Five Point Holdings (FPH) Q3 2026 Earnings Call Transcript

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DATE

Thursday, Oct. 22, 2026

CALL PARTICIPANTS

• President and Chief Executive Officer - Daniel Hedigan
• Chief Operating Officer and Chief Legal Officer - Michael Alvarado
• Chief Financial Officer - Kim Tobler
• Senior Vice President of Finance and Reporting - Leo Kij
• Executive Chairman - Stuart A. Miller

TAKEAWAYS

• Consolidated Revenue -- $14.6 million, primarily generated through management services for the Great Park Venture and the Hearthstone platform.
• Consolidated Net Loss -- $4.4 million, reflecting a period with no significant land sale closings at active communities.
• Net Loss Per Class A Share -- $0.04, compared with basic net income of $0.30 per share in the third quarter of 2025.
• Cash and Cash Equivalents -- $358.7 million, providing the company with financial flexibility to manage its land portfolio without immediate monetization requirements.
• Total Liquidity -- $576.2 million, consisting of cash on hand and $217.5 million of availability on an unsecured revolving credit facility.
• Great Park Distributions -- $40.4 million, comprising $31.8 million in venture distributions and $8.6 million in incentive compensation payments.
• Valencia Home Sales -- 92 units sold by builders during the third quarter, compared with 78 homes sold in the second quarter.
• Great Park Home Sales -- 54 units sold by builders, compared with 56 homes in the second quarter.
• Hearthstone Management Revenue -- $6.5 million, derived from the oversight of approximately $3.4 billion in assets under management.
• Revised FY 2026 Net Income Guidance -- $20 million, adjusted to account for the strategic deferral of certain land sales into 2027.
• Homestead South Entitlements -- 3,600 approved homesites across 752 acres at Valencia, increasing the community's inventory of entitled land for future monetization.
• Debt to Total Capitalization -- 16.2%, which results in a net debt to total capitalization ratio of 3.8%.
• Great Park Management Revenue -- $7.4 million for the quarter, bringing the year-to-date total from management services to $23.4 million.
• Development Expenditures -- $38.1 million, focused on infrastructure and entitlement activities at the Valencia and San Francisco projects.
• Selling, General, and Administrative Expenses -- $12.5 million, compared with $14.3 million in the third quarter of the prior year.
• Hearthstone Operating Cash Flow -- $10.6 million year to date, with income from operations reaching $7.8 million during the same period.
• EB-5 Principal and Interest Payments -- $1.6 million, leaving an outstanding balance of $15.1 million on this obligation at the end of the quarter.
• Interest Income -- $2.8 million, earned on the company's cash balances during the three months ended Sept. 30.
• Great Park Venture Cash -- $129 million as of Sept. 30, which is held by the venture and is not included in the company's consolidated balance sheet.

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RISKS

• Hedigan stated, "Higher mortgage rates, driven by inflation and geopolitical uncertainty along with weaker consumer confidence, have combined to pressure housing affordability and cause many prospective homebuyers to delay purchasing decisions," noting that these factors contributed to the decision to defer certain land sales.

SUMMARY

Five Point Holdings, LLC (NYSE:FPH) reported a consolidated net loss for the third quarter as management elected to defer several land sales to preserve asset value amid slowing buyer absorption and elevated interest rates. Management revised its full-year net income guidance, citing the timing of land sales as the primary factor and noted that land pricing expectations remained stable. The company maintained its liquidity position while advancing development and entitlement milestones across its California communities. Beyond residential development, the company continued to expand its fee-based revenue streams through the Hearthstone land banking platform and renewed management agreements for the Great Park Venture.

• Management renewed the development management agreement for Great Park through Dec. 31, 2028, securing incentive compensation equal to 9% of all venture distributions.
• President and CEO Daniel Hedigan stated, "The strength of our balance sheet gives us the flexibility to be patient, and pursue land sales when market conditions support the values we believe our assets deserve."
• The company reported groundbreaking for development activities at Candlestick in San Francisco, a project planned for 7,200 homesites and 2.8 million square feet of commercial space.
• Management indicated that approved subdivision maps at Valencia reached 6,600 homesites during the quarter, with a target to increase that figure to approximately 10,000 in coming quarters.
• CFO Kim Tobler noted that the company plans to balance development expenditures with near-term revenue opportunities, aiming for a total spend of approximately $125 million for the year.
• Daniel Hedigan indicated that the Hearthstone platform provides recurring fee-based income and growth opportunities while requiring less direct balance sheet investment than traditional land development.

