

Kim Tobler: In addition, we incurred development costs in San Francisco of $7.3 million for the quarter and $8.4 million for the year, which are largely associated with the rebalancing efforts and our litigation against Tetra Tech and the Navy. Last quarter, I took time to emphasize the significance of the Great Park Venture and our financial results. This quarter, it continued to stand out in two particular areas.

Speaker Change: In addition, we incurred development costs at San Francisco of $7 $3 million for the quarter and $8 $4 million for the year.

Speaker Change: Our largely associated with the rebalancing efforts and our litigation against Tetra Tech and the Navy.

Speaker Change: Last quarter I took time to emphasize the significance of the Great Park venture in our financial results.

Speaker Change: This quarter it continued to standout in two particular places.

Kim Tobler: Firstly, as an unconsolidated joint venture, we report our proportionate share of the venture's earnings and receive distributions for our ownership percentage interest. Secondly, we provide management services, as Mike discussed, to the Great Park Venture. As compensation for these management services, we receive a fixed monthly base fee and incentive management compensation, which is expressed as generally as 9% of the distributions that the venture makes to its members.

Speaker Change: Firstly as an unconsolidated joint venture we report our proportionate share of the ventures earnings and.

Speaker Change: And received distributions for our ownership percentage interest.

Speaker Change: Secondly, we provide management services as Mike discussed to the Great Park venture.

Kim Tobler: As compensation for these management services, we receive a fixed monthly base fee and incentive management compensation, which is expressed as generally as 9% of the distributions that the venture makes to its members. We often get specific information about the Great Park venture's activities because of the significant impact they have on Five Points results. When we do so, we try to advise the listener that we are speaking about the great park venture and not five point operations. Now, I'd like to give you a little more background about the Great Park venture's contributions to this quarter's results.

Unknown Attendee: As compensation for these management services, we receive a fixed monthly base fee and incentive management compensation, which is expressed as generally generally as a 9% of the distributions that debenture makes to its members.

Kim Tobler: We often get asked to give specific information about Great Park Ventures activities because of the significant impact they have on Five Points results. When we do so, we try to advise the listener that we are speaking about Great Park Ventures and not Five Point Operations. Now I'd like to give you a little more background about the Great Park Ventures contributions to this quarter's results. First, in addition to the land sale at Great Park Ventures during the quarter, as I noted earlier, the company also recognized additional revenue as a variable price participation consideration.

We often get give specific information about the great Park ventures activities because of the significant impact they have on five points results.

Unknown Attendee: When we do so we try to advise the listener that we're speaking about the great Park venture.

Unknown Attendee: Five point operations now.

Unknown Attendee: Now I'd like to give you a little more background about the great part ventures contributions to this quarter's results.

Kim Tobler: First, in addition to the land sale at the Great Park venture during the quarter, as I noted earlier, the venture also recognized additional revenue as variable price participation consideration. As you recall, as I mentioned earlier, in May of 2023, the great park venture recognized revenue of $357.8 million from the sale of 798 homesites on approximately excuse me. On approximately 84 acres of land, which we now call the Luna Park community, the land sale agreement was comprised of a fixed amount paid at closing and a price participation component to be paid from future home builder home sales.

Unknown Attendee: First in addition to the land sale at the Great Park venture during the quarter as I noted earlier.

Unknown Attendee: The venture also recognized additional revenue is variable price participation consideration.

Kim Tobler: As you recall, as I mentioned earlier, in May of 2023, the Great Park Venture recognized revenue of $357.8 million from the sale of 798 home sites on approximately 84 acres of land, which we now call the Luna Park Community. The land sale agreement was comprised of a fixed amount paid at closing and a price participation component to be paid from future homebuilder home sales. Accordingly, the revenue recognized consisted of $214 million of cash paid at closing, plus $143 million for recognition of a contract asset.

Unknown Attendee: As you'll recall as I mentioned earlier in May of 2023, the Great Park venture recognized revenue of 357 $8 million from the sale of 798 Homesites on approximately.

Unknown Attendee: Hum.

Unknown Attendee: Mhm.

Speaker Change: Excuse me.

Speaker Change: On approximately 84 acres of land, which we now call the Luna Park community.

Speaker Change: Land sale agreement was comprised of a fixed amount paid at closing and a price participation component to be paid from future homebuilder home sales.

Kim Tobler: Accordingly, the revenue recognized consisted of $214 million paid at closing plus $143 million for recognition of a contract asset. You might think of it as a receivable. Representing the venture's estimate of variable consideration from future price participation payments. The home builder is now actively selling homes in the community, and based upon actual experience and near-term forecasts of future home pricing, the venture made the assessment that under applicable housing, under applicable accounting guidelines, it was appropriate to increase the estimate of variable consideration by $36.6 million to a total of $179.7 million. Now, the other area where the Great Park Ventures performance influenced our consolidated results this quarter is with respect to the $47.2 million of incentive management compensation revenue that Five Point is reporting.

Speaker Change: Accordingly, the revenue recognized consisted of $214 million of.

Speaker Change: Paid at closing.

Speaker Change: Plus $143 million for recognition of a contract asset you might think of it as a receivable rep.

Kim Tobler: You might think of it as a receivable, representing the Ventures Estimate of Variable Consideration from Future Price Participation Payment. The home builder is now actively selling homes in the community. And based upon actual experience and near-term forecasts of future home prices, the venture made the assessment that, under applicable accounting guidelines, it was appropriate to increase the estimate of variable consideration by $36.6 million to a total of $179.7 million. Now, the other area where Great Park Ventures' performance influenced our consolidated results this quarter is with respect to the $47.2 million of incentive management compensation revenue that Five Point is reporting.

Representing the ventures estimate of variable consideration from future price participation payments. The homebuilder is now actively selling homes in the community and based upon actual experience and near term forecasts of future home pricing the venture made the assessment that under applicable housing.

Speaker Change: Under applicable accounting guidelines it was appropriate to increase the estimate of variable consideration by $36.6 million to a total of $179 $7 million.

Speaker Change: Now the other area, where the Great Park Venture's performance influenced our consolidated results. This quarter is with respect to the $47 $2 million of incentive management compensation revenue that five point is reporting here also we are required to estimate the amount of incentive compensation.

Kim Tobler: Here also, we are required to estimate the amount of incentive compensation that Five Point expects to receive under our management agreement and to report revenue as it is earned by recording a contract asset, which may be in advance of receiving the actual payment. In order to do so, we have to estimate the activity of the venture and project distributions that the activity will generate. If there are significant changes in that estimate, it can lead to adjustments to the amounts previously recognized.

Kim Tobler: Here also, we are required to estimate the amount of incentive compensation that Five Point expects to receive under our management agreement and to report revenue as it is earned by recording a contract asset, which may be in advance of receiving the actual payment. In order to do so, we have to estimate the activity of the venture and project distributions that the activity will generate. If there are significant changes in that estimate, it can lead to adjustments to the amounts previously recognized. Since the venture's Lunapark sale in May of 2023, at a base price of $4.3 million an acre, which is currently at $4.7 million an acre with the additional variable price participation consideration that I just discussed, the venture had a sale in the first quarter at $6.4 million per acre, and the sale in the second quarter that was just reported at $7.8 million per acre.

Speaker Change: That five point expects to receive under our management agreement and to report revenue as it is earned by recording a contract asset which may be in advance of receiving the actual payment.

Speaker Change: In order to do so we have to estimate the activity of the venture and project distributions that the activity will generate.

Speaker Change: If there are significant changes in that estimate it can lead to adjustments to the amounts previously recognized.

Kim Tobler: Since the venture's Luna Park sale in May of 2023, at a base price of $4.3 million an acre, which is currently at $4.7 million an acre with the additional variable price participation consideration that I just discussed, the venture had a sale in the first quarter at $6.4 million per acre, and the sale in the second quarter that was just reported at $7.8 million per acre.

Speaker Change: Since the adventures Luna Park sale in May of 2023 at a base price of $4 $3 million, an acre, which is currently at $4 $7 million an acre with the additional variable price participation consideration that I just discussed.

Speaker Change: Vince you had a sale in the first quarter at $6 $4 million per acre and the sale in the second quarter that was just reported at $7.8 million per acre.

Kim Tobler: In Dan's comments, he mentioned that we are currently under contract for a sale expected to close in December at $9.6 million per acre. Partly, as a result of this trend of increasing land values and other market factors, we adjusted our estimates of future distributions, and the resulting increase gave rise to the majority of the $47.2 million in revenue recognized by Five Point this quarter from incentive management compensation for our management of the Great Park Venture. As a result of this additional revenue as of June 30th, Five Point has a contract asset for expected future incentive management compensation payments of $104.6 million that will be received when future distributions to members occur.

