Good morning. Thank you for attending the 2025 Annual Shareholder Meeting. It's our 15th annual meeting. Thank you so much for joining us today. I met someone who came from Hong Kong. Very grateful for people flying in, particularly 15 hours to come to the meeting. We'll have to make it worth your while. Now we're going to go to a presentation, and I will begin. So just the context for kind of the change in Howard Hughes. We've been shareholders, obviously, from the beginning of the company, major shareholders of the business through the Pershing Square funds. And while we felt great about the business progress the company's made, we've been, I would say, disappointed in the shareholder progress of the company over the last 15 years. And we attribute a lot of that to a business that we think, I would say, Wall Street doesn't love. Why? Because most real estate companies are REITs. They pay dividends. They're focused on one property type. Ours is a C Corp. We don't pay dividends. We do a lot of development. We own a lot of land. And we have really every property type in multiple jurisdictions. And the complexity in a relatively small company has made this a challenging stock for people to own, and very few kind of comparables. And at the same time, it's a business that we are, I would say, enamored with, certainly on a very long-term basis. The idea of owning a business which owns small cities and places where people want to live, and where they're controlled by a private beneficent operator who makes these very desirable places to live, is a very good strategy. If you look at the kind of long-term trajectory of land values in great cities and real estate values, a lot of wealth has been created. And we think a lot of wealth will be created in these small cities. But the public markets have assigned what I would describe as a very high discount rate to the company because of sort of keywords like land, development, lack of a dividend, and some of the complexity. So what we're doing, in some sense, is embracing the complexity by increasing our investment in the company. The $900 million that we invested to buy stock at $100 a share came from not the Pershing Square funds, but the Pershing Square Management Company. It's a business that's 90% owned by myself, Ryan, Ben, and other members of our team. So it's a very meaningful. It's by far my largest personal investment in any company other than Pershing Square Holdings, which is our principal public security investment vehicle. We paid a 48% premium. I give credit to the Special Committee and the board for negotiating the premium. This was sort of the one time where our interests were not perfectly aligned with Howard Hughes. We would want to pay a lower price. The board, of course, wanted a higher price, and they ultimately won. And they paid a higher price. But we were willing to do so because of our view of, one, the intrinsic value of the company, and, two, the value of this as a potential platform to build what we describe as a diversified holding company. The incremental investment increased our overall stake in the company to just shy of 47%. We agreed to cap our vote at 40%. This was not intended to be a change of control transaction. The board remains an independent board with Ryan and I joining, or returning Ryan joining. So three of the 11 directors are from Pershing Square, David O'Reilly, and then, of course, the other seven independent directors, including three new terrific directors who we were just getting to know even better last night at dinner. I joined as Executive Chair. Ryan joins as CIO. These are, in some sense, new positions at the company. I was not in an executive role in my prior relationship with the business. And as part of the transaction, we bring to bear not just Ryan, myself, and Ben as directors and as in executive roles, but the full resources of Pershing Square. Pershing Square today manages, without Howard Hughes, about $20 billion of assets in the public securities market. We've got a terrific track record, which I'll have the opportunity to share with you. We think we were trying to. It's a bit like fitting sort of a new engine into a car and didn't quite fit into the hood. We had to keep the engine, if you will, external to the company. We came up with an arrangement where I would not take a salary. We would not get any form of option or equity compensation, nor would any of the other 40-odd Pershing Square team members. We would make the full resources of the firm available to the company for whatever the company needs with respect to investment decision-making, advice of all kinds, everything, including business development, transaction execution, capital markets, et cetera. We think the combination of these two teams creates the potential for a very interesting business over time. We didn't do it for free. We are in the investment management business. We did so on, I would say, the best terms we've ever offered an independent pool of capital. We charge our other funds a 1.5% management fee of their market cap or their net asset value. We charge an annual incentive fee anywhere between 16% and 20%. In the case of Howard Hughes, we charged a $15 million annual base management fee and then a 1.5% management fee on the increase in the value of the company in excess of inflation above the market cap at the time we made our investment based on a fixed share account, which means that the incentive management fee, we call it that, only gets paid if the market cap increases in excess of inflation due to an increase in the share price over time. And that enables us to recover some of the costs associated with working for the company, but it does so on a basis that is, we think, very attractive for shareholders. If you were to try to hire the management team directly, it could not be justified in the context of the business's size today. I mentioned three new directors. You met them. We caught sight of them sort of a moment ago. But just a little bit of background. Jean-Baptiste was Chairman of the Investment Committee and CIO of BC Partners, which is a $30 billion or so plus, maybe I've got that number low, private equity firm. And our expectation over time is for Howard Hughes to buy businesses outside of the real estate universe, private transactions, where Jean-Baptiste's background is very, very relevant. Susan was CFO of News Corp up until very recently. Big, complex organization brings, obviously, very valuable financial skills. Thom Lachman, significant career at P&G. And then when Berkshire acquired Duracell, he was brought on to lead that business now as a Berkshire subsidiary. He ran the Canadian business of Procter & Gamble beforehand. Thom actually reached out to us. He sort of heard that we were, if you will, building a modern-day Berkshire Hathaway. He had mentioned to a colleague, actually a business school professor colleague of his, that he was looking for some incremental responsibilities. He's stepping down as Chairman and CEO of Duracell at the beginning of next year. A business school professor I knew said, you should talk to Bill Ackman. And that's how we ended up paying a fee still to the search firm for the director. But we're very happy that Thom joined. The Howard Hughes leadership team, led by David O'Reilly and Carlos as CFO, remain unchanged. And actually, we're quite excited about the Howard Hughes business. I feel like the business is performing at the best by every metric. And David will share some of those highlights with you. And we also think at a very interesting sort of fulcrum point for the company. It really took us 15 years to get Howard Hughes right. The genesis of this transaction began with an investment in November of 2008. We bought a 25% stake in a soon-to-be-bankrupt mall company called General Growth, and one of the catalysts for the bankruptcy of the company was too much leverage, and it was a bit complex. Some of the complexity came from assets unrelated to the Class A shopping mall business, and we tried to make it look as close to Simon Properties as possible, and we did that by taking all the assets that were unrelated to malls out of the business, and that was the genesis of Howard Hughes. We had this sort of new company that came with a jumble of assets. Over the last 15 years, two management teams and very successfully executed over the last five years by this team refined the assets to kind of a core of what we call the master- planned communities business, or they're really like small cities as opposed to community cities with 100,000 in some cases, 150,000, 180,000 residents, and over time, hopefully, millions. That is really a terrific business, a very profitable business, where some of the key metrics, what you want to do over time is just make these more and more desirable places to live by bringing in new residents and driving more demand for income-producing assets that you develop to meet the needs of the community. Then all of that development, the inflows of people, the enhancements to the community lead to appreciation in the land that you continue to own. The metrics you should look at in valuing Howard Hughes include what's the value of the land we have not sold. The only land we really sell is residential lots to home builders, so we can bring people into the community. We retain the commercial land, and we develop it to meet the needs. If you look at the progress of our net operating income, which is probably the best metric to think about our income-producing assets, if you look at the value of our land that we have not sold, and you look at how much cash we've generated from the lots that we've sold in any one year, plus our condominium business, which David will talk about, you get a sense of the sort of progress of the enterprise. And by every measure, we're at the all-time highs in terms of land values, in terms of cash flows from lot sales, as well as net operating income from our business. So we set up a holding company a couple of years ago on top of what was Howard Hughes Corporation. We did so to provide more flexibility to the company. We had a little twinkle in our eyes that someday we might do something along these lines. The way it exists today, the holding company, there's $900 million of cash there. There's really no operations today at the holding company. All the activity of the company takes place at the Howard Hughes Communities. We call it Howard Hughes Communities officially now? Yeah. We do. OK. So that's the name of that subsidiary. That's the core business of the company. Our plan is to take sort of $900 million from the holding company, maybe some excess cash from the real estate sub, potentially some resources from the issuance of debt to acquire an insurance operation. We'll talk about that in more detail. Over time, you can envision a series of subsidiaries in different lines of businesses. Likely, these are companies where we own a controlling interest. Likely, businesses we own 80% plus that will comprise the future of this diversified holding company. So let's talk about insurance. So our focus on insurance, again, we've talked about building a modern-day Berkshire Hathaway. A useful exercise is to go back and read the history of Berkshire, beginning in the 1960s. A very efficient way to do that is there's a book called The Financial History of Berkshire Hathaway. I think the author is Adam Mead. He did a really remarkable job. It's a bit of a tome. I don't know that people read anymore. But if you're geeky enough to show up at this meeting, you might want to buy this book. It kind of walks through every transaction that Berkshire did over 60 years. What's sort of notable as you read the book is you realize how important insurance has been to the progress and the profitability of Berkshire Hathaway. Difficult to calculate the quantifiable impact, but it's definitely more than half the value created here. Probably my guess is something like 70%, 75% of the value created has been through the insurance operation, but not so much from the profitability of the insurance company, but from the flexibility that the way the insurance company was managed in enabling Buffett to invest in common stocks. And when you read an article in the press that says Warren Buffett bought a $50 billion stake in Apple, it was really Berkshire's insurance subsidiary bought a $50 billion stake in Apple. And because Buffett's been a good investor in the stock market and because he's created sort of low-cost liabilities in insurance companies, the combination has led to an insurance operation that's compounded its equity at north of 20% over a very long period of time. And the power of compounding as such, that's driven a large amount of the value of the business. What Pershing Square brings to Howard Hughes, our track record today is principally in the public markets. We've got almost a 22-year track record, which I'll walk you through, but it's one that we can bring to bear for an insurance operation if it's run in a similar manner to Berkshire Hathaway. What we like about insurance as a kind of initial business is the business itself is inherently cash flow generative. You write premium, i.e., you make a promise, you receive cash, and then you have the opportunity to invest that cash, and it's a business that does not require us to constantly issue equity in order for that business to grow, so it's a self-financing kind of operation. The investment side of the insurance operation is something where we can bring real value. And as part of our arrangement with Howard Hughes, we're not charging anything to manage that insurance company or anything incremental to manage that insurance company's capital. So our record is held back by the fact that we charge fees to our clients. But the beauty of what we bring to Howard Hughes' future insurance subsidiary is we're not going to charge any fees. So this insurance operation will have no cost associated with its investment operation, which gives it a significant competitive advantage. The third point is, as a holding company, as we're structured as a holding company, that's an advantage for any insurance operation that we were to acquire. Insurance is a business where it makes sense to be opportunistic. You don't want to have any pressure to grow your earnings every quarter, to grow your volumes, to grow your premiums that you write every quarter, because it's a business that is episodically attractive. And different segments of different lines of insurance are profitable at different times, depending upon what's going on in the world, whether there's been a natural disaster or not, whether there are new entrants of capital. And the best-run insurers have been able to kind of navigate the sort of pricing environment over time. It's much harder to do that if you're a standalone public company and you have the pressure from your analysts and shareholders to generate earnings. One of the benefits that Berkshire's insurance operations have had is that Buffett, owning half the company, is a controlling shareholder, taking a long-term view, put no pressure on his insurance operations to write business. That enabled them to be kind of more profitable. As a 47% owner of Howard Hughes, we put whatever insurance operation we acquire in the same position. We can run the business intelligently without regard to outside pressures. The other thing we bring here is that we've been a very supportive shareholder of Howard Hughes, beginning when the business was spun off from General Growth. We backstopped a rights offering at that time. We stepped in during COVID to invest in March of 2020, $500 million in the company, an equity offering the business did. And then most recently, when we spun off the Seaport, a company now called Seaport Entertainment Group, we backstopped a rights offering there. So we've got kind of a long-term history of providing capital support to the company, which is helpful. Insurance is a business where the clients really care about the creditworthiness of the counterparty, and the fact that this is owned by a diversified holding company that in turn is owned by a well-capitalized owner, we think, gives it a significant competitive advantage. There are three components to the benefit. One, the holding company structure, our business plan of stealing a bit from Berkshire's model, so the holding company structure, Berkshire has run its insurance operations in a very sort of low-leverage fashion, but it's been more aggressive, at least as the world thinks about it, in how it's invested its assets, and our plan is to do the same thing here, so kind of a quick little kind of summary on how to think about the profitability of insurance. There are really two sides of the insurance business. There's the profits or losses made on the insurance operation, that is, writing, making a promise in the future to pay a claim in the event there is one. And then there is an investment side of the operation where you invest the equity capital and the float of the insurer. The profitability of an insurer, the returns that it earns on its capital, are basically adding the profitability from the insurance operation to the extent there are profits to the profitability of the investment side of the operation. When are you jumping? I forgot. About five slides ago. Oh, I was going to let Ryan do this. OK. You know what? Your slide. You do it. This is Ryan Israel. Thank you. Good morning. Thank you. As Bill was mentioning, when we look at insurance, the way that we think about it is ultimately the success of a business like insurance should be judged by its returns on equity through an insurance underwriting cycle. And as Bill was explaining, there's really two components. Your underwriting return, which is the core insurance operation's return on the equity capital. But at the same time, there's a second component, which is your investment return. And so if you break that down into the two key components, as Bill mentioned, your underwriting margin or how profitable the business that you're writing is per unit of risk is the first key component. And the amount of premium leverage you have, or the amount of business that you're writing relative to your base of equity capital is the second component. Combined, that makes up the underwriting returns on equity, and then the second component is really your investment returns, and that's just a function of what is the percentage returns that you're earning on all the assets that you gather. As Bill mentioned previously, business is very cash generative, where when you write business, people pay you upfront. Over time, when losses occur and you make good on the policies you've written, you pay out cash. That lag provides investment funds that are available to invest that you add to the equity capital that you have in the business, and the combination of those factors is your investment assets. What return you get on that is very important, but it also creates financial leverage, so when we look at an insurance company, we look at the amount of invested assets relative to the amount of equity capital. The combination of the investment performance, the investment leverage, so it gives you return on equity. When you add those two together, you can assess what the total returns on equity are for an insurance business. I'll give you a little bit of a primer as to how we think about how the typical insurance company in the P&C space is run. Using kind of those four key metrics to get your overall return on equity, what we see is that, in general, most P&C companies write net premiums that are roughly equal to the amount of capital that they have. No real investment leverage, kind of a one-to-one framework. Most businesses target a very modest underwriting profit margin. In industry parlance, that means that the combined ratio is less than 100%. The combined ratio is really just the total expenses that you have relative to the amount of premiums that you write. So the key point here is they target a modest underwriting margin, and they write just about equal to the business equal to the capital they have. On the investment side, most insurers actually invest in fixed- income instruments, a lot of government bonds, a lot of high-grade corporate credit. And then they leverage that up two to three times on average in order to get a little bit higher of an equity return than what they would otherwise receive for investing in these relatively low fixed-instrument investments. So what we've done here is really try to show you more graphically what the broad industry looks like through a cycle on each of those four components. When you look at premium leverage, what you'll see here is the average company, which is the red bar. It's about 110% of the premiums that it writes each year on average relative to the equity capital it has. You can see there's some variation. For example, when you take what's called a short-tail line of business, which is something like auto insurance represented by Progressive, where effectively you're writing policies and repricing them every six months because you get losses very, very quickly, you're allowed to have a little bit more investment leverage typically then because you can reprice in case you got a mistake. But on the far end, you could see companies, for example, like RenaissanceRe and others who might write what they call longer- tail lines of business, where you write business today, but you may not know for many years exactly what you'll have to pay out. Those companies typically write a little bit less than 100%. But on average, it's pretty close. The amount of premiums you write is equal to roughly the equity capital base you have. The second component of the insurance underwriting return on equity is really just your profitability. So what we've looked here at is over, again, roughly the last 10 years, the combined ratios, which is sort of the total expense ratio. And the average is about 94%, which implies about a 6% underwriting profit margin. Some of the best companies, like Chubb, are doing about a 10% profit margin