INDUSTRY GLOSSARY

• Great Park Venture: A partnership between the company and third-party investors to develop the Great Park Neighborhoods in Irvine, California.
• Hearthstone: An asset management platform that provides land banking and investment services to homebuilders and institutional capital providers.
• Valencia: A master-planned community development in Los Angeles County, formerly known as Newhall Ranch.
• Candlestick: A development project in San Francisco featuring residential, commercial, and retail uses.
• AUM (Assets Under Management): The total market value of assets overseen by an investment management platform.
• CFD (Community Facilities District): A special taxing district in California used to fund public infrastructure and services for a specific development.
• EB-5: A federal program that allows foreign investors to obtain permanent residency by investing in U.S. businesses and creating jobs.

Full Conference Call Transcript

Operator: Greetings and welcome to the 5 Point Holdings Q3 2026 Conference Call. As a reminder, this call is being recorded. Today's call may include forward looking statements regarding 5 Points' business, financial condition, operations, cash flow, strategy and acquisitions and prospects. Forward looking statements represent 5 Point's estimates on the date of this conference call and are not intended to give any assurance as to actual future results. Those 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 5 points actual activities or results to differ materially from the activities and results anticipated in forward looking statements.

These factors include those described in today's press release and 5 Points' SEC filings, including those in the Risk Factors section of 5 Points' most recent annual report on Form 10 ks filed with the SEC. Please note that 5 Point assumes no obligation to update any forward looking statements. Now I would like to turn the call over to Daniel Hedigan, President and Chief Executive Officer.

Daniel Hedigan: Thank you. Good afternoon, everyone, and thank you for joining us today for a review of 5 Point Q3 results and discussion of our outlook. I have with me today Mike Alvarado, our Chief Operating Officer and Chief Legal Officer Kim Tobler, our Chief Financial Officer and Leo Kij, our Senior Vice President of Finance and Reporting. Stuart A. Miller, our Executive Chairman, is joining us remotely. Today, I will review our third quarter results and outlook for the remainder of the year Michael will then discuss our operational highlights in more detail. After which Kim will review our financial results. We will then open the line for questions.

During the third quarter, we continued making progress on several important fronts, even as market conditions have remained uncertain with higher interest rates driven by inflation concerns and weaker consumer confidence. Against this backdrop, we are focused on maximizing the long term value of our California master plan communities, while we are also expanding our relationships with leading homebuilders for our Hearthstone residential land banking platform. Our long term strategy remains unchanged. We are focused on building a more diversified company that combines a significant embedded value in our strategic cash generating assets along with a growing stream of recurring asset light fee based income.

We believe these complementary businesses provide 5 Point with multiple avenues for long term value creation. Perhaps most importantly, we continue to maintain a strong balance sheet which gives us the financial flexibility to execute our strategy while navigating the current challenges in the housing market. Turning to our financial results. 5 Points generated consolidated revenue of $14.6 million for the third quarter and a small consolidated net loss of $4.4 million As we detailed in our second quarter call, we did not close any significant land sale transactions at our active communities in the third quarter. As we have discussed previously, the timing and size of individual land sale transactions can create considerable variability in our reported quarterly earnings.

Importantly, Craig Park continued to generate meaningful cash from 5 Point, with distributions and incentive compensation payments totaling $40.4 million during the quarter. We ended September with $359 million in cash and cash equivalents. Total liquidity of $576 million and a debt to total capitalization ratio of 16.2% which gives us a net debt to total capitalization ratio of just 3.8%. These metrics underscore the financial strength of our company, and our ability to take a disciplined long term approach to managing our assets. As has been widely reported, new home market has faced considerable challenges in recent months.

Higher mortgage rates, driven by inflation and geopolitical uncertainty along with weaker consumer confidence, have combined to pressure housing affordability and cause many prospective homebuyers to delay purchasing decisions. Slowing homebuyer demand influences our decisions regarding additional land sales. As we carefully balance absorption and demand within our communities, to preserve and maximize the value of our remaining land. As a result, we will likely elect to defer certain land sales that we previously anticipated closing in 2026 rather than transact in a less favorable market. Fortunately, as I have said before, they are not making more land and time is in California being difficult to achieve. And land does not spoil.