Kim Tobler: In Dan's comments, he mentioned that we are currently under contract for a sale expected to close in December at $9.6 million per acre. Partly as a result of this trend of increasing land values and other market factors, we have adjusted our estimates of future distribution. And the resulting increase gave rise to the majority of the $47.2 million in revenue recognized by Five Point this quarter from Incentive Management Compensation for our management of the Great Park Venture. As a result of this additional revenue as of June 30,

Speaker Change: And Dan's comments. He mentioned that we are currently under contract for sale expected to close in December at $9 $6 million per acre.

Speaker Change: Partly as a result of this trend of increasing land values and other market factors, we adjusted our estimates of future distributions.

Speaker Change: And the resulting increase gave rise to the majority of the $47 $2 million in revenue recognized by five points this quarter from incentive management compensation for our management of the Great Park venture.

Speaker Change: As a result of this additional revenue as of June 30th five point has a contract asset for expected future incentive management compensation payments of $104 $6 million that will be received when future distributions to members occur.

Kim Tobler: Five Point has a contract asset for expected future incentive management compensation payments of $104.6 million that will be received when future distributions to members occur. These cumulative adjustments to revenue are attributable to changes in estimates and may not be recurring in nature.

Kim Tobler: These cumulative adjustments to revenue are attributable to changes in estimates and may not be reoccurring in nature.

Speaker Change: These cumulative adjustments to revenue are attributable to changes in estimates and may not be recruit reoccurring in nature.

Kim Tobler: Now for some limited guidance. The second quarter performed better than we expected, which was primarily attributable to the strong performance of the Great Park. Concurrently, we are not expecting to close any residential land sales in the third quarter, and therefore expect to have a small reported loss of $5 to $10 million for the quarter. This will turn around in the fourth quarter as we finish the year strong with sales at both Valencia and the Great Park that Dan mentioned earlier. Therefore, we expect to end the year with annual net income of over $100 million in a cash balance and excess of $300 million.

Kim Tobler: Now for some limited guidance. The second quarter performed better than we expected, which was primarily attributable to the strong performance of the Great Park. We are not expecting to close any residential land sales in the third quarter and therefore expect to have a small reported loss of $5 to $10 million for the quarter. This will turn around in the fourth quarter as we finish the year strong with sales at both Valencia and the Great Park, as Dan mentioned earlier.

Speaker Change: Now for some limited guidance.

Speaker Change: The second quarter performed better than we expected, which was primarily attributable to the strong performance at the Great Park.

Speaker Change: Concurrent currently.

Speaker Change: We are not expecting to close any residential land sales in the third quarter and therefore expect to have a small reported loss of $5 million to $10 million for the quarter.

Speaker Change: This will turn around in the fourth quarter as we finished the year strong with sales at Valencia, and the great part that Dan mentioned earlier. Therefore, we expect to end the year with annual net income of over $100 million and our cash balance in excess of $300 million.

Kim Tobler: Therefore, we expect to end the year with annual net income of over $100 million and a cash balance in excess of $300. It remains critical for us to stay focused on our strategic priorities of generating revenue, controlling our expenses, and carefully managing our capital spend to match near-term revenues, and we are committed to those priorities. With that, I will return the call to the operator.

Kim Tobler: It remains critical for us to stay focused on our strategic priorities of generating revenue, controlling our expenses, and carefully managing our capital spend to match near-term revenues, and we are committed to those priorities.

Speaker Change: It remains critical for us to stay focused on our strategic priorities of generating revenue controlling our expenses and carefully managing our capital spend to match near term revenues and we are committed to those priorities with that I will return the call back to the operator.

Unknown Attendee: With that, I will return the call back to the office.

Operator: Thank you. We'll now be conducting a question and answer session. If you'd like to ask a question, please press star one on your telephone keypad; confirmation time will indicate your line is in the question. You may press star two if you'd like to remove your question.

Unknown Attendee: We will now be conducting a question-and-answer session. If you would like to ask a question, please press star one on your telephone keypad. A confirmation tone will indicate your line is in the question queue. You may press star two if you'd like to, or move your questions in the queue.

Speaker Change: Thank you we will now be conducting a question and answer session. If you'd like to ask a question. Please press star one on your telephone keypad.

Speaker Change: A confirmation tone will indicate your line is in the question queue.

Speaker Change: You May press Star Turnkey later move your questions in the queue for participants using speaker equipment and may be necessary to pick up your handset.

Operator: For participants using speaker equipment, it may be necessary to pick up your handset before pressing the start button. One moment, please, while we poll for questions. Thank you. Our first question is from Alan Ratner with Zellman & Associates. Please proceed with your question. Hey guys, good afternoon.

Unknown Attendee: For participants, you need to seek your equipment and maybe message card if it's up your hands at the first question. One moment, please. Molly Polk's question. Thank you.

Speaker Change: Our Q.

Speaker Change: One honestly it while we poll for questions.

Speaker Change: Yes.

Alan S. Ratner: Congratulations on the continued progress. Great, great to see, and thank you for all the, Unknown Attendee, Daniel Hedigan, Leo Kij, Kim Tobler, Five Point Holdings LLC Class A Um, you know, my first question is, I just want to make sure I understand the, uh, management service revenue this quarter and how you explained it. But am I right to think that this quarter's revenue is more gross up, and going forward, you know, assuming there's no major changes in your estimates from this point, that the quarterly run rate would look more similar to kind of what it's been over the last several years, kind of in that 10 million per quarter range, this kind of setting a higher bar. Unknown Attendee, Daniel Hedigan, Leo Kij, Kim Toble It is always good to hear from you.

Speaker Change: Thank you. Our first question is from Alan Ratner with Zelman and Associates. Please proceed with your question.

Alan Ratner: Our first question is from Alan Ratner, with Delman and Associates. Please continue with your question.

Alan Ratner: Hey guys, good afternoon. Congrats on the continued progress. Great, great to see and thank you for all the additional color of this quarter. Very helpful given all the moving pieces.

Kim Tobler: Let me ask Kim to answer that question to make sure we get it from the authority. Yeah, you identified it as a catch-up because of the additional projected income that we're expecting. And so there's a catch-up, but it'll go back to a more regular flow, as you mentioned.

Alan S. Ratner: Hey, guys. Good afternoon. Congrats on the continued progress great great to see and thank you for all the additional color this quarter very helpful. Given all the moving pieces.

Alan Ratner: You know, my first question, I just want to make sure I understand the management service revenue this quarter, and I think you explained it well. But am I right to think of this quarter's revenue as more kind of a gross up and going forward, assuming there's no major changes in your estimates from this point, that the quarterly run rate would look more similar to kind of what it's been over the last several years, kind of in that 10 million per quarter range. This kind of resetting a higher bar, and we should think about for modeling purposes, a higher number going forward.

Speaker Change: My first question I, just want to make sure I understand the management service revenue this quarter.

Speaker Change: You explained it well.

Speaker Change: Am I right to think of it this quarter's revenue as more kind of a gross up and going forward, assuming there's no major changes in your estimates from this point that the quarterly run rate would look more similar to kind of what it's been over the last several years kind of in that $10 million per quarter range. This kind of resetting a higher bar in.

Speaker Change: We should think about for modeling purposes, the higher higher number going forward.

Kim Tobler: Thanks, Alan; always good to hear from you. Let me ask Kim to answer that question for it. Make sure we get it from the authority. It's a catch-up because of the additional projected income that we're expecting. And so there's a catch up, but it'll go back to a more regular flow, as you mentioned. Got it.

Speaker Change: Yeah.

Always good to hear from you let me ask Kim to answer that question for it make sure we get it from the authority.

Speaker Change: Yeah.

Kim: Identified it's it's a catch up because of the additional projected income that we're expecting and so there's a catch up but it'll go back to a more.

Speaker Change: Regular flow as you've mentioned.

Alan S. Ratner: Okay, that's helpful. All right, two more questions for me, if I can. Number one, Dan, you mentioned some of the issues you're facing with fire and, in the state at Unknown Attendee, Daniel Hedigan, Leo Kij, Kim Tobler, Five Point Holdings LLC Class A, Unknown Attendee, Daniel Hedigan, Leo Kij, Kim Tobler, Five Point Holdings LLC Class A. Well, Alan, those are actually very good questions.

Alan Ratner: Okay, that's helpful. All right, two more questions from me if I can. Number one, Dan, you mentioned, you know, some of the issues you're facing with the fire insurance in the state and, you know, changing, I guess, a little bit the plans related to the product you're bringing forth. You mentioned Valencia, so I wasn't, first of all, I wasn't sure if that applies to Great Park as well. But I guess my question is if the plans in at least in the near term are going to be skewed more towards detached product, which is what I think he said.