or just under a 90% combined ratio. And some others are getting a little bit more modest, for example, a 3% or 4% underwriting margin or a 97% or 96% combined ratio. What's interesting about the P&C space and our study of them is insurers are nearly exclusively focused on the insurance side of the business. But as I mentioned before, a very important component of the overall return on equity for an insurer actually comes from the investment side of the business. But our study of the typical P&C insurer landscape is they actually sub-optimize their investment returns. What I mean by that is they are not pursuing the high return on equity strategies that we believe are available to a P&C insurer if it has the right caliber of investors and it has the institutional capacity in order to pursue this strategy. So it raises a question of why doesn't the typical P&C insurer do this if that's actually an approach which maximizes the return on equity over time? And our perspective is there's a couple of reasons. First, we don't think that the typical P&C insurance company is well-suited to be able to attract the type of investment talent that would be able to pursue this high return on equity strategy because they're competing often with institutional investors and asset management firms, which have the capability to compensate the best-in-class investment talent. And secondly, going to the holding company point that Bill made, the typical P&C company is a standalone public insurer that needs to report results every 90 days. And as a result, they don't have the support structure of being a subsidiary of a holding company that has a more diversified stream of earnings. Nor do they have typically the very well-capitalized owner, such as a 47% owner of Pershing Square, being able to back and justify the longer-term nature of the business, which might create a little bit more volatility in the accounting results that are reported each quarter. And so as a result, they tend to look towards having fixed-income securities, which on an accounting basis do not show much volatility. That is an approach that helps them be able to smooth out their earnings over time and is something that, when combined with a lack of investment support, leads to a shorter-duration fixed-income portfolio. As a result, they tend to have much lower returns by investing in fixed-income assets. Now, while there's a lot of perceived stability, and certainly there's a lot less volatility in that strategy on a quarterly basis, it doesn't mean that that's actually lower risk. For example, when you invest in fixed-income instruments, you are taking on two types of risk. First is duration, which is really how the changes in interest rates in the future may affect the value of the bonds that you've purchased. Second is credit risk, the risk simply of people paying you back or not. Typically, because a P&C insurer would be investing in these lower return on assets, they actually lever up the portfolio two to three times. So in order to get a more reasonable return on equity in the industry, they actually take on more financial leverage, which means to the extent you do have a problem with duration or credit risk, that gets actually amplified in terms of the losses that they take as well. I think it's important to acknowledge that while typically most P&C insurers don't really put a lot of focus on investments, there have been a couple of examples over the last decade or two where there are some asset managers that have actually gone into the insurance space. Most of the time, the reason that those people are doing that is they are trying to come up with a way to increase their assets under management on which they can charge fees. The results of those companies on the whole have not been particularly attractive because we think that they're not putting enough focus on the insurance business, and they have some incentives that are not aligned to deliver the best returns on equity overall for shareholders. Our structure and what we're imagining with the Howard Hughes Insurance Company is that we would not suffer from those because our interests would be very well aligned with investors. We would be owning this business outright, which means we are sharing in the success of the business over time and making sure that we limit the risk because we bear the ultimate returns. Secondly, as Bill mentioned, we would not be charging any incremental fees for managing the assets. This would be truly an insurer that focuses on insurance while also bringing to bear the investment resources of the Pershing Square organization. In focusing a little bit more on the asset allocation and how the P&C insurers sub-optimize their returns, the chart here, if you look at the box that's circled, really shows how much of the assets are invested in fixed-income securities. On average, if you take the dark blue line of 78%, add in the 7% blue line, that gets you your fixed income. About 85% of assets across the industry are invested in fixed income, which leaves about 15% that can be split to equities or private equity. I think what's important on this page to realize is those numbers are actually overstating what the typical company does because on the far left, Cincinnati Financial has about 40% of its assets invested in common stocks because they're pursuing a little bit more of an equity-based strategy. The rest of the companies really have about 1% to 6% of their overall investment assets in common stocks, even though over the longer term, typically results in common stocks that have a much higher return on an asset basis than fixed-income instruments would. The second component is financial leverage. As I mentioned, a lot of companies, because they have a lower return on asset strategy, tend to have more financial leverage in their portfolios. The industry average over the last decade is about 3:1, meaning for every dollar of equity capital, you have about $3 invested in assets. Some are a little bit above, and some are a little bit below based upon the duration of their float or the time lag between when they get investment funds and they have to pay them out and based upon the overall strategies and the investment bases and the allocation that they have. But typically, a roughly 2.5% to 3% expense leverage. So on this page, we really wanted to tie together some of the qualitative points we made about how the returns on equity play out and explain, if you dissect them, how you can analyze a typical P&C. So to start with, typically across the cycle, you see about a 12% return for most of these P&C companies on average that have taken this insurance-led approach. And interestingly, only about 4% of that return of the 12% comes from the core insurance operations. So what we see here is, on average, the companies are writing at a 95% combined ratio, which means about a 5% underwriting margin. They have to pay taxes, which gives you about a 4%. And because they have premiums that are equal to their equity capital, that's about a 4% underwriting return just on the insurance. What's interesting is actually an extra 8% of their return comes from the investment side of it. And if you look at the typical balance sheet of an insurer, you see that about 5% is coming from higher-yielding common stocks, but 95% is actually coming from very low-yielding fixed-income investments. So they're getting about a 4% pre-tax return due to that mix of assets after taxes at 3%, which is similar to what they earn from the insurance business, but they're able to lever it up about 2.5:1 or 3:1 to get something a little bit higher, about 8%. So on average, you get about a 12% return for the P&C industry, with most of that coming from investments. Now, Bill will come back up, and he'll be able to walk you through how Berkshire Hathaway has really created a differentiated approach that sort of turned the typical P&C insurer on its head with much more success and is really the aspirational model for how we'd like to build the Howard Hughes Insurance Company. Thanks, Ryan. And sorry to steal your slides. But actually, let me just go back one. What I think is interesting, if you think about it, you talk about an insurance company. Only a third of the return on capital is coming from insurance. Two-thirds is coming from investments. On the investment side, they're getting to return with financial leverage and investing in pretty low, I would say generally lower-risk, people think of as lower-risk securities in the form of fixed-income investments. But it's really an investment business, the insurance operation. So if you could optimize the investment side of the business, and I think this is an insight that Buffett must have had 60 years ago, you could build a much more profitable insurance company. What's different about Berkshire is he takes a very low, Buffett takes a very low leverage approach to the way he runs this insurance operation. Instead of writing 100% premium relative to or an equal amount of premium relative to equity capital, he writes somewhere between 20% and 40% each year relative to equity capital. It's like an insurance company running at very low RPMs. If you think about it as a car just coasting along. He also uses lower leverage on the investment portfolio. Ryan showed you kind of average for the industry is something approaching three times assets to equity as the financial leverage for insurers. And Buffett's at 1.5% to 2%. So much less leverage on the investment side and a fraction of the leverage, if you will, on the insurance side. The other approach he takes is like a barbell approach. So with respect to the float, the sort of money received from premium to be paid potentially in future claims, he invests that money in short-term Treasuries and takes no risk. However, he takes approaching 100% of the equity capital of his insurance operation, and he invests in common stocks. So it's super low risk with respect to the float, really taking no risk. And a common stock approach to the investment, to the bulk of the investments of the insurer. His insurance subsidiaries are subsidiaries of, today, a highly diversified, very creditworthy holding company. And again, as an effectively controlled company and a long history with shareholders of not focusing on, it's not important to the Berkshire shareholders to focus on quarterly results. It's something that Buffett has done very well in cultivating a shareholder base that he always talks about, you get the shareholders you deserve. The story he always told was to think kind of longer-term. He was never under any pressure to run his insurance operation to achieve a short-term growth, for example, in premiums. The result is that the range of 20% to 40% premium to capital is really a function of the market. What Buffett has done over time is he sort of instructed his insurance team to put pedal to the metal, so to speak, when businesses and pricing is good, but even pedal to the metal is a fraction of the premium writing relative to capital for a typical insurer and to kind of step away when the pricing is unattractive. I think his recognition here is that the insurance business is not a particularly important part of the profitability of the company. So instead of 100% premium relative to equity, it's 20% to 40%, kind of a similar degree of profitability. And again, at the scale that Berkshire operates, having a combined ratio of 95% is actually quite impressive. And then a much lower leverage on the investment side of the house, which works out to a balance sheet which instead of so it's more liquid with respect to float, very small exposure to kind of longer-term fixed-income instruments, and about 14X the exposure to common stocks versus a typical insurance company. And this sort of over-capitalization of the insurer has some marketing benefits. Berkshire can always talk about being by far the best capitalized insurance company in the world. And that over-capitalization enables him to be much more nimble with respect to there's a major event that causes catastrophic losses for the industry. He's in a position to immediately write lots of additional business, but he's under no pressure and therefore can run the business profitably, taking no risk on the float. It just seems like a sensible approach because if you expect to run a slightly profitable insurer, if you take 100% of your float and invest in treasuries, that should cover your potential claims. And that gives you the flexibility. And he invests in generally liquid common stocks, although at one point he put his railroad 100% ownership of Burlington Northern actually inside of the insurance company. And this sort of over-capitalization is a sleep-at-night approach. You never find yourself in a world where something catastrophic happens and it has a particularly mere material effect on your capital. And of course, the rating agencies have come to really appreciate this strategy, and that's given Berkshire. It was at one point a AAA-rated company. Today, it's in the AA category, but clearly one of the best capitalized places to go. And in a world where there are very few carriers that can write enormous risks, it gives a real competitive advantage in terms of how they price the business they do. If you look at the investment side of the house over the last decade, Berkshire has actually slightly underperformed the S&P 500 on the common stock portfolio. What we've done using the financials of Berkshire is kind of extracted his returns from his equity portfolio. Had he put the funds in an index fund, he actually would have done better than had he picked stocks. The last five years, he's fairly meaningfully underperformed the S&P. Obviously, the 60-year record is extraordinary. But what you're seeing here is what he complains about is some of the problems of scale. As you get larger, Berkshire has whatever several hundred billion-dollar cash position today. It's a trillion-dollar company. There are some limitations on his ability to earn excess returns as he had in the past. So Ryan took you through the typical P&C insurer. Again, a third of the profitability comes from insurance. Two-thirds comes from the kind of levered fixed-income portfolio, getting to about a 12.2% return on capital. Berkshire is able to run a somewhat more profitable insurance operation because, again, he can pick his moments. He's not as aggressive in terms of writing the business. But even so, of the 15%, let's say, return on equity that Berkshire has earned in recent years, only about 15% or 14% of that has come from actually the insurance business, and 85%, 86% of that has come from the investment side of the operation. So again, it's nominally an insurance company, but it's really an investment operation that happens to be in the insurance business. So when we get back to Howard Hughes and we take a page from what Buffett has done, we have the benefit of his experience, is that we think we have kind of a similar opportunity to build a profitable insurance company inside of Howard Hughes with a kind of diversified lines of business. And the benefit of a diversified insurance operation is insurance is not all the same. There are different markets, whether it's marine or there's some major event where there's a catastrophic loss that can affect the pricing in a particular insurance line and make it more favorable, whereas other lines are less profitable. If you have exposure to different lines, you can be more aggressive in different segments of the market, taking advantage of sort of the nature of the market. And so what we'd like is, one, if we can find a business that we think meets our criteria for being a well-run insurance operation with a good management team and kind of a diversified portfolio, you combine that with our investment track record. And then within the context of Howard Hughes as a diversified holding company, starting at a tiny scale relative to Berkshire, we think we can accomplish something very good for the company. Touching on our track record, so these are our net returns. As I mentioned, we charge our clients anywhere between 1.5% and 16% and 1.5% and 20%. If you look at Pershing Square over the last almost 22 years, we've compounded at 16.4% net versus 10.4% for the S&P index over that similar period, about a 600 basis point per annum outperformance over that period of time, and the power of compounding, the difference between a 16.4% return and a 10.4% return, we'll show you that on chart. It's obviously quite meaningful. There have been several, I would say, stages in Pershing Square's development. We started out as a hedge fund type structure for the first, really up until 2018, when we became what I would describe as a permanent capital firm where today 95% and soon to be effectively 100% of our assets are in permanent capital. One of the reasons why Buffett went from managing a hedge fund 15 years later to taking control of a company and where he had permanent capital is it's a huge competitive advantage to not have to worry about capital coming in or capital coming out. Capital coming in dilutes your returns. Capital leaving can put pressure on you as a manager. Our results have improved dramatically. We've had about almost 1,000 basis point per annum outperformance versus a very strong S&P over the last now almost eight years. And then just to do a five-year comparison again here, almost about a 770 basis point per annum outperformance. Again, these are all sort of net returns. But again, for Howard Hughes, we're not going to be charging 1.5% and 20% or 1.5% and 16% on the investment portfolio. We're going to charge nothing on the insurance operation. If you look at our results without fees, they look even more attractive. So about 1,100 basis points per annum excess return over the last 22 years. And then in what we described since we've had permanent capital, it's been almost 1,500 basis points per annum. These are pretty much off-the-charts results versus any other equity investor over this kind of similar periods, a 28% return compounding for the last eight years and a similar 28% return for the last five. If you look at that in chart form, you start to really realize the power of compounding. Let me just kind of walk you through the history of the firm. As I like to say, success is not a straight line up, but you learn from experiences about making mistakes and learning from them. The first, I would say, 11.5 years, we made very few mistakes. We had an extraordinary record. It was about a 21% plus compound return net of fees over that period. In October of 2014, we launched our first permanent capital vehicle, an entity called Pershing Square Holdings, which today trades in London. Unfortunately, a year or so, or about a year and a half later after launching that entity, actually not quite a little more than a year, we made an investment in a company called Valeant Pharmaceuticals, which was a large passive investment. Up until this point in time, we had made only, I would say, activist-type investments where we had a lot of influence over a company. It turned into a disaster. We lost approaching 90% of our capital on what was a pretty substantial investment, 1,200-1,300 basis points of a loss, which itself wasn't catastrophic. But the very negative press associated with it and the perception in the market that this big negative loss would lead to redemptions from our clients made it a bit of a fatal complaint. And we started, people started shorting the relatively few positions we had. We owned about 10 companies at the time. And they went long the one stock we were short, a company called Herbalife. There's a movie if you want to learn more. And we found ourselves down fairly quickly, whatever, within another year or so, we were down 30% plus. And you see that little moment on the chart. I said to the team at the time, where's the pointer part? The green. Oh, that's how you advance the slides. Okay. Anyway, you see that little thing. Well, that's down 35%. It's no fun. The decision we made in 2017 was basically to get out of the business of managing assets that can leave. We had launched this vehicle called Pershing Square Holdings. We went public. It had $6 billion of assets, $6 billion of capital. At the bottom, it had $3.9 billion of equity. And what I did at the time, I was 50 years old, not a fun moment in my career. I looked up how much capital was Warren Buffett managing when he was 50. And Berkshire had, when he was 50 years old, only $400 million of equity capital. So I looked at Buffett had $400 million. We have $3.9 billion. If the rest of our assets go away that we manage for clients, then we're 10X ahead of Warren, and I've got only 44 more years to catch him. So the other thing we did at the time is something I don't like generally doing, but it was sort of essential at the time. It borrowed $300 million. And I had redeemed some capital from the Pershing Square Hedge Funds. And I bought effective control of our European vehicle by buying, along with other team members, more than 25% of the shares of the company, which were trading at a double discount. Our stocks were cheap, and it was trading at a discount to its net asset value. And that made this closed-end fund effectively permanent. And we could now invest for the long term. We wouldn't have to worry about investors redeeming capital. And so that's the history is 11.5 years of great, everything worked well. This one big mistake that led to this kind of challenge to our business, a strategic decision to exit the open-end hedge fund business, and then kind of a business plan. We're just going to manage permanent capital from this point going forward. If you look at that outcome, if you put $10,000 in Pershing Square at the beginning of time, it turned into a $660,000 if you didn't pay fees. If you paid fees, it still was pretty good. You made about 26 times your money over the last nearly over that sort of period of time. Howard Hughes now gets the benefit of 22 years of experience. Of course, an insurance company is effectively a permanent capital type vehicle. It also has the