The strength of our balance sheet gives us the flexibility to be patient, and pursue land sales when market conditions support the values we believe our assets deserve. As a result, we now expect to generate a small amount of consolidated net income in the fourth quarter and the end of the year with approximately $20 million of net income. Want to emphasize an important point. Our revised outlook reflects the anticipated timing of land transactions, rather than the decision on our part to reduce land pricing to accelerate sales. While we cannot control market conditions, we can control how we manage our land portfolio and protect the value of our assets.

We remain focused on maximizing the long term value of our land, We have consistently taken a disciplined and prudent approach to developing and monetizing our communities. And maintaining that discipline remains particularly important in the current environment. Despite the more challenging housing backdrop, we achieved several important milestones during the quarter. At Great Park, the venture renewed our development management agreement through 12/31/2028. We believe this renewal reflects the value of our development expertise and our continued commitment to the successful execution of 1 of the country's premier master plan communities. At Valencia, we made significant progress on entitlements. Including approvals related to our Homestead South Village which is planned for over 3.6 thousand home sites.

This represents an important step in expanding our inventory of entitled homesites and positions Valencia for future development and monetization. And in San Francisco, we recently celebrated groundbreaking for development activities at Candlestick. Marking a significant milestone in advancing this unique waterfront property towards the next phase development. I have been involved in several master plan communities within California throughout my career, and I can say with conviction that opportunities to create an entire neighborhood of this scale from the ground up in a community as large and iconic as San Francisco simply do not come along very often.

With 7.2 thousand home sites, 2.8 million square feet of planned commercial space, and 550 thousand square feet of space for retail, hotel, entertainment and other community uses, We envision creating a vibrant and multifaceted community that will contribute to San Francisco's future as a global hub of technology, and innovation. Meanwhile, Hearthstone continues to broaden our participation in the homebuilding industry nationally through strengthened relationships with institutional capital providers and homebuilders. This asset management business adds an increasingly important source of recurring fee based revenues and provides opportunities for growth that require substantially less direct balance sheet investment than traditional land development. Our balance sheet remains a cornerstone of our strategy.

With more than $350 million in cash at quarter end, substantial additional borrowing capacity and no scheduled debt maturities until 2030, we believe we are well positioned to manage through the current housing cycle while continuing to invest in opportunities that create long term value. Our capital allocation philosophy remains focused on disciplined investment in our communities, expanding Hearthstone's capital light business model maintain financial flexibility and evaluating opportunities to enhance shareholder value. We believe strongly in the underlying value of our California land holdings, and the long term potential of Hearthstone. Remain committed to demonstrating that value through continued progress thoughtful modernization of our assets and growth in recurring fee based income.

While the timing of land transactions may affect quarterly earnings, we believe the fundamental strengths of our business remain intact. Our substantial portfolio of entitled California land established relationships with leading homebuilders growing national investment management platform, and strong financial position provide a solid foundation for future growth and shareholder value creation. We believe we have the right strategy, the right assets and the financial flexibility to successfully navigate the current market environment. While we recognize the challenges facing the housing industry today, remain optimistic about the opportunities ahead and confident in our ability to continue creating meaningful value for our shareholders. With that, I will turn the call over to Mike for an update on our operating activities.

Michael A. Alvarado: Thank you, Daniel. Begin with an update on our California master plan communities, followed by a discussion of Hearthstone, and the trends we are seeing across our homebuilder relationships. Starting with the Great Park, the venture continued advancing development activities during the third quarter. Builders sold 54 homes during the quarter, compared with 56 in the second quarter. While absorptions remain below the levels we would like to see, Great Park continues to benefit from its premier Orange County location established infrastructure, and highly desirable residential communities. As Dan mentioned, we will likely elect to defer several land sale transactions that we previously anticipated closing in the fourth quarter.

We continue to work closely with our builder partners to evaluate the timing and structure of land sales while remaining focused on protecting the long term value of the land. We also reached an important milestone with the renewal of our development management agreement through December of this year or 2020. This agreement extends our role in managing the continued development of Great Park and provides an ongoing source of fee based revenue. As a reminder, we are also entitled to incentive compensation payments equal to 9% of all distributions to the Great Park Venture Partners.

During the quarter, our Great Park Management Services business generated 7.4 million in revenue, bringing the year-to-date total to $23.4 million We believe Great Park remains exceptionally well positioned supported by the scarcity of developable land in Orange County, the quality of the community, and the significant development opportunities that remain. Turning to Valencia. We made significant progress during the quarter on an important entitlement initiative that substantially expands our future development opportunities in Los Angeles. In September, the Los Angeles County Board of Supervisors confirmed the approval of the Homestead South project that had first been approved by the Planning Commission earlier in the quarter. Homestead South encompasses approximately 752 acres and is planned for over 3.6 thousand homesites.