Speaker Change: Got it okay. That's helpful.

Dan: Alright, two more questions for me if I can number one Dan you mentioned some of the issues you're facing with the fire insurance in the state and changing I asked a little bit the plans related to the product you bring it forward that you mentioned <unk> I wasn't first of all I wasn't sure if that applies to great Park as well.

Speaker Change: My question is if this.

Speaker Change: The plans and at least in the near term or are going to be skewed more towards detached product, which is what I think you said does that change the density opportunity within the community meaning are we now you know should we think about a smaller number of <unk>.

Alan Ratner: Does that change the density opportunity within the community, meaning are we now, you know, should we think about a smaller number of home sites over the length of the community if you're skewing more towards detached?

Speaker Change: Homesites over the length of the the community if you're skewing more towards detached.

Daniel Hedigan: Well, Alan, those are actually very good questions. First, we're really not seeing any fire insurance issues in the Great Park, just because of that and how it's situational. If it's new development and it's, you know, it's on the edge of some open space areas, there does, there is an issue, I should say there's an issue, there's fire insurance available, but the premiums have increased. So working with the builders, what they found in the attached projects, the higher each way, do you make the home, that home, an attached home, uncompetitive from a cost perspective. So we're still moving with density, but they're using high-density motor courts, duplexes; get separate insurance so they can still use duplexes.

Speaker Change: So.

Speaker Change: Alan those are actually very good questions first I would rather have really not seen any fire insurance issues in the great Park I'm, just because of that and how it's such a way.

Alan S. Ratner: First, we're really not seeing any fire insurance issues in the Great Park, just because of that and how it's situated. Unknown Attendee, Daniel Hedigan, Leo Kij, Kim Tobler, Five Point Holdings LLC Class, High Density Motor Court duplexes get separate insurance, so they can still use duplexes.

Speaker Change: So that's new development and it's you know it's on the edge of some open space areas. It does there is an issue I shouldn't say, there's an issue there is fire insurance available, but the premiums have increased so working with the builders what they found in the attached projects the higher HOA dues make the that hold that home and attach.

Speaker Change: At home uncompetitive from a cost perspective, so we're still moving with density but they're using.

Speaker Change: High density Merck Duplexes gets separate insurance. So they can still use duplexes. So we really have gone away from is the kind of 10 unit 11 unit high density buildings those were good for them because they allow us allowed us to have a lower.

Daniel Hedigan: So what we really have gone away from are the kind of 10-unit, 11-unit, high-density buildings. Those are good for the market because they allow us to have a lower price point for people to get entry into the market. So it's a segment that we actually liked, and we do expect the state to sort out what's happening with prior insurance, and we'll be able to go back to that type of product. Once again, it's really that entry-level product that we do think is important to the market.

Daniel Hedigan: So we really have gone away from as the kind of 10 unit, 11 unit, high-density buildings. Those are good for the market because they allow us to have a lower price point for people to get entry into the market. So it's a segment that we actually liked, and we do expect the state to sort out what's happening on fire insurance, and we'll be able to go back to that type of product. Once again, it's really that entry level product that we do think is important to the market. As far as we have so much land and so much time still there, our units really can move around.

Speaker Change: Our price point for people to get entry into the market. So it's a segment that we actually liked.

Speaker Change: And we do expect the state to sort out what's happening on prior insurance it won't be able to go back to that type of product. Once again, it's really that entry level product that we do think is important to the market as far as you know the we have so much land and so much time still there or.

Daniel Hedigan: As far as, you know, we have so much land and so much time still there, you know, our units really can move around. So I think we'll, you know, at this point still anticipate we'd have very similar unit counts because we think this is a temporary issue.

Speaker Change: Our units really can can move around so I think we'll you know we would at this point still anticipate we'd have a very similar unit counts because we think this is a temporary issue, but once again you know the current market condition at the HOA dues are really material. So that's really why we've kind of the builders have come to us.

Daniel Hedigan: So I think we would at this point still anticipate we'd have very similar unit counts because we think this is a temporary issue, but once again, the current market condition, the HWA dues are really material, so that's really why the builders have come to us and said, you know, we still want the land, we still pay the same amount for land, but we do need to make some adjustments to products. So we've just been very proactive in getting ahead of that issue, but I think that long-term it fixes itself and we probably end up with similar unit counts.

Daniel Hedigan: But once again, you know, the current market conditions for HOA dues are really material. So that's really why we kind of, the builders have come to us and said, you know, we still want the land, we can still pay the same amount for land, but we do need to make some adjustments to the product. So we've just been very proactive in getting ahead of that issue. But I think that, long term, it will fix itself, and we probably end up with similar unit counts. But, you know, but one of the yeah. No, that's really helpful, Dan. I appreciate that. And then, sorry, were you gonna say something else?

Speaker Change: And said you know we still want to land, we can still pay the same amount for land, but we do need to make some adjustments. Some products. So we've just been very proactive in getting ahead of that issue, but I think that long term it fixes itself and we probably ended up with similar.

Daniel Hedigan: Yes, but you know, but one of the, yeah. No, that's really the thing. I appreciate that. And then, sorry, were you going to say something else? No, I said, say it doesn't really, you know, it hasn't really had an impact any of our valuations on land. You know, we still obviously, we think about it in units, but we're, you know, we're always selling land, and I'm going to use all the same land, and it hasn't had an impact on valuation at all. So it's really just about having a broader segmentation in the market, which we really like to have.

Speaker Change: Similar unit counts.

Speaker Change: But you know, but one of the that's helpful. Yeah.

Dan: No not necessarily Dan I appreciate that and then I'm sorry were you going to say something else, they're not going to say it doesn't really it hasn't really had an impact any of our valuations on land. We still obviously, we think about it in units, but we're you know, we're always selling land and I'm going to use all the same land and it hasn't had impact on.

Daniel Hedigan: No, I was gonna say, it doesn't really, you know, it hasn't really had an impact on any of our valuations on land. You know, we still obviously think about it in units, but we're, you know, we're always selling land, and I'm going to use all the same land, and it hasn't had an impact on valuation at all. So it's really just about having a broader segmentation in the market, which we really like to have. Got it. This wasn't my other question.

Dan: Evaluation at all so it's really just about having a broader segmentation of the market, which we really like to have.

Unknown Attendee: Got it.

Alan S. Ratner: But I guess just to follow up on that, then, if you're kind of eliminating that more entry level price point, and maybe you can say what that was, so now what is the kind of way you see it in the near term, your entry level price point given this this shift, like how much has it gone up by? Well, you know the... with some of the density that we're able to get in detached and also with duplexes. And we probably, you know, when we opened up the community a couple of years ago, a lot of things happened a couple of years ago; we were able to deliver high-density detached product under five hundred thousand dollars a home.

Speaker Change: Got it and this wasn't my other question, but I guess just to follow up on that then.

Unknown Attendee: This wasn't my other question, but I guess just to follow up on that then, if you're kind of eliminating that entry-level price point, then maybe you can say what that was. And now what is kind of, at least in the way you see it in the near term, your kind of entry level price point given this, this shift, like how much has it gone up by? Well, you know, with some of the density that we're able to get in detached and also with two flexes, you know, we probably, you know, when we opened up the community a couple years ago, a lot of things happened a couple years ago, we were able to deliver high density detached product under $500,000 a home.

Speaker Change: If you are kind of eliminating that that entry level price point and maybe you can say what that was so now what is kind of at least the way you see it in the near term your kind of entry level price point, given this shift like how much would have gone up by.

Speaker Change: Well you know that.

Speaker Change: Yes.

Speaker Change: Yeah.

Speaker Change: With some of the density that we're able to get in detached and also with Duplexes and we'd probably you know when we opened up the community a couple of years ago and a lot of things happen in a couple of years ago, we were able to deliver high density detach product under $500000 of home.

Alan S. Ratner: That was naturally moving up through the pandemic and through cost increases and things of that nature. But I would say what we probably have done is probably move from that, you know, high fives, low six, more like high six, low seven as far as entry level. But that's, hopefully, a temporary situation.

Unknown Attendee: That was naturally moving up through the pandemic and through cost increases and things of that nature. But I would say what we've probably have done is probably moved from that, you know, high fives, low six, more like high six, low seven, as far as entry level. But that's hopefully a temporary situation, and we'll be able to bring back. In our future communities, we still have real opportunities for more density and more variability in the product. So we hope you'll bring that back, but I would tell you now if you're thinking about it, that's probably, it's probably somewhere around the mid-sixes.

Speaker Change: That was naturally moving up through the pandemic and through cost increases and things of that nature, but I would say, we probably have done has probably moved from that.

