Five Point Q3 2024 Earnings Call Transcript

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Provided by Quartr
October 17, 2024

There are 6 speakers on the call.

Operator

Greetings, and welcome to the Five Point Holdings LLC Third Quarter 2024 Conference Call. Today's call may include forward looking statements regarding Five Point's business, financial condition, operations, cash flow, strategy and prospects. Forward looking statements represent Five Point's estimates on the date of this conference call and are not intended to give any assurance as to actual future results. Because forward looking statements relates to the matters that have not yet occurred, these statements are inherently subject to risks and uncertainties. Many factors could affect the future results and may cause Five Point's actual activities or results to differ materially from the activities and results anticipated in forward looking statements.

Operator

These factors include those described in today's press release and Five Point's SEC filings, including those in the Risk Factors section of the Five Point's most recent annual report on Form 10 ks filed with the SEC. Please note that Five Points assumes no obligation to update any forward looking statements. Now, I would like to turn the call over to Dan Hedigan, Chief Executive Officer.

Speaker 1

Thank you. Good afternoon and thank you for joining our call. I have with me today Kim Tobler, our Chief Financial Officer Mike Alvarado, our Chief Operating Officer and Chief Legal Officer and Leo Key, 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 Q3 results, on our team's focus during the quarter and the steps we are taking to implement our strategic priorities.

Speaker 1

Next, Kim will give an overview of the company's financial performance and condition with some updated guidance for the rest of the year. We'll then open the line for questions to our management team. So let us begin. I'm pleased to report another very successful quarter for 5 Points as we continue to build a program with consistent profitability with a defined pathway to growth for our future. In the Q3, we generated stronger than expected net income of $12,300,000 which is our 6th consecutive quarter reporting net income as we remain focused on generating revenue, controlling our expenses and managing our capital spend.

Speaker 1

Consistent with last quarter, most of our revenue and bottom line was driven by operational focus and execution in our Great Park community. This community has become both the driver of current performance as well as our model for future growth. During the 3 months ended September 30, 2024, our management team closed 2 retail land sales in Great Park totaling 12.8 acres for an aggregate purchase price of $25,400,000 The Great Park Venture also recognized additional revenue of approximately $36,000,000 which is derived from our strong price and profit participation programs that benefit from housing revenue increases for builders in the Great Park. As a result of these partnership revenues, Five Point received $38,900,000 in distributions from the Great Park Venture during the quarter, representing in part a return on invested capital and also received $10,500,000 of incentive compensation payments or promote pursuant to our Great Park development management agreement. We also received approximately $3,000,000 in base management fees in the quarter under the management agreement.

Speaker 1

Given our strong performance over the past years, the Great Park partners have agreed to extend this agreement through the end of 2026. The amended agreement includes an increased base management fee while maintaining incentive compensation at existing levels. This extension reflects the strength of the relationship between our management team and our partners and reflects how the Great Park Venture Development Management model is one that we believe can be repeated in new communities as we grow 5.2 to a best in class asset lighter, land and community partnership manager. We expect to demonstrate growth in coming quarters. I'd also like to note that the Great Park Venture reached another milestone this quarter.

Speaker 1

Until now, the venture has had a legacy interest that initially had a priority over all distributions and more recently required 10% of all distributions to be paid to the legacy interest holders. This legacy interest has now been satisfied. So 100% of all distributions will go to the Great Park percentage interest holders. Five Point owns 37.5 percent of the percentage interest. Our Great Park Venture will continue to drive the most significant bottom line earnings for Five Point.

Speaker 1

Our planned Q4 closings at both the Great Park and Valencia are on track. If these sales close as scheduled, we will likely exceed our prior guidance that we expected to finish the year with over $100,000,000 annual net income and cash in excess of $300,000,000 Kim will update our guidance based on how we currently anticipate finishing the year. Looking ahead, our Great Park Venture is currently finalizing contracts to sell an additional 407 home sites on approximately 28 acres in our next development area at pricing levels that reflect sustained high levels demand for land at the Great Park. These sales are anticipated to close in the first half of twenty twenty five. We also began marketing for sale additional residential land in another development area in Great Park that we anticipate closing in late 2025.

Speaker 1

We continue to see strong builder interest in these home sites with the potential for sustained strong per acre land values, which we believe is driven in part by allowing our guest builders to design the home programs in our communities. We're also continuing to manage program segmentation in order to maintain an appropriate velocity in each community. In addition to strong revenues, we have remained focused on reducing overhead and holding down costs. Even with increased performance, we have remained disciplined and held our overall SG and A to $11,900,000 which is flat year over year and slightly down compared to the Q2 of this year. We remain vigilant about managing an excellent business with tightly controlled overhead.