benefit of our not charging fees. So we think it's a very good setup for us to be a meaningful contributor to Howard Hughes. I guess Ryan touched on this before. What are our incentives here? I have the view that incentives drive all human behavior. More recently, I said love drives all human behavior, but I was giving a toast to my wife. But in the financial context, I would say, what are our incentives? So today, the team owns stock directly in Howard Hughes through our stake, through our ownership of the Pershing Square Management Company. We also are major investors in the Pershing Square funds. So about 28 of the capital Pershing Square manages is employee capital. So on a look-through basis, of the 47% of the company we own, about 25 percentage points of that is directly and indirectly owned by the team. We've got a lot of skin in the game. We're charging a well below, for us, management fee to the company to recover some of the incremental costs to manage this operation. We're managing the assets of this hopefully future insurance subsidiary at no cost, which we think gives this insurance operation a significant competitive advantage. We're ambitious, motivated people. Yes, saying we want to build a modern-day Berkshire Hathaway, it's always we're kind of putting a stake in the ground about what we're trying to accomplish. We're very excited about what we want to do here. As evidenced by our confidence in our ability to do so, we paid about a 50% premium to the market price for the stock of the company, really for the opportunity to pursue this business plan. We're going to follow the Berkshire plan. And in terms of the way we've managed the insurance operation, we're going to expect to write about 50% premium relative to our equity capital. And we'll put the pedal down or we'll step away, brakes on, depending upon the profitability of different segments of the operation. And we're going to instruct the team that manages this company that they're under no pressure to do business. We just want to write profitable business. We expect to be levered similarly to Berkshire in terms of the way we manage the investment assets, 1.5 to 2 times versus 3X for a typical insurer. We're going to take all of the float. We're going to invest the float in short-term US Treasuries. And then we're going to invest the equity capital of this insurer directly in common stocks that will be held by the insurance subsidiary. So you see hedge funds. Greenlight created an entity. I think Dan Loeb at one point created one where they basically took control of an insurance company. And the insurance company took its capital and invested in the hedge fund. And the insurance company is paying full fees to invest in a hedge fund. It's a way for a hedge fund manager to get permanent capital. We are not doing that. What we're doing is the insurance company is going to run as a standalone operation. It's going to invest its assets directly in common stocks and U.S. Treasuries. We're going to manage those assets as an external manager for no cost. If you take we've got the typical insurer, which we talked about. We talked about Berkshire. Now let's talk about Howard Hughes. So typical insurers generated a 95% combined ratio. Berkshire has been at 93%. We're going to pick 94%, which is a bit of picking a number out of the air. But we have, I would say, significant advantages versus a typical insurer because we have no pressure to write business. And we have significant advantages versus Berkshire because of our size. We'll be tiny in the context of the insurance business. It should enable us to choose risk. So I think it's a reasonably conservative estimate if we can over time achieve a combined ratio, not any one particular year, but over time, certainly at the kind of scale that we begin our operation. That means the insurance company has sort of a 6% profit margin. We assume a 21% tax. And that, in light of the amount of premiums we're writing relative to equity, that gets to about 2.4% of our return on equity will come from the insurer. We assume that all the float, expected to be about 40% of assets over time, invested in short-term Treasuries. Today, that's maybe a little higher than today's return, but we're assuming a 3% return, de minimis investment in fixed income, let's say 60% of our assets invested in common stocks. And we're saying over time, can we generate a 20% return, assuming that we pay no fees on a gross basis? We think that's not an unreasonable assumption. Historically, over the last 22 years, it's been 21.5%. Since we've had permanent capital, it's been 28%. And we think that is a reasonable estimate of what we can achieve with our investment strategies. You adjust for the proportion of the capital that's invested in common stocks. You reduce taxes. It gets you to an after-tax return of about 10%. We're assuming the midpoint of the range, the amount of leverage we use, the amount of assets relative to equity. That gets you to a 20% plus return on equity. Now, if our returns on investment are higher, if our insurance company is more profitable, obviously these numbers kind of get better over time, and we've got a little matrix here. Pick your return on common stocks. Choose your combined ratio, and you have an insurance operation that in almost every cell on the page gets you to high teens to kind of mid-20s ROE. You do that over a period of time, the power of compounding, and this becomes a very profitable insurance operation of scale. Again, part of a holding company structure, no pressure to generate to write business. We think that will enable this insurance company. By the way, we are. I'll update you where we are in a moment. But we've had some conversations, obviously, with people in the industry over time. And the opportunity to work for an insurance company that is run in this fashion is a very appealing opportunity. The choices today, if you're an insurance executive, is generally to work for a standalone public company, which has the pressures that I've talked about. You can partner with private equity, which arguably may have even more pressure because you have capital that is being invested with an expectation of an c within a five- or seven-year period of time. Here, we're taking a multi-decade approach. And it's a much more interesting place to come work if you like insurance. And then you get the benefit of the asset side. The investment side of insurance is generally an afterthought for almost every insurance executive. And having someone else with competency who can handle that, I think, is very appealing. And this would be a permanent holding of Howard Hughes. You don't have to worry about the business being sold to someone else in seven years, which I think is very appealing in terms of our ability to recruit and retain talent. So just briefly on the holding company structure, again, diversification, because the real estate business really is unrelated to what we'll be doing in insurance. Over time, that holding company becomes more diversified. But it's a nice base of today, the sort of market cap of the company. It's about $5 billion of capital of incremental credit support to the insurance company. You take closer to our estimate of intrinsic value for Howard Hughes, it's more like it's, I would say, $5 billion plus of incremental credit support. That entity, in turn, is owned by Pershing Square Holdings. Owns about 30% of Howard Hughes. It's an S&P A- rated company with $19 billion of assets, $16.5 billion of equity. And it's owned 15% by Pershing Square, the Pershing Square Management Company, which was valued a year ago about $10.5 billion in today's worth, considerably more. So you've got two very strong owners that own a diversified holding company that, in turn, own the insurer, which is a very good backstop and something that we think the rating agencies will find appealing. That's effectively this slide here. There's really $30 billion of equity backstop for this insurer beyond the capital that the insurer itself will hold. And we've been, as I mentioned before, a supportive long-term investor in Howard Hughes. In a world of short-term investors, we're 15 years in, and we're just getting started. So we're planning to be around for a long time. This is just graphically what I just described. OK. With that, I'm going to turn it over. Oh, last comment. So where are we? The answer is we've executed an NDA. We've done what I would describe as detailed but preliminary due diligence on an insurance operation that is privately owned today. We've made an offer now in writing for that business. And we've gotten some we think we are in the zone with respect to the price they're looking for. We're expecting to be afforded the opportunity to do a more deep dive on this particular business. It's probably a 90-day due diligence process. If it's theoretically possible we're in a position to announce a deal if the facts check out and we can come to an agreement on terms. I would say by end of year or maybe early January is sort of a reasonable expectation. What we bring to the table to a private owner today is, one, this is a very attractive opportunity for the management team. And two, we can afford to pay, I would say, more than what could be achieved if they were to take the business public tomorrow in terms of where P&C companies are trading generally. And because we bring value to the insurer by virtue of managing the assets effectively, we can justify paying a premium price to them. So it's a win for the seller. And I think it's a good setup for us. And we're taking a very long-term view. So we can justify a premium. So I would say cautiously optimistic, we will get a transaction done. With that, I'm going to turn it over to David O'Reilly to talk about Howard Hughes. And then we'll be happy to answer your questions. Thank you, Bill. I share Bill and Ryan's enthusiasm on building this diversified holding company and focusing on the insurance business. And one of the reasons why I do is we have the benefit, unlike Berkshire, of building this business on the foundation of an incredibly successful and profitable real estate business. One of the hardest things I have to do in talking to our existing and new investors and talking about our real estate business is to convey the size, breadth, scope, scale, quality of the communities that we develop. And there's no picture in an annual report that can do it any justice. So please bear with me. We put together a very brief, but I think illustrative video that conveys just the quality of what we do at Howard Hughes Communities. Video, please. At the foundation of Howard Hughes Holdings is our highly successful real estate platform, Howard Hughes Communities. Our portfolio spans more than 118,000 acres across five states, featuring the nation's premier master plan communities and mixed-use developments. With unmatched competitive advantages and a robust pipeline of opportunities, Howard Hughes Communities is positioned for decades of growth. Developers buy a plot of land, build a building, maximize the value, sell it, and move on. Community builders like Howard Hughes, we build and we stay. Whether it's a new residential neighborhood, a Class A office campus, a condominium tower, a school, or even a sports and entertainment venue, our focus goes beyond building. We are enhancing the quality of life for which our communities are known for generations to come. The benefit of having this diverse portfolio is that as market demand shifts, it allows us to be very flexible in how we allocate our capital such that we're always developing at the highest risk-adjusted returns, creating the most value for our shareholders. We have tens of thousands of undeveloped acres, both residential and commercial, that we'll be building on, unlocking the value into great income-producing assets that will generate recurring cash flow for decades ahead across our national portfolio of Howard Hughes Communities. Columbia is situated in between Washington, D.C., and Baltimore, but it's its own true city. There's 16,000 acres, and we're responsible for filling out the downtown. We're building the urban center for this entire community. The downtown Columbia plan was established over a decade ago, so we're well on our way through that, but it's a 30-year plan. The Woodlands is approximately 28,000 acres. It's located 25 miles north of downtown Houston. It is home to over 120,000 residents. It's been named the number one place to live in America and is also a great place to have a business. We have a significant operating portfolio here in The Woodlands, made up of Class A office, multifamily, and retail centers. And we continue to deliver new projects all the time. Bridgeland is located on the northwest side of Houston, right in the path of growth. It makes up 11,500 acres. We expect 70,000 residents at total build-out in Bridgeland. And we're just at the tip of the iceberg of the commercial offerings that we're bringing as well. You're seeing some of those projects break ground now. But you're going to see those projects continue for decades to come. Summerlin, which is a 22,500-acre master plan community located in Las Vegas, 15 minutes from the Strip, and adjacent to the natural landscape of Red Rock Canyon. With more than three decades of planning and design completed, Summerlin consistently ranks as one of the top-selling communities in the country. We have Class A office, premier multifamily developments, and a vibrant, walkable retail, dining, and entertainment center. We're located on the south shore of Oahu, and it's this incredible opportunity of 60 acres along the coast. We have a chance to deliver really a high-rise format of mixed use and do that in a sequence that integrates the streetscapes, the parks, the retail, the shopping, the restaurants, the culture at a scale that is really unprecedented. In Arizona, our latest acquisition is Teravalis, 37,000 acres just west of the White Tank Mountains, just north of Interstate 10 and the future site of Interstate 11 that will connect Las Vegas to Phoenix. We expect to welcome our first residents and neighbors this fall and deliver more than 8,000 homes in the coming years. At full build-out, Teravalis is planned for 100,000 homes, 300,000 residents, and 55 million sq ft of commercial development, a community that is ideally positioned for growth and ready to meet the demand in one of the nation's fastest-growing cities. Within a master plan community, Howard Hughes has a meaningful competitive advantage in that we are the largest owner of Class A office and multifamily space and the dominant owner of the undeveloped land. That gives us the ability to build just to meet demand, never overflooding the market with too much product. It protects us throughout all market cycles such that we're able to outperform in good times and in downturns. Competitive advantage revolves around our ability to self-fund our business plan. We're able to use the free cash flow from rent collection, land sales, and condo sales to fund all the equity requirements into the developments that improve our communities. Even with the success we've achieved, the opportunity ahead is even more compelling. Howard Hughes Communities has a decades-long pipeline of development firmly positioned to generate strong, sustainable cash flow today and in the future. That cash flow powers both the continued growth of our communities and the new opportunities for Howard Hughes Holdings. Howard Hughes Communities, the foundation on which we are building the next great diversified holding company. All right. Hopefully, that video conveyed a lot of what we do at Howard Hughes Communities. So I'm going to be brief in my remarks. I did want to highlight just a couple of things around why we're different and why we have these unique competitive advantages, the first of which is this perpetual cycle of value creation. We sell land to home builders. Residents move in. We take that capital to build great amenities in our communities. And therefore, more residents want to move in, and our remaining land value goes up. And that goes on for decades and decades. The second around is the lack of competition we have. And most will characterize development as a relatively risky business. But why is it risky? You have entitlement risk. You have approval risk. You have competition, sometimes four corners of an intersection with four office buildings going up at the same time. In Howard Hughes Communities, we are fully entitled. We have our use approvals. And there is no competition because we're the dominant owner of both the existing property and the undeveloped land. And then the final competitive advantage is our ability to self-fund this business model. Our recurring NOI for rent collection almost covers entirely our interest in cash G&A, leaving the profitability from land sales to home builders, represented as MPC, EBT, and profitability of selling condos to fund any future growth into the company. And as Bill mentioned in his opening remarks, we're in a unique inflection point in the company today. And I'm going to talk about that in a second. But first, that competitive advantage around the self-fulfilling cycle of value creation, I want to start on that for a second. In 2017, we did an Investor Day. And I told our audience that we had about $3.7 billion of unsold land at an appropriate discount rate and an average growth rate per year in terms of price appreciation of that land. Since then, we've been very successful in selling that land to home builders. We've sold $2.7 billion at an average margin of between 65% and 70%. So under the melting ice cube approach, we'd think, oh, today, you probably have a billion dollars of land left. But what's happened to that remaining land is the price per acre has appreciated as we've improved these communities, as we've provided great places to live, shop, dine, great places for businesses to thrive and families to grow at an incredible rate, 164% in Summerlin, 60% in Bridgeland, and almost 50% in The Woodlands Hills, such that that remaining land that mathematically may appear to be a billion dollars is actually $4.8 billion today. That's the virtuous cycle of value creation that goes on and on in these unique communities where we have a competitive moat built around tens of thousands of acres. That is going to go on and on for the next several decades. The other area I want to highlight before I wrap up and open for Q&A is to talk about our free cash flow. This year, we've guided to $410 million of adjusted operating cash flow based on recurring NOI, land sales to home builders, and zero condo margin because we don't have a tower that closes this year at a profit. I'll explain that in a second, against our G&A and interest expense. But we're at a unique point. Within our rent collection business of our operating asset NOI, we're currently stabilizing recently completed developments that will add $73 million of incremental NOI and finishing under construction projects that will add another $15 million of NOI. So over the next several years, that $267 million can stabilize it up to $355 million, increasing the free cash flow of the company. Within our land sales to home builders, we're selling at an all-time high this year, b t not at an all-time high in terms of number of acres. That increased profitability is really driven by price per acre. And assuming we sell a similar number of acres and a similar price per acre over the next several years, that's a number that should remain in the $425 million-$450 million. Now, I am cautiously optimistic that we'll see increased price appreciation the way we've seen in these communities over the past five years. But we're not going to count those eggs until they hatch. Finally, in our condo business, right now, we're closing to. And that is part of the requirements of our entitlements there is to deliver 20% of our units as workforce. We deliver those at a 0% profit margin, which is why we have 0% profit from condo this year. Going forward, we have six towers that are largely pre-sold, some of which are under construction at 97%, 93%, and 70%. And those that are still in the pre-sales, we haven't even started construction, at 67% and 50%. Those, at their current sale levels today, represent $4 billion of revenue that, historically speaking, have delivered at a 25% to 30% margin. That increased cash flow, if I add all three of those segments together with a similar level of interest and overhead, will take our adjusted operating free cash flow from $410 million to $690 million. Now, as much as I love to reinvest into our communities, it's hard for me to imagine a situation where I need all $690 million to go back into The Woodlands into Summerlin. That incremental free cash flow is what can get into Howard Hughes Holdings, the parent company, that can be invested in insurance and other durable free cash flow businesses. To me, that is what's incredibly exciting about this opportunity. I'm going to stop there. I'm going to turn it over to Bill if he has any closing remarks before we have Q&A. Yeah, actually, if they could bring the house lights down a bit so we can see the audience, because we've got pretty good glare here. But I think what we'd like to do is just open it up for questions. Be happy to answer questions about anything that you find relevant and interesting. And questions for the board, including people not on the stage, are also welcome. So maybe can they turn the house lights down a little bit? I'm sure you can still see us. And that way, we can see the audience a little better. OK, someone's going to work on that. So with that, please feel free, once you raise your hand and. Thanks, Bill and team, for hosting this in person. Much appreciated, Ian Sanderson from Calgary in Canada. If we look at sort of the publicly traded insurance companies that you presented on, what would be the closest analog to the type of company you're looking for? And what are some of the characteristics of an insurance company that you find attractive? I think, one, it's got