Speaker Change: High Fives low six more like high six low seven as far as entry level, but that's hopefully a temporary situation and we'll be able to bring back in our future communities. We still have real opportunities for more density more variability in the products. So we hope be able to bring that back but I would tell you know if you're thinking about it it's probably it's probably somewhere around the mid sixes.

Daniel Hedigan: And we'll be able to bring that back in our future communities. We still have real opportunities for more density, more variability in the product. So we hope to be able to bring that back. But I would tell you now, if you're thinking about it, it's probably somewhere around the mid sixes. I've taken a lot of time here, so I'll pass it on and get back in the queue.

Unknown Attendee: Got it. Okay, that's helpful.

Speaker Change: Got it Okay. That's helpful. Alright, I've taken a lot of time here, So I'll pass it on and get back in the queue I appreciate it.

Unknown Attendee: All right, I've taken a lot of time here, so I'll pass it on and get back in the key. Appreciate it. Thanks, Alan. Thank you.

Alan S. Ratner: Thanks Alan.

Alan S. Ratner: Thanks, Alan. Thank you. Our next question is from Matt Jackson with Micor Capital. Please proceed with your question. Hey guys, thanks for taking the questions. Just two quick ones and congratulations on the progress on Candlestick.

Alan S. Ratner: Thank you. Our next question from Matt Jackson with my core capital. Please proceed with your question.

Matt Jackson: Our next question is from Matt Jackson with My Core Capital. Please proceed with your question.

Matt Jackson: Hey, guys, thanks for taking the question. Just two quick ones and two congratulations on the progress on candlestick. Just curious, did you also mention that you would look to do a similar structure for Valencia and kind of move back to being more of a joint venture? And then I guess on both of those projects, like how should we think about that? Are you just going to look for a partner? Like a partnership there? Is there going to be some capital that could come into the business to help you guys? Obviously, you have this expensive debt, so outstanding.

Matt Jackson: Just curious, did you also mention that you would look to do a similar structure for Valencia and kind of move back to being more of a joint venture? And then, on both of those projects, like how should we think about that? Are you just going to look for a partner?

Matt Jackson: Hey, guys. Thanks for taking the question.

Matt Jackson: Just two quick ones I mean, congratulations on the progress on Candlestick just.

Matt Jackson: Did you also mentioned that you would look to do a similar structure for for Valencia, and kind of move back to being more of a joint.

Matt Jackson: Joint venture and then I guess on both of those projects like how.

Speaker Change: How should we think about that are you just going to look for a partner.

Speaker Change: Yeah.

Matt Jackson: Partnership there? Is there going to be some capital that could come into the business to help you guys? You obviously have this expensive debt.

Speaker Change: Like a partnership there isn't going to be some capital that could come into the business to help you guys. Obviously you have this expensive debt.

Daniel Hedigan: Unknown Attendee, Daniel Hedigan, Leo Kij, Kim Tobler, Five Point Holdings LLC Class A, Well, Matt, thank you for that question. You know, first off, on both of those communities, Candlestick and Valencia, we are working from an entitlement first strategy. We think that before we look at partners or, you know, additional capital joining us, we need to deliver on entitlement. And so both of those are our highest priorities for both of those communities.

Speaker Change: So outstanding just kind of curious like how do you think all the moving parts will shake out maybe a year in the future and what you ultimately hope the country looks like.

Daniel Hedigan: Just kind of curious, like, how do you think all the moving parts will shake out maybe a year in the future, and what you ultimately hope the company looks like? Well, Matt, thank you for that question. You know, first on both of those communities, Candlestick and Valencia, we were working from an entitlement-first strategy. We think that before we look at partners or additional capital joining us, we need to deliver on the entitlement. And so both of those are our highest priorities for both of those communities. And so Valencia's got a longer runway to get to that additional entitlement that we're working on.

Speaker Change: Okay.

Speaker Change: Well, Matt. Thank you for that question you know first on both of those communities Candlestick and Valencia.

Speaker Change: We were working from a entitlement first strategy, we think that before we look at partners or additional capital joining us we need to deliver on the entitlement and so both of those are our highest priorities for both of those communities and so flinches got a longer runway to get to that additional entitlements.

Daniel Hedigan: And so Valencia's got a longer runway to get to that additional entitlement that we're working on. As I noted, Candlestick and the City and County of San Francisco are all working hand-in-hand to move that towards completion. And, you know, we've had a number of folks reach out to us in the past. So there's not any one particular structure we're looking at. And once again, it's going to be making sure that we do whatever is best and create the most value for our shareholders. So we haven't tried to land on a structure yet.

Daniel Hedigan: As I noted, you know, Candlestick and the City and County of San Francisco are all working hand in hand to move that towards completion. And, you know, we've had a number of folks reach out to us in the past. So there's not any one particular structure we're looking at. And once again, it's going to be making sure that we do whatever is best and create some of the most value for our shareholders. So we haven't tried the land on a structure. As Mike indicated, we do have a model that's worked very well for us here at the Great Park.

Speaker Change: We're working on as I noted you know.

Speaker Change: Candlestick and the city and county of San Francisco, or we're all working hand in hand, and move that towards completion and you know we've had a number of folks I'll reach out to us in the past so theres not any one particular structure. We're looking at it once again, it's going to be making sure that we do whatever is best and Craig Smith most value for our.

Unknown Attendee: Shareholders. So we haven't tried to land on a structure as Mike indicated we do have a model has worked very well for us here at the Great Park. So that's probably how we lean but it's part of it is gonna be seen who's who we ended up.

Daniel Hedigan: As Mike indicated, we do have a model that has worked very well for us here at the Great Park. So that's probably how we will lean. But as part of it, we're going to be seeing who we end up working with in that area. So, from a pure structure perspective, you know, the idea would be to attract a partnership that would include capital coming into the company. Unknown Attendee, Daniel Hedigan, Leo Kij, Kim Tobler, Five Point Holdings LLC Class A, following the name that long. Just curious.

Daniel Hedigan: So that's probably how we lean, but as part of it is going to be seen who's who we end up working with in that area.

Unknown Attendee: Working with in that in that area.

Matt Jackson: So, from a pure structure perspective, the idea would be to attract a partnership that would include capital coming into the company. Great, that's super helpful.

Speaker Change: So from a pure structure perspective, you know the idea would be to the attractive partnership that would include capital coming into the company.

Speaker Change: Great. That's Super helpful. And then I guess just more on a oh.

Unknown Attendee: And then I guess just more on a housekeeping item, it looks like sometimes you reported the home site that Valentia; other times not. You know, haven't been following the name that long, just curious. Did that imply no home sites were sold at the length of this quarter? Am I correct? This quarter we didn't close any sales at Valentia. Any land sales to builders you're talking about, is that correct? Yeah, yeah, yeah, land sales to builders. Yeah, we didn't not close any land sales to builders as quarter at Valentia. Those the sales we have queued up there, the ones we're talking about will all close in the fourth quarter.

Speaker Change: Housekeeping item.

Speaker Change: It looks like some times you reported the Homesites at Valencia.

Speaker Change: <unk>.

Speaker Change: I haven't been following the name that long just curious.

Matt Jackson: That implied that no home sites were sold at Valencia this quarter. Am I correct? This quarter, we didn't close any sales at Valencia, any land sales to builders you're talking about. Is that correct? Yeah, yeah, yeah, land sales to builders. Yeah, we did not close any land sales to builders this quarter in Valencia. The sales we have queued up there, the ones we're talking about, will all close in the fourth quarter. Great. It was awesome.

Speaker Change: Does that imply no home sites were sold at <unk> This quarter am I correct.

This quarter, we didnt close any sales at Valencia any land sales to builders are talking about is that correct. Yeah. Yeah, Yeah land sales to build yeah. Yeah. We did not closing land sales of builders this quarter at Valencia. Those the sales we have queued up there the ones. We're talking about will all close in the fourth quarter.

Unknown Attendee: Okay, great, great, awesome. Well, next, guys, good luck.

Speaker Change: Okay, great great awesome.

Speaker Change: Guys and good luck.

Speaker Change: Yeah.

Kyle Chung: Thank you.

Matt Jackson: Well, thanks, guys, and good luck. Thank you. Our next question is from Kyle Chung, a Private Investor. Please proceed with your question. Hi Dan, I actually have kind of a big picture question, if I can. Dan, you and your team for the past two and a half years, you guys have done a great job of highlighting the valuable assets that are in this company, Unknown Attendee, Daniel Hedigan, Leo Kij, Kim Tobler, Five Point Holdings LLC Class A. And despite all that, you know, your stock is trading at $3 So my question is, is that what's the benefit to staying public?