Speaker 1

Finally, we have also continued to focus on our balance sheet. We ended our Q3 with a very healthy liquidity position with $224,500,000 in cash and $0 drawn on our $125,000,000 revolver. As we have carefully managed capital deployed as we develop our properties. By driving the bottom line, carefully managing overhead and limiting development dollars to just in time deployment, we ended the Q3 with total liquidity of $349,500,000 Kim will cover more details regarding our financials during his comments. Now let me move to a brief market update.

Speaker 1

We're particularly pleased that we've been able to post consistent results even as the macroeconomic environment has remained somewhat challenging. Although the Federal Reserve announced a meaningful rate cut during the quarter, the news regarding interest rates and inflation continued to send mixed signals with key mortgage interest rates initially moving down but then rebounding higher. While interest rates are a key data point in the housing market, California generally and our communities specifically remain in chronically undersupplied residential land markets and this undersupply continues to support land sales even as interest rates fluctuate. The land shortage is primarily driven by California's challenging land use approval process. We expect shortages of entitled land and existing home inventory will continue to drive strong demand from builders.

Speaker 1

The continued lack of existing home inventory coupled with low unemployment and fairly strong consumer confidence has helped sustain demand for land in our communities. While we are mindful of the potential impacts to affordability created by mortgage rates, most of our guest builders have been able to mitigate the impacts of higher rates through the use of a variety of incentive structures. The commercial land side of our business has proved to be more rate sensitive than residential. While we reported 2 retail sales at Great Park this quarter, we do not expect to maximize values through commercial transactions in the near future. Accordingly, we are currently looking at opportunities to repurpose certain commercial sites for residential use, given the depth of demand and values being driven by residential uses, much like what we did with the 35 acre commercial site in Valencia that we converted to a residential use.

Speaker 1

We'll have more to report on this in the coming quarters. 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 reflects the benefits that we and our Great Park Venture partners are receiving from the investments made in this community in prior years. During the Q3, builders in our Great Park community sold 166 homes versus 63 in Q2. This increase in sales is primarily attributable to Luna Park, our newest neighborhood, which now has substantially all home offerings ultimately for sale.

Speaker 1

We are once again able to offer a wide variety of housing options in Great Park neighborhoods. In addition to high levels of homebuyer interest, we're still seeing strong demand from builders for our land at the Great Park. As I mentioned earlier, we are currently finalizing contracts with 3 builders for 5 different residential programs consisting of 407 home sites. We also completed the bidding process for a group of 9 new residential programs totaling 5 72 homes. We received strong interest in all 9 programs are currently working on finalizing purchase and sale agreements and due diligence with 6 different builders.

Speaker 1

We'll have more to report on these programs in the future. During the quarter, the City of Irvine completed its state mandated arena general plan and zoning updates for the Great Park planning area. This update will provide the Great Park Venture with the opportunity to convert some or substantial portions of its remaining commercial land holdings to residential uses. We're continuing to study these options and the requirements to make these changes consistent with the RHNA program adopted by the city. Next, I'll move to Valencia, our other active community.

Speaker 1

As a reminder, Valencia is in the early stage of its development and still has many future phases of land delivery ahead of it, which will enable us to provide much needed housing in the Los Angeles market. During the 2nd quarter, home sales remained steady as our guest builders sold 89 new homes versus 84 in Q2. In our current financial development areas, we have 8 builder programs open and actively selling. Additionally, from the land we sold at the end of last year, there are 6 programs we anticipate will open in late 2024 and early 2025, offering a greater diversity of home offerings for prospective home buyers. Projected land sales for the Q4 are proceeding as anticipated.

Speaker 1

We have completed the conversion of a 35 acre commercial site to residential use and the sale of those 179 home sites is expected to close in December. We have also completed the bidding and are finalizing contracts for 4 additional programs consisting of 314 home sites, which are currently expected to close either in December or Q1 of 2025. We continue to work with Los Angeles County and other agencies on approvals that will allow us to deliver thousands of additional home sites in a county's severely undersupplied market. We expect our next active residential village will be in Trada South, which is expected to consist of approximately 116 net acres of residential land, over 1300 market rate home sites and approximately 44 net acres of commercial land. We also expect to have additional commercial land available at the Glenchet Commerce Center, which is expected to include approximately 139 net acres and will cater towards industrial focused uses.

