v3.26.1
Mortgages, Notes, and Loans Payable, Net
 3 Months Ended
Mar. 31, 2026
Debt Disclosure [Abstract]  
Mortgages, Notes, and Loans Payable, Net
6. Mortgages, Notes, and Loans Payable, Net

Mortgages, Notes, and Loans Payable, Net Mortgages, notes, and loans payable, net are summarized as follows:
thousands
March 31, 2026
December 31, 2025
Fixed-rate debt
Senior unsecured notes$2,300,000 $2,050,000 
Secured mortgages payable1,791,695 1,793,561 
Special Improvement District bonds78,173 80,294 
Variable-rate debt (a)
Secured Bridgeland Notes85,000 85,000 
Secured mortgages payable1,583,396 1,135,359 
Unamortized deferred financing costs (b)(46,968)(34,386)
Mortgages, notes, and loans payable, net$5,791,296 $5,109,828 
(a)The Company has entered into derivative instruments to manage the variable interest rate exposure. See Note 8 - Derivative Instruments and Hedging Activities for additional information.
(b)Deferred financing costs are amortized to interest expense over the initial contractual term of the respective financing agreements using the effective interest method (or other methods which approximate the effective interest method).

As of March 31, 2026, land, buildings and equipment, developments, and other collateral with a net book value of $5.3 billion have been pledged as collateral for the Company’s mortgages, notes, and loans payable.

Senior Unsecured Notes In February 2026, HHC issued $500.0 million of 5.875% senior unsecured notes due 2032 and $500.0 million of 6.125% senior unsecured notes due 2034 (collectively the February 2026 Senior Notes). These notes will pay interest semi-annually beginning in September 2026. HHC used the net proceeds to redeem its outstanding $750.0 million 5.375% senior unsecured notes due 2028 and will use the remaining proceeds for general corporate purposes.

The February 2026 Senior Notes were offered in a private placement, solely to persons reasonably believed to be qualified institutional buyers. These notes have not been, and will not be, registered under the Securities Act or the securities laws of any other jurisdiction and may not be offered or sold in the United States absent registration or an applicable exemption from the registration requirements.
The following table summarizes the Company’s senior unsecured notes by issuance date. These notes have fixed rates of interest that are payable semi-annually and are interest only until maturity.
$ in thousandsPrincipalMaturity DateInterest Rate
February 2021650,000 February 2029
4.125%
February 2021650,000 February 2031
4.375%
February 2026500,000 February 2032
5.875%
February 2026500,000 February 2034
6.125%
Senior unsecured notes$2,300,000 

Secured Mortgages Payable The Company’s outstanding mortgages are collateralized by certain of the Company’s real estate assets. Certain of the Company’s loans contain provisions that grant the lender a security interest in the operating cash flow of the property that represents the collateral for the loan. Certain mortgage notes may be prepaid subject to a prepayment penalty equal to a yield maintenance premium, defeasance, or a percentage of the loan balance. Construction loans related to the Company’s development properties are generally variable-rate, interest-only, and have maturities of five years or less. Debt obligations related to the Company’s operating properties generally require monthly installments of principal and interest. The Company’s secured mortgages mature over various terms through September 2052.

The following table summarizes the Company’s secured mortgages payable:
March 31, 2026December 31, 2025
$ in thousandsPrincipalRange of Interest RatesWeighted-average Interest RateWeighted-average Years to MaturityPrincipalRange of Interest RatesWeighted-average Interest RateWeighted-average Years to Maturity
Fixed rate (a)$1,791,695 
3.13% - 8.67%
4.92 %4.8$1,793,561 
3.13% - 8.67%
4.91%5.1
Variable rate (b)1,583,396 
5.42% - 8.87%
6.89 %2.01,135,359 
5.77% - 8.87%
7.34%1.3
Secured mortgages payable$3,375,091 
3.13% - 8.87%
5.84 %3.5$2,928,920 
3.13% - 8.87%
5.85%3.6
(a)Interest rates presented are based upon the coupon rates of the Company’s fixed-rate debt obligations.
(b)Interest rates presented are based on the applicable reference interest rates as of March 31, 2026, and December 31, 2025, excluding the effects of interest rate derivatives.

The Company has entered into derivative instruments to manage its variable interest rate exposure. The weighted-average interest rate of the Company’s variable-rate mortgages payable, inclusive of interest rate derivatives, was 6.82% as of March 31, 2026, and 7.15% as of December 31, 2025. See Note 8 - Derivative Instruments and Hedging Activities for additional information.

During 2026, the Company’s mortgage activity included new borrowings of $369.6 million, draws on existing mortgages of $81.0 million, and repayments of $5.1 million. As of March 31, 2026, the Company’s secured mortgage loans had $1.1 billion of undrawn lender commitment available to be drawn for property development, subject to certain restrictions.

Special Improvement District Bonds The Summerlin MPC uses SID bonds to finance certain common infrastructure improvements. These bonds are issued by the municipalities and are secured by the assessments on the land. The majority of proceeds from each bond issued is held in a construction escrow and disbursed to the Company as infrastructure projects are completed, inspected by the municipalities, and approved for reimbursement. Accordingly, the SID bonds have been classified as debt, and the Summerlin MPC pays the debt service on the bonds semi‑annually. As Summerlin sells land, the buyers assume a proportionate share of the bond obligation at closing, and the residential sales contracts provide for the reimbursement of the principal amounts that the Company previously paid with respect to such proportionate share of the bond. These bonds bear interest at fixed rates ranging from 4.13% to 6.05% with maturities ranging from 2030 to 2055 as of March 31, 2026, and fixed rates ranging from 4.13% to 6.50% with maturities ranging from 2030 to 2055 as of December 31, 2025. During the three months ended March 31, 2026, obligations of $1.4 million were assumed by buyers and no SID bonds were issued.

Secured Bridgeland Notes The Company’s $600.0 million secured notes mature in 2029 and are secured by MUD receivables and land in Bridgeland. The loan requires a 10% fully refundable deposit on the outstanding balance and has an interest rate of 5.95%. In the second quarter of 2025, $198.0 million was repaid primarily using the proceeds from the sale of MUD receivables, bringing outstanding borrowings to $85.0 million as of March 31, 2026.
Debt Compliance On certain of its debt obligations, the Company has the option to exercise extension options, subject to certain terms, which may include minimum debt service coverage, minimum occupancy levels or condominium sales levels, as applicable, and other performance criteria. In certain cases, due to property performance not meeting identified covenants, the Company may be required to pay down a portion of the loan to exercise the extension option.
As of March 31, 2026, the Company was not in compliance with certain property-level debt covenants. As a result, the excess net cash flow after debt service from the underlying properties became restricted. While the restricted cash could not be used for general corporate purposes, it could be used to fund operations of the underlying assets and did not have a material impact on the Company’s liquidity or its ability to operate these assets.