Speaker Change: Thank you. Our next question is from Kyle Chung private Investor. Please proceed with your question.

Kyle Chung: Our next question is Kyle Chung, private investor; please to see with your question. Hi, I actually have kind of a big picture question if I can. Then I think, you know, you and your team, for the past two and a half years, you guys have done a great job of highlighting the valuable assets that are in the company. You know, you've lowered that CNA, you've pushed out the debt maturity, you've done all these things, and you are selling the commercial residential and all these things. And despite all that, you know, your stock is trading at $3 a share; the public investors just don't seem to care.

Kyle Chung: Unknown Attendee, Daniel Hedigan, Leo Kij, Kim Tobler, Five Point Holdings LLC Class A: Why not, you know, launch a formal process to see if there are private investors who will, you know, value these assets as something that's closer to book? Well, Kyle, thank you for the question. And I kind of just start with one of the things you should always know is that our board of directors is always very engaged.

Kyle Chung: Hi, I actually have kind of a big picture question, if I can.

Dan: Dan I think you and your team for the past two and a half years you guys have done a great job of highlighting that the valuable assets.

Dan: And the company.

Speaker Change: You've lowered at CNA, you've pushed out the debt maturity.

Speaker Change: All of these things that you are selling the commercial residential and all these things.

Speaker Change: And despite all of that.

Speaker Change: Your stock is still trading at $3 a share.

Speaker Change: With public investors just don't seem to care.

Kyle Chung: So my question is, is that what's the benefit to staying public? I mean, why, I mean, I guess another way is, you know, why not, you know, launch an affordable process to see if there are private investors who will, you know, value these assets as something that's closer to book value than what the public investors are doing.

Speaker Change: So my question is does that what's the benefit to staying public.

Speaker Change: I mean, why I mean, I guess another way it is.

Speaker Change: Why not launch a formal process.

Speaker Change: If there are private investors, who will value these assets at something that's closer to book value.

Speaker Change: And what the public investments.

Speaker Change: Oh.

Daniel Hedigan: Well, Kyle, thank you for the question. I kind of just start with one of the things you should always know is that our board of directors is always very engaged. And if there are opportunities, as you mentioned, that would come towards us. Our board would certainly take a look at those opportunities, and once again, we're always about trying to support, you know, our shareholders. But the, you know, one of the things that we do understand is that we don't really get to set the price in the market. And you're right; we're trying to, there's a lot of good things going on here.

Kyle Chung: And if there are opportunities, as you mentioned, that come our way, our board would certainly take a look at those opportunities. And once again, we're always about trying to support, you know, our shareholders. One of the things that we do understand is that we don't really get to set the price in the market, and you're right. There are a lot of good things going on here, and we're hopeful that the market will at some point recognize some of those things. We've been focused on G&A and cash and capital outlay.

Speaker Change: Well Kyle Thank you for the question and I kind of just start with one of the things you should always know is that our board of directors is as always very engaged and if there are opportunities as you mentioned that would come towards us Our board would certainly take a look at those opportunities and once again, we're always about trying to support.

You know our shareholders.

Speaker Change: But the you know the one of the things that we do understand is that we don't really get to set the price in the market and you're right. We're trying to there's a lot of good things going on here and we're hopeful that the market will at some point recognize some of those things were really focused on you know we've been focused on.

Daniel Hedigan: And we're hopeful that that market will, at some point, recognize some of those things. We're really focused on, you know, we've been focused on, you know, the, you know, GNA and cash and capital outweigh. And so, you know, we think that will sometime, hopefully, in the market be recognized. But going back to your original question, you know, we are always open to considering all options. It's just, you know, what presents itself to us. Well, I guess a different way to ask the question is, I think what I'm, what I'm hearing you say is that you are, you are waiting for like an inbound.

Speaker Change: The G&A.

Speaker Change: G&A and cash and capital outweigh and so you know what.

Daniel Hedigan: We think that will hopefully be recognized in the market. But going back to the original question, you know, we are always open to considering all options. It's just, you know, what presents itself to us. Well, I guess a different way to ask the question is I think what I'm hearing you say is that you are waiting for like an inbound call. Unknown Attendee, Daniel Hedigan, Leo Kij, Kim Tobler, Five Point Holdings LLC Class A You know, that the private investors out there know that the company, Well, well, the team you have here on the phone today, you know, we really have, we really focus day to day on running the business. But I'm just so sure our board has considered all options. And, you know, we're not necessarily waiting for inbound offers. The board has and continues to consider all options that are available.

Speaker Change: We think that will sometime hopefully in the market would be recognized but going back to your original question.

Speaker Change: We are always open to considering all options. It's just you know what presents itself to us.

Speaker Change: Well I guess a different way to ask that question I think what I'm, what I'm hearing you say that you are waiting for like an inbound inquiry.

Kyle Chung: Query. And I mean, you know, you're doing all the right things; you're pulling all the right levers, and the public investor doesn't seem to care. Then, and you also, you know, being a public company, you incur a class along with that. And there's it doesn't seem to be any, you know, strategic reason to have a small low stock trading in the public market.

Speaker Change: And I mean, there's a you know youre doing all the right things you were pulling all the right levers and in the public investors don't seem to care.

Speaker Change: And.

Speaker Change: You also you know being a public company you incur costs, along with that and does it doesn't seem to be any.

Speaker Change: <unk> reason to.

Speaker Change: Have a small low spot trading in the public market why not formally.

Daniel Hedigan: Why not formally, you know, launch a process, put a, you know, let the, you know, private investors out there know that the company is exploring options. Well, the team you have here on the phone today, you know, we really have, we really focused day to day on running the business, but I'm just so sure our board has considered all options. And, you know, and we're not waiting necessarily for inbound offers; the board has and continues to consider all options that are available to them. Okay, I understand.

Speaker Change: <unk> is a process.

Speaker Change: You know that.

Speaker Change: Private investors out there know that the company is.

Speaker Change: Is exploring options.

Speaker Change: Well the team you have here on the phone today, we really have we really focus day to day on running the business, but I can just assure you. Our board has considered all options and you know.

Speaker Change: And we're not waiting necessary for inbound offers the board has and continues to consider all options that are available to them.

Speaker Change: Okay I understand thank you.

Unknown Attendee: Thank you.

Speaker Change: Okay.

Kyle Chung: Thank you. Our next question is from Robert Cohen, a Private Investor. Please proceed with your question. Yeah, hi.

Speaker Change: Thank you. Our next question is from Robert Cohen Private Investor. Please proceed with your question.

Robert Cohen: Our next question is from Robert Cohen, private investor. Please proceed with your question. Yeah, hi, my first question relates to the 75% only gateway commercial venture. I just wanted to clarify one thing on that venture. I believe a few years ago, they said that that venture owns 50 acres next to your office building. Is that correct? And if so, are you planning on selling those acres at some point?

Robert Cohen: My first question relates to the 75% owned gateway commercial venture. I just wanted to clarify one thing about that venture. I believe a few years ago that they said that that venture owned 50 acres next to your office building. Is that correct? And if so, are you planning on selling those acres?

Speaker Change: Yes, Hi, My first question relates to the 75% only gateway commercial venture I just wanted to clarify one thing on that venture I believe a few years ago. They said that that venture owns.

Speaker Change: 50 acres next to your office building is that correct and if so are you planning on selling those acres at some point.

Kim Tobler: So I might have Kim talk about that, but understand what that really is, is there's a campus here. And part of those acres are looking at as part of an R.E.A. parking lot. It's the other aspects of the overall campus, but you know, let Mike actually Mike can probably speak that he's been here longer when the building was built and purchased. Yeah, this campus was originally sold to Broadcom. It was 70 acres where they were going to build a 2 million square foot campus in 2017. We acquired the campus back. And in that venture, that venture in which we own the 75% interest.

Robert Cohen: So Robert, I might have Kim talk about that. But understand what that really is, is there's a campus here. And part of those acres you're looking at is part of an REA, it's a parking lot, it's the other aspects of the overall campus. But let Mike, actually, Mike can probably speak to that.

Speaker Change: So Robert I might have Kim talk about that but understand what that really is is there's a campus here and part of those acres were looking at it as part of an already a its a parking lot of the other aspects of the of the overall campus, but you know, let Mike actually Mike can probably speak.

Unknown Attendee: He's been here longer than when the building was built and purchased. Yeah, this campus was originally sold to Broadcom. It was 70 acres where they were going to build a 2 million square foot campus. In 2017, we acquired the campus back, and into that venture, that venture in which we own the 75% interest. So the campus has really been envisioned as an R&D facility and now, of course, the City of Hope R&D plus, you know, cancer slash medical uses.