Speaker 1

We remain fully committed to obtaining the approvals necessary to unlock additional housing supply and remain focused on balancing expediency with feasible conditions. Turning to San Francisco, the city, county and other applicable regulatory agencies are continuing to advance the public approval process to rebalancing entitlements between our 2 San Francisco communities, Candlestick and the Shipyard. We're excited about the near term possibility of Candlestick and we hope to have more to report on our next call. Once the rebalancing is approved, we anticipate working promptly with the City to initiate our infrastructure plans for the first phase at Candlestick in order to unlock the value of this Bayfront land in the City of San Francisco. Let me conclude by saying I've never been more optimistic about the future of Five Point.

Speaker 1

We have remained focused on driving consistent quarterly earnings, carefully controlling our overhead and carefully manage our land development spend. Accordingly, our balance sheet continues to strengthen and our liquidity continues to grow. This focus will enable us to turn our attention to growth for our future as we continue to validate our asset lighter land partnership model that's reflected in our Great Park Venture. Some additional items have evolved over this quarter to pave the way for our future growth. Recent rotations in Five Point Stock should enable future investment without unusual sell pressure on our stock.

Speaker 1

Castle Lake recently disclosed the sale of its sizable equity interest in the company and its subsidiaries to a fund owned by Glick Family Investments. There have also been additional publicly disclosed rotations of our shares in the hands of longer term investors. In connection with the Castle Lake sale, we announced yesterday that Sam Levinson, Chief Investment Officer at Glick has joined our Board. We are very pleased to welcome Sam to the Board as he brings a history of success and extensive experience in real estate investment enhance our efforts to maximize value for our shareholders and to grow our business. At the same time, we also announced that Evan Crothers will be stepping down as a member of the Board, filing completion of the sale of Castle Lake's equity interest to Glick.

Speaker 1

Castle Lake has been an investor in Five Point since the business combination and Evan's insight and guidance have been incredibly valuable in building the foundation and shaping the direction of Five Point. We are grateful for Evan's leadership and wish him all the best. Let me reiterate that our Q3 represents continuing progress on 3 main priorities, generating revenue and positive cash flow, controlling SG and A costs and managing capital spend to match near term revenue opportunities, Advancing entitlements for our next neighborhoods in Valencia and finalizing the candlestick rebalancing process remain critical operational objectives. We believe that the underlying housing environment in California has not materially changed and we're focused on ensuring that we are positioned to deliver the home sites that have been so severely lacking. As you can see, we have been continuously improving our financial condition, which allows us to not only focus on executing our current projects, but also to plan for the growth of Five Point beyond our existing communities.

Speaker 1

Now let me turn it over to Kim, who will report on our financial results and provide some limited guidance for the remainder of the year.

Speaker 2

Thank you, Dan. First, let me provide a little background around the improvement we experienced in our Q3 net income compared to what I shared with you last quarter. As you may recall, I had indicated that we were expecting to report a $5,000,000 to $10,000,000 net loss for the quarter, owing to the fact that we didn't expect any residential land sales during the quarter. While we did not have any residential land sales, as Dan mentioned in his comments, the Great Park Venture recognized approximately $36,000,000 of price and profit participation revenue from earlier residential land sales. The home sale velocity and pricing achieved by our builders during the Q3 exceeded our earlier expectations, which increased revenues at the Great Park.

Speaker 2

This recognition of revenue at the Great Park improved our Q3 results through higher than expected equity and earnings from the venture. Therefore, for the Q3, we reported consolidated net income of $12,300,000 which was generated primarily from $12,900,000 of revenue from incentive management compensation and $12,100,000 of equity and earnings from our investment in the Great Park Venture. The Great Park Venture's income for the quarter was largely generated by the sale of an 11.1 acre retail site with a sales price of $21,100,000 and a child care use parcel on 1.7 acres for a sales price of $4,300,000 Both sales have a profit margin of 72.5 percent before closing costs. You will note that at roughly $2,000,000 per acre, the price per acre for the retail and childcare sites is significantly less than the value we have been achieving for the residential and other commercial parcels in the project, but is reflective of the market for such uses. This is consistent with, but on the higher end of similar use properties in the market and is in line with what we have been projecting.