to be of a size that it's acquirable by us. So it's got to be a relatively modest size, a couple of billion dollar kind of scale. It ideally is diversified in its operations and the business that it's written over time. So it's got an experienced team. And it participates in kind of broader lines of business. But beyond that, we don't really need much more because we obviously want it to come with a very strong team that's got a good brand and track record and credibility because we want them to be shown the best business. But those are kind of the key. I mean, Ryan, are you leaving anything out? No, I think that covers it really well. I would just add, in the public markets, I think a lot of the businesses in terms of insurance that we admire are at a vastly larger scale, as Bill pointed out, and so while we admire those businesses, those are probably not going to be the ones that we would be able to acquire just given the relative size differentials, but they've really given us some great learnings about what has inspired us in terms of trying to find a smaller insurer that kind of meets the size criteria that Bill pointed out. I think a lot of that is just fundamentally standalone public insurers, for the most part, are understandably trying to appeal to their investor bases who generally want a steady level of growing premiums and do not want any volatility in the investment results. We believe that that ultimately leads to an insurer that, through the cycle, will underperform its potential. On the insurance side, if you're constantly trying to grow your premiums, that may not be the right way to achieve long-term insurance success because insurance, as Bill mentioned, it's not a business where every day it's the right decision to continue growing your book of business. Some lines of business are going to have very bad pricing. And you should actually be reducing your premiums. Other times, there may be a great way in which you want to accelerate the growth. So when we've looked at some businesses who have gone a different way, I think we admire that. One company, again, much larger, $30+ billion market cap that we've studied and really admired is Arch Capital. They have done a great job, we believe, of really not trying to adhere to a constant growth strategy but really looking at when is the market presenting those opportunities. And then the second approach, as Bill mentioned, are companies where ultimately they have a focus on achieving the best investment results. And I think you've seen Berkshire Hathaway is clearly the best example of that. And there are some smaller versions of that that, over time, I think we believe have a structure, although they haven't really matched the investment performance of Berkshire. It's hard for us to see. Yeah, there's a hand here if you can give the gentleman the microphone. Hey, Jim Cohen from St. Petersburg, Florida. So I was wondering, so let's say you closed on an insurance company tomorrow. Would the stock portfolio that you're buying, would it exactly mirror Pershing Square? Maybe I'm wrong, but it seems like maybe regulators would want you to be more diversified, have more than eight or nine stocks. And if so, how much of a drag on your performance do you think that would be? Sure. So today, we own 15 stocks in our portfolio. And I think that's an appropriate level of diversification. One of the things we have yet to do, but that's an important step, is as we get closer to a potential transaction, meeting with the kind of ambassadors of the world and the rating agencies just to talk to them about what our plans are. But I think the nature of how we invest capital in generally kind of large-cap, very liquid, very dominant, durable growth companies that themselves are sort of investment-grade businesses. We think a portfolio of businesses like that is a very good fit for the common stock portfolio of an insurance operation. We would be somewhat more diversified, possibly, but I don't think so in a manner that will meaningfully affect our ability to generate attractive returns over time. We can also, if you look at our record over 22 years, I would say 75% or so of the profits have come from buying great companies at attractive prices. But about 25% of our profits have been realized gains from hedges that we've implemented over time when we've had concerns about, I would say, black swan-type risks in the market. So going into the financial, by the way, much better, we can actually see the audience now. Whoever made that change should get a prize. And that hedging strategy, we intend to bring to bear to the insurance operation. So we'll have all of the benefits in terms of how we select common stocks for Pershing Square, all the same resources. The portfolio will look likely very similar with perhaps some we won't own Howard Hughes, obviously, in the insurance operation. We'll have to replace that commitment with something else. The same hedging strategy. Can I tell you in advance which portfolio will do better than the other? I probably couldn't. I will say one net of fees, one gross of fees. I think the gross of fees one will have a huge advantage. If I could just add, looking at some of the other insurers who do have a little bit more investment-led approach, just one analog is Berkshire Hathaway. And they have often, throughout their history, had positions which are approaching 25% to 30% of their total equity investments in there. So there is a model for concentration. And oftentimes, Berkshire has had the top 5% of positions anywhere between 60% and 2/3% of the total portfolio. So that would be a similar level of concentration in terms of how we might run for the average stock. But certainly, his larger stocks have been much larger in terms of concentration. And while there could be some differences, we do think that there are some public situations where concentration has not necessarily been viewed as something that you would not be able to do. One request for the people doing audio. If you could leave my microphone on and not turn it down, turn it up, turn it down, turn it up, just keep it at the same level, I would appreciate it. OK, next question. How about whoever's got the mic gets to ask the question. Raise your hand if you want to ask a question. Do we have more than one microphone? I hope we do. There's another microphone here. Why don't you give the microphone to this guy in the front? Whoever has the microphone first can ask their question. Is it on? Thank you. Oh, it is on now. Great. Go ahead. Sure. I'm Josh Rushing with a show called Fault Lines, and I'm curious, how much money-. I should say where you're from. We're going to award for a person who came the farthest. But where are you from? From Fault Lines. It's a television show. And I'm curious, how much money have you put toward the New York City mayoral election? And should your wealth give you more power in a democracy? OK, that's a good question. So I invested $500,000 with Andrew Cuomo. And it was not a very successful investment, certainly in the primary. Look, I think the answer is I'm not a huge fan of changing the laws that allow individuals and corporations to invest massive amounts of money in elections. So if that law were to be changed, I think it would be a good thing where there were limits on it. It's crazy to me that there was a Senate election in Pennsylvania. And people spent $550 million on that election. Seems like a huge kind of waste of money. But operating in a world where it's legal and the other side will do the same, I think it's very important who the future mayor of New York City is. I think it's less important for me personally. It's much more important for the 10 million-plus other people who live in the city. And I'm very concerned about a socialist mayor who believes in defunding the police and shutting down Rikers and legalizing prostitution and a series of other initiatives that I think are going to be really bad for New York. And I think if New York becomes a less safe place and a less attractive place to do business, people. It's a competitive country. People will move their businesses. The finance industry, for example, is a very portable industry. Ryan has a house in Miami. He would love for me to move Pershing Square to Florida. It's much more favorable from a tax perspective. It's much more the mayor of Miami would do backflips to have us and other people in our industry go there, and I think you want a mayor that is supportive of business, supportive of the financial industry because that is very important for the tax base of the city. It's very important for job growth here, and you want a mayor who believes in being tough on crime because if people feel unsafe or something happens to their wife or their children or whatever, that's going to take about a very short period of time before they decide to exit the city. I mean, one of the reasons why Howard Hughes has been so successful is where its real estate is located. Texas, Las Vegas, Nevada, et cetera, are zero or very Phoenix, very low-tax states, very pro-business. That's why the country and people in our country are moving there. That demand enables us to sell lots and build these sort of successful businesses. But all of that growth is at the expense of places like California and New York and Chicago and other cities and states that are sort of anti-business. I think if a socialist, a pronounced socialist, a proud socialist, some would say communist based on some of his plans from a real estate perspective, were to become mayor of New York, it would have very negative signaling value for the city. Mary Ann, who's on our board, is probably the most important corporate relocator in the country in terms of people looking to move businesses and would play a major role in moving businesses in and potentially moving businesses out of New York City. I mean, I can ask her views on what the risk is to New York if we have a Mamdani-type mayor. Why don't I do that? I'm going to call you out, Mary Ann. We can give Mary Ann a microphone. Hold on, hold on. Let me get you the mic. You're going to be sorry Bill pressed this button with me. So let's start with the fact that I just read this morning that JPMorgan Chase now has more employees in Texas than it does in Manhattan. They have always been, at least in my career, the number one private sector employer. So it just validates the points that Bill was making. But you know when we touch upon affordability, I think that that is something that we need to peel back and understand why the city is unaffordable. And I would tell you that for those of you who are paying market-rate rent, a third of every dime you're paying is New York City real estate taxes. I can tell you that real estate provides 50%, basically, of all the tax money that we generate in this city. We've leaned on it so heavily that we've made so much unaffordable as a result. I can also tell you that the desire for more affordable housing is a universal sentiment about anybody who cares about this city. We thrive because we can attract people to live here at all different levels of economic success and also that we want to be able to underpin the people who are challenged here. If we expect every affordable opportunity in this city to solve every social ill, we're not going to get the amount of affordable housing we need. What do I mean by that? If you're designating a certain percentage has to be affordable, then you can't also expect that you're paying the highest level of union wage. You can't also expect that there's contributions being made to the community, et cetera, et cetera. Pick your battles. Make hard decisions. Pick what you want to solve and go for that, and last but not least, I think we all believe that the city has some exceptional things that we need to preserve. In order to preserve those things, we need the sanitation. We need the safety. We need to develop processes so that people don't take forever to implement. Have you been following the casino projects now? I told you you'd be sorry. If you've been following the casino projects, you can see that every Manhattan casino, and I'm not, by the way, an enthusiast. Every Manhattan casino was set up to fail. All you had to know is the politics, and you knew it was a joke. And we make the hurdle so high for everything that the execution, the intentions may be good, but the execution takes forever and costs way out of proportion. So perhaps this can be solved with a whole new perspective. But I do have to say, this is a tough one to learn on the job. That's what I want to say. Sorry. Excellent. I'm just going to be a very specific example of what Mary Ann's talking about. So Howard Hughes used to own the Seaport and a site in the Seaport where we could build a, I don't know, 400 or 500 unit of apartment complex. And I don't know, 25% of that, 20% of that had to be affordable housing. And the construction of this project would contribute meaningfully. There were protests trying to hold up the development of the site, claiming that toxic stuff in the soil from a former factory would be released from the construction. And obviously, before we would build anything there, we were going to clean it up. In fact, we did. We dug out this soil. The people protesting weren't protesting because they were concerned about a school that was located nearby and fumes going into the world. They were protesting because they lived in the building just behind it that would be blocked, and their view of the water would be blocked. The building behind it was, I think, a Mitchell-Lama low-income, moderate-income development that started out as an affordable housing development where people were able to buy apartments for $20,000, very little money. And then after like a 20-odd year period of time, the building sort of went market rate. And the people who paid $20,000 for their apartment ended up owning units that are now worth $1 million with views of the water and more than that. And they didn't like the idea of what it would do to the value of their units if a new building was built in front of them. So there's a lot of fake protests in New York. Many of the same people supporting Mamdani are people who are protesting against development in New York. What keeps housing expensive in New York City is a lack of supply and how difficult it is to create supply in New York at a cost that's competitive. You want to bring rents down, open up the floodgates in terms of development, and make this an easier city to do business. That's a good question. That's exactly why. It's exactly why we're affordable in our communities because we're building the housing supply to keep up with demand. And when I meet with CEOs in New York or California or otherwise, I can give their employees twice a house for half the price. Quality, low-cost college educations in Texas and Nevada. And our communities, since they're not incorporated cities, we don't have many of the problems, unfortunately, of the politics of a typical city. And so you go to The Woodlands. It's spotless. It's clean. It's safe. You can walk around at night. You don't have to worry about having an event like that. And that has become, obviously, very, very appealing for people. Next. Please. Go ahead. Front row. Yeah. Hi. This is for Mr. O'Reilly. Your downtown property in Summerlin, the downtown core, in the next 24 months, because NOI is really the story for us going forward, why can't we put four Tanager Echoes, stagger them 24 months, and really kick up the development of NOI properties? It's a great question. But it speaks to kind of how we'd like to pace our demand, how we like to pace our development really to meet demand. Putting four Tanager Echoes at the same time would be too much supply relative to the demand that's in the market. We like to build one multifamily property. The property you referred to for the benefit of the audience is a multifamily apartment building that's done very well for us. It's almost entirely leased at some of the highest rates in Southern Nevada. Now that that's filled, we're in design and getting ready to start that next multifamily apartment building in Downtown Summerlin. When that's filled, we'll start the next one. Always just building enough to meet demand, never building too much and getting out over our skis and creating an event where we have excess vacancy and therefore putting pressure on rates. Just another one, if I could. Bill, you've said over 20 years there's been many opportunities in private businesses that you've been approached to potentially buy. Can you, even if you don't name them, give us some examples of things you've had to pass on that would have been a great fit for Howard Hughes other than insurance? You know. The way I've managed my personal investment, the way it works at Pershing Square is if I want to invest in public securities, I do that through the Pershing Square funds. The only other things I can do are private investments. So over time, I've made investments in a kind of broad array of different businesses, generally as a minority investor in a deal. And I don't know that, but a better way to answer your question is, first, we're going to focus on buying an insurance company. That's going to consume, I would say, the majority of our free capital. And we're going to invest the assets of that insurance company, as we described. Over time, as the real estate operation generates excess cash, it gets repatriated to the holding company. We're going to look for businesses that meet our standards for business quality. One of the benefits Pershing Square has is we're a very well-known investor in the public markets. I'm a well-known personality in the investment world. And the result of that is just we get a lot of interesting deal flow. But the word has been private stuff we're really not looking. We're going to let the world know precisely what we're looking for, and people are going to be aware of it. And that's going to lead to interesting transactions. So the incremental question would be, what's our competitive advantage in buying a $400 million enterprise value company versus a small private equity firm, which is really the other alternative? Today, if you built a business, your family built a business over 50 years, and you're looking at this point to exit, the kids may be less interested in running whatever the business is, and you want to sell it. That kind of scale, even a $1 billion, $2 billion enterprise business, is generally too small today to go public. And going public is not an exit strategy. It's really the beginning of a journey where you get some potential liquidity, maybe at the time of the IPO and then over time. So if you're 75 years old and it's time for you to kind of organize your affairs for the next generation, you have to sort of sell to private equity or you have to sell to a strategic. If there isn't a strategic, your only choice today, I would say, is a private equity owner. The private equity journey is not that appealing for many private business owners. Why? Because they buy your company. They can decide to create whatever synergies they want. And then five, seven years from now, they're under pressure to sell it to someone else. And for someone who's built something over a lifetime, maybe the business is located in a community that's obviously important to you, it's not a very comfortable thing to sell your business to someone and not know who the ultimate owner is. We have the ability, as a public enterprise with a large owner, to commit to someone to be effectively a permanent owner of their company and not put a lot of leverage on the business and operate it the way a kind of more typical private equity owner would operate a business that they intend to sell in five or seven years. And I think that will make us an appealing potential owner for sellers. Next. The woman here, if someone can give her a microphone. Bill, we've received a number of questions from our online audience as well. If you want to take them. Why don't we take one of those, and then we'll take your question next. Great. So there is a lot of private equity money flooding into insurance. How will you ensure that underwriting discipline is maintained? And are you willing to walk away from businesses if the premiums are wrong and do not assess the risk properly? And relatedly, how do you see AI impacting underwriting in the near to midterm? Sure. Actually, Ryan, why don't you take that? Sure. So it's a great question. And I would kind of take the first part of it in terms of the flood of private equity money coming in. I think what's really important to think about is most of the capital that's coming into insurance is not coming into P&C or property casualty insurance. It's really coming into the life business. In particular, it's coming into the annuities or the retirement products. Those are vastly different value propositions for vastly different people. So what we're talking about in property casualty is really sort of the risks that a corporation or business might face when it's going to conduct any manner of things, whether it's Bill mentioned, gave an example of marine of protecting ships. It could actually be protecting the business infrastructure. It could be for directors and officers protecting. There's a whole range of dozens of categories in which businesses might seek protection for anything core to their operations. What a lot of the private equity folks are doing is trying to build up businesses where ultimately an annuity is nothing more than a guarantee to pay a retiree a certain rate of interest over time for the rest of their life. And as a result, they get in a flow of funds that they can use to invest, ultimately at a higher rate of credit than what they are giving the retirees in that annuity product. So that's really a financing type of transaction. And the reason so much money is floating in is you have a lot of private equity firms that are publicly traded that have market values anywhere between $50 and $100 plus billion. And so they need an area in which they can put a huge