Speaker Change: That he's been here longer than when the building was built and purchased this.

Unknown Attendee: So the acreage is really living on the campus ready for future commercial development. Okay, so at some point, you could be selling that. Yes. Unknown Attendee, Daniel Hedigan, Leo Kij, Kim Tobler, Five Point Holdings LLC Class A. So three of the four buildings are owned by other parties at this point.

Speaker Change: This campus was originally sold to Broadcom. It was 70 acres, where they were going to build a 2 million square foot campus in 2017, we acquired the campus back.

Speaker Change: And in that venture that pension I wish we own 75% interest.

Michael Alvarado: So the campus has really been envisioned as an R.N.D. and now, of course, the city of Hope R.N.D. plus, you know, cancer slash medical uses. So the acreage is really living on the campus, ready for future commercial development. Okay, so at some point, you could be selling that. Yes, absolutely 75% on that, that could be quite valuable. Yeah, and now keep in mind that we already sold, you know, two other buildings to brought to a triple net investor that Broadcom is their tenant and then we sold a course and another building to City of Hope.

Speaker Change: So the campus has really been envisioned isn't R&D and now of course, the city of hope R&D plus <unk>.

Speaker Change: Cancer Slash medical uses.

Speaker Change: The acreage is really living on the campus ready for future commercial development.

Speaker Change: Oh, Okay. So at some point you could be selling that.

Speaker Change: Yes.

Speaker Change: Absolutely 75% of own.

Speaker Change: That could be quite valuable.

Speaker Change: Yeah, and now keep in mind that we already sold.

Speaker Change: Two other buildings abroad to triple that investor that Broadcom is their tenant and then we saw of course, another adult anticity help.

Michael Alvarado: So three of the four buildings are owned by other parties at this point.

So three of the four buildings are owned by other parties at this point.

Robert Cohen: Oh, okay. And my next question relates to the value of land in Valencia. So I know, obviously, the land in the Great Parks has appreciated quite rapidly over the past year. I was wondering if you could comment on how much, if any, the land in Valencia has increased in value over the last few years. Well, Robert, one of the things that we've been working on in Valencia, just like we've been working on here at the Great Park, is really trying to work with our builders to be sure that we're developing and identifying the highest-valued land for that property.

Robert Cohen: Okay, and my next question relates to the value of the land in Valencia. So I know, obviously, the land in the great parts is appreciated quite rapidly over the past year. I was wondering if you could comment on how much, if any, the land in Valencia has increased in value over. of the past year. Robert, you know, one of the things that, you know, one of the things that we've been working on in Valencia, just like we've been working on here at the Great Park, is really trying to work with our builders to be sure that we're developing and identifying the highest value land for that property.

Speaker Change: Oh, Okay and my next question relates to the value of the land in Valencia, So I know that.

Speaker Change: Obviously the land in the Great Park has appreciated quite rapidly over the past year I was wondering if you could comment and how much if any of the land in Valencia has increased in value over the past year.

Speaker Change: Well, Robert you know one of the things that.

Robert Cohen: And, you know, I think we're, once again, with Great Park being a much more mature one of our master plans. We've been able to really make some big changes quickly, both kinds of market and product-driven changes. In Valencia, we're doing the same thing, and we actually have seen land values increase in Valencia, but not to the same level as Great Park.

Speaker Change: Yeah.

Speaker Change: One of the things that we've been working on in Valencia, just like we've been working on here at the Great Park is really trying to work with our builders to be sure that we're developing and identifying the highest value land for that property and you know I think were once again with with.

Daniel Hedigan: And, you know, I think we're once again, with Great Park, we need a much more mature one of our master plans. We've been able to really make some big changes quickly, both kind of market and product-driven changes. In Valencia, we're doing the same thing, and we actually have seen land values increasing in Valencia, but not to the same level as Great Park. And I think part of the process is there are certain fixed pieces that we can't change. We have to stay with. And we're now in Great Park; we're fully into the areas where we can change all the pieces.

Speaker Change: Great Park in a much more mature.

Speaker Change: One of our Master plans, we've been able to really make some big changes quickly both kind of market and product driven changes in Valencia were doing the same thing and we actually have seen land values, increasing in Valencia, but not to the same level as.

Daniel Hedigan: And I think part of the process is there. There are certain fixed pieces that we can't change, we have to stay with. And we're now in Great Park; we're fully into the areas where we can change all the pieces. Haven't been able to achieve that.

Speaker Change: His great Park, and I think part of the process is there theres certain fixed pieces that we can't change we have to stay with it.

Speaker Change: And we're now in Great Park, we're fully into the areas, where we can change all the pieces haven't been able to achieve that I've got we haven't gotten to that point I should say, we haven't got to that point in Valencia, but we expect to achieve it.

Daniel Hedigan: Haven't been able to achieve that. We haven't gotten to that point, I should say. We haven't got to that point in Valencia, but we expect to achieve it. But, you know, Irvine is always going to be a little bit of a unique market, but we are seeing appreciation, and we're going to continue to work with the builders to find ways to create higher value for that land.

Robert Cohen: We haven't gotten to that point yet, I should say. We haven't gotten to that point in Valencia, but we expect to achieve it. But Irvine is always going to be a little bit of a unique market, but we are seeing appreciation, and we're going to continue to work with the builders to find ways to create higher values for that land. And my last question relates to your largest shareholder, Lenar. I don't know if you can answer this question, but they're moving to an asset-light model.

Speaker Change: You know Irvine is always going to be a little bit of a unique market, but we are seeing appreciation and we're going to continue to work with the builders to find ways to create higher value for that land.

Robert Cohen: Okay. And my last question relates to your larger shareholder, LaNara. I don't know if you can answer this question, but they're moving to an asset-like model. And I was just wondering if you know how Five Points fits into their plans? Will they be transferring? I believe they're 40% stake into a plant spinoff, or will they be selling the stake? Do you have knowledge about what they'll be doing? You know, Robert, we do not. Okay. I wasn't sure. I know there's a lot of, I know they've been going back and forth in their communications about their plans, but so you have no input on, you have no knowledge of what's going to be taking place.

Speaker Change: Oh, Okay and my last question relates to your largest shareholder Lenoir I don't know if you can answer this question.

But they but they are moving to an asset light model and I was just wondering if you know how five points fits into their plants will they be transferring I believe their 40% stake into our planned spin off or will they be selling the stake do you have any knowledge about what they'll be doing.

Robert Cohen: And I was just wondering if you know how Five Points fits into their plans? Will they be transferring, I believe, their 40% stake into a plan spin-off? Or will they be selling the stake? Do you have any knowledge about what they'll be doing? You know, Robert, we do not.

Speaker Change: You know Robert we do not.

Speaker Change: Oh, okay.

Daniel Hedigan: Okay, well, yeah, I wasn't sure. I know there's a lot of information, I know they've been going back and forth in their communications about their plans. But so you have no, you have no knowledge of what's going to be taking place.

Speaker Change: Okay.

Speaker Change: I wasn't sure I know, there's a lot of I know they've been going back and forth and their communications about their plans, but so you have no input on you have no knowledge of what's going to be taking place okay.

Unknown Attendee: Okay.

Unknown Attendee: I appreciate those are my only questions. Thank you.

Speaker Change: I appreciate those are my only questions. Thank you.

Speaker Change: Yeah.

Robert Cohen: Okay. I appreciate those are my only questions. Thank you. Our next question is from Andrew Ocon, Private Investor. Please proceed with your question. Hi, thank you very much for taking my question. My question is... and I read in the news.

Speaker Change: Thank you. Our next question is from Andrew O'connor Private Investor. Please proceed with your question.

Andrew Ocon: Our next question is from Andrew Ocon, private investor. Please proceed with your question.

Andrew Ocon: Hi. Thank you very much for taking my question. My question is associated with candlestick. And I read in the news recently that it appears that you guys are setting up to do approximately 7,000 residential units, and the rest would be office and lab space. And I'm wondering, is that mix, is that what the mix is going to be because obviously office and lab seem like a pretty difficult market right now? Thank you very much.

Speaker Change #100: Alright. Thank you very much for taking my question my questions associated with Candlestick and I read in the news recently that it appears that you guys are setting up to do approximately 7000.

Andrew Ocon: Here's that you guys are setting up to do approximately 7,000 residential units, and the rest would be office and lab. And I'm wondering, is that Nick?

Speaker Change #101: Residential units and the rest would be office and lab space and I'm wondering is that mix is that what the mix is going to be because obviously office and lab seemed like a pretty difficult market right now.

Andrew Ocon: Is that what the mix is going to be because obviously, office and lab seem like a pretty difficult market? Thank you very much. Andrew

Speaker Change #102: Thank you very much.