Speaker 2

Additionally, as I mentioned at the beginning, the Great Park Venture had an additional price participation revenue because the Luna Park home sales and collection openings were stronger than expected. And therefore, we determined that the expected price participation consideration should be increased by an additional $30,000,000 as well as profit participation of approximately $6,000,000 from the Venture's other active residential programs. Turning back to Five Point's consolidated results. For the 1st 9 months of the year, we have recognized net income of $56,600,000 These results included $78,100,000 of total revenue made up largely of management services revenues from the Great Park Venture and equity and earnings from the Great Park Venture of $45,200,000 Consistent with our continued focus on managing our costs, as Dan mentioned, our 3rd quarter SG and A expense was $11,900,000 compared to the prior year Q3 of $11,900,000 $12,200,000 in the Q2 of this year. Now let me turn to liquidity and cash.

Speaker 2

As Dan mentioned, we ended the quarter with $224,500,000 of cash as well as $125,000,000 of availability on our revolving credit facility, resulting in total liquidity of $349,500,000 At the end of the quarter, our debt to total capitalization was 20.5%. For the quarter, we had positive cash flow of $7,100,000 interest payments on our senior notes were due in the 3rd quarter with the next scheduled interest payment of $27,500,000 to be made in November. The significant sources of cash have been equity distributions from the Great Park Venture of $38,900,000 for the quarter $86,200,000 year to date. The incentive management compensation of $10,500,000 for the quarter $23,300,000 year to date. The significant uses of cash other than SG and A and debt service have been development costs at Valencia of $29,300,000 for the quarter $60,700,000 year to date, which is largely related to entitlement activities and preparing for the sales expected to close in the at the

Speaker 3

end of the year.

Speaker 2

In addition, we incurred development costs at San Francisco of $5,300,000 for the quarter $13,700,000 for the year to date that are largely associated with the rebalancing efforts and our litigation against Tetra Tech in the Navy. As Dan mentioned, we have extended our contract to manage the Great Park Ventures development activity for 2 more years, from January 2025 through December 2026. We increased our annual base fee from $12,000,000 a year to $13,500,000 per year. And we will continue to receive 9% of each distribution made by the venture to the partners as an incentive management fee. As I noted last quarter, we are carrying a related party contract asset, which relates to the revenue we have recognized for the incentive management fee that we expect to be paid from the future distributions from the venture.

Speaker 2

As of September 30, that contract asset is carried at $106,700,000 Dan also mentioned another achievement that the Great Park Venture completed during the quarter. As you may recall, when 5 Point was formed in a roll up of our three assets, Five Point's interest in the Great Park Venture was 37.5 percentage interest that was subordinate to $565,000,000 of distributions to the legacy interests, which generally didn't include 5 Point. The $565,000,000 was divided into 2 tiers, dollars 476,000,000 that was paid before any distributions would be paid to the common percentage interests and $89,000,000 that was to be paid from 10% of any equity distributions until it was fully retired. In June of 2021, the venture completed paying the 1st tier and Five Point started participating in the equity distributions and the legacy interests continued to receive 10% of such distributions. This quarter with the distributions made by the venture, the legacy interests have been fully distributed.

Speaker 2

And from this point forward, the common percentage interest will receive distributions equal to their percentage interest. Now for some limited guidance. We are pleased with the 3rd quarter performance, which continues to be attributable to the strong activity at the Great Park Venture and our consistent focus on SG and A and development costs. As Dan noted in his remarks, we have a number of residential land sales scheduled to close at Valencia and the Great Park in the Q4. Assuming that most or all of these sales close in December, we will expect to end the year with annual net income of between $120,000,000 $140,000,000 and a cash balance of between $320,000,000 $350,000,000 Any sales that don't close in the Q4 would be expected to close in the Q1 of 2025.

Speaker 2

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, let me turn it back to the operator, who will now open it up for questions.

Operator

Thank you. We will now be conducting a question and answer And our first question comes from Alan Ratner, Zelman and Associates.

Speaker 4

Hey, guys. Good afternoon. Congrats on the continued improvement here. It's great to see the consistency of results in quarter to quarter. Dan, you mentioned a few times kind of looking into the future a little bit maybe for the next stage of growth for Five Point.

Speaker 4

And I know this is something that even going back to your IPO days, there were a lot of discussions, strategies, plans on how the company would evolve. And I'm just curious if there's anything you might be willing to share with us at this point, either specific deals or just conceptually kind of what the next pillar growth for 5 Point might look like, especially with Great Park kind of maybe not at the end of its life cycle, but certainly closer to the end than the beginning at this point?

