MPC On July 26, 2026, a reconsideration event occurred related to Floreo, an MPC joint venture currently developing land in the greater Phoenix, Arizona area. Floreo is a VIE that was previously accounted for under the equity method. In July 2026, the other Floreo members were deemed to be in default under the LLC Agreement, which resulted in a significant curtailment of their governance rights and constituted a reconsideration event. As a result, it was determined that, as of July 2026, the Company became the primary beneficiary of Floreo as it has the power to direct the activities that most significantly impact Floreo’s economic performance and has the obligation to absorb losses or the right to receive benefits that could potentially be significant. Accordingly, beginning in July 2026, the Company consolidated Floreo with the other members’ combined interest reflected as a noncontrolling interest.

The transaction was accounted for as a business combination using the acquisition method of accounting. The Company’s previously held equity method investment in Floreo was remeasured to its fair value of $51.1 million based upon a valuation of the acquired business as of the acquisition date, resulting in the recognition of a $19.4 million loss on initial consolidation in Equity in earnings (losses) from unconsolidated ventures in the Condensed Consolidated Statements of Operations. The fair value of the noncontrolling interest in Floreo as of the acquisition date was $40.1 million. The consolidation of Floreo was a noncash investing activity, except for $26.2 million of cash and cash equivalents held by Floreo at the acquisition date, which is presented as Cash from consolidation of joint venture in the Condensed Consolidated Statements of Cash Flows.

The Company recorded the assets acquired and liabilities assumed at their estimated acquisition-date fair values, as summarized in the table below. Certain data necessary to complete the allocation of fair value is not yet available, and includes, but is not limited to, the final appraisals of certain acquired assets and assumed liabilities. The Company will finalize the fair value allocation during the 12-month period following the acquisition date, during which time the value of the assets and liabilities may be revised as appropriate.


thousands	July 26, 2026
Fair value of assets acquired:
Master Planned Communities assets	$	266,700
Buildings and equipment	994



Investment in unconsolidated ventures	1,032
Cash and cash equivalents	26,226

Accounts receivable, net	592
Municipal district receivables, net	75,100


Other assets, net	27,604
Total estimated fair value of assets acquired	398,248

Fair value of liabilities assumed:
Mortgages, notes, and loans payable, net	270,016

Other liabilities, net	37,003
Total estimated fair value of liabilities assumed	307,019

Fair value of net assets acquired	$	91,229

The Company engaged independent valuation specialists to assist management in determining the fair values of certain acquired assets and assumed liabilities. The determination of fair value required significant judgment and estimates and was based on information available as of the acquisition date. No material separately identifiable intangible assets were identified.

The valuation used an income approach based on discounted cash flows over a finite projection period. No terminal value was applied because the projections represent a finite-life MPC development. The Company’s land model forecasts the expected cash flows associated with the development of the MPC, including projected land sales, development costs, and related reimbursement cash flows. As such, the discounted cash flow analysis captures the economics of the underlying MPC asset value in total and the fair value of the MPC assets equals the residual value after separately recognizing the fair values of the other identifiable assets and liabilities.

Municipal district receivables, which are CFD receivables, were valued using a discounted cash flow method. These receivables represent development costs incurred that were eligible for reimbursement through future CFD bond issuances. The valuation reflected the Company’s expectation that the existing receivables would be reimbursed on a first-in, first-out basis as future CFD proceeds were received. The forecasted proceeds attributable to the existing receivables were discounted based on their expected timing of collection.

The fair value measurements for the MPC assets and municipal district receivables were based on significant unobservable inputs and are classified as Level 3 fair value measurements. Significant unobservable inputs included projected land sales, development costs, the timing and amount of CFD proceeds and impact fee reimbursements, and discount rates. All other acquired assets and assumed liabilities were recorded at their carrying amounts which were determined to approximate fair value.

Pro forma financial information assuming the consolidation has occurred as of the beginning of the calendar year prior to consolidation, as well as the Floreo revenues and earnings generated during the period since the acquisition date, are not material for disclosure purposes.

Strategic Developments In May 2025, the Company acquired the 7 Waterway office property and the adjacent parking garage for $16.3 million in an asset acquisition. The 186,369-square-foot office property is located in The Woodlands.

Dispositions Gains and losses on asset dispositions are recorded to Gain (loss) on sale or disposal of real estate and other assets, net in the Condensed Consolidated Statements of Operations, unless otherwise noted.

Strategic Developments The Grogan’s Mill Library and Community Center was developed in connection with a land swap agreement entered into with Montgomery County, Texas. In July 2025, upon completion of construction, the Company transferred the Grogan’s Mill Library and Community Center to Montgomery County in exchange for a land parcel on the Waterway in The Woodlands (Town Green), resulting in a gain of $10.1 million. Town Green was measured at fair value and is held in the Strategic Developments segment for future development.

Operating Assets In June 2026, the Company completed the sale of Creekside Park, a 292-unit multifamily property, in The Woodlands for total proceeds of $55.5 million, resulting in a gain of $25.4 million.

In June 2026, the Company completed the sale of Creekside Park The Grove, a 360-unit multifamily property, in The Woodlands for total proceeds of $71.8 million, resulting in a gain of $26.8 million.

In September 2025, the Company completed the sale of two land parcels, which included a 6,890-square-foot retail space, in Ward Village for total proceeds of $6.0 million, resulting in a gain of $4.4 million.

In January 2025, the Company completed the sale of two land parcels, which included a 13,870-square-foot retail space, in Ward Village for total consideration of $12.2 million, resulting in a gain of $10.0 million.