Daniel Hedigan: So Andrew, Candlestick and Hunter's Point were designed as kind of a comprehensive community with kind of a preset amount of commercial square footage. And within that commercial square footage, there are certain uses that are allowed in a preset number of residential units. And, you know, all that we're doing right now, what we've worked with the city and county on because of the ways at Hunter's Point. We need it flexibility because early on, before the anticipated delays, there was a strategy of how you would balance between the two because you build them both concurrently. Well, what happened with the delay is that we, you know, we can't build them both concurrently.

Andrew O'connor: So Andrew.

Daniel Hedigan: Candlestick and Hunter's Point were designed as kind of a comprehensive Community with a kind of a preset amount of commercial square footage. And within that commercial square footage, there are certain uses that are allowed in a preset number of residential units. And, you know, everything that we're doing right now, what we've been working with the city and county on because of the delays at Hunter's point, we needed flexibility because, you know, early on, before the anticipated delays, there was a strategy of how you would balance between the two, because you'd build them both concurrently.

Andrew O'connor: Candlestick and hunters point were designed as kind of a comprehensive.

Andrew O'connor: Community with a.

Speaker Change #104: What's kind of a preset amount of commercial square footage and within that commercial square footage or certain leases that are allowed and it's been a preset number of residential units.

Speaker Change #104: And you know the all that we're doing right now what we've been working with the city and county on because of the delays.

Speaker Change #104: At.

Speaker Change #104: Hunters point, we needed flexibility because we you know early on before the anticipated delays there was a strategy of how you would balance between the two because you'd build them both concurrently well what happened with the delays that we you know we can't build them. Both concurrently. So we've really we are working with and when we talk about three.

Daniel Hedigan: Well, what happened with the delay is that we, you know, we can't build them both concurrently. So we really are working on, and we talked about the rebalancing, it really gives us flexibility to be able to meet the market. And if the market is more residential oriented, it'll be more residential; if it's more commercial, it'll be more commercial. But you know, the type of commercial we're looking at there is really R&D.

Daniel Hedigan: So we really are working with them when we talk about rebalancing. It really gives us flexibility to be able to meet the market. Then, if the market is more residential oriented, it'll be more residential. It's more commercial. But, you know, the type of commercial we're looking at there is really R&D. It isn't commercial office. It's something that needs different floor plates and needs, you know, needs labs and different uses. There's a whole different market segment out there than what the traditional commercial office that you would think of. But, you know, the idea; we don't have, we don't have a set.

Speaker Change #104: Balancing it really gives us flexibility to be able to meet the market and if the market is more residential oriented there'll be more residential or it's more commercial it would be more commercial but you know the the type of.

Daniel Hedigan: It isn't commercial office. It's something that needs different floor plates and needs, you know, needs labs and different uses. There's a whole different market segment out there than the traditional commercial office that you would think of.

Speaker Change #104: Commercial were looking at there is really.

Speaker Change #104: R&D it isn't commercial office, it's something that needs different floor plates and needs.

Speaker Change #104: <unk> labs and different uses theres, a theres a whole different market segment out there than what the traditional commercial office that you would think of but.

Daniel Hedigan: But, you know, the idea we don't have. We don't have a set plan for our next development. What we're really doing is working with the city to say, let us have an opportunity to work where the market is strongest, but we need flexibility to do that. And this is where the city and county understand that. We still, in the long term, only have one basket of entitlement, but now we're going to be able to use it more flexibly to really meet the market.

You know that idea, we don't have we don't have a.

Speaker Change #104: Set.

Daniel Hedigan: Plan for our next development; what we're really doing is working with the city to say, let us have an opportunity to work where the market is strongest. But we need flexibility to do that. And this is where the city and county understand that. We still long term only have one basket of entitlement, but now we're going to be able to use it more flexibly to really meet the market. So we're going to, we're going to build what the market tells us creates the best value out there. Okay, so are you saying that your residential units will be capped at what they combined was previously entitled before the when you got to go together?

Speaker Change #104: Plan for our next development, what we're really doing is working with the city to say, let us have an opportunity to work where the market is strongest but we need flexibility to do that and this is where the city and county understand that.

We still long term when we have one basket of entitlement, but now we're gonna be able to use it more flexibly to really meet the market. So we're going to we're going to build what the market tells us creates the best value out there.

Daniel Hedigan: So we're going to build what the market tells us creates the best value out there. Okay, so are you saying that your residential units will be capped at what the combined was previously entitled to before when you guys were going to go together? Yeah, well, you know, once again, we're not trying to add or subtract anything out there. It really is to kind of keep the master plan in place and just have the flexibility to move them around. So once again, your question, though, once again, candlestick is a long development process. That's not to say that I don't think so.

Speaker Change #105: Okay. So are you, saying that your residential units will be capped at what the combined was previously entitled before when you guys going to built together.

Daniel Hedigan: Yeah, well, you know, the once again, we're not trying to add or subtract anything out there. It really is to kind of keep the master plan in place and just have flexibility to move them around.

Speaker Change #106: Yeah, well you know the once again.

Speaker Change #106: We're not trying to add or subtract anything out there. It really is just kind of keep the master plan in place and just have flexibility to move them around so once again your question, though once again candlestick is a it's a long development process, that's not to say that picky.

Andrew Ocon: So once again, your question though, once again, candlestick is a long development process. That's not to say that. Pick your favorite time frame that we couldn't go back and ask the city for more residential. You know, there will be opportunities to adjust that, but there's nothing today that tells us we need to adjust what was approved. It's really about flexibility, how and where we use it. Okay, thank you very much. Thank you.

Andrew Ocon: Pick your favorite time frame that we couldn't go back and ask the city for more residential space. You know, there'll be opportunities to adjust that. But there's nothing today that tells us we need to adjust what was approved. It's really about flexibility, how and where we use it. Okay, thank you very much. Thank you. Our next question is from Myron Kaplan, Prime Investor. Please proceed with your question. Yeah, hi guys. I just have one.

Speaker Change #106: Pick your favorite timeframe that we couldn't go back and ask the city for more residential.

Speaker Change #106: The opportunities to adjust that but theres nothing to date that tells us we need to adjust what was approved it's really about flexibility, how and where we use it.

Speaker Change #107: Okay. Thank you very much.

Speaker Change #107: Okay.

Speaker Change #107: Thank you. Our next question from Myron Kaplan private Investor. Please proceed with your question, Yes, Hi, guys. Thanks for taking the questions.

Myron Kaplan: Our next question is from Myron Kaplan. Probably Investor.

Myron Kaplan: Please proceed with your question. Yeah, hi guys. Thanks for taking questions. I just have one. This is just a technical thing in the first paragraph of today's release. You say that the great park venture distribution is total 29.7 million. And then when I go to the next page, which is equity and earnings from unsolidated entities. First on that paragraph, it says that the share of net income was 15.5 million. And if I turn the page, then you have a contribution of. 23.4 million for the three A's, the 37.5% percentage interest. So, so how can have been able to be three different.

Myron Kaplan: This is just a technical thing. In the first paragraph of today's release, you say that the Great Park Venture distribution is totaled $29.7 million. And then when I go to the next page, which is equity and earnings from unconsolidated entities. First on that paragraph, it says that the share of net income was 15.5. If I turn the page..., and then you have a contribution of $23.4 million for the 3A, 37.5 percent. So how can there be three different numbers?

Myron Kaplan: I just have one this is just a technical thing in in the first paragraph of today's release, you say that would be great Park venture distributions totaled $29 7 million.

Myron Kaplan: And then when I go to the next page, where which is equity and earnings from unconsolidated entities.

Speaker Change #109: First on the.

Speaker Change #110: <unk> paragraph it says that the share of net income was 15 5 million.

Speaker Change #111: Turning the page.

Speaker Change #111: Well then you have a contribution of.

Speaker Change #111: Yeah.

Speaker Change #111: Yeah.

Speaker Change #111: Okay.

Speaker Change #112: 23.4 million for the three ace.

37, five percentage to interact.

Speaker Change #112: So how can have done there, but can be three different numbers.

Myron Kaplan: numbers.

Kim Tobler: First of all, Myron Kaplan, it's good to hear you again today. I'm Kim, and what you want to note is that there are distributions there being received. So one of the numbers is the cash that we're receiving. The other is our share of the earnings, and they'll be quarter-to-date numbers and they'll be year-to-date numbers. And so you need to line those up so you know which one you're looking at. So always the cash contribution from a great venture to five point in the second quarter. In the second quarter? Yes. The cash 15.5. So 15.5 was our share of their earnings, and 23.4 is the amount of cash they gave us.