Speaker 1

Thanks, Alan. Appreciate the question. The one thing if it doesn't come out, I am very optimistic that Five Point is on a good path and has a bright future. And what we have been able to execute on at the Great Park is really the model for where we look to go in the future. The one comment I would make is that we're not looking for additional legacy or I just I'll call it generational assets.

Speaker 1

Obviously, you know how long we have been involved with the Great Park and we both Valencia and San Francisco are long term assets. And while we have those assets, we also know that generally merchant builders are looking for an asset lighter approach. And we think that there is a real opportunity for us to use the experience we have working with partners and managing larger communities to actually build on that platform and look at other land that we can work with and can work with builders on. But that is not, as I say, a generational project. We don't need another 25,000 unit project.

Speaker 1

So we I don't have anything I can point you to today, Alan, but I can tell you that we're really optimistic that there's really an opportunity for us there to grow this business. There's always going to be demand for land.

Speaker 4

Got you. That's helpful. And Dan, again, I know there's no specifics here, but just big picture, would this be within California, your backyard, your area of expertise? Or do you see an opportunity for Five Point even kind of take that approach elsewhere in the country? And would you be working primarily with Lennar in that situation?

Speaker 4

Or is this something that is open to the old universe of builders given kind of your experience?

Speaker 1

Well, I so I would start to say that we would I think right now focus on California because that's where we're at, although we wouldn't say we wouldn't look outside of it. And we'd definitely look to work with a broad spectrum of builders, not just Lennar. And what we're looking to do is that we would invest in future land deals in a partnership form with these builders and we'll have obviously our limited investment, but we'll also get management fees and promote for our expertise. So it's really just building on our current model and hopefully expanding that base of folks that we can work with. And once again, as you think about our company, as I look at it today, we are a land company.

Speaker 1

We're a horizontal company. We're not looking to be vertical, but we think we have a lot of expertise in that horizontal that we want to grow on.

Speaker 4

Perfect. I appreciate that. If I could ask a second one, just kind of thinking through the pricing tower that you have in your communities where you're selling lots today. You mentioned rate buy downs and incentives from builders and we're seeing that obviously in our channel checks as well that right now it's a pretty it's a healthy demand environment, but one where I would say it's fairly competitive from an incentive standpoint. And I'm curious as you think about what that means for land residuals and values as we kind of weigh that the tight inventory situation from a lot perspective with the seemingly lack of pricing power on the home side, at least for the time being.

Speaker 4

How do you see that filtering through the land values over the next 12 months to 24 months? You've got a lot of deals come into the market. Do you still feel like you have pricing power, the ability to raise land prices even as home prices on a net basis are pretty steady for the time being?

Speaker 1

Well, I think first what I would the comment I would make is because we're in California, a lot of the pricing power we're seeing is really drives from California's acute land shortage and the time it takes to get entitled land. And once again, you actually get a snapshot of a much broader market than we're working in. In Irvine, we still have you're right about the builders are helping sales. On other hand, we still have the builder sell pricing power in Irvine. So we haven't really seen anything that would erode land and as we are out bidding and talking to builders, we're seeing our land values hold up.

Speaker 1

And because of that, we are able to that acute shortage of land and home sites, we are able to get some price appreciation in our land from transaction to transaction. Now I would tell you that Irvine is always a unique piece of property as you know. In Valencia, we don't have quite as strong a push. But once again, based upon what we have going on up there, our builders are able to get some price appreciation. So we're not really seeing any downward pressure yet on land prices.

Speaker 1

And once again, I think a lot of that is just acute shortage of land. There are just very few places for builders to get entitled land that's ready to go in California.

Speaker 4

Got it. I do have one final one and then I'll get back in the queue, but if I could ask it quickly. Thank you. Appreciate the time. You mentioned kind of program segmentation and product segmentation and obviously that's so important to these larger communities.

Speaker 4

Are you seeing any kind of shifts in demand from builders these days as far as prioritizing entry level versus move up or active adult or kind of attached versus detached? Any kind of trends you could point to just in terms of what you're seeing and hearing from the builders where there's greater demand or maybe less demand?

Speaker 1

I would tell you that it's been pretty constant here. But one of the very a real similarity between Irvine and Valencia, they are both very family oriented communities. And so it's about schools, it's about family, it's about safety and both of them have the very similar profile, especially around schools. So the product is really kind of remaining consistent. And I think that the builders are always looking at maybe we'll size it a little bit differently, but we're not really seeing a big movement away from one product segment or another.