amount of capital to work such that if they're successful, it moves the needle for the publicly traded businesses' market values. What we're talking about is a different type of business that operates at a scale that is many, many multiples below that. So a lot of private equity money wouldn't even be interested in what we're trying to do because it would not move the needle for them. So we think that's actually a very strong competitive advantage for us participating in a different market than where they go at and at a much, much lower scale. In terms of the pricing, I think the question is absolutely right. What we've heard from Bill and myself is we have no intention of getting into a business where we need to be constantly increasing the level of premiums that are written every year, even if the pricing doesn't make sense. We think that's a core competitive advantage that Berkshire and other well-run insurers have done for many decades. And that's something that we think is really important. One of the reasons I think that we can say that is because of the holding company structure, which removes some of those incentives where people have to have the only line of business that's public writing all the time. We have other lines of business that insulate it. But the second reason is because we're taking an investment-led approach. Bill talked about how in the typical P&C company, a third of the overall return on equity is coming from the insurance. Two-thirds is coming from the investments, even though the investment return is pretty low. We have the ability, through our common stock selection approach, to really lean into the investments. And that environment is based upon something that is entirely different than where the pricing for insurance policies are. So we have the luxury where, by over-capitalizing, focused on common stock investments, we can be earning a very strong return, even if we never wrote a policy for an entire year, although the intention would be, across a lot of different lines of business, to try to write insurance premiums that we could write. The second part of the question is on AI. Yep, and then for AI, we think AI is more likely going to be a benefit for the insurance companies, but it's going to take time, so if I kind of step back very broadly, what you see primarily in the insurance industry is companies that have been around for many decades, which tend to actually be the largest ones in the industry through the history of it. They're a little bit more analog, where they've had processes that have been in place for decades. They're very reliant on human judgment. And they're just very much scratching the surface to see what's possible for even using technology to start things. There's another set of companies that have really been created, I would say, within the last five to 10 years that are starting to use not necessarily AI, but just much more technology infrastructure in order to really improve their underwriting and to be able to help the underwriters actually have more data available to make a decision. From what we have seen, some of those companies, some of which are publicly traded, some of which are private, they are achieving pretty attractive results, and I think that could be a competitive advantage for some of those businesses because it's very hard to take an organization that has a decades-long history and is many, many multiples larger and completely infuse technology into that when it's very different than what they've done historically. I think it's going to be a very long time, though, before AI is writing enough policies on its own without any human intervention or judgment such that the price of insurance comes down and that returns are equalized. So I think there's a window for particularly the types of companies that we're looking to acquire where technology and AI can be a real benefit in allowing them to underwrite more profitably by lowering the cost and better achieving risk. But at the same time, it won't be broad enough through the industry where it's going to have a negative impact on pricing and hurt returns. Yes. Hi, I'm Stephanie from Dallas. I just wanted to ask, have you talked to Mr. Buffett directly on your plans with Howard Hughes? And if so, what did he say? And did he have any advice for you that you can share? And also, we'd love to have you all move down to Texas. So come on down. Thanks for the invitation, and I do get the opportunity to spend some time in Texas, and we have board meetings there as well. I have not spoken to Mr. Buffett. My last communication with Warren was actually, I wrote him a thank-you note, actually, last week, and it was a thank-you note because this is a person that's had a very significant influence on me over the course of my life. I got interested in this business reading the Berkshire Hathaway and reports. He came to speak at my business school. It was my first sort of interaction with him, and I built a modest relationship with him over time, got to know him a little bit better through kind of Giving Pledge and other meetings, and very important influences. My note to him was basically, other than my parents, no one has had a greater positive impact on me than you, and so I wrote him a thank-you note, but no, I haven't asked him about Howard Hughes, and I hope he's well. Whoever's got the mic. Is that over here? Yes. Hi, Scott from Atlanta. I'm just wondering why the focus only on P&C, and would you consider other types of insurance in the future? And also, when you get an acquisition opportunity you think could fit into Howard Hughes, how would you figure out whether to do that or to go with the SPARC option for an acquisition that you? Sure. Why don't you take the first, I'll do the second. So it's a great question. We've really evaluated all different types of lines of business. Going back to a prior question, what we like about the P&C business is, first of all, we think that it best sets up for the investment approach that we've outlined. There's some a little more complicated regulations, but I think a very high-level way to think about it is we've talked about for P&C companies that they tend to be levered on average two to three times. We obviously plan to be a little bit less. If you start getting outside of property and casualty going into life or other retirement products, you can see leverage levels between seven and 11x. When you get leverage that high, it actually makes it virtually, well, it makes it very difficult to be able to implement the type of common stock approach in a very safe manner that we want. So I would say those types of things outside of P&C are more complicated for an investment approach. But I also think there's a lot of competition because there are other people who will not be investing in stocks, will invest in credit that really want to start playing in the life space because they think they can scale it up from a very small business to a very large business rapidly. So we think there are some competitive advantages in terms of fewer dollars trying to do the strategies that we're implementing if we stay on the P&C. And so that's why it's really been our initial focus for both of those reasons. Your second question, just for context for people who didn't appreciate the question, and maybe a more general question about allocation, so today at Pershing Square with Howard Hughes, you think of it as we have sort of two strategies. The biggest strategy we have today is we manage three funds, the largest of which is Pershing Square Holdings. And then we have two, I would say, remnants of our hedge fund business that invest in publicly traded securities. We own minority stakes, generally in large-cap and mega-cap companies. We're buying these businesses at times where we feel that they're underappreciated by shareholders. We're buying them at discounts. They're companies that we, in many cases, can have a lot of influence on the company to the extent that it's a business that needs optimization or assistance. Think Chipotle after a food safety crisis. Think Canadian Pacific, a railroad that was really undermanaged. But it's a minority stake in a liquid large-cap public company strategy. With respect to Howard Hughes's investments, the investment portfolio of a future insurance operation will be managed very similarly to our public strategy, minority stakes, and likely very similar companies to be owned that are owned by the funds we manage. To the extent Howard Hughes invests in a private business, it's a controlling interest in a private business. And Howard Hughes would be our vehicle for acquiring controlling interests in private businesses of a scale that's appropriate in light of Howard Hughes. We created an entity a couple of years ago called Pershing Square SPARC Holdings. It's an acquisition company. Think a better version. There's a special purpose acquisition company, a SPAC. And then we created something called a SPARC, a Special Purpose Acquisition Rights Company. And what it is, is it's a much better version of a SPAC. The way it works is we gave rights to our previous investors in our previous SPAC, an entity called Pershing Square Tontine. Those rights don't trade today. And we're looking for a company to take public that's of scale. The minimum investment we can make in a SPARC transaction is $1.5 billion and effectively scales to a theoretically unlimited size. But we'll be using that capital generally to buy a minority stake in a company that's private with the purpose of taking it public. So let's think a $10 billion business owned by private equity where they want to take it public. That would be a transaction that we could execute using SPARC. So we've got a couple of different structures and entities, each of which is targeted to kind of a specific kind of transaction. And there really isn't a lot of overlap, which is why it makes sense. Okay, go ahead. This is from New Jersey. First, we would like to thank you and the team for having this in-person meeting. But I have two questions. Why and when did you choose Berkshire Hathaway as your model to decide how the Howard Hughes insurance company should run? And also, looking years and years ahead, what other company types would Howard Hughes be open to acquiring? Sure, so young man, aren't you supposed to be in school? Yeah. It is school. This is school. I agree. Good decision to come to the meeting. So the reason why Berkshire's model for insurance is the model we want to use here is because we don't just want to buy a profitable. There are some really well-run profitable insurance companies. If we had the resources to buy them, we probably wouldn't buy them. Why? Because we'd have to pay probably two, three times book value for a very well-run profitable insurance company. And it would be hard for us to add meaningful value to that business because it's an insurer that's really making a lot of profits on its insurance operation and probably run in a traditional fashion with a fair amount of leverage in its insurance operation, not giving us the flexibility to take advantage of our competitive advantage, which is our ability to make investments in the stock market. If you look at what Berkshire's done, they really, in some sense, I think this is not well understood, but Buffett's really underemphasized the insurance operation of his insurance company, but really used a P&C business and a reinsurance operation as a platform to make common stock investments in a public company context. One of the things that I think is not well known, but today, if you want to have a public company investing in common stocks, it's called a mutual fund or a closed-end fund. And there are pretty tight regulations on how that entity is operated. And think of all the various examples that you can give. And there's something called the 1940 Act, the Investment Company Act of 1940, which limits the amount of capital a public company could invest in minority stakes in public companies. But if you buy an insurance operation whose investment portfolio is in common stocks, you can get exposure to common stocks without getting in trouble from an investment company perspective. So I think what Buffett did is he recognized, by virtue of his, at the time, 15-year track record investing in the stock market, that buying minority stakes in public companies, he could earn very attractive returns. He wanted to continue that in a public company context, but do so within the confines of the rules. And that led him to acquire an insurance business and manage that insurance business in such a fashion that he didn't have to worry about sleeping at night based on the insurance operation. And it would give him the flexibility to invest in common stocks. The same competitive advantage that Buffett, I think, recognized in himself in the 1960s is a competitive advantage that we have at Pershing Square in terms of investing in common stocks. We wanted to be able to continue that by investing in Howard Hughes. That was your first question. The second question was. What kind of businesses are we looking to buy outside of? What kind of businesses are we looking to buy? We're looking. It's less so a certain type of or particular industry. It's a business that has certain economic characteristics. So we are looking. Our favorite kind of business is sort of a royalty-collecting company. If you look at the Pershing Square portfolio today, we own a company called Universal Music. Universal Music is the dominant company, recorded music, and a near number one company in the music publishing business. And these are businesses that look like royalty-collecting businesses. If you stream YouTube, you probably don't listen to YouTube. I might be here to listen to Taylor Swift. I'm not sure what you listen to, but. He says no. Good. Okay. But if you stream whatever it is, every time you listen, a fraction of a penny is being paid to the artist and also being paid to Universal Music. We like businesses where other people put up the bulk of the capital, build the distribution channel, think Spotify. And we get every time, or the company gets, every time people listen, a fraction of a penny. We own Hilton. Hilton's a company where a bunch of entrepreneurs build and own hotels. And the Hilton brand brings a lot of customers and helps the profitability of the hotel. They also manage some assets. It's a business that doesn't require a lot of capital. And they get a royalty on every dollar that's spent on rooms and food and amenities in a hotel. We own a company called Restaurant Brands with which owns Burger King, which is Tim Hortons and Popeyes and other brands, and every time someone has a hamburger, fries, and a Coke, we get 5% of the revenues off the top, so those are our sort of favorite kind of business, sort of a very dominant company in a particular industry in a sort of capital-like business model, and we can envision kind of decades of growth nicely above the rate of inflation. Those are kind of our favorite businesses and businesses where their costs don't grow nearly as quickly as their revenues can grow. That's kind of our favorite, but generally, businesses that earn high returns and where we can predict with a pretty high degree of confidence that technological or other disruption is not going to interfere with the business. And that's the hardest thing to do today, particularly in a world with AI, which is going to lead to major changes in business models and be very disruptive of industry. So if you're going to invest in a company, most businesses pay out a relatively small amount of their earnings and dividends, and some pay out none. So to earn a very attractive return and do well over time, you have to be confident they're going to reinvest the cash they generate over time and earn attractive returns. At the end of the day, the business is not going to be disrupted. If you buy a stock in a business and they invest capital and earn high returns over time over the next 20 years, and then they get disrupted and it goes to zero, ultimately, you've made nothing. So the key is predicting the risk of disruption and understanding the factors that protect the business. The same approach we use for very large companies. We're investing in companies today that have, in some cases, multi-trillion market caps. In some cases, multi-billion market caps. We'll be investing in businesses at Howard Hughes that are smaller than that, but we're going to want them to have similar kinds of characteristics. If I could just add, I started reading Warren Buffett when I was 18 or 19 years old. And I thought I started pretty early. But you're not exactly how far ahead. But you're definitely ahead of where we all were. So I'm excited to see where you'll be in 20 years. Yeah, a big advantage in investing is starting early. I'm 59. So that gives me some hopefully multi-decade, hopefully, opportunity to compound from here. Getting back to my Warren Buffett example, his net worth was in the several hundred million dollar range when he was 50. He's created 99.6% or so of his net worth after 50. So there's still hope for the old people. Next question. Who's got the mic? So you should just give the mic to someone whose hand is raised. And then go ahead. Gavish from New Brunswick. By the way, the other mic should go to someone else who had their hand raised, and that way, we keep it going faster. Okay. Gavish from New Brunswick, New Jersey. So my question is in regards to investing in general. So the Mag 7 has an incredibly high concentration in the S&P, I think about 35%. And the S&P is up 13% for the year. But if you look at the equal-weighted index, it's up about 8%. So where I'm going with this is these companies have an incredibly high multiple, even for the forward earnings. So how do you manage that where you don't want to overpay for the companies because they're trading at extremely big multiples, but you also don't want to underperform the market? So how do you manage that where, yes, you want to outperform the market, but also not want to overpay for the companies? Sure, so the way we assemble a portfolio is unrelated to the market. We don't really care what the stock market is going to do over time. The benefit of being an investor with a permanent capital structure is we don't have to worry about being judged every quarter, every year against the competition. The vast majority of investors, people in the asset management industry, have money that can leave that day, like a mutual fund, or on a quarterly basis or annual basis, like a hedge fund. And therefore, they're always at risk of people kind of pulling their capital. And when people underperform for a period, that's an opportunity for someone to make a decision to take their money away. When you have permanent capital, you can take a kind of a longer-term view. So, when we're investing in companies, we're buying a stock without any real view where it's going to trade in 90 days or at the end of the year. But we're buying it at a price where we think our kind of discounted view of the future profitability of the company is such that it's a very attractive return. We don't make investments, generally, unless we expect to earn a 20% rate of return kind of over time. So we don't kind of construct a portfolio on the basis of how the stock market is constructed. We construct a portfolio, so to speak, bottom up. We're buying businesses that we think offer very attractive returns relative to the risk. The other point I would make in terms of kind of the context of your question, simply because a stock trades at a high multiple does not mean it's expensive. The value of a business is the present value of the cash it generates over its life. There are many examples of companies that, on the basis of next year's earnings, look expensive. But on the basis of the 10, 20, 30-year trajectory, the business look really cheap. And that's the job of the analyst to kind of figure out what the future trajectory. There are businesses that, if you think about venture capital, there are many companies that are losing money, therefore trading at an infinite multiple, but could be very cheap based on their progress. One of the things that Jeff Bezos did exceptionally well as a CEO is one of the first kind of really significant examples I've seen of this, where he kind of made a very significant decision at the time that the business went public is he was going to spend effectively 100% of his profits on just enhancing the customer experience, improving the technology, creating more modes around the business. So it was trading at like an infinite multiple. But if you had bought Amazon any time in the last 25 years, it would have been cheap. So your job as an analyst is to say, yes, a P multiple is kind of a quick back-of-the-envelope way to think about whether a stock is cheap or expensive. But it's just that. It may be entirely misleading. By the way, stocks trading at low multiples of earnings may be expensive because their earnings are going to go away. Stocks trading at high multiples of earnings could be cheap because their earnings are going to grow much faster than people expect. If I could just give one. We thought a lot about your question. I think it's a great one. A couple of interesting statistics, if you kind of dig into that. So generally, people think the Mag 7 is probably trading at 32 to 35x earnings. The S&P is probably trading about 23x, kind of 12 months out earnings. Interestingly, two of those Mag 7 companies are Meta and Alphabet, so Google and Facebook, basically. Facebook trades at 26x earnings and is going to grow its earnings probably 20+ percent next year, 20% to 25%. Alphabet or Google is trading at 24x earnings, and it's going to grow its earnings probably 18%, 19% next year. What's interesting about that is those two companies are basically trading just a little bit more than the average stock. But the average stock next year is going to probably grow 11% to 12%. So even inside of the Mag 7, while overall it's very expensive because of Tesla and Nvidia, you can find, to Bill's