With this milestone, we have now more than 6.6 thousand homesites in Los Angeles County that have approved subdivision maps and we are working toward increasing that figure to approximately 10 thousand over the coming quarters subject to the remaining approval processes. This represents an important addition to our portfolio of entitled land and supports our long term strategy of creating value through the entitlement and development process. Importantly, securing entitlements across multiple villages provides us with optionality with respect to development sequencing and product segmentation that will allow us to thoughtfully allocate capital and optimize revenues at Valencia.

On the sales front, builders at Valencia sold 92 homes during the third quarter, compared with 78 homes in the second quarter. We continue working with our builder partners to manage inventory position the community for future success. Valencia remains a significant revenue generating opportunity for 5 Point. Our continued investment in entitlements, and infrastructure is designed to enhance the value and marketability of our land over time, while providing homebuilders with access to well located home sites in a supply constrained market. Moving up the coast, September marked an important milestone for our Candlestick Development, as we celebrated the groundbreaking For The Next Phase Of Development Activities.

The Event Was Attended By San Francisco's mayor Daniel Lurie, and other prominent national and local officials. Underscoring the importance of the project to the city, and the surrounding community. The groundbreaking marks an important transition from the planning and entitlement process toward physical development of the property. Like our work in our other active communities, we will be creating and installing the fundamental infrastructure to support the future construction of homes, commercial space, parks, community amenities that will create a vibrant and multifaceted destination that includes a mix of housing, employment, and recreation. We believe this project's location, scale, and mix of residential and commercial uses provide an opportunity to create substantial value over the long term.

While contributing to the revitalization of San Francisco's southeastern waterfront, Although development and monetization will occur over an extended period, we re-- we view the progress made during the quarter as a meaningful step toward realizing the potential of this asset. Finally, I would like to discuss Hearthstone, which continues to represent an important component of our strategy to diversify 5 Point's operations and expand our partnerships in the national residential real estate market. During the third quarter, Hearthstone generated approximately $6.5 million in management services revenue. Hearthstone currently oversees approximately $3.4 billion in assets under management and provides land banking and residential investment management services through relationships with institutional capital providers, and homebuilders across the country.

The business is designed to address an increasingly important need within the homebuilding industry, Builders continue to seek ways to improve capital efficiency, reduce the amount of land carried on their balance sheets, and maintain flexibility in managing their future homesite pipelines. For 5 Point, the model creates opportunities to generate recurring management fees and potential performance based income while limiting the amount of our own capital required to support the growth. Our objective is to continue expanding Hearthstone's institutional relationships and homebuilder partnerships building on this established platform, and positioning the business for growth as demand for capital efficient land solutions evolves. Overall, we are pleased with the progress we have made across our communities and at Hearthstone.

Despite the challenges in today's housing market, our teams continue to move important initiatives forward secure valuable entitlements, and advance development activities that will position us for future growth. We remain focused on executing our development plans, strengthening our builder relationships, and preparing our communities to take advantage of improving market conditions. We are optimistic about what lies ahead and confident in our ability to continue unlocking the significant value of our assets. With that, I will turn the call over to Kim.

Kim Tobler: Thank you, Mike. As Dan mentioned, our strong balance sheet and liquidity give us flexibility to take a disciplined long term approach to managing our assets. So as expected, we did not close any land sales during the quarter. And we reported a consolidated net loss of $4.4 million Against that backdrop, I want to emphasize our strong cash and liquidity position. At September 30, we had $359 million in cash and cash equivalents as well as $218 million of availability on our revolving credit facility resulting in total liquidity of $576 million This does not include $129 million of cash held by the Great Park Venture as of September 30.

Our debt to total capitalization ratio was 16.2% and our net debt was $91.3 million representing a net debt to total capitalization ratio of 3.8%. We have no borrowings outstanding under our revolving credit facility. In addition, as Daniel said, we do not have any material debt maturities until 2030. As we navigate the current market environment, we will continue to match our major development expenditures with near term revenue opportunities. Now a little more detail about our cash flow for the quarter.