Myron Kaplan: First of all, Myron, it's good to hear you again today. This is Kim. And what you want to note is that there are distributions that are being received. So one of the numbers is the cash that we're receiving. The other is our share of the earnings. And there'll be quarter-to-date numbers, and there'll be year-to-date numbers. And so you need to line those up so you know which one you're looking at. And so what was the cash contribution from Great Park Venture to Five Point in the second quarter? in the second quarter?

Speaker Change #112: First of all Myra good good to hear you again today.

Kim Tobler: Yeah. The cash distribution was $23.4 million. Okay, and the equity and earnings were 15.5. So 15.5 was our share of their earnings, and 23.4 was the amount of cash they gave us. Okay, thank you. And then, and then for the next six months, Myron. We had equity and earnings of $33.1, and we received cash of $47.3.

Speaker Change #111: Kim and what you want to to note is that there.

Speaker Change #113: There are distributions that are being received so one of the numbers is the cash that we're receiving.

Speaker Change #113: The other is our share of the earnings and there'll be a quarter to date numbers there'll be year to date numbers and so you need to line those up so you know, which one youre looking at.

Speaker Change #113: Yeah.

Speaker Change #113: So always the cash what was the cash contribution from Great Park venture two five points in the second quarter.

Speaker Change #113: In the second quarter Yeah.

Speaker Change #113: Yeah.

Speaker Change #119: The cash distribution was $23 $4 million.

Speaker Change #114: Uh huh.

Speaker Change #122: Okay, and the and the equity in earnings was $15 five.

Speaker Change #116: $15 five was our share of their earnings and $23. Four is the amount of cash they gave us.

Kim Tobler: Okay. Thank you. And then for the six months, Myron, we had equity and earnings of 33.1, and we received cash of 47.3. Right. Okay. Well, that's good. Certainly welcome. Very welcome. And I'm glad to see that you're stepping up. I think you're trying to step up the throttle, or let's say push the pedal down on Valencia, which you've been pretty much been running on about three cylinders for a long time. In such a vast project, and you would think that there's opportunities to do a lot more volume. If you can get, if you can get these villages entitled.

Speaker Change #116: Okay. Thank you and then and then for the for the six months Myron.

Myron Kaplan: We had equity in earnings of $33 one.

Myron Kaplan: And we received cash of 47 three.

Kim Tobler: Right. Okay. Well, that's good and certainly welcome. Very welcome, and I'm glad to see that you're stepping up. I think you're trying to step up the throttle or put, let's say, push the pedal, push the pedal down on Valencia, which you've been, you know, pretty much running on about three cylinders for a long time. Such a vast project, you would think that there are opportunities to do a lot more value and get if you can get these villages. We agree. Can I ask you why you haven't done it before

Speaker Change #117: Okay, well that's good it's certainly welcome.

Speaker Change #118: Very welcome.

Speaker Change #123: I'm glad to see that you're stepping up.

Speaker Change #115: We're trying to step up your throttle or let's.

Speaker Change #114: Let's say pushed apparel.

Speaker Change #114: The pedal down on Valencia, which had been.

Speaker Change #114: Pretty much been running on or about three cylinders for a long time.

Speaker Change #124: I mean, it's such a vast project.

Speaker Change #114: You you would think that there's opportunities to do a lot more volume if he can get if you can get these villages.

Speaker Change #114: Title.

Daniel Hedigan: We agree.

Speaker Change #114: We agree.

Daniel Hedigan: Well, can I ask you why you haven't done it before? As you said, it's the pace at which we can get the entitlements through the County of Los Angeles. That's what our limiting factor is. I see. And this is a sale that you're talking about that's going to take place in where there's a contract in the fourth quarter. Is that the piece that's that 35-acre mixed-use parcel that you had that was near the county line? Yes. Uh-huh. So that's going to become mostly residential or commercial. It's going to be it's going to be a traditional SFD for sale.

Speaker Change #120: Well can I ask you why you haven't done it before.

Daniel Hedigan: As you said, it's the pace at which we can get the entitlements through the County of Los Angeles. That's what our limiting factor is. Unknown Attendee, Daniel Hedigan, Leo Kij, Kim Tobler, Five Point Holdings LLC Class, So that's going to become mostly residential or commercial, it's going to be it's going to be a traditional SFD for sale. I'm sorry.

Speaker Change #121: It's as you said, it's it's the pace at which we can get the entitlement through the county of Los Angeles, That's what our limiting factor as I say.

Speaker Change #121: I see and this sale of <unk>.

Speaker Change #121: But that's going to take place and whether there's a contract in the fourth quarter is that the piece that's.

Speaker Change #121: Yeah, 35 acre mixed use so that you have done a series of county line.

Speaker Change #121: Yes.

Speaker Change #121: Hi.

Speaker Change #121: That's gonna become mostly residential or commercial.

Speaker Change #121: It's going to be it's going to be a traditional SSD for sale.

Daniel Hedigan: I'm sorry. It's going to be traditional housing single-family details. They're very good. It's terrific. I mean, it's all good. Yeah.

Speaker Change #125: I'm sorry.

It's gonna be traditional housing single family detached houses, they're very good alright terrific Charles it's all good.

Daniel Hedigan: Very, very good. I mean, it's terrific. It's all, it's all good. I mean, basically, we just have to snooze till the end of the year, and then you'll have a great outcome, and the company is going to be in an even more secure base.

Daniel Hedigan: I mean, so I guess basically we just have to snooze till the end of the year, and then you'll have a great outcome. And the company is going to be an even more secure basis. I assure you this team will not be snoozing to year-end. Well, we're going to be working hard. No, you're like, how about you got to whip the stairs so you get them to keep moving? But at the end of the day, you know, when it gets dark, you hope that you'll be so you'll be in the town when they'll be in Corral.

Speaker Change #126: Yeah, I mean, so I guess basically we just have to assume you still until the end of the year and then you'll have a great outcome and the company is going to be an even more secure basis.

Myron Kaplan: I assure you, this team will not be snoozing at your end. We're gonna be working hard. No, you're like cowboys, you gotta whip the steers so you get them to keep moving. At the end of the day, you know, when it gets dark, you hope that you'll be you'll be so you'll be in a town where they'll be in a corral, and you'll have the money in the bank.

Speaker Change #127: I assure you this team will not be snoozing to year end well.

Speaker Change #128: Well, we're gonna be wouldn't be working hard.

Like how bullish you got it.

Speaker Change #129: The spirits or you get them to keep moving but.

Speaker Change #129: At the end of the day when you.

Speaker Change #129: Well I guess the heart.

Speaker Change #129: Youll see youll be in town.

Speaker Change #129: Yeah.

Unknown Attendee: You'll have the money in the back. You're doing pretty well. I think you're doing things. It looks like things are going, you know, quite well for the company. I guess we, we, we, we are to be pleased even though quote the market, the retail investor doesn't care on quote. Well, thank you. Yeah. Thank you.

Speaker Change #129: Corral.

Speaker Change #129: Good money in the bank.

Speaker Change #129: Yeah.

Speaker Change #129: By doing so.

Myron Kaplan: Thanks Myron.

Myron Kaplan: You you're doing pretty well.

Speaker Change #130: Youre doing things it looks like things are going quite well for the company.

Daniel Hedigan: [inaudible] Unknown Attendee, Daniel Hedigan, Leo Kij, Kim Tobler, Five Point Holdings LLC Class A, Thank you. There are no further questions at this time. I would like to hand the floor back over to Dan Hedigan for any closing comments. Well, thank you, everyone. On behalf of our management team, we thank you for joining us on today's call, and we look forward to speaking with you next quarter. This concludes today's conference call. You may disconnect your lines at this time. Thank you for your participation.

Speaker Change #131: I guess, when we start college ought to be.

We are pleased even though quote.

Speaker Change #132: The market there.

Speaker Change #133: Retail investor doesn't care unquote.

Well thank you.

Speaker Change #133: Yeah.

Speaker Change #133: Yeah.

Speaker Change #133: Thank you there are no further questions at this time I would like to hand, the floor back over to Dan Halligan for any closing comments.

Unknown Attendee: There are no further questions at this time.

Unknown Attendee: I would like to hand the floor.

Daniel Hedigan: I covered a Dan Hedigan for any closing comments. Well, thank you, everyone. On behalf of our management team, we thank you for joining us some days call, and we look forward to speaking with you next quarter.

Daniel Hedigan: Well. Thank you everyone on behalf of our management team. We thank you for joining us in today's call and we look forward to speaking with you next quarter.

Unknown Attendee: This concludes today's conference. You may disconnect your lines at this time. Thank you for your participation.

Speaker Change #135: This concludes today's conference you may disconnect your lines at this time. Thank you for your participation.