point, if you're going through very carefully, you can even find stocks that, on a very back-of-the-envelope calculation, are trading at just slightly higher than the overall S&P multiples, but maybe growing kind of double that level. And that's even inside of the Mag 7 itself. So I think, to Bill's point, what we try to do is look very detailed at every single company that we think is of a size and substance that we could invest in and really try to think about it individually. And then we also kind of look at where the general market statistics are as well, really just for context more than anything else. Go ahead. Hi, Bill and Ryan and everyone on the stage, David and Joel from Omaha, Nebraska. So I made the trip here. I usually make the trip down to Omaha. I said, hey, we're going to make the trip and come down and see what's going on with Howard Hughes. So I wanted to say thank you, first of all, for everything because. I'm going to make you ask a question, but you're very good. I will ask the question. The story of how I started following your career and Ryan's career. I grew up in Africa and had the opportunity to go to Asia, and going to college, I saw videos about cash flows and everything, and I decided to, hey, follow what's going on, and a couple of years later, we're sitting down here today. So I was going to ask a question in line with what the gentleman, the grown-up kid, there asked in terms of if insurance wasn't the route you wanted to go with these, were there other alternatives? I mean, look at See's Candies, for instance. Were there other alternatives you would have taken to produce the same results that you were looking at producing or we were looking at producing in terms of insurance? Sure. And by the way, thank you for attending the meeting. Let's assume we have a billion or two of cash maybe available for an acquisition. And let's assume we spent it on one business. After we spent that capital on one business, depending on the nature of the business, if it's a business that we expect to grow at a nice rate over time, most businesses like that aren't able to spin off a lot of cash out of the business. So now we've made one acquisition. We own one business. Hopefully, we did a good job selecting that business. But our ability to make an additional acquisition is going to require us to raise capital. We probably have some debt capacity, but not a tremendous amount. But beyond that, we're going to have to issue shares. One of the secrets to Berkshire's success over time is that Buffett was able to grow the enterprise in a very dramatic way over a long period of time, principally because he, of the kind of free cash flow generative nature of the insurance operation, grew the investment portfolio enormously over time without issuing stock. When he took control of the company, I think there were 1 million shares outstanding. Only at one point in his history, like in the 2000s, did he issue a meaningful amount of stock when he bought Gen Re. And then today, there's something like 1.5 million shares outstanding of the company. And so all of that asset value he created gets divided over a relatively small share count. And that's a big part of the reason. If instead what Buffett had done is made a series of acquisitions by issuing common stock over time, one, he would be very sensitive to the price at which the shares traded. Because if your stock's trading at a discount to intrinsic value and you're issuing equity to buy businesses, it's very hard to create value. The only examples of companies that have issued a lot of stock over time and bought businesses and that have been successful are ones that have been able to continually trade at very substantial premiums. And that's a hard game. And I think there's a lot of risk associated with it. So that's what's led us to adopt or copy or intend to copy what Berkshire has done over time. Bill, I think it's fair to say that outside of insurance, for other things we might do in the future, what we could have done had we not gone down the insurance route is we're somewhat industry agnostic, but we're looking for specific economic characteristics of a business that we like. And Bill kind of described we like royalties. We like businesses that have a very strong competitive position where it's hard to disrupt their moat, to use a Buffett term, that have secular growth. Generally speaking, we would either like a management team that we think can execute well on a business plan, or where we think that we might be able to find a management team that could come in and execute well. And then it needs to meet certain size criteria. But other than, I would say, ruling out certain industries where there is some first-order impact on the business value that might come from a commodity or something where we would not be able to predict and would not be within the control of the business we buy, we're really looking for a set of economic criteria that meets our needs rather than looking in any type of specific industry. Insurance was a little bit unique. It does have those characteristics. But a lot of it was the value we could add would be in the investment portfolio, which is something that we do on a daily basis already. It's always helpful in making an acquisition to have a business where it's more valuable in your hands than it is to the person who's selling it to you because that gives you a benefit in terms of being able to buy it at a price that's interesting to the seller. That'd be a question from someone else. Yes. Hello. Who's next? Raise your hand. I can't see you. Right here. Go ahead. Hi. My name is Paul. I'm from Chicago. Thanks for hosting us at this event. So Mr. Buffett has been intentional about cultivating a shareholder base that is long-term, low turnover, not overly concerned with quarterly results. I was curious for your all's perspective on what's the shareholder base that you're looking for for Howard Hughes and what's the approach for cultivating it. Consider this your cultivation, beginning of your cultivation. I think you get the shareholders you deserve. I think that's accurate. If you present yourself to the world as where you give people guidance about next quarter's results or the next year's results and the focus is on a very short-term basis, you're going to get shareholders and analysts that focus on those attributes and how they measure the company. If you take the time to explain your business strategy at an annual meeting and you do what you say you're going to do, over time you'll build a constituency of people that like the kind of policies that you adopt. Our goal here is to compound Howard Hughes shares at a very nice rate over a long period of time. We really like the starting base of assets and the management team that we've had the opportunity to work with, for David I've known now a decade, I think, since he's joined the company, and Carlos for not quite a decade, but how long? Eight years. Eight years. And then the team at the property level, we really have an exceptional team that has been refined, polished, and has learned a lot kind of over time. So we really like the starting base of assets. We think we've got a good shot of implementing the strategy that we've outlined here with insurance. And I think we create sort of a unique, interesting company. This is a permanent holding for Pershing Square. And we want this. We kind of like to do a good job for you. And hopefully, we'll attract shareholders that understand that message. And it's important for us to be consistent about delivering that message. OK. The returns you showed would have been lower if the companies had been saddled with goodwill and intangibles. And I think you've alluded to that. How much goodwill are you guys willing to take on? Could you give us some idea of the private company you're bidding with, what the price-to-tangible book of that company is? And then thirdly, did you at all look at Radian's acquisition of Inigo, which is trying to create another type of Arch? Did you have the opportunity to bid on that Lloyd's company? So no to the last question. With respect, I would say we don't generally think about when we're buying a business. Let's put aside insurance for a moment. We're generally not focused on the book value, intangible, or otherwise of a business we're investing in. What we're doing is we're thinking about the price we're willing to pay for a business. We're predicting the future cash flows that business is going to generate over time. One of the factors we consider in sort of measuring the attractiveness of a business is what kind of returns it earns on its capital base. And that capital base can be affected by sort of its acquisition history and accounting for goodwill and some other factors. But we sort of ignore. I would say translate the GAAP earnings of a business and the GAAP measures of the company's balance sheet into sort of economic measures. We use those economic measures to think about a business. I'd rather not comment on price discussions with respect to an insurance company that we intend to acquire. It would be hard for us. We can't overpay. Otherwise, it's not going to be an attractive proposition for us. We're going to be very thoughtful about it. All that being said, as I mentioned, we can afford to pay a premium to where this particular company or other such examples were to trade if they were to take a public tomorrow. The trading price of relatively small P&C companies in today's market is they trade relatively modest premiums to book value. There was a recent privatization transaction. It's something like 1.3 times book value. We can be competitive with the public market trading prices. But we're not going to overpay because if you start at a too high a price, it's not going to be a good outcome for sure. It's for you to go this way as opposed to go de novo, just hire a really top executive. And it's just going to take too long if you start it on your own. So we're open to starting from scratch and backing someone. But if we can find an existing platform where the time and energy has been invested to actually begin, even if it's at the relatively earlier stages, that's going to save us a fair bit of time. And that's why we're willing to, obviously, you start an insurance company. You pay book value for it. You buy an insurance company like we're talking about. We're going to pay a premium. And that premium reflects the benefits of getting a little bit of a head start versus starting from scratch. One additional point I'd add to that is what's interesting if you think about what we may buy over a decade. I got one request from whoever is doing audio. Please leave my microphone on. Please leave Ryan's microphone on. I don't like it when it's off and then it goes on. Sorry to. So what's interesting about insurance relative to most businesses is because a lot of the, or substantially all of the capital would be retained by the insurance company. Even if you paid a premium to book value today for the insurance company, over time it will be retaining its earnings. And all of those earnings would be deployed at book value. And so what's interesting is unlike most businesses where you may say company A merges with company B and the vast majority of the capital that will ever go in is acquired at a premium to book value, and therefore your returns would be lower than if you bought at book value. In insurance, you actually will be putting in more capital at book value over time. So the starting base is important in getting ahead. And if you have to pay a little bit of a premium to do that, if you think about the capital you'll put in over the subsequent years at book value, you actually can very much bring down any premium you pay over time such that your returns over time become very similar to what they would be as if you'd started this with only a book value investment, which is kind of a unique attribute to the insurance business, unlike other more cash flow based businesses. Yeah. It's a very good point. And the fact that we're taking a long-term approach is what enables us to pay a premium. Thank you. Here. Go ahead. Steve from Queens. I was just curious if you were considering investing in TikTok and also if you have any thoughts on the impact of tariffs on the investing landscape. Not thinking about investing in TikTok. Not because it might be an interesting business, but this is a very large transaction. For Howard Hughes, it would be a very small participation. I don't know what it would really do for us as a potential investment. I also think it's somewhat difficult to predict the future of TikTok. So I'm not sure it's something that we can know. The second question was? The impact of tariffs in general for investing. Ryan, would you take that? So what's interesting about tariffs? Maybe David can comment on the impact of tariffs. Why don't you go first on that? Sure. Clearly, tariffs are having an impact on the construction cost of what we're doing, and to the earlier question of why we're not building four multifamily all at once, the returns of development have been squeezed as a result of construction cost increases and multifamily rents that haven't grown as fast. Those construction cost increases have been primarily driven by some of the impacts of tariffs. We've had the benefit in most of our current projects that are underway, largely the condominiums in Hawaii, where we've pre-bought our materials, signed GMP contracts so that we know where our profitability is and locked in place. It's slowed some of the new developments over the past 12 months, but it's maintained the profitability of all those in-process developments that we started earlier. In terms of tariffs more generally, what I would say, looking kind of at the typical Pershing Square types of investments that we would either make in Howard Hughes or we have in our existing funds, we really try to select for businesses that have a degree of economic insularity from things like tariffs. So if you look at a lot of our positions where you think about something like Alphabet, really no impact whatsoever. It's really tariffs are implying first-order companies that are dealing with goods. And a lot of our businesses don't deal with that. So we've tried to construct the portfolio in a way where it's less impactful to specific businesses we own. More broadly for the markets and the economy in general, I would say tariffs by and large have had a much less impact than what just about anybody thought that they would if you looked at the estimates in April when we announced this for Liberation Day versus now. I think some of the reason for that is most of the goods that get traded actually come from different parts around the world and actually are sold in lots of different places. There are some products where it's only being sold to US consumers. But most goods actually are sold pretty much equally to people around the world, and so what we've seen, and I don't think people expect it, is pricing has actually gone up for everybody who buys those goods. So instead of saying we need to meet a 15% or 20% tariff just for US consumers on a good that's sold globally that happens to come into the U.S., a lot of producers have said, we're going to take a pricing 3% and make everybody who's not in the U.S. share as part of that burden. So to some extent, I'm not sure this was intended or not at the time. But what we've actually done is increased pricing for the rest of the world. At the same time, we've increased pricing for the U.S. But because we've spread it out, it's not been much of a price hike for anybody. And therefore, everybody's kind of sharing that burden. But it's been less impactful to US businesses and to US consumers over time, which I think was not a widely expected outcome. But I think that's one of the reasons why overall tariffs have been much less impactful to the economy and to most businesses that were affected by it. I'm there. Hey, I'm Scott. Hello. I'm Scott from New Jersey. Thanks for having us. I had a question in regards to basically the split of income or revenue from Howard Hughes Communities versus the soon-to-come insurance operation with the diversified portfolio investing in mispriced assets, both publicly traded and potentially private. What do we see as the split in the revenue from the portfolio versus the real estate business versus some other type of workout deals as? Yeah. I don't think a revenue comparison would get you the answer you're looking for. I think the way to think about it today is, let's say, the existing Howard Hughes business, something in order of $5 billion of equity invested in that business. We're talking about taking $1 billion of equity and putting it in an insurance operation. So at least initially on the basis of equity or the capital invested, the company will still be 80% plus real estate and the balance 15% to 20% in insurance. We do think the insurance operation over time can earn a higher return on capital than the real estate operation. So with the passage of time and with the real estate operation taking its excess capital and sending it to the holding company, there will be a mixed shift in where the company's equity is invested over time. Hopefully, we'll be shifting that equity into higher return businesses like the insurance operation plus other companies that we're going to acquire. We don't intend to invest in real estate with the excess cash. We intend to invest in other businesses that will begin or increase the diversification of our portfolio and businesses that can grow faster and earn higher returns than the core real estate operation. Here. Hi, guys. I'm Nick. I'm from Hong Kong as well. I was curious, over the next couple of years, especially as you kind of get started with the acquisition and move to this new structure, what do you think would be some of the bigger idiosyncratic challenges that you'd face, and what do you think the mitigants would be to those? So I think that the real estate operation is in a really good place. If you look at the history of Howard Hughes' real estate operation, other than the South Street Seaport, the company's really executed incredibly well in terms of, from a development perspective, built things on time, on budget. They rent up the way we expect, achieve the rents or the sale prices that we expect. And I think we've got a really strong team that has a lot of experience and a lot of tenure. So I feel very comfortable with the real estate operation. I would say insurance, while we've done a lot of work analyzing insurance companies at Pershing Square, but we've not been major investors in the space, it's sort of a new space for us. And we don't intend to run the business directly. We intend to buy a business that comes with a very strong team, but insurance is an inherently involved business, and you can be surprised, or we're in a world which has a high degree of uncertainty geopolitically and otherwise. I don't know that people who wrote insurance in Ukraine thought that Russia was going to invade, for example. That obviously has not played out well if you were in the business of writing insurance where you had exposure to property in Ukraine, so I would say those Buffett talks about investing in insurance. He spent a lot of time watching the Weather Channel in September, so I would say there's that inherent volatility. The way we mitigate that is by running an insurance operation at a very low leverage, so even a bad outcome can not have a particularly draconian effect on the capital of that business. We just make sure we don't get over our skis. When you are in the business of writing, committing to things in the future, and people take your signature, it can be dangerous. When you're, I always think it's easier for a kid to pay with a credit card because it seems like, or even worse now when you've got Apple Pay. It doesn't seem like when you take actual cash out of your pocket, it seems much more tangible. The problem with insurance is you're making a promise with, you're uncertain about when you're going to pay the claim. And people accept your signature. You can get into a lot of trouble. And so having the right controls and discipline and oversight, I think, is the biggest factor. And that's about having the right controls, oversight, and really ultimately the people and making sure they have the right incentives. And I think designing the incentives is really, really important. Thanks. Who's got a mic? Go ahead. Just start talking, and then they'll turn on your mic. I'm Avery Brooks from Orlando, Florida. From your perspective, why aren't there more clones of the Berkshire Hathaway insurance operation? You explain that a lot of the existing insurance businesses don't necessarily have the investment expertise that would be required. But why aren't there more groups that, let's say, do have the investment experience and expertise that have sort of followed the Berkshire model? I think a lot of the information that you shared today that sort of differentiates Berkshire's investment or Berkshire's insurance operation is publicly available. So why aren't there more folks in finance that sort of follow that model? Sure. So I think you need a few ingredients. One, you need a company with a near controlling shareholder that owns 47%, or in our case. Two, I would say the bigger answer is that if you're a really talented investor, you can get paid 2 and 20 to manage a hedge fund. And for you to give that up to go work for Buffett basically gave up a he was managing $100 million. $25 million of it was his. The hedge fund paid his expenses, which were very modest. And he got 25% of the profits over a 6% return. That promote structure was very valuable. But he believed that, and he would be happier and ultimately more successful if he gave that up to become CEO of a crappy textile company and take a $100,000 salary and no stock options. That turned out to be a good trade for him. Buffett would have been nearly the wealthiest person in the world if he hadn't given away so much Berkshire stock over the last