Addition to the operating cash flow from our Great Park And Hearthstone management activities, The other significant sources of cash this quarter included the following: a $31.8 million distribution from the Great Park Venture and $8.6 million incentive compensation payment from the Great Park Venture. Dollars 8.9 million of CFD reimbursements at the Valencia project, and $2.8 million of interest income. The significant non operating uses of cash during the quarter included $38.1 million of development costs at Valencia and San Francisco, and $1.6 million of EB-5 principal and interest payments with $15.1 million remaining outstanding on this obligation at quarter end. As I have already mentioned, we reported a consolidated net loss of $4.4 million for the quarter.

Our third quarter results were driven primarily by our reoccurring management activities at the Great Park and Hearthstone. Management services revenue made up $13.9 million of the $14.7 million of consolidated revenues. Including $7.4 million from our management of the Great Park Venture. Of which $4 million representative incentive compensation and $6.5 million from our Hearthstone asset management platform, We had $5.7 million of costs and expenses associated with our management services activities. Dollars 1.6 million of which was associated with the Great Park Venture and $4 million of which was associated with Hearthstone. We recognized $2.2 million of equity and loss from our unconsolidated entities dollars 2.7 million of which came from the Great Park Venture.

Our third quarter SG and A was $12.5 million compared with $14.3 million for the prior year third quarter. Hearthstone Ventures assets under management and fee paying assets under management remained unchanged at $3.4 billion and $2.8 billion or respectively at quarter end. Year to date, Hearthstone has provided $10.6 million of cash flow and $7.8 million of income from operations, which is tracking our expectations. As Dan mentioned, we will likely elect to defer certain land sales that we had previously anticipated closing in the fourth quarter of 2020 6.

You may recall that in our initial guidance 2026, we indicated that we expect expected to sell 20 acres of land in Valencia and 50 acres of land in the Great Park. We have already sold 17.7 acres this year at the Great Park. For purposes of updating our guidance, we have assumed no more sales of the Great Park at the Great Park and a sale of approximately 5 acres at Valencia. Therefore, we now expect to generate a small amount of consolidated net income in the fourth quarter and end the year with approximately $20 million of consolidated net income. We also expect to finish the year with over $300 million of cash and cash equivalents.

With that, let me turn it back to the operator who will open the line for questions.

Operator: For participants using speaker equipment, it may be necessary to pick up your handset before continuing before pressing the star keys. We will now poll for questions. Our first question is from Alan Ratner of Zelman and Associates. Thank you, You may proceed with your question.

Alan Ratner: Hey, guys. Good afternoon. Appreciate all the details so far, recognizing it is a tricky environment. So I guess, first, on the decision to delay lot sales. I think it makes sense in the current backdrop. I am curious as you think through that, is that more a function of as you have been having conversations with builders there, you know, their bid pricing was coming in lower than your expectations or what you are willing to sell at? Or is it more you kind of canvassing the home sale environment in these communities and deciding that you want to you do not want to flood the projects with more lots as home sales are soft.

I am just curious if it is more based on a bid ask spread that is widening or if this is more your view based on sale transactions?

Daniel Hedigan: Alan, thank you for the question. It is actually more about absorptions. it is not about land pricing. We have got fully negotiated transactions, but the builders are basically saying there is not current need for the land. So it is not that we are cannot come to a price. it is more about how much inventory they have right now and just really the slowing absorption. So it is it is. that is really why we are looking and saying, alright. We will work with you. We will we will, push these land sales 2027. Got it. Okay. that is helpful, and what I kind of figured. Second question on Hearthstone and land banking.

So land banking has been a pretty you know, pretty discussed, issue on a lot of the homebuilder conference calls lately, and what we are hearing from some builders is that they are you know, in the process of renegotiating some of their land banking contracts Mostly, it sounds like it is either pushing out takedowns or deferring interest payments. But in some cases, and anecdotally we are hearing some renegotiation on actual lot takedown prices as well.

And I was hoping you could just clarify or maybe explain your role in this situation, assuming that a builder that Hearthstone Stone banks land with comes to you to renegotiate an option contract, How does that flow through to you as an asset manager Meaning, like, if you decide to defer interest payments or even reduce the takedown price, is there any outside of obviously some lower management fees, is there any ramifications for you from that standpoint? Alan, I think, look, I think what I am I am going to do is have Kim answer that question for you.

Kim Tobler: Hi, Alan. Yes. that is I mean, this is something that Harsh has had to deal with over the 30 years that they have been in operation. And they are managing capital. So they would be discussing all of those types of situations with their capital partners that they are managing And they will come to a conclusion of what they think is best overall for that fund.

