Teravalis development to accelerate as Howard Hughes secures major funding boost

Developer says $900M capital infusion will speed up, solidify Arizona project

By Angela Gonzales

With a $900 million capital infusion from its former chairman, Howard Hughes Holdings Inc. (NYSE: HHH) will use a portion of those proceeds to grow and develop its largest master-planned community, the Teravalis project in Buckeye.

New York-based Pershing Square Holdco LP and its wholly owned subsidiary Pershing Square Capital Management LP disclosed earlier this week plans to invest $900 million to acquire 9 million newly issued shares of HHH.

This investment comes on the cusp of the grand opening of the 37,000-acre master-planned community, Howard Hughes CEO David O'Reilly told Phoenix Business Journal.

In October 2021, Howard Hughes paid $600 million for the 37,000-acre swath of vacant land, which sits on the west side of the White Tank Mountains 35 miles west of downtown Phoenix.

It is the Texas-based developer's largest master-planned community to date, with an expected 100,000 homes, 300,000 residents and 55 million square feet of commercial development.

Seven homebuilders already have bought hundreds of lots within Floreo, the first village at Teravalis, which will encompass 8,500 homes.

Homebuilders are starting to build their model homes, with a grand opening to kick off sales set for this fall, O'Reilly said. Howard Hughes is based in The Woodlands, north of Houston.

"Any time you can raise $900 million and bring in expertise, it's a benefit to every asset the company owns," O'Reilly said. "With this capital, we are able to invest even further in Teravalis and it becomes even more profitable."

This investment will enable HHH to become a diversified holding company by acquiring controlling stakes in high-quality, durable growth public and private operating companies while continuing to invest in and grow the company's core real estate development and master planned communities businesses.

Pershing Square's chairman and CEO, Bill Ackman, has been named the executive chairman of the HHH board.

Nearly 15 years ago, Ackman took control of a bankrupt General Growth Properties, which included a collection of master-planned communities across the country.

"Bill saw those and he spun them out into a company called Howard Hughes," O'Reilly said. "He became chairman of the board and he was the largest shareholder. So Bill and Pershing have been involved with Howard Hughes since it was born."

So when Ackman came up with an idea in January to transform Howard Hughes from a purely master-planned developer into a diversified holding company, much like a mini Berkshire Hathaway Inc., O'Reilly said he was fascinated by the concept.

The timing is perfect for the grand opening of Teravalis, he said.

Company has experience with desert developments

Water has been an issue for the city of Buckeye, which is not a designated water provider, though O'Reilly said those issues were no surprise to him when he bought Teravalis.

While Floreo has the required certificates of assured water supply, the remaining portion of Tervalis does not yet have that designation.

"We knew it when we came into it, but we also have an incredible amount of experience and we've built a community of 120,000 residents in the desert, known as Summerlin," O'Reilly said.

That Las Vegas master-planned community will be home to more than 200,000 people upon completion.

"In Summerlin we're using a little bit less than 90 gallons per capita today, which is about 40% less of what Phoenix uses today," O'Reilly said. "And if we're able to apply those same smart things we've done in Summerlin to the entire Phoenix Valley, there's enough water for everyone."

Howard Hughes reported its first quarter 2025 results on May 7, which places the company firmly on track to achieve its 2025 full-year guidance, O'Reilly said in a statement when releasing the financials.

Howard Hughes reported $10.84 million in net income on total revenue of $199.32 million for the three months ended March 31. That compares with a net loss of $21 million on $156.5 million during the same quarter in 2024.

"We've learned a lot over the 50-plus years of developing some of the best communities in the world," O'Reilly said. "Applying all those learnings to Teravalis is something that we really look forward to in trying to create that next great community for people to live, work, play, learn and discover."

Final Thoughts
The $900 million investment into Howard Hughes Holdings marks a pivotal moment for Teravalis — not only accelerating its timeline but reinforcing its potential as Arizona’s next major community hub. With deep experience in building thriving desert developments like Summerlin, and a long-term vision to transform the West Valley, Teravalis stands to reshape Buckeye’s future. As infrastructure and water supply planning evolve, the project could become a model for sustainable, large-scale growth in the Southwest.