whatever period of time. That was a pretty good if you believe you can compound it at 20% and you're going to live a really long time; it really matters what kind of vehicle you're operating with. He just didn't want the headache of dealing with investors. He didn't want people pulling money at the wrong time. He walked away from all of that. If you're a really talented investor today, you're going to go work for Fidelity Investments or you're going to go work for a hedge fund. You're going to go work for a private equity fund because the pay scales there are much better. You're not going to go work for insurance companies like if you're a super talented investor, you don't go work for an insurance company. So I think they have a tough time kind of recruiting talent. They have a tough time paying the talent because the compensation you can earn managing a hedge fund is well above what you can get paid as being an officer of an insurance company. And so I think the combination of the compensation issue, the fact that you have to take a very long-term approach, the fact that you sort of need to happen in the context of a controlled or a near-controlled company, it took us 15 years to get to this point. There was actually an article in Forbes 10 years ago. I was on the cover. It said Baby Berkshire or Baby Buffett or something. And we thought about Howard Hughes as a platform for doing this. But the stars didn't align until more recently. So I think that's really the answer. And I think the good news about that is it means the competitive landscape for doing what we do is not going to be crowded. Yes? Hi. My name is Amir Haryani. I have a few questions related to the Howard Hughes Communities, the real estate component. Maybe back in June or July, I flew to Phoenix. I went to Teravalis. I wanted to see the model homes that were starting to pop up, I think, around July. And at that time, a few of them were up. And when I went inside, what struck me was that the broker was really pitching that the project was Howard Hughes and indexing so hard on Howard Hughes as the brand and didn't even really bring up the homebuilder who built the spec home that we walked in, which made me realize how important was the brand behind Howard Hughes. She was bringing up Summerlin, Bridgeland, and all these successful projects that the company has done in the past. Part of my thought going forward is we're going to have the real estate operations within the Howard Hughes company. Real estate is a very capital-intensive operation. Every time it generates NOI, you could find a hole to reinvest it. We're in the real estate development business ourselves. We know. And so if you could front-load the cash flow generation of these assets so that Ackman and Ryan and Pershing Square can reinvest it, that will help with the value of Howard Hughes. Has there been thought put into whether we can utilize a Howard Hughes brand and maybe partner with other institutional groups to develop some assets within the communities? Maybe instead of certain multifamily product, maybe instead of certain office product or whatever it is, kind of like how the hotel model, like the Hilton model, they've created a brand. And they get other partners to come in, bring in all the capital, help do the development, and then generate fees. Do we see Howard Hughes going towards any kind of path that way where we could bring in other developers, tag on the Howard Hughes name, and help accelerate the creation of these communities faster? It's a fascinating question, and I think Bill knows and some of our directors knows. We've looked at some other opportunities in the past where we would have a smaller capital investment, bring in other partners, put the Howard Hughes umbrella on a potential community, and think that we could increase its patina, if you will, and earn fees. It is really difficult to find the properties that we think should be associated with the name and the brand Howard Hughes. Close to major cities, close to major infrastructure, ability to build great schools, lower tax, warmer climates, business-friendly, those type of properties that are of scale - and you were at Teravalis, 37,000 acres. That's three times the size of Manhattan - are very, very difficult to find. If we wanted to export our name to every 2,500-acre master plan community, that's a nice bedroom community for another community where they may not build great parks and great schools, I think that's a dilution of what we've built to date, which is a six-year track record in Columbia, a 50-year track record in The Woodlands, and 30 years in Summerlin a building incredible loyalty and brand amongst our community, our residents, and businesses that locate there. Yeah. I think I would add that the reason why they're emphasizing the Howard Hughes brand is that if you're going to be the first buyers in a 36,000-acre community, you want to make sure that the developer doesn't run out of money and that it actually gets built. Otherwise, you own a home in the middle of nowhere, versus if it's the Howard Hughes Community and you're the first buyer, and you're getting in really inexpensively because you're in that over time, as the community develops, your home is going to appreciate at a much more rapid rate than it will in a typical kind of development. But we can't just. can't just. It's not like Trump, and he can just put his name on a condominium. It's really about building a city and committing to own it and oversee it for decades. And I think very few people can. It'd be hard for us to partner with someone else who could make that kind of commitment. And I think that's the issue. I've got something too. Go I've got something too. Go ahead. With respect to the condo division within Howard Hughes, so we have the projects that we're finishing in Hawaii, and that has a long span remaining. Do we envision continuing to take on master plan communities where we do these large-scale condo developments going forward? Or are we just planning on finishing up our current pipeline of projects and then maybe focusing more on strategic condos like the Ritz-Carlton projects that we've done, I believe, a? I think that over the past 15 years that Howard Hughes has been public, one of the things that I'm most proud of is the incredible talent that's been built in our condo development and sales team. And I think they execute among the best that I've ever seen in my career. And to leverage the skills and ability that that team possesses across our entire portfolio is what we're trying to do first and foremost. And you've seen that expand from Hawaii into The Woodlands with the Ritz-Carlton, where we've enjoyed an amazing amount of success. And I think that we can take that and expand it not just in The Woodlands, but also some of our other communities like Summerlin, where there is a demand for luxury lock-and-leave with a population that's aging and children moving out of the home that want that lifestyle. And if we can build that at an incredibly profitable rate the way we have historically, we should leverage the skills and expertise of our team to build those condominium towers in our communities. Expanding that beyond our communities is harder because we don't have the competitive advantage of controlling the block across the street or down around the corner. And having that competitive nature down the street can impact margins and profitability and squeeze us and potentially have a branded product of Howard Hughes condominium in some remote location that doesn't live up to our standards. So I think primarily, we're going to execute in Hawaii. We're going to build those towers that we have pre-sales and those next set of entitlements that we just received. We're going to take the skills and expand it in The Woodlands and Summerlin and within the walls of the communities where we have a competitive advantage. And I think that's going to be an incredible pipeline that should keep our team busy for over a decade. And the other thing I would say, in Hawaii, there are some other major landowners, Kamehameha Schools, et cetera. And I think Howard Hughes has really proven itself as an amazing developer there. So there, I think, is the potential for us to do perhaps joint ventures with other landowners in Hawaii as well. But actually, Bonnie, who leads our sales efforts, I think, is here. Is Bonnie here? Right here. Yeah. So Yeah. So why don't you stand up? Why don't you give her a microphone and have her explain the magic that she does? Just don't share too much magic. Hi, I will. How do you do what you do? Explain what you do. I think first and foremost, condominiums, when you're selling condominiums, what makes them great is how they're embedded in, I guess, the orbit of the Plaza Mayor or the walkability or the exciting area that you're in. You can see that right here in New York. That is what we're doing, really. Our condominiums are embedded within a walkable community that is engaging and interesting. That's the first thing. So I think product. Also, the product that the developer seeks out. We're looking for the best designers in the world. We're compiling, I guess, a recipe two years in advance. Before we sell for two years, we're working on what do people want, what are they looking for? And not just what are they looking for, but what can we anticipate? When the car came out, you asked people what you want. Say a faster horse, right? You can't do that. So you have to be sure that you're anticipating that product. So those are the two really product things, and then the process. Howard Hughes has invested capital in our platform. But also, we play long. You mentioned during COVID when you invested in the company. That move allowed us in Hawaii, for instance, to wipe out any competition. When we came out after that infusion, we kept developing and we kept going. When we came back up for air, let's say 2021, we crushed it with another launch that is actually closing next year. So a lot of the recipe is embedding ourselves in the master plan community, exactly what David said, and then supporting the process, which is long-term thinking, and a third, I think, condominiums are, I guess, a self-validating business. You design them, you put a certain amount of capital out, and they have to sell before you build them, and that's good because then you know they're going to be a good thing, so with everyone's support, I think it's been there. The last thing is we have an owner mentality. David mentioned our team, but our team is really entrepreneurial, and we all have the leadership team has facilitated an ownership mentality, so when we're in it, we're playing the game to win. Yeah. Actually, Bonnie, thank you, Bonnie. There's one consistent theme that I think applies to almost everything that we do. So the advantage that Pershing Square has investing in the stock market is we only deploy capital if we think we're going to have a high rate of return over a long period of time. And our time frame is long-term, much longer than the typical investor. The way we're going to run our insurance business is the same way. We're only going to deploy capital. We're only going to take on risk. We're only going to write premium if the risk makes sense. And if there's nothing to do, we're happy to pause and do nothing. The same thing's true of how we build condominiums. We take the very long-term view. The world was going to recover from COVID. We're going to keep investing. The result is that we've really dominated that market now for approaching a decade. There really isn't material competition, and we take an approach. So one of the first towers we built, unfortunately, we had problems with the facade, and it was a curved glass facade. Based on the aerodynamics of the facade, it would squeak periodically. It cost $100 and whatever, $40 million to replace the facade. Now, again, we had a contractor, and we had a claim, and we could sue them and do whatever. But in the meantime, we had people living in units with a little chirping sound, and so what did we do? We replaced the facade without knowing whether we were going to make an insurance recovery from our insurers, without knowing whether we were going to recover from the curtain wall contractor, and we did that. If we were a standalone developer of one tower in Hawaii, one, we couldn't have afforded to do that. And two, we probably would have said, you know what? The next tower we're going to build, we're going to build somewhere far from Hawaii. We're going to do it under a different name. But the brand actually really matters. And what gives a condominium buyer confidence is, you know what? A lot of our buyers in our new towers actually bought in our old towers. And they made a lot of money because they were early. They got on Bonnie's Whisper list, and they got in early. And they were able to pick out their unit. And it appreciated over time. They knew that if there was ever going to be one, that we're probably not going to have a problem because we're a very experienced developer, but if there was a problem, we're going to fix it. I think that brand and kind of a willingness to take a long-term approach really matters in a world in which the vast majority of people are either constrained by the capital they manage or their desire to get rich quick. I think that is an enormous competitive advantage in every business. Yes. Who's ever got a? Yeah. Thanks for having the meeting, Phil Rosto from Dallas. You mentioned earlier that Buffett rarely issued stock. If you come across a transaction for Howard Hughes and you like the economics of predictable cash flows, but they'd say, Bill, for tax reasons, I need to do an all-stock deal. What are your thoughts on that? And then also to maintain control, what are your thoughts? Berkshire has been mentioned. What are your thoughts on a class B with no voting rights? Yeah. So I think we're going to be very, very reluctant to issue stock, a material amount of stock, in order to do a transaction. And we're going to be that much more reluctant if our stock price is not trading reflective of our underlying value of our business. Today, where we sit, the stock, we think we paid $100 a share. We did so six months ago. The business is more valuable today five months ago than it was then. And so we're certainly not going to issue stock at today's share price to do something. So I would say assume our goal is over time to have the same or fewer shares outstanding. All of that being said, if there's something important and strategic to do and we can issue stock at a price that is reflective of the value of the business and we can use it to buy a business at a price that's very attractive, we could consider it. But it's not going to be our business plan. Here is not to buy things, issue stock, buy something else, issue stock. But I would say it's more likely that the shares outstanding doesn't meaningfully grow from the current level. To be clear also, I would add, if a seller needs stock in order to satisfy a tax consequence, as long as we have the cash on hand to be able to immediately buy back the same amount of stock that we would have issued to them such that it was from an economic perspective as if the shares were never issued or bought in cash, but it satisfied a tax need for a seller, that is an option that we have. I think Bill's point, we don't expect to be issuing stock as a way to fund acquisitions over time. But I would distinguish that slightly from our ability to meet a seller's need, assuming that we could have bought the business in cash and had that available to then repurchase those shares immediately afterwards. Yes. Hi. My name is Jacob Garlick from Abraham Trust, visiting from Los Angeles. Thanks for hosting such an intimate Q&A session and presentation. I was hoping you might be willing to expand on one of the points you made earlier. You shared one of the core attributes or principles you're using in making an acquisition is an effort to find businesses that won't be disrupted by technology in the future, bringing your investment initially to zero. What might you be able to expand on the lesser understood ways in which technology will disrupt businesses that you need to watch out for? I think technology creates opportunities and also creates risks. Look, there was a transaction announced yesterday to buy this entertainment gaming company. Biggest LBO of all time, pretty decent premium for a stock that's continued, has gone up a lot. My guess is that the business plan is basically to massively reduce the cost of the business by using AI to develop games and that their financial model is not business as usual. It's that the ability with AI in terms of ability to write software, to do video, et cetera, has so dramatically changed the gaming business that this gaming franchise could be run at a fraction of the cost that it's currently being run. At the same time, there are businesses where AI is going to be enormously disruptive. The simplest example, of course, is the kind of traditional call center. That model you want to stay away from. Now, how do you assess technology risk? For us, it's sort of like a thought experiment, and I don't know that there's a systematic way to really do so. A lot of it has to do with how strong is the company's position where it sits today. There's been a lot of debate about Uber. We have a large investment in Uber, maybe probably our largest investment, and we were able to buy the stock at an attractive price because the world has said Elon's going to introduce this very low-cost Tesla taxi, and Tesla's going to get effectively 100% market share in the mobility business. Our assessment was the customer wants a car, a clean car, at the lowest price with the least amount of wait time to get them safely from one place to another. Our view is that Tesla's going to be an important player over time, but it'll be one of multiple players. The customer won't want to go to the Tesla app. They'll prefer to be at the Uber app where they can access the full supply of autonomous vehicles as well as human-driven vehicles in addition to other things they might want to go to the app for, for example, getting food delivery or drugs from the pharmacy. It's sort of a thought experiment. You kind of play out over time what the likely outcome is. You think about consumer behavior. You think about how much time it's going to take Tesla to be in the position that we've talked about and where the Uber platform will be over time. So I don't know how you what would you say on that question? Yeah. I I agree with you. I don't think there's a hard and fast rule. One thought experiment that I think we apply pretty consistently whenever we're looking at businesses and trying to understand even the risk of not just existing technology. Now it's very easy. You can ask yourself for every business you look at, how's AI going to be helpful or hurtful? But I would say in general, one thing that we try to think about, which is actually much better than just for AI or technology, we always think about why is the customer, whether it's an individual or it's a business, why are they purchasing the product? What problem is it solving? Why is the reason why they're doing that? And is there any pressure point that would cause them to go a different direction? I think when you start really thinking about the consumer, and again, that doesn't have to be a person. It could also be business and these types of business-to-business models, that often starts answering a lot of these questions. If you think about the history of technology, I would argue most of the reason, if you go back to the early 1900s, why did we go to cars versus horses? People actually wanted a more efficient way to get around. The issue was that there wasn't something there until Henry Ford really created the engine automobile. And that allowed people to get something that they wanted. They didn't want to ride a horse. They just wanted to get from point A to point B the most quickly. Technology unlocked that. If you go back to the late 1990s, ultimately, when you start thinking about the rise of Amazon, people would go to retail because they sold them the products they wanted. They didn't really care to go to the retail store and spend the time in the car to go buy it. What they wanted was to get the product there relatively quickly and have a wide selection. Amazon unlocked that. I think if you kind of apply those types of analogies to the AI, a lot of it comes down to what is the customer ultimately looking for? And is there some technological innovation that could solve that, even if the technology doesn't exist? And how would that change people's behaviors? That's sort of a little bit of a heuristic that we think about when we analyze businesses. One of the reasons why we like Howard Hughes as kind of a base to build our modern-day Berkshire Hathaway is if you think about what Buffett started with. He started with a textile business that he bought at basically a discount to working capital that he effectively liquidated over time and redeployed the capital into insurance, into banking, into a diverse collection of businesses over time. What I like about our core business of Howard Hughes is I'm not concerned about AI disruption. People can still rent apartments. They're going to buy homes. They're going to buy condominiums. Land is going to be valuable. In fact, in a more virtual world, it's easier for people to live in lower tax environments that have. I think a lot of the forces in the world that are kind of encouraging people to leave cities like Chicago and hopefully not New York, but perhaps New York if we have the wrong mayoralty and wrong governance. I think these communities are going to be really attractive regardless of what's going on with AI. There are certain kinds of companies where you just can't figure it out, and you just pass. The beauty of the investment business is you don't have to have an answer. Not everyone has to be Jim Cramer and say, buy, sell, or hold. I don't know how Jim actually does it. But with us, I