Alan Ratner: Got it. Okay. So it is done in concert with the capital providers. Are you able to kind of from a high level perspective, just give some color on how those conversations have been trending more recently as builders presumably are seeking some renegotiation?

Kim Tobler: You know what, Hearthstone, you know, has a has a national platform And, you know, over that platform, there will be lots of things going on. I have not seen any concentrations or anything like that is occurred over the period. I am sure there are conversations going on. But we have not seen a material change in the outlook. Got it.

Alan Ratner: Okay. Appreciate that. And then 1 final 1. Congrats on the groundbreaking in San Francisco. Appreciate the guidance at Valencia in terms of the lot sales. Is there any updated time line you can give us as far as how we should think through both cash flow or cash expenses from development as well as when the first sales might start to take place in San Francisco?

Daniel Hedigan: Let me actually see if Kim can actually talk to you a little bit about the cash flow. But our expectation would be to have our first sales in San Francisco in 28.

Kim Tobler: Yes. So Alan, as Daniel said, we are planning towards the first sales in 2028, probably towards the latter part of 2028.

Alan Ratner: The spend is going to be a slow buildup with probably towards the end of 27 getting into some larger amounts and going into 2028 to have things ready for sale 2029. I mean, in 2028. Got it. that is really helpful. So if this quarter's land spend was, I think you said, roughly $40 million between Valencia and San Francisco, Should we think about that kind of moderately increasing through 2027 on a quarterly basis as San Francisco gets a little bit more in the weeds It can.

Kim Tobler: We are going to be trying to balance that out. I am trying not to spend more than we have spent this year in total. So I think I said last time we spoke it was about 125 for the total for the year this year. And I am I am trying to keep it around that next year as well. So it might. It kind of bounces back and forth between Valencia and San Francisco. And at the same time, you know, we are gonna moderate any development spend to be in line with the revenue opportunities we see in the future.

Alan Ratner: that is great. Really appreciate all the detail. Thanks a lot.

Operator: Thank you. Our next question is from Michael Odell of MidOcean Partners. Michael, you may begin with your question.

Michael: Thanks guys. All my questions were actually answered. Thanks.

Operator: Excellent. Thank you very much, Michael. Our next question is from Peter O'Keefe of Advisory. Peter, you may proceed with your question.

Peter: Hi. I have a couple of questions for Kim. He mentioned that the Great Park neighborhood has $128 million, does that all belong to 5 Point or is that 37% of that belong to you?

Kim Tobler: It belongs to the venture. And we own 37.5% of the venture. So, yeah, that is the way I would think about it.

Peter: Okay. And then regarding capital allocation, I think you have done some minor share repurchases and debt reduction could you discuss the plans for capital allocation say for the next year or 2?

Kim Tobler: I cannot I cannot speak towards next year. I mean, now, we are we are monitoring things. And we think that our shares are still attractive at the level they are at but we are balancing that buyback against the other capital needs. Given the current nature of the housing market, we believe that maintaining our flex financial flexibility is really important and is the right approach However, we believe the authorization is an important tool in our efforts to maximize long term shareholder value. Okay.

Peter: Thank you.

Operator: Thank you. Our next question is from Eddie Liu of Kaiser Permanente. Eddie, you may proceed with your question.

Eddie: Hi. Thank you, guys. Have a question for Daniel. So this is regards to San Francisco Candlestick Point development. So has there been any tech company or AI company approached you guys And, also, you said 2028. that is for the land sale, right? there is no residential it is just the utility down will be at 2028. Correct? Correct.

Daniel Hedigan: So, yeah, Eddie, the. Yeah. You know, we are. As a horizontal developer, what we are on is our land deliveries and our initial land delivery should be in 2028 up in San Francisco. As far as the question about the development, we have elected not to go into the market. that is 1 of the things that we felt was important in that market is to get the project started. And so the groundbreaking we had in September, and we are now working on a really a comprehensive plan for exploring a lot of market opportunities out there. San Francisco is an incredibly strong market right now. With a lot of opportunities. And so we are actually now.

Just now getting ready to start exploring the next steps as far as the vertical development.

Eddie: Okay. Thank you.

Operator: Thank you. This concludes our question and answer section. I would like to turn the floor back over to Daniel for closing comments.

Daniel Hedigan: 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 year.

Operator: Ladies and gentlemen, thank you for your participation. This concludes today's teleconference. Please disconnect your lines and have a wonderful day.

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