Emile Haddad is Chairman and Chief Executive Officer of Five Point Holdings, LLC. Five Point, the largest developer of mixed-use communities in coastal California, owns and manages Great Park Neighborhoods in Irvine, Newhall Ranch in Los Angeles County and The San Francisco Shipyard and Candlestick Point in San Francisco.
Combined, these four mixed-used communities will include approximately 40,000 residential homes and 23 million square feet of commercial space. All total, these developments will generate approximately 288,000 jobs during construction and $54 billion in activity for the California economy.
Prior to founding Five Point, Mr. Haddad was the Chief Investment Officer of Lennar Corporation, one of the nation’s leading homebuilders, where he was in charge of the company’s real estate investments and asset management.
In this 5,964 word interview, exclusively in the Wall Street Transcript, Mr. Haddad explores his company’s strategy to continue its real estate development in the midst of the COVID 19 global pandemic.
Mr. Haddad has a unique perspective on economic adversity:
“I grew up in Beirut, Lebanon, and went to the American University of Beirut and studied civil engineering. And as we are witnessing right now, once in a while in life you get thrown a curveball, and that curveball actually takes you to a place that changes perspective and allows you to start looking at things differently.
So that shift happened in my life in 1975 when I was 17, when the civil war in Lebanon started.
We lived 11 years in the civil war, which created conditions very different than the rest of the world. There was no water and no electricity, no gas and, a lot of times, no food. That’s how life was.
I went through high school and then school of engineering and studied by candlelight.
During the war, I saw a lot of unfortunate people who didn’t make it, but I also saw people who are like me, who were lucky enough to come out and gain perspective.”
His life in America has been the result of hard work and perseverance:
“At that point, we became a very familiar story of a family in pursuit of the American dream, and we lived together in a small place for five years, and I started working my first job.
After looking for a job for six months, I found a job that was about 75 miles away from my home. They paid me $10 an hour as a junior engineer, and I was so excited to get it because it gave me a job and allowed me to start helping and support the family.
About a year later, I had an offer to work for a client, at that time was a homebuilding company in West L.A., and I took that because I wanted to be on the development side and I was doing some tenant improvements on the side to make more money.
So my days used to be like, I hit the road at 4:45 in the morning, and I’d be back about 9:30 or 10 o’clock at night and do it all over again. On the weekends I was studying to get my licenses in engineering and contracting.
Then, my career path started getting a little bit more clarity. People started realizing that I can do more, and I started getting promotions.”
The company’s financial strength is lower leverage and a conservative financial outlook:
“The company’s approach has always been a balance-sheet-first approach. We are not the company that is looking for growth just for the sake of growth.
We have a lot of assets, and our assets are honestly irreplaceable, and we have a lot of value creation out of them. So again, our focus is on cash flow and the balance sheet.
We have 24% debt to cap. That’s all in bonds that are maturing five years from now. We are sitting with a lot of liquidity, very little debt; none of these assets are encumbered with any project financing except an office complex that we own.
We are very well-positioned for this crisis and, in some ways, have been preparing for this for a long time.”
Read the rest of this 5,964 word interview, exclusively in the Wall Street Transcript, and get the rest of the outlook on Mr. Haddad’s real estate development company.