think there are many public companies that no one really knows what they're worth. It's kind of like a game. But there are certain businesses that you can predict with a pretty high degree of confidence what it looks like over time. So if you find yourself with something where you were concerned about technological disruption, but you're not sure, you just don't invest in it. Yes. A couple of questions from the online audience. Would you consider investments outside of the U.S.? And what are your thoughts on digital assets? And would you acquire any kind of business related to them? So I would say less likely we'd invest in something outside the U.S. because I think proximity to the company is certainly at the early stages of our business going to be important. We're not going to be buying 100 businesses a year. And we'd want to almost co-locate with or have certainly near to us just for oversight reasons, an insurance operation, and also any sort of initial business that we'd buy. In terms of digital assets, is this crypto we're talking about, or is it something else? Yes. Yeah. So I think the whole crypto space is sort of interesting, but not something that's relevant from an investment perspective for Howard Hughes. And no, we're not going to build a Bitcoin Trust company. But interesting on Bitcoin Trust companies. So I talked about the Investment Company Act of 1940. So in the 1920s, Andrew Ross Sorkin is coming out with a book called 1929. I read one of the early drafts. And it's a really good book. I encourage you to buy the book when it comes out, I think, in the next few weeks. But it's really interesting to read about the 1920s. In the 1920s, there were trust companies created by the likes of Goldman Sachs that would basically buy publicly traded securities using and the companies themselves would use leverage. So if you bought the stock, it was a way to own a levered interest, for example, in a portfolio of public companies. And then people would get margin loans where they'd buy the Goldman Sachs Trust Company, which itself was levered, and you get these sort of massive multiples. And when the market went straight up, you could make a fortune owning them. And then the crash happened. And the Goldman Sachs one went from like $300 a share to $3 a share. And people lost a lot of money. And then the Investment Company Act of 1940 came into existence. And it basically said that a public operating company has to have 60% plus of its assets in businesses in which it's the controlling shareholder, which is why Berkshire didn't buy common stocks in a public company. It bought an insurance operation that had a portfolio where you could invest sort of indirectly in common stocks. This phenomenon of Bitcoin Trust companies, which I'm not sure people are familiar with, the most famous of which is a company called MicroStrategy, previously MicroStrategy. A guy named Michael Saylor basically had this sort of not particularly successful software company. He used the excess cash of the business to start buying Bitcoin. It created the way for the average person on the street or even institutions to get indirect ownership of Bitcoin and use a little bit of leverage. The stock would always trade at a big premium to the Bitcoin per share. So he could issue equity, buy Bitcoin, and aggregate what today is, I don't know, 3% or so of the total supply of Bitcoin and continue to trade at a significant premium. It's like this money machine, right? If you can issue stock at a premium to the Bitcoin NAV and then use it to buy Bitcoin and it continues to trade at a premium, you'd literally have like a perpetual motion money-making machine. Other people have noticed that. Now, why can you do that with Bitcoin and you can't do that with common stocks like they did during the 1920s? Bitcoin is deemed not to be a security. And so it doesn't fall afoul of this sort of 1940 Investment Company Act of 1940. At the same time, I believe it suffers from the same problems of some of these companies that you saw in the 1920s where I don't think there's real economic value being created by these businesses. They're highly dependent on them trading at premiums. In a world in which Bitcoin went down, the premium went away or went to a discount. Companies had liabilities that they had to repay. You could see a world in which this phenomenon goes in reverse, and there are a lot of copycat entities, so I would say the MicroStrategy example, it's large cap. It's liquid. He's been pretty thoughtful about the kind of securities he's issued, so he doesn't have like a big debt maturity, but some of the other ones I think are problematic, and many of them are now starting to trade at discounts, and you could see a world in which they're forced to sell Bitcoin in order to meet their obligations. The good news is we don't have to worry about that at Howard Hughes. While we'd be happy to have a Bitcoin someone as our tenant. But we are not going to get into the business of buying digital assets. Yes. Whoever's got the mic? Fight for the mic and you get to ask a question. Go ahead. Yes. So this is Tassos Recachinas from Sophis Investments here in New York. Just a question. Relatively new shareholder to Howard Hughes and a couple of questions. One is what attracted us to this was some of the event-driven developments with spinning off Seaport being a pure play. It's still a very complex situation, but the other thing, of course, is having Pershing Square's involvement as a large shareholder. They've done extremely well. They're a super investor over 20 plus years, an exceptional investment track record. So when you see Pershing Square step in and buy stock at $100 a share, you can deduce that they believe there's a 20% plus IRR from $100 a share and you're still trading at a substantial discount to that price. So, I guess the questions would be for Pershing as well as Howard Hughes. Maybe if you could talk about your view, if possible, on what NAV is today and maybe what it looks like down the road, as well as would you, a slightly separate question, is would you entertain buying another REIT or buying a REIT, or are REITs not in the picture for Howard Hughes because of potentially the lack of synergies or similarities? Howard Hughes is kind of an orphan company, and there's not many REITs like you out there, so I know you're in. I understand the question. So what I would say is we're not going to buy a REIT simply because we want to our excess capital. One, we want to build a diversified holding company. If we buy other real estate assets, we're not going to be diversified. We're going to be doubling down on real estate. We also think that we can earn higher returns in other businesses, insurance, et cetera, than we can in real estate. And we already have. We've got a team we trust. We've got a much better business than your typical REIT because, again, David's talked about the competitive advantages of owning all of the commercial land, controlling the community, making sure that it doesn't get overbuilt. And so we're not going to buy another REIT. In terms of intrinsic value of the company today, I think the best measure you can get is we would not have paid $100 a share if we thought the stock was worth $80. We paid $100 a share. We were prepared to pay $100 a share. By the way, I have not seen many examples of someone buy 15% of a company and pay $100 a share when the stock is at $66. I think it's the only example I can kind of think of. Now, either we're stupid or we believed that the stock has been perennially sort of undervalued, which is the case. The last time management reported that net asset value calculation was like the $118 level, and that was how long ago? Over a year, about 15-16 months. About 15 or 16 months ago, the company sort of, if you look at their presentation they did at Analyst Day, they have a reasonable way of thinking about value, $118. So $100, $118. But I think if the stock's $80, wherever it is today, I think it's a very comfortable starting base. And I think if we do a good job creating value from here, you'll be very happy you own the stock over a long period of time. I guess that's my best answer to your question. All right. I'm sure some people are hungry. Why don't we do the following? Why don't we take how many more questions are there? We've got one, two, three, four, five. OK, we'll try to crank through five questions. And we'll let people go have lunch. Next year, maybe we'll have lunch served. OK, go ahead. I'm Min-Ju. I'm coming from Nashville, not Hong Kong, and if we get the wrong mayor, I really hope everyone goes to Dallas and the Howard Hughes Corporation on properties. Yeah, Howard Hughes is our hedge against the bad mayor. Woodlands. Woodlands. Woodlands. Woodlands. Woodlands. Woodlands. Woodlands. Woodlands. Woodlands. Woodlands. Woodlands. I'm waiting a minute. My questions will be longer, but I'll try to make it as quick as possible. So, outside of Alan Mulally from Ford, you know my. All right. Hold the mic near you so we can hear you. You're my greatest role model. Right now, I work in corporate development for a Fortune 25 IT integrator. I certainly don't think I'd be here without the inspiration I've drawn from you over the years. My question really has to do with the timing of the investment. Mr. Howard Marks, a lot of times he talks about it's important to choose the right asset, but also at the right time. Would you help us understand why right now would be the right time for us to be acquiring insurance assets? Also, to me, it seems like President Trump wants a dollar or two weakened a little bit to balance the trades. It wouldn't be a prime time for us to be acquiring assets overseas, maybe Canada fairly close, English-speaking, Australia, or even South Korea. Thank you. Sure. So with respect to investing outside of the U.S. today, for the reasons I've talked, first of all, I'm very bullish on America. And I think there are good reasons to believe that our economy is actually in a pretty good place. One, inflation is really coming down, is disappearing or coming way down. That's a setup for the Fed to start lowering rates. And I think you're going to see a continued opportunity for the Federal Reserve to lower interest rates. That's obviously good for a real estate company. The value of anything is the present value of the future cash, discounted at an appropriate discount rate. The discount rate goes down when rates go down. And I think inflation and somewhat weakening job growth, I think, creates the opportunity for the Federal Reserve to cut rates. You've got a very pro-business president. You've had a tax bill that was approved by the Congress, but that has very significant incentives, including 100% depreciation. You have this massive, massive AI investment, which is really a U.S., principally a US phenomenon. And you're going to see literally trillions of dollars invested in CapEx, building data centers. And you think that's before you get to the kind of the productivity enhancements that come from AI. I think next on the agenda for the Treasury Secretary and the President, from a business perspective, is kind of a big deregulation, kind of push, kind of more sensible kind of regulatory regime. If the war in Gaza is, let's hope that's resolved by the President's recent initiative. I think this Russia-Ukraine war has not been very good to, obviously, Ukraine, but it's not been very helpful to Russia. I think that's getting closer to an end. So I think you can envision a world where geopolitical risk starts coming down, Fed's lowering rates, huge secular tailwinds. And I think U.S. preeminence, more so than I can think of in a very long time, has been demonstrated with everything from what happened taking out Iran's or setting back Iran's nuclear capability. So I'm very constructive on the United States. And then for the reason we talked about before, proximity is a reason why we want to be here. And if you invest in a very high-quality business, you don't really have to worry so much about the currency because a great business can raise prices over time. And if the currency devalues, but it's a product people want, you can charge a global price in whatever the particular currency that you're selling your product or service in. Now, I forgot your first question. The timing. Timing. So look, I think the setup for investing in Howard Hughes is that I would say our real estate business is in the best place it's ever been. Our communities are as dominant as they've ever been. And the company itself is this was a cash flow negative business. And we had to finance, continually raise capital in order to build out our communities. And we started with $35 million of net operating income. Today, that number on a run rate basis is approaching $300 million of recurring cash flows from apartment rents and office and retail. Our land values have been continued to compound at very nice rates. You've got huge supply-demand imbalance in terms of demand for homes and kind of a limited supply. The supply is even more limited in places where people really want to live, like Texas, Nevada, particularly in communities like the ones we have, which have good schools and are safe and clean and have really good kind of governance. So I think that the core Howard Hughes business itself is in the best place it's ever been. And for the economic factors I talked about, I think we've got a very significant tailwind, including the benefit of reduced interest rates. And the business is at sort of this fulcrum point where it's going to become cash flow positive. If you think that Pershing Square is going to do a good job with the excess cash the company has, both the $900 million we put in and the cash the business will generate, and you like our strategy, and you can buy it at a 20% discount to the price we paid in May, that seems like a pretty good setup. OK, next question. Ryan from New York. Embedded in the sort of insurance plan. Mic too. Yeah. Embedded in the insurance plan. It seems like there's a presumption that you'll get Berkshire-like regulatory treatment to have investment flexibility. So what's sort of the plan if you don't? Is there sort of jurisdictional things you could do? And then also, is that reflected in the premium you're willing to pay for an operation? Or if you have less investment flexibility, maybe you don't want to pay a premium that you're currently contemplating? Sure. It's an excellent question. So there's a little bit of a, I would say, a misunderstanding about Berkshire's sort of investment flexibility. I would say the investment flexibility he has, he sort of deserves because of the approach that he's taken. If his plan was to write 100% premium to total, to equity, and operate with 3x leverage, he would not be able to have 70% of his or 60% plus percent of his assets in common stocks. He's able to accomplish that objective because of how conservatively run the insurance operation is. If you think about it, if you take 100% of your float and you invest in short-term treasuries, and the treasuries are in a 3% or 4% return, just that portfolio will cover your insurance losses at anything less than 103% kind of combined ratio. And then on top of that, you have liquid common stocks and a somewhat diversified portfolio that more than cover that kind of a loss. We expect if we adopt that kind of approach, we'll get something approaching what Berkshire has. And maybe in the earlier years, we've got to have maybe a little more treasuries and a little less common stocks if that's what's necessary to kind of prove ourselves kind of over time. But long term, we think that doesn't make a huge difference. Where Berkshire has gotten sort of special treatment is when he bought Burlington Northern and put a private asset under the insurer. I would say that was a bit unusual. And Omaha, I think, in Nebraska has pretty favorable because of the Buffett experience. So I think we have the benefit we're going to bring a 22-year track record of investing in equities that's demonstrable. And we're hopefully going to come with a management team that has a demonstrable long-term track record, even if it's a business we're buying that has a shorter-term track record. And then we're going to explain what we have in mind. And I think we'll get pretty close to what we want. And over time, we'll get there. OK, there were three more questions. Yes. This is a question-dense area here on the left. Absolutely. I think part of what you're saying here is that the current Howard Hughes real estate platform is a much better asset than a textile mill was in 1965 or whenever that was, and there's no real need to reallocate capital to other investments. If you were to acquire or start the insurance subsidiary and use the float to fund the development of the master plan communities, what do you think that would do for the return on equity of the company, all else equal? We would never use the float of an insurance company to invest in a real estate development business. The good news is the real estate subsidiary is well capitalized on a standalone basis. In fact, we expect we'll generate more capital than can be redeployed intelligently in the business model of Howard Hughes is we sell lots to home builders. We take that cash. And we've historically invested that cash as equity in, let's say, for example, a condominium development or an office building or an apartment, et cetera. But at a certain degree of maturity with the large amount, the several billion dollars of condominiums that we have under contract with 20% deposits, is it three billion or four billion? 4 billion. $4 billion. $4 billion of condominiums we have under contract with 20% deposits. That, on top of the cash flows from the business as the communities mature, that business is going to generate more cash than we can intelligently invest as equity in these communities, and we're not going to buy any more master plan communities. We've got enough on our plate with Phoenix and just our existing assets. The insurance sub will be operated separately, and it's likely to retain all of its capital because it should be able to reinvest that capital. Again, we're starting one of the big advantages we have versus Berkshire is this is a tiny company, relatively speaking. We've got 59 million shares. It's a, whatever, $4.8 billion market cap company. Maybe it's $10 billion of total assets, including all of our real estate assets. It's a good starting base to grow. It's much easier to grow something into something significant if you start small. OK, we have two last questions. One here and one there. OK. The guy with the mic. You go ahead. Thanks for the presentation, guys. Gabriel Nardi-Huffman with Tadpole Investments in Connecticut. I just had a quick one on timing. Assuming there were no regulatory issues, if you could get a deal done in the next few months, how aggressive would you be of moving that portfolio over to equities? Would you be willing to sell fixed income securities, even at losses? And just how quickly do you want the portfolios to align? Yeah, I think our plan. I would say getting a transaction executed. I think the earliest would be three months. The more likely case, somewhere between three and six months to get just all the approvals, HSR, whatever is necessary. Getting something definitive signed, I think, could be accomplished theoretically by the end of the year, and well, I'm getting tired. Investment portfolio. I think the good news when you look at most of these companies in general is they actually invest primarily in treasuries of some duration. And then they invest in generally investment-grade bonds. They have very, as I mentioned, very tiny allocations to private credit or funds where it would take time. So the liquidity in those markets means you can almost, I don't want to say overnight, but within a very short period of time, you can take back that capital. And then you can redeploy it however you would see fit. And we're also. We need to operate on a less levered basis. So we would buy a company and likely put more capital into it to kind of deleverage the investment portfolio and the insurer. OK, last question. All righty. So with three million sq ft in the Ward Village, what does that look like for shareholders? And what is the development potential for the West Village? Or what development potential does it hold? Right. So if you look at our most recent announcement, where we sold $1.2 billion at ILima and Melia at nrth of 3,000 a foot for front row product. And I extrapolate that to west of Ward, which is primarily second row product. And if you thought about a sales price per foot times three million sq ft of somewhere around 2,000 a foot, if we're still able to generate the 25% to 30% profit margin, that's a five- to eight-year execution discounted back to today, is a great amount of profit for us on a present value. On a future cash flow basis, even better in terms of what can be re-executed in terms of invested into other businesses in the future. I'd add to that. In Hawaii, the negative about a condominium business is that once you sold it, there's no recurring cash flows. But the base of all of those towers makes up a million sq ft of retail with now a lot of density because of what's being built on top of it. One of the most valuable malls in the country you can walk to from our property, Ala Moana, and the rents are in the, what, $120-$150 a foot? I don't know what the number is. The rents that we have on our older properties that we knocked down. Like $20. Are like $25, $30 net. Right. There's no. Right. There's no. We're replacing those with $80 rents net. You've got 1 million sq ft at 80. That's 80 million of NOI. And Al a Moana probably sold at one of the lowest cap rates, like 25 times. So there's a very valuable recurring base of cash and a valuable asset underneath these towers once the development's fully completed. Anyway, everyone's been ery gracious to spend a few hours with us. Thank you. Enjoyed our first shareholder meeting of the new Howard Hughes. Thank you so much for coming.