Speaker 4

Great. I appreciate all the time. Thanks a lot.

Operator

Thank you. Our next question comes from Andrew Akane, Private Investor.

Speaker 3

Yes. Thank you very much for taking my call. I have two questions. 1, I believe the City Council of San Francisco vote next week on Candlestick and I am wondering whether you guys would be willing to break out the book value of the San Francisco venture during Hunters Point and Candlestick. It's not required under segment operating accounting rules, but I think it would be helpful as an investor to understand the book value of each one separately.

Speaker 3

And second of all, going back to your pro sup from 2016, you guys mentioned that the tax basis of your land exceeded the accounting book value by $500,000,000 I'm wondering is that something that Five Point would benefit from or is that really covered in the tax receivable agreements by the parties that have contributed the volume? Thank you very much.

Speaker 1

Andrew, thank you for the question. I think what I'd like to do is kick that one to Kim and see if there's some more information he can share with you.

Speaker 2

Yes, Andrew, thank you. Just first, with respect to your first question about breaking out 100 points from Candlestick. Again, that was originally visualized. That was a single project. Everything we've done up to this point has presented it that way.

Speaker 2

You bring up a good point of something that we often think about and consider and so we'll take that under consideration and the like. But for the time being, we don't have a way to do that right now. And because the project is so closely related to each other with respect to the requirements under the DDA, we aren't inclined to do that at this time. But I recognize your question regarding that and we would provide some additional information going forward to help investors with that. With respect to the tax basis, since that tax basis is associated with the Valencia project, where we have that additional tax basis And that project is owned 100% by the company.

Speaker 2

Therefore, it will all go to the benefit of the company and isn't really reflected in the tax receivable agreement. The tax receivable agreement had more to do with built in gains that reduces the built in gains that were potentially on those on that asset, but it doesn't is not directly related to it. Does that make sense?

Speaker 3

Yes, that does. So you guys will be able to benefit from the additional basis in Valencia and have been.

Speaker 2

Yes, we have been benefiting from Yes.

Speaker 3

Okay. Thank you very much and you guys are doing a great job. Glad to see the stock moving.

Speaker 1

Thank you, Andrew.

Operator

And our next question comes from Myron Kaplan, Private Investor. Please proceed.

Speaker 5

Hello, guys. How are you?

Speaker 1

Fine, Myron. How are you?

Speaker 5

Okay. Thanks for taking the questions. So overall, things are looking up, I guess.

Speaker 1

Well, I would say I'd like to say better than that. I think we're on a great path to a bright future.

Speaker 5

Good. What I wanted to ask about this management agreement that you emphasize is the renewal is so important that you could use it as a template for future deals and so forth. I don't quite understand its importance. I mean, I understand that maintaining it is important financially, but as far as for future deals, maybe could you elaborate?

Speaker 1

Well, I think once again, we're very optimistic about the program and what we've been working on here. But it's a great structure, it's a template we look at. It's been very successful here. We look at it as a really strong template as we move forward. So it's kind of a model for future deals.

Speaker 1

It won't be necessarily always the deal, but we just think it's a really good way to start to help you think about the company and where we're going with future deals.

Speaker 5

So right. But nothing is contemplated as you emphasized already?

Speaker 1

Correct.

Speaker 5

So I guess you've got a better tranche of land for sale in Valencia coming up, we hope starting next year?

Speaker 1

Yes. Yes. Everything is progressing as anticipated.

Speaker 5

And how is the selection or the realignment of the new Board of Directors, how does that affect operations?

Speaker 1

I don't think we don't look at it as impacting operations at all. So we're I think once again we're on a great path. So we do appreciate your questions, but we're very we think we're just in a good spot and heading in the right direction.

Speaker 5

And in Canada, you're optimistic that you'll be able to have some kind of development activity begin maybe in a year or so?

Speaker 1

Yes. I mean, once again, we're very optimistic on how that is progressing with the city and the county.

Speaker 5

So that you're succeeding in rebalancing the entitlements and so forth?

Speaker 1

Yes, it's moving in a very positive direction.

Speaker 5

All right. Well, you guys are doing a really good job. Congratulations so far.

Speaker 1

Thank you, Myron.

Operator

Thank you. There are no further questions at this time. I'd like to turn the floor back to Dan Hedigan for closing remarks.

Speaker 1

Thank you. On behalf of our management team, we thank you for joining us on today's call. We look forward to speaking with you next quarter. Thanks everyone.

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Earnings Conference Call
Five Point Q3 2024
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